TONGHUA PROTEST FOLLOW-UP: INVESTIGATION GOING

C O N F I D E N T I A L SECTION 01 OF 02 SHENYANG 000152

SIPDIS

E.O. 12958: DECL: 08/26/2019
TAGS: CH ECON ELAB PGOV PINS SPILL
SUBJECT: TONGHUA PROTEST FOLLOW-UP: INVESTIGATION GOING
POORLY

REF: SHENYANG 130

Classified By: Pol/Econ Chief Dannielle R. Andrews for Reasons 1.4 b/d


1. (C) Summary. Wang Shou Kun, chief economic research
advisor investigating the Tonghua Steel factory labor
disturbance that resulted in the death a manager (reftel)
says the Jilin government is committed to getting to the
bottom of what happened but that no arrests have been made.
Rumors of mafia involvement and internal corruption
investigations are false. Wang recounted the violent history
between Tonghua Steel and Jianlong Steel and said that the
tensions stem from workers' lack of trust in Jianlong and the
local government. Wang strongly feels that labor
negotiations are not the government's strong point and sees
no hope that this will improve. Since reopening, production
at the plant is at historic highs. End Summary.


A Hard Case to Crack
--------------


2. (C) On August 17 Congenoffs and visiting Pol M/C met with
Jilin Provincial Government Investigation and Research Office
Senior Economic Advisor Wang Shou Kun, who has been tasked
with investigating the Tonghua labor dispute police
investigation and making recommendations for further action.
Wang said the police investigation into the death of General
Manager Chen Guojun has not gone well thus far. Although many
workers were brought in initially for questioning, they have
all been released and no one in Tonghua Steel has been
detained. Wang said rumors stating that local gangsters were
involved in the murder and that Tonghua Steel's Chairman of
the Board and Deputy General Managers have been detained and
investigated are false. With the local government wary of
sparking more unrest, quelling such rumors and paying careful
attention to workers' statements are very important. Despite
these challenges, the Jilin Government is determined to find
out the truth. "After all, a man lost his life," concluded
Wang.


A History of a Situation Spun Out of Control
--------------


3. (SBU) According to Wang, Mr. Chen's death was not part of
a planned disturbance, but the result of the wrong person
being at the wrong place at the wrong time and saying the
wrong thing. In fact, the incident, as it was, started off
simply. On the day in question, Mr. Chen had arrived at the
plant just when a disturbance had occurred. Knowing of Mr.
Chen's imminent arrival at the Tonghua Steel plant, workers
had assembled around a side gate of the plant to complain
about Jianlong's return. As the crowd grew, two workers put
up banners condemning Jianlong. When two plainclothes police
officers among the crowd tried to remove the banner, the
crowd became enraged. Workers beat the officers, who escaped
briefly to run to the main gate that houses the plant's
police station, hoping to find reinforcement. At the main
gate, workers encountered Mr. Chen, who was immediately
surrounded and questioned by the workers. Chen made no
attempt to pacify the crowd but instead threatened to fire
all the workers. It was this blanket threat, said Wang, that
led to the three beatings that ended Chen's life. Per reftel,
emergency services were not allowed onto the compound by
workers until well into the evening, and Chen was later
pronounced dead by health officials.


A History of Violence, A History of Conflict
--------------


4. (C) Wang, a self-proclaimed labor negotiation and disputes
expert, faults the Jianlong Steel Share Holding Company and
the Jilin provincial government's mismanagement of the
merger. To his knowledge, Chen's death is not the first time
that a member of Jianlong's management in Tonghua Steel has
been killed by a worker(s). Wang recalled that on Christmas
Eve of 2008, the Director of the Steel Rolling Plant found a
worker drunk on duty. Instead of referring the worker to
junior officials for punishment, the director told the worker
that he was fired. The inebriated worker, fueled by anger,
killed the director with a hammer. During the subsequent
police investigation, no witness stepped forward; everyone
present claimed they had not seen anything.


5. (C) According to Wang, due to Jianlong's simplistic and
hard-lined management style, disputes had been become a

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regular problem at the plant. At the outset of the merger,
Jianlong laid off workers and junior Tonghua officials alike.
Whoever violated regulations or the interest of Jianlong
management were immediately fined or fired, heightening
management/worker conflicts. Wang also stated that workers
were unhappy with what they perceived as an unfair wage
structure--their average salary being about RMB 300, while
managers from Jianlong made tens of thousands of RMB a month.


A History of Mistrust
--------------


6. (C) Mr. Wang said the Tonghua Steel case is also a
reflection of the workers' mistrust of the local government.
As an example, after Chen's death, local government officials
assured the workers orally that Jianlong was permanently
excluded from the restructuring of Tonghua Steel. However,
the workers refused to disperse until they saw the provincial
government decree in writing. According to Wang, Jilin
State-Owned Assets Supervision and Administration Commission
failed to consider worker interests in the restructuring deal
and should have done more to address their concerns. He said
government officials lack the necessary communication skills,
training, patience and expertise to carry out such sensitive
mergers. Wang believes that with increased privatization
and/or mergers, incidents like Tonghua will continue.


Historic Highs: Workers Express Their Love
--------------


7. (SBU) Wang says Tonghua Steel is now back to business and
workers are working harder than ever. Steel production in the
plant over the past three weeks has been the highest in the
plant history. As a matter of fact, workers have refused to
go home after work, voluntarily staying to help the next
shift. According to Wang, this is their gesture to prove
that they love the steel plant and do not want to create any
further problems.
WICKMAN