PRD Labor NGOs Prepare Comments for Draft Social

C O N F I D E N T I A L SECTION 01 OF 02 GUANGZHOU 000444

STATE FOR EAP/CM, DRL
SIPDIS

E.O. 12958: DECL: 2019/07/28
TAGS: ELAB PHUM PGOV CH
SUBJECT: PRD Labor NGOs Prepare Comments for Draft Social
Security Law

GUANGZHOU 00000444 001.2 OF 002



1. (U) Classified by Consul General Brian Goldbeck for
reason 1.4 (d).


2. (C) SUMMARY AND COMMENT: Labor nongovernmental
organizations (NGOs) in the Pearl River Delta (PRD) are
in the process of preparing suggested revisions to a
draft Social Security Law. The NGO document, which is
not yet finalized, mainly focuses on expanding
accountability and transparency and clarifying
ambiguities regarding oversight and benefits. The
submission of a single document representing the views of
many PRD labor NGOs would constitute an uncommonly direct
move to influence government policy. END SUMMARY AND
COMMENT.

Testing the Mainstream Waters
--------------


3. (C) South China's labor NGOs are working together to
systematically prepare suggested revisions to national-
level draft social security legislation, according to
Guangzhou-based labor rights activist Zeng Feiyang
(protect). The NGOs' 22 pages of changes to the
document, which the government posted online to solicit
public comments, generally seek to codify specific
protections and guarantees for workers and to eliminate
differences in treatment between "urban workers" and
"rural residents working in cities."


4. (C) Comment: Submitting to the government a position
paper on behalf of the PRD's most significant -- and
unofficial -- labor NGOs would be a risky but potentially
productive action. Though authorities would doubtless be
disturbed by already-suspect groups "organizing" to
coordinate their approach to the new legislation, the
document might also be seen as a good-faith effort by
NGOs to work within the system to effect change. End
comment.

Suggested Revisions
--------------


5. (C) The document, which already incorporates comments
from Shenzhen-based labor NGOs, is currently under review
by NGOs in Guangzhou. Of the revisions proposed by
Shenzhen NGOs, the following are most noteworthy:

-- Article 3: the original text says that the social
security system should follow a "broad coverage"
principle; the NGO revision calls for "complete
coverage," and says that one "uniform" social security
system should cover all areas, regardless of rural or
urban status.

-- Article 4: the original text requires both employers
and individuals to pay social security fees; the NGO
revision would exempt those earning less than 40 percent
of the local area's average income, mandating the
government pay instead.

-- Article 6: the original text leaves supervision of
social security funds to the government; the NGOs call
for the creation of an "independent supervision
organization" -- consisting of auditors, academics and
members of People's Congresses -- which would publish
semiannual audit results.

-- Article 7: whereas the original text charges the
Social Security Administration under the State Council to
manage the social security funds, the NGO revision would
put the Finance Ministry in charge of collecting the
funds while the Labor and Social Security Ministry would
be responsible for budgeting and allocating the funds.


GUANGZHOU 00000444 002.2 OF 002


-- Article 8: the original text gives trade unions the
right to participate in any research or study concerning
social security issues; NGOs would give the privilege to
"grassroots organizations."

-- Article 14: the original text entitles citizens to
monthly pensions until they die, as long as they have
"paid enough years of social security fees" and "reached
the age of retirement;" the benefit structure proposed by
the NGOs would provide 40 percent of average local income
to those who have paid more than 30 years, 35 percent for
15-30 years, and 30 percent for those paying less than 15
years or who are too poor to pay.

-- Article 16: the original text has pensions adjusted
based on average income increase and inflation; the NGOs
contend that increases should be based on national GDP
figures.

-- Article 79: the original text levies unspecified fines
against employers who fail to pay social security fees;
the NGO revision specifies a fine between CNY 50,000 and
300,000 (approximately USD 7,300 and USD 44,000
respectively) plus the possibility of up to three years
imprisonment.

GOLDBECK