[Joint House and Senate Hearing, 108 Congress]
[From the U.S. Government Publishing Office]
FREEDOM OF ASSOCIATION FOR CHINESE WORKERS
=======================================================================
ROUNDTABLE
before the
CONGRESSIONAL-EXECUTIVE COMMISSION ON CHINA
ONE HUNDRED EIGHTH CONGRESS
FIRST SESSION
__________
JULY 7, 2003
__________
Printed for the use of the Congressional-Executive Commission on China
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CONGRESSIONAL-EXECUTIVE COMMISSION ON CHINA
LEGISLATIVE BRANCH COMMISSIONERS
House Senate
JIM LEACH, Iowa, Chairman CHUCK HAGEL, Nebraska, Co-Chairman
DOUG BEREUTER, Nebraska CRAIG THOMAS, Wyoming
DAVID DREIER, California SAM BROWNBACK, Kansas
FRANK WOLF, Virginia PAT ROBERTS, Kansas
JOE PITTS, Pennsylvania GORDON SMITH, Oregon
SANDER LEVIN, Michigan MAX BAUCUS, Montana
MARCY KAPTUR, Ohio CARL LEVIN, Michigan
SHERROD BROWN, Ohio DIANNE FEINSTEIN, California
DAVID WU, Oregon BYRON DORGAN, North Dakota
EXECUTIVE BRANCH COMMISSIONERS
PAULA DOBRIANSKY, Department of State*
GRANT ALDONAS, Department of Commerce*
D. CAMERON FINDLAY, Department of Labor*
LORNE CRANER, Department of State*
JAMES KELLY, Department of State*
John Foarde, Staff Director
David Dorman, Deputy Staff Director
* Appointed in the 107th Congress; not yet formally appointed in
the 108th Congress.
(ii)
C O N T E N T S
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Page
STATEMENTS
Hall, Amy, manager for social accountability, Eileen Fisher,
Inc., and member, the advisory board, Social Accountability
International, Irvington, NY................................... 2
Fishman, Phil, assistant director for international affairs, AFL-
CIO, Washington, DC............................................ 5
APPENDIX
Prepared Statements
Hall, Amy........................................................ 28
Fishman, Phil.................................................... 32
FREEDOM OF ASSOCIATION FOR WORKERS
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MONDAY, JULY 7, 2003
Congressional-Executive
Commission on China,
Washington, DC.
The roundtable was convened, pursuant to notice, at 12:39
p.m., in room 2255, Rayburn House Office building, John Foarde
[staff director] presiding.
Also present: David Dorman, deputy staff director; Sarah
Dudley, office of Senator Max Baucus; Andrea Yaffe, office of
Senator Carl Levin; Michael Castellano, office of
Representative Sander Levin; Alicia O'Donnell, office of
Representative Doug Bereuter; Robert Shepard, office of Deputy
Secretary of Labor D. Cameron Findlay; Susan O'Sullivan, office
of Assistant Secretary of State Lorne Craner; and Susan Weld,
general counsel.
Mr. Foarde. I would like to welcome everyone to this issues
roundtable of the Congressional-Executive Commission on China.
On behalf of Chairman Jim Leach and Co-chairman Senator Chuck
Hagel, welcome to our panelists, as well as all of you who are
attending today.
This afternoon we want to continue our look at freedom of
association issues in China by looking specifically at the
limits of freedom of association and its effect on Chinese
working men and women.
To help us delve into those issues more deeply, we have two
very distinguished panelists. Amy Hall is manager for social
accountability at Eileen Fisher, Inc. She is here in her
capacity as a member of the advisory board for Social
Accountability International [SAI]. She is going to talk to us
about representation, SA8000
industry standards, et cetera.
Phil Fishman joins us from Washington, where he is
assistant
director of international affairs at the AFL-CIO, and we look
forward to hearing from Phil on Chinese union law and its
impact on workers organized in China.
In keeping with the practices that we have had now for
about a year and a half at these issues roundtables, we will
give each panelist 10 minutes to make an initial presentation,
understanding that you will not be able to cover everything. We
will probably be able to pick up the points that you cannot get
to initially during our question and answer session.
I will let you know when 8 minutes has elapsed. When there
are 2 minutes left, that is your signal to wrap things up.
After both of you have spoken, then we will then open it up
to the staff panel to ask questions and we will keep the
conversation going as long as it is interesting, or 4 o'clock,
whichever comes first.
So with that, let me recognize Amy Hall. You can go ahead.
STATEMENT OF AMY HALL, MANAGER FOR SOCIAL ACCOUNTABILITY,
EILEEN FISHER, INC., AND MEMBER, THE ADVISORY BOARD, SOCIAL
ACCOUNTABILITY INTERNATIONAL, IRVINGTON, NY
Ms. Hall. Good afternoon. I am here, as John said,
representing both Social Accountability International, where I
serve on the advisory board, and women's clothing company
Eileen Fisher, where I manage our Social Accountability
Program.
Both roles have taken me to China several times in recent
years to work with our clothing factories, non-governmental
organizations [NGOs], and other brands on improving factory
working
conditions. Freedom of association is just one issue area where
we have been challenged and where we see some rays of hope
emerging.
I am sure we all agree that freedom of association and
collective bargaining do not, in any meaningful terms, exist in
China. Under Chinese law, workers may only form or belong to
unions which are part of the All China Federation of Trade
Unions [ACFTU], the sole official trade union organization.
The ACFTU is generally recognized as a conduit for the
relay of policies from the Communist Party and the state to
workers. Even the current Chinese President, Hu Jintao, has
defined the ACFTU role in such a way.
Despite its being part of the state apparatus, the ACFTU
appears to be organized in less than 5 percent of non-state-
owned enterprises. Nevertheless, we feel it may be possible to
work on
improving workers' rights to freedom of association through
active engagement at the factory level.
We are seeking to help create more opportunities for
workers in China to learn about their voice and to access their
rights. Recent developments on the ground in China indicate
that there are openings for encouraging such opportunities, and
I will give you three examples.
First, some worker rights groups--such as the Institute of
Contemporary Observation in Shenzhen, and the Migrant Workers
Centers in Beijing and Panyu--have become active in mainland
China.
Second, there are indications that the ACFTU may be looking
at how to become more effective as China continues its rapid
transition from a planned economy to a market economy.
In October 2001, China passed a new trade union law,
granting ACFTU more legal leverage to defend workers'
interests. In January 2003, the official Xinhua News Agency
reported that the ACFTU was conducting experiments to encourage
the direct election of its union leaders at the factory level,
particularly in small and medium-sized enterprises.
Third, some international companies have joined with NGOs
to launch encouraging initiatives to promote worker
representation in China. The most recent example is the direct
election of union leaders at Taiwan-owned footwear factories in
a process in which the main buyer, Reebok, together with
workers' rights groups, played a pivotal role.
According to SAI sources in China, Reebok gained positive
comments from the ACFTU Guangzhou branch, which considered it
``a model worthwhile to replicate.'' Doug Cahn of Reebok has
briefly testified to the Commission on these cases.
Although it is unlikely that thorough democratic changes
will occur from the top down anytime soon, these examples
illustrate the limited space that is emerging in which
international organizations can foster respect for workers'
rights.
It is important to recognize the broader political
challenges that these trends could face, while continuing to
work directly with managers and workers on ensuring rights in
the workplace.
At Eileen Fisher, we ask our suppliers to adhere to the
SA8000 standard, and we are working with SAI and others on
various factory-level training programs. For those who are not
too familiar with SA8000, briefly, this standard is the result
of a consensus-based drafting process by trade unions, NGOs,
and business representatives from around the world.
The SAI advisory board, which is responsible for drafting
SA8000 and advising on policies related to the certification
system includes members from Amnesty International and the
International Textile, Garment, and Leather Workers Federation
[ITGLWF], among others.
The SA8000 standard covers eight core workplace issues: the
right to freedom of association and collective bargaining,
child labor, forced and bonded labor, discrimination,
discipline, health and safety, working hours, and remuneration.
The requirements in these eight areas are based on 12
International Labor Organization [ILO] conventions and other
international human rights norms.
A ninth element consists of management systems needed to
ensure ongoing compliance with the standard and to encourage
continuous improvement.
In drafting SA8000 standards, the SAI advisory board agreed
that we could not exclude Chinese factories from such a
certification program. We saw direct engagement on workers'
rights as crucial to fostering change and having an impact on
the lives of millions of workers.
SA8000 encourages change by providing an incentive to
achieve certification. At the same time, certification is an
important means to enable workers and their advocates to file a
complaint if they detect some failing in compliance with the
minimums defined in SA8000.
Because there are legal restrictions on freedom of
association in China, the SAI advisory board came up with the
following requirement: ``the company shall, in those situations
in which the right to freedom of association and collective
bargaining are restricted under law, facilitate parallel means
in independent and free association and bargaining for all such
personnel.''
The chief purpose of parallel means is to ensure that
workers in countries such as China have the means to address
their concerns and seek solutions without fear of repercussion.
This requirement draws on the spirit of the Sullivan Principles
implemented by companies doing business in South Africa during
the apartheid regime.
In the same way that the Sullivan Principles called for
companies to implement parallel means for protecting human
rights by providing a non-discriminatory environment within the
workplace that they managed, the SA8000 standard adopts a
similar
approach.
Companies are encouraged to provide opportunities for
workers and their factories to organize themselves, to assist
communications between workers and management, and to work to
assure compliance with Chinese law.
SA8000 requires companies to let workers know that they are
free to organize and elect representatives in order to raise
their concerns with management on key issues and, essentially,
to negotiate solutions.
The company I work for, Eileen Fisher, uses eight factories
in southern China, representing about 60 percent of our total
production. We do not own or in any way manage these factories.
In fact, our share of the total capacity in these factories
ranges from 10 to 30 percent, depending on the season.
Many other brands use the same factories and apply their
own labor standards to these facilities. All of the factories
have agreed to adopt SA8000, and we engage in a program of
monitoring, continuous improvement, and education to help
facilitate this process.
Early in the process we realized that we cannot simply
provide the standard and walk away. Neither the factory workers
nor the managers have the cultural context with which to fully
comprehend or utilize the elements of the standard.
After all, how can we expect a manager to eliminate all
forms of unacceptable disciplinary practices or forced labor
when the act of putting padlocks on women's dormitories is
generally accepted practice in order to keep the female workers
safe?
How can we expect a worker to voice concern about sexual
harassment when she or he does not even recognize when it is
occurring? How can we expect workers to speak up about anything
when they are raised with such a deep-seated, Confucian respect
for their elders, and when freedom of speech is limited?
In the cases I have been sharing where management
facilitates parallel means to freely associate, we have found
it difficult to encourage workers to make active use of worker
committees.
This is likely due to some or all of the following reasons:
the workforce is largely made up of migrant workers who fear
they could be sent back to their provinces; management does not
understand how to enable workers to form such committees;
workers
distrust management claims that such committees will be
independent and unproblematic for workers who join them;
workers are inexperienced in organizing and participating in
such a dialog with management and lack prior experience with
real change resulting from committee work; or, finally, payment
structures may not allow workers to participate in worker
committees without losing incentive-based income.
What is needed is change, not a ``Westernization'' of the
cultural norms of the factory people, but a movement to foster
greater understanding of their universally recognized rights,
the ability to talk about those rights when they are being
violated, knowledge of how these rights can be exercised, and
the ability for managers to respond to those comments in a
compassionate, non-discriminatory, effective manner. This was
not something we could leave in the hands of the managers to
coordinate, nor was it something that could happen in a
classroom on a single day.
We have been engaging in training programs for our managers
and our workers through two organizations, SAI and Verite, a
nonprofit, U.S.-based research and monitoring organization.
I will not go into detail at the moment, but suffice it to
say that these two programs have provided a wonderful
foundation for the workers and the managers to begin to
understand how to communicate with each other and how to
recognize and understand their rights.
We are about to offer three of our factories to SAI to
participate in a worker training program that they are creating
in China, based on a program that has taken place already now
in 12 other countries, to train workers on how to use codes of
conduct as an additional tool to defend their rights and
interests. This program will begin later this year, and I will
be happy to tell people about it later on if they are
interested.
In summary, we believe that for anyone concerned with
worker rights, China certainly represents both risks and
opportunities. We understand that substantial change will take
time, but we must recognize the important role that all of us
can play by fostering that change from within and from the
bottom up.
We have a choice. We can walk away from this challenge,
jeopardizing the jobs and livelihoods of millions of workers,
or we can be a catalyst for something better, and we believe in
the possibilities.
[The prepared statement of Ms. Hall appears in the
appendix.]
Mr. Foarde. You are admirably disciplined and you are right
on time. Thank you.
Phil, please.
STATEMENT OF PHIL FISHMAN, ASSISTANT DIRECTOR FOR INTERNATIONAL
AFFAIRS, AFL-CIO, WASHINGTON, DC
Mr. Fishman. Thank you. I thank you for the opportunity to
present the views of the AFL-CIO of freedom of association in
China and its effects on workers.
Let me emphasize at the outset that the AFL-CIO has been
watching quite closely, and with an open mind, the efforts of
some companies to more effectively apply their codes of conduct
to workplaces in China.
We understand clearly the magnitude of change China has
been undergoing for the past two decades and the challenges
created by this change to international worker rights and labor
standards.
We also have a growing awareness of the impact of such
profound change on Chinese people. It is staggering that as
many as 20 million people a year are leaving the rural areas of
China for urban areas in search of work.
To put this in some perspective, a single year's inflow of
new urban workers in China is equivalent to the entire
manufacturing employment base of the United States, a
manufacturing base which everyone in this room knows is
shrinking, in part, because jobs are moving to China.
But it is not only the developed countries that are losing
jobs to China. Developing countries are also losing a growing
number of jobs to China, and this process is accelerating.
There is a United Nations Development Program [UNDP] estimate,
for example, that Bangladesh will lose more than a million jobs
to China once the Multifiber Agreement [MFA] on Apparel expires
in 2005.
For these reasons, we are watching with keen interest
developments that may contribute to arresting the race to the
bottom, as many have characterized the shifting of much of the
world's production to China.
We see some opportunity in the efforts made by some
companies to enforce their codes and we will continue to
evaluate such efforts based on our knowledge of what the
realities are for Chinese workers on the ground.
However, I want to emphasize that companies with codes are
only a small proportion of companies doing business in China.
Moreover, companies that take their codes seriously are, in our
view, a very small subset of this already very small group.
Let me briefly turn to how the ILO defines freedom of
association and the right to organize and bargain collectively.
You can find these definitions, of course, in ILO Conventions
87 and 98.
The former has been ratified by 80 percent of the ILO's 176
member countries, while 87 percent has ratified the latter.
Sadly, two of the countries that have refused to ratify
Conventions 87 and 98 are China and the United States.
Decades of review and comment by the ILO standards
enforcement machinery have defined what these words mean in
real situations in countries and workplaces around the world.
Based on this jurisprudence, it is clear beyond any doubt, as
Amy indicated, that China's laws and practices are in
fundamental contravention of both these core Conventions and
the principles they embody. It is also clear that the notion of
parallel means, in and of itself, does not satisfy the ILO
definition of freedom of association.
There are differing views regarding the significance of the
changes to the Trade Union Law introduced in 2001, and it is
too soon for a definitive assessment. A couple of things seem
clear.
First, the changes were designed to strengthen the role of
the ACFTU in private sector workplaces. There are many reasons
for this objective. Clearly, the old ACFTU, an ACFTU confined
to dying state enterprises, was becoming an irrelevant
organization.
Second, the government was clearly embarrassed by repeated
stories of exploitation. Finally, and perhaps most importantly,
the Communist Party needed a means to prevent the establishment
of independent worker organizations and to combat the growing
number of spontaneous work actions.
At the same time, the state and Party bolstered its hold on
the ACFTU. The Trade Union Law, as amended in 2001, maintains
the trade union monopoly enjoyed by the ACFTU--article 10--and
strengthens the link between the ACFTU structure, the Chinese
Communist Party [CCP], and the government, clearly identifying
in more specific language than before the union's obligation to
follow the leadership of the Communist party and to assist in
maintaining the Party's monopoly of power.
Article 11 stipulates that the establishment of basic-level
trade union organizations, local trade union federations, and
national or local industrial trade unions shall be submitted to
higher level trade union authority organizations for approval.
Not only is this article in clear violation of ILO
Convention 87, which states that workers should be able to
organize into unions of their own choosing, but is also a major
obstacle to independent attempts to organize trade unions. The
only way such efforts can succeed under the law is by
submitting to the authority of the ACFTU.
This scheme is further strengthened by the fact that
company-level unions are totally dependent on higher level
ACFTU structures for income.
Companies are required to pay the equivalent of 2 percent
of payroll in union dues to the higher ACFTU structure, which
in turn is supposed to return a percentage back to the factory-
level union, at least in theory.
So, under the current law, a factory union is wholly
dependent on the higher level ACFTU to receive even a
percentage of the dues paid by its own members.
In sum, the current trade union law specifically provides
for a trade union monopoly in the ACFTU; the program and
activities of the ACFTU are subordinate to the wishes of the
Party and state; questions of affiliation to international
trade union bodies are subject to the approval of the state;
workers who attempt to organize independent trade unions or
carry out what we would define as normal trade union activity,
such as participating in protests; all of these things and many
others, demonstrate the distance China must travel for freedom
of association and free collective bargaining to be respected
in both law and practice.
This is not to say that good, well-meaning people cannot be
found in the ACFTU. It is to say, however, that institutionally
the ACFTU is a creature of the Chinese state and the Communist
party and is obligated by its own rules to act as a
transmission belt for party and state policy.
I want to emphasize that the International Confederation of
Free Trade Unions, which represents 158 million workers in 150
countries, shares this view. I also want to emphasize that
differences among various trade union organizations do not
focus on the nature of the ACFTU as a government entity. On
this point, most are quite clear.
But on whether or not the ACFTU can be reformed, indeed,
the fact that the ACFTU is widely viewed as a government entity
is precisely why most codes of conduct have included in them
the concept of parallel means.
With this in mind, let me turn to company efforts to
enforce labor rights through their codes and through various
monitoring schemes such as SA8000.
It is our view that the most effective way to monitor
factory compliance with national law, international standards,
and company codes is by empowering workers themselves to play
this role collectively and independently in an atmosphere
absent of fear and
intimidation.
Workers have an obvious interest in ending abuses and
violations as a way to improve their daily lives and can
provide the daily continuity necessarily for monitoring to be
truly effective. It is virtually impossible to monitor
workplaces effectively without such continuity.
What meets standards in a factory one day can be quite
different 3 months later, unless there is daily vigilance. This
has been demonstrated by the fact that SAI and other monitoring
groups have had to remove certification of several facilities
when it was disclosed that they did not, in fact, meet the
standards.
In most, if not all, of these cases, it was outside
watchdog NGOs such as the National Labor Committee that
uncovered the labor rights abuses, and only when they went
public were the factories de-certified.
We find this troubling, especially when combined with the
fact that over one-third of the factories certified under
SA8000 are located in China and Vietnam, where freedom of
association does not exist.
According to SAI, parallel means is designed to encourage
nascent forms of worker self-representation in countries like
China where independent unions are prohibited. While we look
upon such efforts with interest, we remain skeptical as to
where such effort actually lead.
Our experience in China suggests that if a parallel
organization formed in China is to survive, let alone lead to
real freedom of
association, a sustained effort must be made to nurture the
organization through the provision of training and a commitment
to maintaining the space in which the parallel organization can
operate.
We have not yet seen more than a handful of companies, such
as Reebok, make such a commitment. It is unclear even then that
they will succeed in individual workplaces, let alone
influencing what happens outside of them.
I do want to note with particular interest the two
elections in facilities producing for Reebok. While we see some
problems, such as the insistence by the ACFTU at the second
facility to provide all worker education and training rather
than respected NGOs from Hong Kong, as was the case at the
first facility, we hope that the empirical evidence begins to
emerge that such experiments lead to freedom of association.
The experiences of countries such as South Korea and
Indonesia suggest that workers became empowered only after both
countries underwent fundamental political change, despite long-
time support by the international trade union community.
So the value of parallel means is problematic for us,
absent similar political change in China. Without empirical
evidence that notions like parallel means leads to real freedom
of association, it is our view that companies outside and
inside China, with a code of conduct that includes freedom of
association, are in fundamental violation of their own codes.
Furthermore, until such evidence begins to emerge, there
will be a continuing concern that at the end of the day,
improving labor standards without legitimate trade union
representation is an acceptable, even preferred, outcome to
companies involved in such schemes.
Let me conclude by saying that we believe that inevitably
workers will win the right to freely associate in China. We do
not expect this right to be handed to them by the business
community. That has never happened. That has never been the
case anywhere, as far as we know.
In Taiwan and Indonesia, workers won the right by
challenging tired, old state-run organizations that neither had
the energy or the interest to represent workers' interests. In
China, we are seeing that happen now in the old state
enterprise sector, where workers are challenging the ACFTU on
almost a daily basis.
Similarly, representative groups are beginning to develop
in the private sector, where workers are beginning to organize.
American companies can help by finding effective ways to
support these groups and resisting the temptation to adopt
schemes that only pretend to meet the obligations of their own
codes of conduct. Thank you.
[The prepared statement of Mr. Fishman appears in the
appendix.]
Mr. Foarde. Thanks very much, Phil. You have given us great
food for thought and great grist for the question mill. So I
think I will exercise the prerogative of the Chair and begin.
Picking up on something you said, Phil, about the presence
of good people in the ACFTU, and not confusing the fact that
they work for an organization that is an apparatus of the state
or the Communist Party, how can people who care about freedom
of association identify those people working at ACFTU at
various levels and give them encouragement, either training or
exchanges, whatever might work to help strengthen their hand.
Is there anything that can be done?
Mr. Fishman. We have had our own experiences in other
countries where freedom of association was challenged. I
mentioned Indonesia, for example, and South Korea. In both of
those situations, we were able to operate openly, with
sufficient space to identify those people and to work with
them.
The challenge that we face in China is that if the AFL-CIO
would attempt to work inside China, the ACFTU would not allow
us to identify those people and to work with them.
I base that comment not only our view of the fundamental
lack of space to operate, but I also base it on the experience
of many trade union organizations that have been, in fact,
operating inside China for many years.
None of them say, as far as I know, that their years of
experience have produced significant results in being able to
identify and reach the more legitimate elements within the
official structure, if in fact they do exist.
Mr. Foarde. Amy, can you explain briefly why Eileen Fisher
decided to go with SA8000? What was the logic in that?
Ms. Hall. Well, we are a medium-sized company. We are, in
the whole scheme of things, not a very large company. At the
time when we were exploring this question, we felt that there
were so many options out there already. Why create another code
of conduct?
We were invited to help develop SA8000, precisely because
of the size of our company, to see if it could work for a
smaller company.
Most of the companies that we know of out there who are
involved in this tend to be larger, so you want to make sure
that companies of our size could afford doing this and that it
could be applied to workforces of the smaller size that we tend
to encounter.
That was initially why we got involved with SA8000. But
having now gotten to know many of the other options out there,
we feel that the management systems component is quite strong
and really sets it apart from the other standards, because it
creates an innate mechanism with which this system just
perpetuates itself and continues to improve, where at least
most of the other systems do not have it. Parallel means sets
it apart, and living wage sets it apart as well. So, we felt,
for all those reasons, it was a stronger option.
Mr. Foarde. Well, could you venture an opinion about how
well SA8000 has been received compared to the other standards?
Are people flocking to it, or is it building momentum? Roughly
how many companies are signed up for the SA8000 compared to
some of the other standards?
Ms. Hall. They are not flocking to it, as they are not
flocking to any of the other competing systems, with the
exception possibly of WRAPP. I do not know if I am going to get
into what all these are, but WRAPP is the Worldwide Responsible
Apparel Production Principles.
I would say that a lot of companies are sitting back,
waiting to see which one emerges as the successful option. That
is my personal opinion.
How many companies are involved? I would say the ones that
are actively involved as signatory members are probably fewer
than 20. They are all over the world, European brands, American
brands, and others. There are, I believe, about 250 certified
facilities out there now.
I think that takes into account, as Phil mentioned, that
several have been taken off the list because they lost the
certification through discoveries made after they were first
certified. So that gives me an idea that the number of
certified facilities is growing
consistently.
So I would say that, although it is not a hugely popular
standard yet, it has definitely caught the attention of many
organizations and companies around the world who are interested
right now in looking at it.
Mr. Foarde. Even if they have not actually signed onto it.
Ms. Hall. Right.
Mr. Foarde. They are waiting to see what happens.
Ms. Hall. Yes. There is a lot of conversation happening out
there. I think it is just going to wait and see.
Mr. Foarde. All right. Thank you.
It is now my pleasure to recognize my friend and partner,
Dave Dorman, representing our Co-chairman, Senator Chuck Hagel.
David.
Mr. Dorman. First of all, let me thank both of you for
taking the time today to share your wisdom and knowledge on
these important subjects. I know each of our commissioners will
be very interested in this testimony and find it useful in
building their understanding of the topic.
I have a short question for each of you. Phil, Amy made a
very interesting statement I would like you to comment on. Amy
quoted the Guangzhou branch or the Shenzhen branch of the All
China Federation of Trade Unions saying in early March that the
Reebok initiative actually saying ``this is a model worth
replicating.'' Am I remembering right, Amy?
Ms. Hall. Yes.
Mr. Dorman. Phil, what would be your guidance to business
leaders, NGOs, and this Commission? How do you interpret the
ACFTU statement of support? Is this an opening we should
pursue?
Mr. Fishman. I think it is clearly the case that the ACFTU
has not been supportive of any of the hundreds of worker
actions each year that take place throughout southern China, in
particular.
Even in the Reebok example, the first facility that had an
election brought in reputable NGOs from Hong Kong to do a lot
of the training. That was stopped, we understand, by local
security authorities who wrote to the company and said that it
cannot go on any more.
We have also heard reports that the local ACFTU was
involved in the decision to stop that kind of training. Indeed,
when you take a look at the second facility, the ACFTU, as I
said in my initial statement, has insisted that only it provide
training.
So I think you have to take a look at what Reebok is doing
in light of this. In fact, we are hearing stories now that even
the second facility is causing some issues for Reebok and the
training might be suspended. If that is the case, I would be
very surprised to see the ACFTU rally to the defense of that
experiment.
Mr. Dorman. You made a comment, Ms. Hall, I believe, in
your testimony concerning the necessity of worker collaboration
to sustain these efforts. To what extent has SAI or Eileen
Fisher been successful in building the collaboration across
factories, across brands, and across NGOs that could make this
happen?
Ms. Hall. In terms of SAI, I believe that the multi-
stakeholder approach can be seen most in how it has been
building its advisory board, to start with, because that is
where a lot of the decisions are made as to how to implement
the standard.
First of all, the advisory board was created with members
of--I think I mentioned this--the International Leather,
Textile, and Garment Workers Union. There are now members from
another major union, as well as NGOs from Vietnam, and I want
to say China, I believe, brand-new, brought on board.
So the idea is not only to expand into the NGO community,
but also to make sure there is representation from all parts of
the world, recognizing that this is a multi-industry standard
that can be applied anywhere in the world.
In terms of carrying out its work, SA8000 is very
interested in partnering with any NGO out there that has the
relationships with factories. In terms of China, I mentioned
this one that I had already mentioned in the testimony, the
Institute for Contemporary Observation.
I believe the director has been brought on as an advisory
board member, a representative from that organization. They
have conducted some really interesting multi-stakeholder
discussions, one that happened a couple of years ago in
southern China, to address the topic of wages and hours, where
we had members from the ACFTU, members of the local labor
bureau, and other small organizations around the area, as well
as other brands.
They also work with other organizations, such as Business
for Social Responsibility. So there is really an effort out
there to work with these other organizations. There is a
relationship now developing with the FLA, for example, or some
discussion, we hope, to see if we can tackle some of these
issues together.
The only organizations Eileen Fisher has directly dealt
with are SAI, Verite, and the Chinese Working Women's Network,
which is based in Hong Kong but does work solely in southern
China on
behalf of factory workers.
Mr. Foarde. We will move on and recognize some of our
colleagues who are personal staff members to our Commission
members, beginning with Bob Shepard. Bob.
Mr. Shepard. Yes. I would like to ask a general question.
Despite some amazing, broad changes in Chinese society and
China's economy over the past decade and even longer, it sounds
to me, from what has been said here and in other places, that
there has been basically no progress nationally for China on
freedom of association.
There are little pockets of change within companies. It is
interesting, because even in the labor field generally there
has been some heightened consciousness within China on issues
like minimum wages, some recognition of the importance of
safety and health in certain areas, and a number of other
things.
It seems to me that the Chinese very consciously are trying
to emulate what used to be called the Asian model. I think Mr.
Fishman made some reference to this, where they tried to
address workers' concerns by ramping up some of the economic
benefits, making the economic side of things more comfortable,
while continuing to keep workers out of the political side.
Both of you seem to indicate in some ways that you had some
optimism that things might change. But in East Asia and
Southeast Asia, they have been able to hold on to that model
for an extremely long period. It is still going on in some
countries.
Maybe you could speak a little bit about the chances that
the Chinese Government has of implementing that type of model
and keeping workers out of the political side of things,
keeping freedom of association limited as it is.
Mr. Fishman. The major place where I think a country has
been successful in holding on to that model is, I think,
Singapore, at least in Asia. I would argue that Singapore is
actually unique. It is a city state. There are aspects of
Singapore that are not shared by any of its neighboring
countries.
If you look even at a place like Taiwan, which is one of
the few examples I can think of where you actually saw
political liberalization before trade union liberalization or
labor law reform, if there was an attempt on the part of the
ruling party to hold onto restrictions or trade unions, it did
not succeed.
In most other countries such as Korea, it was really the
trade unions that led the way to push for change that obviously
the authorities were resisting. In China, I just find it hard
to believe that the authorities will be able to keep the kind
of control that they want. I think we are already seeing
indications of them losing hold. The rising number of wildcat
strikes, I think, is an indication of that dynamic.
This situation is fueled by continuing exploitation,
despite the efforts made by some companies. The reality is that
if you compare the labor standards in China to most other
countries in the world, it is really quite shocking.
You hear stories all the time of workers who work 30 days a
month without a day off. You hear stories all the time of
workers working 16 hours a day. I think that this exploitation
fuels a lot of the desperation and the anger that you see on
the part of workers.
My argument would be that China has grown to the point
where it could survive an independent trade union movement. I
think, as a matter of policy, both national policy for the
United States but also international policy, that this
objective ought to be a major price to pay for China becoming a
member of the international community.
They need to be told, effectively, that the price you have
to pay for full admission to the WTO, for becoming a full,
respected member of the family of nations, is to allow your
workers to organize.
You might find out that when you do that, it will not be
the political threat that you think it might be. It would
certainly promote change. Workers will have a voice. We see
that in a positive way. We hope some day that the authorities
themselves will also see that in a positive way.
Mr. Dorman. Amy, did you want to comment?
Ms. Hall. I do not think I have anything else to add.
Mr. Foarde. We were just about out of time anyway, so let
us go on. Next, representing Senator Max Baucus, our chairman
last year, is Sarah Dudley. Sarah, it is good to have you here
today. Do you have a question?
Ms. Dudley. Yes. I am actually a relative newcomer to some
of these issues, but one of the things that struck me in Mr.
Fishman's testimony was his comment that empowering workers to
play the role of the day-to-day monitoring of continuity of
conditions is a must in these factories. This is kind of a
loaded question. How do you do that with such a void of
institutional role models?
Mr. Fishman. Well, I think you have asked the most
difficult question. I mean, that is really the issue: how do
you empower workers in China to play not only the role of
monitoring labor conditions, but effectively to represent their
interests, both with
employers and also with the government.
It is a very difficult question at this point. I can tell
you that we are grappling with it. We are experimenting as part
of the international trade union community, with all sorts of
programs and approaches to try to address that question. We are
very open-minded about it.
Whether we like it or not, China is the fundamental issue
for workers around the world. Unless workers around the world
figure out a way to arrest the downward spiral on labor
standards and wages that China represents, then workers are
going to be increasingly affected all over the world.
As I said, it is even true in developing countries where
you are seeing a shift of jobs from very poor developing
countries to China for all sorts of reasons.
So, I have trouble answering your question. I think that
you have to try to do all sorts of things and you have to be
open-minded and you have to experiment. But the measure at the
end of the day is freedom of association. That is, I think, the
key point.
What is required is that workers are able to represent
themselves, as defined by the international community. I think
we have to be careful not to allow that measure to slide into
something else.
Ms. Dudley. Thank you.
Mr. Foarde. Let us go on to Andrea Yaffe, who represents
Senator Carl Levin.
Ms. Yaffe. I am wondering what role the American populace
and American legislators can play in enforcing or encouraging
freedom of association in China. I mean, would boycotting
products help, or legislation and resolutions?
Mr. Fishman. Amy and I were actually talking about some of
this before the hearing started. There clearly needs to be a
much greater effort, I think, in the United States to educate
consumers.
As the father of two teenage sons, it seems to me to be
entirely reasonable to try to inculcate some sort of culture
that they ought to be sensitive to how products are made around
the world, that they do not need 10 basketball shorts, that
three will do, and that those three might cost a little bit
more. But in the process of them costing more, that these
products could be produced under much more humane conditions.
You do not see that, and it is almost taboo to discuss. It
has somehow been cast as being anti-free market to try to
introduce that kind of education. I think it is tremendously
important.
In a broader sense, again, I think there are all sorts of
ways. We surely missed an opportunity when China joined the
WTO, but I think the international community has to communicate
to China that its behavior is unacceptable.
Until they change, there will be efforts at the U.N.
Commission on Human Rights, there will be efforts at the ILO,
and every international body to bring up the realities of the
lack of freedom of association in China, and in fact the lack
of other basic human rights.
I think the international community has not done its job in
that regard, and I think in some ways the American Government
has not done its job. I think there is much more that can be
done in that regard.
Ms. Hall. I wish I knew what the U.S. Government could be
doing. It is not easy to answer. But I would say that boycotts
have never appealed to me. I feel that in terms of China, one
of the reasons that Eileen Fisher produces in China is that we
feel we can, as small as we are, have a small impact on
workplace conditions there. We can somehow show that it is
possible to do things a little differently.
From the little seeds that we might be planting, greater
things can grow. If we were to boycott China and just let
millions of workers flounder and lose the opportunities that we
might offer--although Eileen Fisher is not working itself with
millions of workers.
But similar to the experiences of other companies, if we
were to leave them to figure this out on their own, change may
not happen as quickly as it could happen with our influence.
Now, we cannot do it alone. I do not know the answer to the
question. I agree, actually, with what Phil said, that a lot of
it has to come from the public, and perhaps the media, to
educate everyone on what is going on.
Mr. Foarde. We are out of time. We are going to go on to
Alicia O'Donnell, who represents Congressman Doug Bereuter. Do
you have any questions? Please go ahead and pose one.
Ms. O'Donnell. I apologize for running late here today, so
I have not heard your full testimony. But thank you for
participating in this discussion. You may have covered this
already, I do not know.
Can you tell us about some of the demographics of the
people that you are working with the most and from where their
interest stems? Who are they, what age groups? Are you reaching
the younger workers? Are they interested and excited about
organizing and working for workers' rights, or are they
indifferent?
Ms. Hall. I guess I will start with that. Being a
relatively small company, we use, right now, only eight
factories in China, probably with a total of maybe 2,000
workers in them. It is not a huge number, but it can be looked
at as kind of a model for what is possible.
On the whole, most of the workers are on the young side,
probably around 20. Most of them are migrant workers--not all
of them--which means they come from other parts of China and
stay at the factory for 1 to 5 years, depending on their
situation, to make money and go home and start their own
business, or whatever it is, or start a family.
What was the rest of your question? That is the
demographics.
Ms. O'Donnell. Who you are working with in terms of working
toward freedom of association.
Ms. Hall. Oh, right. Are they excited. Honestly, they did
not understand what the concept was. They may still not
completely. They probably do not still completely understand it
because it just does not exist in their world.
That is why we felt it was important to provide some kind
of education to them and not leave it up to the managers to
take the SA8000 standard and figure it out for themselves. I
could not figure it out for myself. I needed to be trained. So,
of course, we felt we needed to facilitate that training and
education.
Now that we have given them an opportunity to organize some
worker committees, they are not too big on negotiating wages
yet. We are not there yet. But they are self-designated worker
representatives from the factories addressing issues that are
relatively innocuous, things like dormitory conditions,
cafeteria conditions, things like that. But at least they feel
they have a voice. They are beginning to find their voice. I
think that they are enjoying it.
We are helping them. They are keeping logs. I think they
have seen the benefit of this approach. Now, when it comes time
to negotiate things like wages and some of the other tougher
issues, we will see what really happens.
Mr. Fishman. We have had a long relationship with some of
the Chinese trade unionists in Hong Kong. Han Dongfang is an
exiled trade unionist who was a leader of the Beijing Workers
Autonomous Federation in Tiananmen Square in 1989. We supported
many of his subsequent activities. There are NGOs in Hong Kong
that operate in southern China, do monitoring, do education. We
have had a long relationship with them.
We have a relationship with the Hong Kong Confederation of
Trade Unions [CTU], which is the largest independent trade
union in mainland China. I might add that the CTU played a
major role in organizing the demonstrations that took place in
Hong Kong just the other day protesting the draft security law.
That seems to have brought about a suspension of the effort by
the government to push this bill forward.
We have relationships with some Chinese workers exiled here
in the United States who continue to have relationships inside
China, one of whom is based in New York named Li Qiang, who, up
until a couple of years ago, actually was organizing
underground unions in southern China. So, he's really the only
union organizer that has come out.
Finally, as part of the international trade union network,
we work closely within the International Confederation of Free
Trade Unions, and the global union federation structure, on a
variety of China issues. There is a China working party within
the ICFTU structure. We are an active participant in those
discussions.
The China working party has an office in Hong Kong. We
support that office. That office is trying to do some research.
They have a Web site, and we have played an active role in
supporting their work.
Mr. Foarde. Next, we will recognize our friend and
colleague Susan O'Sullivan, who represents Assistant Secretary
of State Lorne Craner, one of our commissioners.
Susan.
Ms. O'Sullivan. Well, thanks very much for your
presentations. I would like to pick up a little bit on what Mr.
Fishman touched on, on the problem of the enormous overtime
that workers are working. I understand this is a significant
issue that companies are facing.
It is sort of a two-part question. One, how do you deal
with what must be falsification of information given over to
companies, and what can companies do to get to the bottom of
what is really happening in the factories that they are
operating in and certifying.
Two, is whether or not the training programs that are being
conducted have been successful at all in convincing factory
managers that workers might in fact be more productive if they
were not so overworked. Is that an issue that you are dealing
with?
Ms. Hall. This is a big issue for our company, and for most
apparel companies. I would not try to deny that fact. First of
all, in terms of falsification of documents and weeding those
out, here in the States, as well as in China, it is a big
issue. The most we can do is look at all the different sources
of information and try to verify back and forth between things.
One of the most effective sources, of course, is to speak to
workers themselves and find out how long they have been working
and what they have been paid.
You hope, through doing this over a period of time, that
you weed out those who have been coached also and provided
false information for whatever reason, to protect themselves
for whatever reason. It is an ongoing challenge, but that is
why we have a number of different ways of tackling it.
We might look at these documents and speak to workers
ourselves. We might hire an outside agency to do it. We might
go on the advice of an NGO or somebody who has gone in to give
us feedback that they have heard. All of that is welcome
information.
Training programs can help with overtime. We were just
talking about this earlier today. Overtime is not necessarily
directly related to worker wishes or management wishes.
Here I am, representing an apparel manufacturer, and
sometimes it is imposed by us, the brands, because of the
amount of product that we need to have made within a very short
period of time, the deadlines that we impose.
This is an ongoing discussion that we have internally, as
well as with other brands in how to stretch that out so we are
not forcing overtime on our own factories, the very ones we are
asking not to have overtime.
But the training to help managers negotiate better with the
brands to say, you know what? I cannot take that order now
because you already gave me an order next week, and I cannot do
it without having too much overtime.
Or I can instruct them in how to have a legitimate sub-
supplier system with factories that are also engaged in these
values. So, there can be a positive impact. We have not gotten
that far in terms of training programs with this issue to know
if it is going to be effective.
Mr. Fishman. Just a couple of brief comments on this.
Obviously, the magnitude of the problem in China is so
enormous, given the tens of thousands of factories that are
producing.
We see a couple of possibilities that relate to the brands
themselves. First of all, we think it would be helpful if the
brands would make a commitment to consolidate their sourcing to
a smaller number of companies. That would increase their own
leverage with these companies.
Second, the companies should make their sourcing public so
that NGOs and other independent organizations could actually go
in and confirm whatever they are being told.
Third, there seems to be information that brands, on one
hand, are demanding that the producers improve labor standards,
but on the other hand, are unwilling to pay for it. So you find
that some of these companies producing in China have to meet
new demands, but not having, or claiming not have, the
resources to do it.
I think it is important that brands themselves, to the
extent that they take their codes seriously, take on the
commitment of ending the squeeze on the producer companies
inside China by providing the resources necessary to improve
their labor standards.
Mr. Foarde. Next, I would call upon our friend and
colleague, Mike Castellano, who represents Congressman Sander
Levin.
Mike.
Mr. Castellano. Thank you very much. I apologize as well
for arriving late.
We often talk about labor standards in the trade context as
being an important aspect of international competitiveness in
attracting foreign direct investment, and sometimes in trade
directly, because those factories are building something and
usually exporting it to other countries.
Do you think that is accurate? How big of a role do you
think that the labor rights situation has played in China's
ability to attract FDI, foreign direct investment? Has it
helped it because it is a cheaper and ``more docile''
influence, or has it hurt it because of the negative perception
attached to it? Is it as simple as helped or hurt?
Mr. Fishman. Well, I think there is no question that there
is something that is attracting incredible amounts of
investment and shifting of production away from other parts of
the world to China.
Clearly, an aspect of that attraction is both the cheap
labor costs--and China is not the cheapest place in the world.
But when you combine the fact that China is a relatively
inexpensive place to produce goods, together with the fact that
China's infrastructure is surely much better than a place like
Bangladesh, and the perception that there is some degree of
political stability, it is a very
attractive place.
I mentioned the expiration of the Multifiber Agreement. It
is really a major concern that when this agreement expires, you
are going to see garment industries in developing countries
literally wiped out overnight.
You are going to see garment industries in countries such
as the Philippines or Cambodia, where you have seen some
progress made toward respect for workers' rights and labor
standards, shift overnight to China, because it will be seen as
a more attractive place to buy product.
So what the MFA has done--and I am saying this in
relationship to your comments about the impact of trade--is
force a distribution of production to various countries around
the world. Many of these countries are, in fact, more
democratic than China, and respect the rule of law, worker
rights, and human rights.
As a result, progress has been made for their workers. That
is all going to end to a great extent. I am sure you have seen
the studies of what countries' industries might survive once
the MFA expires.
We see that as not only tremendously tragic but also a
vivid example of how both American trade policy and
international trade policy can have a profound effect on
promoting the rule of law and protecting human rights and
worker rights.
Mr. Foarde. Amy, do you want to comment?
Ms. Hall. My only thought when you asked the question, is
that I feel there are probably many more companies, certainly
many more companies that will invest in China but do not care a
lot about labor rights than there are that do. I think that
says a lot by itself. It is really not going to have much
impact.
Mr. Foarde. I would now recognize our colleague, Susan
Roosevelt Weld, who is the general counsel for the Commission.
Susan.
Ms. Weld. Thank you. I am hearing some pessimism as to how
much impact some of these efforts will have on conditions in
China. Do you think other kinds of efforts would work better?
For example, I would like to hear your opinions on whether the
new Trade Union Law is better for workers, or worse. I think,
Phil, you felt it may have been worse for workers in certain
ways.
Would legislative changes by China or administrative
changes within one of China's subunits, perhaps Shenzhen,
smaller and more developed be effective? Is there some way that
conditions could be improved by local action? Could the United
States do anything that would foster those kinds of changes?
Mr. Fishman. Just a couple of comments. I think one has to
be sober about trying to assess what is going to happen in the
future. I think one of the points that I was trying to make is
that these experiments that are taking place, some of which we
see in a very hopeful light, are really only the beginning. We
are only scraping the surface. Again, even the SA8000 scheme,
affects only a very small percentage of workplaces in China.
So, I think we want to emphasize the point that this is
really only the beginning, and we hope that it grows and we
hope that it goes in directions that we find substantive and
important, and we will continue to watch it.
But we are nowhere near that at this point. I do not want
to convey a sense of pessimism. But I also want to put it
within the perspective that I think it deserves.
We are at a situation where we are trying to find ways to
encourage, and perhaps coerce, the Chinese authorities to
accept things that they really do not want to accept. We have
done that in this world. We have done that, surely, in the case
of South Africa. Amy mentioned South Africa. We are trying to
do that in the case of Burma. We have done that in the case of
Pinochet's Chile.
We have to find a way not only to provide incentives but
also to communicate to the Chinese Government that its
behavior, is unacceptable, and if it continues there will be
repercussions.
Because of the size of China and because it is such an
attractive potential market, I think there has been a prejudice
toward emphasizing the carrot and not emphasizing enough the
stick. I think the Chinese understand that dynamic quite well
and have taken advantage of that difference in emphasis.
Ms. Hall. I just wanted to mention something that is
happening in Vietnam right now. I do not know if this is really
going to directly answer your question or not, but I thought it
was a good place to mention it.
Vietnam is encouraging the use of SA8000 throughout the
apparel industry. I could be wrong on that, but I believe it is
just the apparel industry.
As a result, SAI has just opened an office in Ho Chi Minh
City to facilitate this process, to see if it can work to
create sort of a national movement. Obviously, there are many
challenges. It just started. The office just opened within the
past few months. But it is something that is very promising.
I think Vietnam is large enough that, if this works--and it
is going to take quite a long time for us to see if this is
going to work--this possibly could be something to be looked at
for a larger country such as China, for example.
Of course, how we would bring that to China, I have no
idea. But maybe using the results of these smaller efforts that
we are all undertaking now and showing them as a model that
China could replicate, and showing Vietnam's success, we hope,
would have an
impact.
Ms. Weld. Vietnam--is that program being submitted through
the parallel organization to the All China Federation of Trade
Unions? They have a government union there in Vietnam, too, do
they not?
Ms. Hall. That is a good question. I really do not have all
the details. I know this is happening, but I do not know how
exactly. I would have to tell you later. I would have to look
into that. I do not want to give you wrong information on that.
Ms. Weld. One of my correspondents asked me to put this
question to, I guess, to Amy. Does this effort on parallel
representation in some essential way conflict with the SAI
standards on freedom of association, or does it empty out the
idea of freedom of association so that the whole standard
slips? Will that have a future bad impact?
Ms. Hall. Well, it is only meant to apply to countries
where freedom of association is legally forbidden. So until
China changes--we hope there is a day when it does change--then
this solution, to us, is the best solution.
When the moment comes that free association is legally
allowed, then this will no longer apply, and perhaps it can be
removed. This document is changed every 2 years and updated to
reflect current needs, so I hope that the day will come when we
do not need to talk about it.
Mr. Fishman. Can I make one comment on that? It is our
understanding that parallel means has been applied to
Bangladesh.
Bangladesh is a country that does have freedom of association
protected in its laws. So, that creates certain suspicions as
to the use of parallel means. It is not only being applied, it
seems, in countries that do not respect freedom of association.
For trade unions, there is always a concern of an effort on
the part of companies and governments to create what we would
call yellow unions, or fake organizations. We see that in Latin
America and South America with the growth of the Solidarismo
movement.
I think one of the challenges for SA8000 is precisely to
find ways to satisfy those concerns, those legitimate concerns
on the part of worker organizations around the world. And, of
course, the proof of the pudding is in the tasting.
When there is enough evidence that emerges that parallel
means actually translates into legitimate freedom of
association as defined by the ILO, then I think you will see a
lot more trade unions jump on board.
Again, I think the challenge for China is that we have not
seen that happen elsewhere without a fundamental political
change. So, I think it is going to be a very daunting task.
Mr. Foarde. Let me continue, picking up on something that
Phil just said and Amy brought up in her main presentation, and
that is the Sullivan Principles. I think, to a man and woman,
our commissioners are very interested in the experience of the
Sullivan Principles in South Africa and wonder, and have asked
me many times, whether we on staff think that there are any
parallels or any way that Sullivan-type principles can be
adopted for China. This is not a new question. It has been
around for a number of years.
But I would like to hear from both of you on that question.
What was it about Sullivan with respect to South Africa that
made it--particularly in the context of labor and labor
rights--is there any way that Sullivan Principles might be
arrived at for China, for example?
Ms. Hall. What I am about to say will contradict something
I said earlier. But SAI's feeling about this, explicitly, is
that in the case of South Africa, the Sullivan Principles
probably would not have been effective without divestment.
So if you were to translate that to China, we would
therefore have to boycott, as well as implement parallel means,
or whatever you want to call it. That would be, to me, the
parallel model.
Mr. Fishman. I, too, want to emphasize some of the
differences that make it difficult to apply Sullivan-like
principles.
First, there was clearly an international movement that
communicated to the apartheid regime in South Africa that its
behavior was not acceptable. It had become a pariah state. I
think that was the international climate in which the Sullivan
Principles could become effective. Part of that is the
divestment movement.
Second, even under the worst days of apartheid, there were
black trade unions. There were trade unions that existed in
South Africa, even under a repressive atmosphere, that do not
exist in China. So, there were partners, both inside and
outside, that were able to work together to make the Sullivan
Principles work.
If that existed in China, then I think the Sullivan
Principles, or something like them, should be looked at. But at
this point, it just does not. So it is hard for us to imagine
at this point that the Sullivan Principles, or an effort like
it, would be very effective.
Mr. Foarde. Dave, another question?
Mr. Dorman. I have a two-part question. I'll start with
Amy, and certainly Phil you are more than welcome to comment as
well. Amy, you mentioned Eileen Fisher's working relationship
with eight factories in China. To what extent have the owners
of these factories realized economic benefit from adopting the
SA8000 principles beyond, obviously, Eileen Fisher contracts?
Have other brands been attracted to these factories because
they adopted SA8000 principles?
A second part, and this goes back to a comment that Phil
made. Obviously, Eileen Fisher has invested time, money, and
personnel into developing a positive relationship with its
factories in China. To what extent do you feel your consumer
base in this country is aware of what Eileen Fisher is doing,
and the purchases by these consumers are informed by that
knowledge?
Ms. Hall. In terms of the first question, the factory
managers realizing economic benefit from using SA8000, we
actually used that as a reason for them to adopt it, initially,
in convincing them that this was going to help them.
I mean, we really want them to adopt it because they
believe in it, but in the beginning we had to kind of use every
carrot we could think of. Honestly, I do not think it has made
an impact on them yet.
I believe they probably spent more money than they have
made in having had SA8000 there, and sometimes simply by losing
workers to interviewers every time somebody comes around to
talk to them.
So, yes, so far I do not think there has really been a
measurable advantage to SA8000. I think it is too early. But we
believe there is one. Down the road, there will be one,
ultimately.
As far as our own consumer base, we do not really talk
about what we do in our factories a lot. We certainly are happy
to talk about it if somebody asks us, but we do not broadcast
it. It is available on our web site. We have a handout in the
stores if somebody asked about it, but you would never find it,
by just walking in.
We do get our share of letters from consumers asking about
conditions. They are always interested in China. It is the one
thing they always ask about. We are very open with what we have
done, what has worked, what has not worked, et cetera.
We are looking at, long-term, how to communicate this more
effectively, because we feel that consumers need to understand
why we choose to stay in China and work for women, as well as
manufacture here in the States. Whether or not this helps to
sell clothing, it is just about helping move the movement
forward, we think. But, anyway, we are just talking about that
right now.
Mr. Foarde. We are closing in on the end of our session
this afternoon, but I would like to give the last set of
questions to our friend and colleague, Bob Shepard.
Bob.
Mr. Shepard. Let me ask you a practical question. We in the
U.S. Government, when we do programs in the labor area--working
in the tripartite mode with business, government, and labor--in
the case of China we are restricted from working with the
ACFTU. The reasons are obvious. It is not an independent free
trade union federation.
On the other hand, who else might we work with? I was
curious to get your opinions on whether those restrictions
should continue to be in place, and if so, who we should work
with? Should we make any attempt to work with Chinese workers,
or should we just focus on working with government entities?
Mr. Fishman. I guess that question is for me. Well, as you
probably know, Bob, we played a major role in getting that
language into the legislation. So, as a representative of the
AFL-CIO, I would have to say to you that we believe in the
notion that the American Government ought not to be supporting
the ACFTU.
You raised an interesting question with your last comment.
It is not clear to me that the best role for the American
Government is, in fact, to try to reach out to workers
directly, especially in the
context of a country like China, to do education and training,
or whatever.
Our experience has been that the people who do that the
best are workers themselves. Surely that has been our
experience in many of the countries where we work. We are quite
immodest, I think, about our own effectiveness in providing
worker education. Again, the challenge in China is, how do you
gain access? That is very
difficult.
I will say to you we do have discreet and indirect ways of
reaching workers in workplaces through universities, through
legal help clinics, through, as I said before, NGOs in China.
We are trying to expand our efforts to create space and to sort
of develop support under the radar.
Again, if it becomes known that the AFL-CIO is working
inside China, the ACFTU would, I think, very quickly and very
actively attempt to either stop it or co-opt it.
Mr. Shepard. Do workers ever come to you, to SAI or to the
companies, with questions about how they might play a stronger
role with respect to organizing or with respect to reforming
their branch of the ACFTU? Do they ever ask those questions?
Do you get any sense that there is consciousness about the
whole notion of freedom of association, or are their questions
or demands focused mainly on specific economic benefits?
Ms. Hall. Yes. They are not quite at that point where they
have a big picture in their head. I think this training that we
are hoping to undertake with SAI soon, this very long-term
worker training, will create that consciousness for them. It is
really going to put them in the context of the world as opposed
to just in their factory and just making money to send back
home. But, really, why are we all doing this?
So, anyway, that has not happened yet, and we will be
restarting it later this year. I wish, if somebody had come
forward or we would come forward, I think it would be
wonderful. It has not happened yet.
Mr. Foarde. Well, as we do have some time left, perhaps,
Mike Castellano, do you have another question? Mike.
Mr. Castellano. I have got a question. You mentioned that
the Vietnamese Government had adopted this SA8000 standard on
apparel. I was wondering whether or not you thought it was
possible to adopt something like that in China. I wonder if you
could just kind of think that through right now. What would be
the clear difficulties that would first come to mind?
Ms. Hall. Well, a couple of things just jumped to mind
right now. I mean, China already has an established economy
going on. It does not need this. In fact, this is a huge fly in
the ointment for them.
Vietnam is looking to gain a competitive edge and feels
that, if it can get all of its factories to aspire to something
great, greater than just the law, then they will attract
business from all over the world. That is the reason why they
are undertaking this.
So how do you create that need for China? I am not sure if
it is possible because it is a huge economic expense, for them.
It would be wonderful, but, honestly, I am not really sure how
to make it practical. Perhaps to start it in one area of China,
maybe a depressed area. I am just talking out loud. I really
have no idea. But that might be a possibility.
I always wondered, one of the reasons there are so many
issues going on in China--one of many reasons--is migrant labor
causes so many issues all by itself. Why not open the factories
where labor is? Why do we have to bring labor to the coastline
all the time? So, maybe that is one way to address it.
Mr. Castellano. Let me switch gears. We talk about raising
consumer consciousness. How do we make it so more consumers
make it an issue when they buy things, to consider the labor
issues innate in the goods. It seems to me there could be a
role for government there.
I am wondering if you two have any thoughts about ways in
which government can raise the profile of the issue, increase
the information that is available to make it easier to make
those choices, and other ways in which the government could
help raise consumer awareness and make it more of a consumer
choice issue.
Ms. Hall. I do not really have anything. Nothing is coming
to mind.
Mr. Fishman. Clearly, I think there is a role that the
government can play to provide more information on countries. I
think the Department of Labor, at least under the previous
administration, was moving in that direction, where there was
an attempt to look at worker rights conditions in countries and
to make that
information more public. I think that would be valuable.
How to make that information accessible and attractive to
consumers, I think, is the challenge. I think, with all the
good work the Department of Labor had done in the past, there
are not that many Americans who get online every day and look
at the DOL Web site.
But I do think there is a role for government to provide
education on the status of worker rights and labor standards in
various countries, and to be positive about those countries
that, in fact, have made progress or meet standards and make
sure that consumers understand that.
I spent a fair amount of years in the Philippines. It is
really quite remarkable that we are promoting a trade policy
that will penalize the Philippines because it has made more
progress in terms of democratization, in terms of rule of law,
in terms of respect for human and worker rights. I think that
is exactly the case. When you see 2005 come along, I would be
surprised if the garment and apparel industry in the
Philippines survives. I think it is going to end.
Mr. Foarde. We have reached the magic hour of 4 o'clock. To
avoid imposing upon the tolerance and good nature of our
panelists any longer, we will bring this session to a close.
First, on behalf of our chairman and co-chairman, and all
of our commissioners, thanks to Amy Hall and Phil Fishman; Amy,
for coming all the way to Washington to share your views with
us, and Phil, although you are here, we welcome having a AFL-
CIO representative and our long association with some of your
colleagues who are also here in the room.
Thanks to all of you for coming to attend. We will probably
not have another roundtable now until September, after the
August break, because we are going to have a formal hearing on
Thursday, July 24, 2003.
I will send out a notice soon. If you are not on our notice
list, you can sign up on our Web site. If you are, the exact
time and place are unclear, as we are still negotiating over a
room. It will be a full Commission hearing having to do with
both freedom of religion and the new Chinese leadership.
So with that, let me thank everyone once again and bring
this issues roundtable to a close. Good afternoon.
Thank you.
[Whereupon, at 4:03 p.m. the roundtable was concluded.]
A P P E N D I X
=======================================================================
Prepared Statements
----------
Prepared Statement of Amy Hall
JULY 7, 2003
Promoting Worker Representation in Chinese Factories--The SAI Approach
As a member of the Advisory Board of Social Accountability
International and as Manager of Social Accountability for clothing
designer and retailer Eileen Fisher, I bring both the NGO and corporate
perspectives to the table. On a personal level, I have studied and
traveled extensively in China and have visited our clothing factories
there several times.
But let me begin with a little background.
OPPORTUNITIES FOR CHANGE
Existing legal barriers to forming independent trade unions in
China notwithstanding, we feel it is possible to work on improving
workers' rights to freedom of association through active engagement at
the factory level. We are seeking to help create more opportunities for
workers in China to learn about, voice, and access their rights. Recent
developments on the ground in China indicate that there are openings
for encouraging such opportunities, such as:
(1) Some worker rights groups have become active in mainland China
recently, for example: the Institute of Contemporary Observation in
Shenzhen and the migrant worker centers in Beijing and Panyu.
(2) There are indications that the All China Federation of Trade
Unions (ACFTU), the Chinese official trade union, is looking at how to
become more effective as the Chinese economy continues its rapid
transition from a planned economy to a market economy. In October 2001,
in a positive gain for the ACFTU, China passed a new trade union law
granting the ACFTU more legal leverage to defend worker's interests. In
January 2003, the official Xinhua News Agency reported that the ACFTU
is conducting experiments to encourage the direct election of union
leaders at the factory level.
(3) Some international companies have joined with NGOs to launch
encouraging initiatives to promote worker representation in China. The
most recent example is the direct election of union leaders at a
Taiwanese-owned footwear factory, in a process in which the main buyer
(Reebok)--together with workers' rights groups--played a pivotal role.
According to SAI sources in China, Reebok's effort even gained positive
comments from the ACFTU Guangzhou branch, which considers it ``a model
worthwhile to replicate.'' Doug Kahn of Reebok has previously testified
to this Commission on these cases.
Although it is unlikely that thorough democratic changes will occur
from the top down any time in the near future, these examples
illustrate the limited space that is emerging in which international
organizations can foster respect for workers' rights. It is important
to recognize the broader political challenges that these trends could
face, while continuing to work directly with managers and workers on
ensuring rights in the workplace.
PARALLEL MEANS OF FREEDOM OF ASSOCIATION: THE SAI APPROACH TO PROMOTE
WORKER REPRESENTATION
We at Eileen Fisher are asking our suppliers to adhere to the
SA8000 standard and are working with SAI and others on various factory-
level training programs. The SA8000 standard is the result of a
consensus-based drafting process by trade union, NGO and business
representatives from around the world. The SAI Advisory Board, which is
responsible for drafting SA8000 and advising on policies related to the
SA8000 certification system, includes members from Amnesty
International and the International Textile, Garment and Leather
Workers' Federation (ITFLWF), among others (see attached). The SA8000
standard (also attached) covers eight core workplace issues: child
labor, forced and bonded labor, discrimination, discipline, health and
safety, working hours, remuneration, and the right to freedom of
association and collective bargaining. The requirements in these eight
areas are based on 12 ILO conventions and other international human
rights instruments. A ninth element consists of requirements that focus
on the management systems needed to ensure ongoing compliance with the
standard and encourage continuous improvement even after a factory is
certified for having met the minimum requirements of the standard.
In drafting the SA8000 standard this group--now the SAI Advisory
Board--agreed we could not exclude Chinese factories' access to such a
certification program. We saw direct engagement on workers' rights as
crucial to fostering change. SA8000 encourages change by providing an
incentive to achieve certification. At the same time, certification is
also an important means to enable workers and their advocates to file
complaints if they detect some failing in the factories' compliance
with the minimums defined in SA8000.
SA8000 does require additional efforts on free association for
factories in countries like China where there are legal restrictions on
free association. To that end, the SAI Advisory Board came up with the
following requirement (clause 4.2 of SA8000):
The company shall, in those situations in which the right to
freedom of association and collective bargaining are restricted
under law, facilitate parallel means of independent and free
association and bargaining for all such personnel.
The chief purpose of such ``parallel means'' is to ensure that
workers in countries such as China have the means to address their
concerns and seek solutions without fear of repercussions. This
requirement draws on the spirit of the Sullivan Principles implemented
by companies doing business in South Africa during the apartheid
regime.
The experience of the Sullivan Principles in South Africa shows
that in cases where a government policy restricts an international
human right, companies are able to implement parallel means for
protecting that right within the factory walls. Despite Apartheid, the
Sullivan Principles stated in Principle that companies would promote:
``Non-segregation of the races in all eating, comfort, locker rooms,
and work facilities.'' Compliance with the principles were audited by
the consulting firm Arthur D. Little. Companies adhering to the
Sullivan Principles in their South Africa operations during the
apartheid era were able to make a strong statement against
discrimination by providing a non-discriminatory environment within the
workplaces they managed. The Sullivan principles helped to develop a
movement of business leaders objecting to apartheid, who were thus able
to raise an influential voice against discrimination.
The SA8000 standard adopts a similar approach, with companies
providing additional opportunities for workers in their factory to
organize themselves independently. SA8000 requires companies to let
workers know they are free to organize and elect representatives in
order to raise their concerns with management and, essentially,
negotiate solutions.
EILEEN FISHER: A CASE STUDY
Eileen Fisher utilizes the services of eight factories in southern
China, representing about 60 percent of our total production. (The
balance is manufactured in the U.S.) We do not own or in any way manage
these factories. In fact, our share of the total capacity in these
factories ranges from 10 to 30 percent, depending on the season. Many
other well-known brands use the same factories and apply their own
labor standards to these facilities. All of the factories have agreed
to adopt SA8000, and we engage in a program of monitoring, continuous
improvement and education to help facilitate this process.
Early in the process, Eileen Fisher realized that we cannot simply
provide the SA8000 standard and walk away. Neither the factory workers
nor the managers has the cultural context with which to fully
comprehend or utilize the elements of the standard. For example: How
can we expect a manager to eliminate all forms of unacceptable
disciplinary practices or forced labor when putting padlocks on women's
dormitories is generally accepted practice in order to keep them safe?
How can we expect a worker to voice concern about sexual harassment
when she or he doesn't even recognize when it's occurring? How can we
expect workers to speak up about anything when they are raised with
such a deep-seated respect for their elders (a.k.a. managers,
supervisors, teachers, parents, etc.) and freedom of speech is limited?
In the case of ensuring that management facilitates parallel means
to freely associate, we have found it difficult to encourage workers to
make active use of worker committees. This is likely due to a
combination of reasons, including:
Management not doing enough nor understanding how to enable
workers to form such committees;
Worker distrust of any management information that such
committees will be independent and unproblematic for workers who
join them;
Worker inexperience in organizing and in participating in
such a dialog with management (especially since many workers come
from farming communities) and a lack prior experience with real
change resulting from committee work; and
Payment structures do not allow workers to participate in
worker committees without losing incentive-based income.
What is needed is change--not a ``westernization'' of the cultural
norms of the factory people, but rather to foster greater understanding
of their universally recognized rights, how to talk about those rights
when they are being violated, and how managers can respond to those
comments in a compassionate, non-discriminatory, effective manner. This
was not something we could leave in the hands of the managers to
coordinate. Neither was this something that could happen in a classroom
on a single day.
WORKING TOGETHER TO FOSTER CHANGE
Eileen Fisher engaged the services of SAI and Verite, a non-profit
U.S.-based research and monitoring organization, to conduct SA8000
training for the managers of our China factories. This training is
conducted annually or as needed, with an emphasis on specific issues
that the managers face in achieving compliance to the SA8000 standard.
Verite also provides training to our factory workers through its mobile
worker training van program. The van brings educators to each of our
three primary factories once a month to inform the workers on such
topics as minimum wage calculation, occupational health and safety, and
China's labor law. All of these efforts are intended to lay the
groundwork on which to build effective worker representation and
worker-manager communication systems in each factory.
To illustrate how this process has impacted workers at our China
factories, let me describe an experience in one factory that represents
our experience across the board. When talking with the factory manager
about parallel means of free association, we found that he was eager to
facilitate the formation of worker committees. Initially, though, he
offered to simply form the committees himself. (Why bother with an
election when management already knows who will be chosen based on
popularity of the workers?) When we explained that the process is not
legitimate unless it entails an open worker election, he was skeptical.
Surely he feared that this would lead to unrest among the worker
population. When pressed, however, the manager gave in, knowing that
our business relationship with the factory was at stake. Months later,
when we returned to visit the factory, we were pleasantly surprised to
find a well-functioning worker committee. Skeptical ourselves, we
privately asked the worker reps about the process, and they told us
that, yes, they were elected by their peers (from among their work
groups) and that management does listen to their concerns. Issues
raised have ranged from the quality of food in the cafeteria to
complaints about co-workers being too messy. In every case, management
has addressed the concern in a reasonable manner. And every issue was
documented in a worker-controlled notebook. Time will tell if this
committee continues to function effectively, through employee turnover
and the simple passing of time. But we remain hopeful.
As an SAI Advisory Board member, Eileen Fisher has followed SAI's
worker training program with particular interest. Since 2001, SAI, in
collaboration with the International Textile, Garment, and Leather
Worker's Federation, has been conducting a program in 12 countries to
train 6,000 workers on how to use codes of conduct as an additional
tool to defend their rights and interests (in countries where there is
not restriction on freedom of association).
In 2003-2004, SAI will expand on this program to develop an
innovative worker training for the Chinese context. The primary
objectives of the program are to raise worker's awareness of and to
introduce skills to use all available opportunities, including the
parallel means of freedom of association, to improve working
conditions. Another important objective is to train a group of workers
(who will be selected by their peer workers through secret ballot,
multiple candidate elections) who have the potential and skills to
serve as peer workers' representatives. The group will possibly set up
their own agenda for further activities, such as to train other workers
on how to protect themselves, or to set up worker committee on issues
of their own concerns. Managers will be also trained separately on how
to take proactive action to address workers' concerns and grievances.
Eileen Fisher has offered three of its factories to participate in
the pilot of SAI's China worker training program, to begin later this
year. This program will be conducted with the assistance from local
partners such as the Institute of Contemporary Observation, the and
others. Both organizations have rich experience in training and working
with workers in South China.
Both SAI and Eileen Fisher recognize that, in the case of the right
to free association and collective bargaining, both training and
ongoing assistance are needed. This support work needs to be done
through a multi-stakeholder collaboration so as to foster a sustainable
and credible process. U.S. brands can play a critical role, but they
need to work in partnership with U.S. and international labor, NGOs, as
well as local Chinese organizations.
In summary, SAI and Eileen Fisher believe that, for anyone
concerned with worker rights, China represents both risks and
opportunities. We understand that substantial change will take time.
But we must recognize the important role that all of us can play by
fostering that change from within. We have a choice: We can walk away
from this challenge, jeopardizing the jobs and livelihoods of millions
of workers, or we can be a catalyst for something better. We believe in
the possibilities.
Social Accountability International--SA8000 Advisory Board
It is SAI's policy to balance its Advisory Board (AB) equally between
business and non-business (non-governmental organizations, trade unions,
socially responsible investors and government) members. Parentheses
below indicate the geographic work location of the Advisory Board
member.
Affiliated with Non-Governmental Organizations, Trade Unions, Socially
Responsible Investing and Government\1\
Dorianne Beyer/David Zwiebel (alternate).. National Child Labor
Committee (USA)
Jan Furstenborg........................... Union Network International
(Switzerland)
Oded Grajew/Helio Mattar (alternate)...... Abrinq Foundation for
Children's Rights (Brazil)
Joseph Iarocci............................ CARE International (USA)
Neil Kearney.............................. International Textile,
Garment & Leather Workers
Federation (Belgium)
Kaiming Liu............................... Institute of Contemporary
Observation (China)
Alice Tepper Marlin....................... Social Accountability
International (USA)
The Honorable William Thompson/Ken Office of the Comptroller,
Sylvester (alternate). City of New York (USA)
Morton Winston............................ Amnesty International (USA)
Lynda Yanz................................ Maquila Solidarity Network
(Canada)
Affiliated with Business\1\
Ivano Barberini/Alessandra Vaccari Legacoop and Coop Italia
(alternate). (Italy)
Sylvain Cuperlier......................... Dole Food Company (France)
Tom DeLuca (Chair)........................ Toys ``R'' Us (USA)
Durai Duraiswamy/Robin Cornelius Prem Durai Exports (India)
(alternate). and Switcher SA
(Switzerland)
Pietro Foschi/Andrew Kirkby (alternate)... Bureau Veritas Quality
International Holding SA
(United Kingdom)
Amy Hall.................................. Eileen Fisher (USA)
Fitz Hilaire.............................. Hilaire Associates (USA)
(formerly of Avon Products,
Inc.)
David McLaughlin/George Jaksch (alternate) Chiquita Brands
International (Costa Rica &
Belgium)
Dr. Johannes Merck/Achim Lohrie OTTO-Versand (Germany)
(alternate).
Frits Nagel............................... WE Europe (The Netherlands)
\1\Affiliations are for identification only.
______
Prepared Statement of Phil Fishman
JULY 7, 2003
Let me thank you for the opportunity to present the views of the
AFL-CIO on Freedom of Association in China and its Effects on Workers.
I realize that representatives of the AFL-CIO have participated in your
discussions in the past and I want you to know that we greatly
appreciate the fact that this Commission has solicited our opinions on
a number of important issues for both workers in the United States and
in China, and indeed for workers around the world.
I will try not to repeat what we have said in the past and I wish
to cite the testimony provided by Mark Hankin from our Solidarity
Center last year concerning the labor rights situation in China.\1\ His
comprehensive analysis continues to represent the views of the AFL-CIO
today as we attempt to better understand the worker rights situation in
China during these rapidly changing times and to develop and revise
strategies to effectively support efforts by workers and their allies
to gain
effective union representation at the workplace.
---------------------------------------------------------------------------
\1\ Testimony presented by Mark Hankin, Coordinator for Program
Development, American Center for International Labor Solidarity AFL-
CIO, March 18, 2002.
---------------------------------------------------------------------------
I will focus today on three areas to supplement what has already
been said. First, I want to spend a few moments looking at how the
International Labor Organization defines Freedom of Association and the
Right to Organize and Bargain Collectively given that these rights are
included in most of the Codes of Conduct of U.S. companies operating in
one manner or another inside China. Second, I will express our views as
well as those of much of the international trade union community
regarding the All China Federation of Trade Unions (ACFTU), again
trying not to repeat what we have said already. A few comments about
the 2001 amendments to the trade union law will be offered in this
context. And finally, given that I am sharing this occasion with Amy
Hall who represents a company that bases its social accountability
monitoring on the SA8000 system, I will speak to the challenges posed
and questions raised by such notions as ``parallel means'' contained in
the SA8000 standards and guidance.
I wish to emphasize at the outset that the AFL-CIO has been
watching quite closely and with an open mind the efforts by some
companies to more effectively apply their codes of conduct to
workplaces in China. We understand quite clearly the magnitude of
change China has been undergoing for the past two decades and the
challenges created by this change to international worker rights and
labor standards. We also have a growing awareness of the impact of such
profound change on China's people. It is staggering that as many as 20
million people a year are leaving the rural areas of China for urban
areas in search of work. To put this in perspective, a single year's
inflow of new urban workers in China is equivalent to the entire
manufacturing employment base of the United States--a manufacturing
base which everyone in this room knows is shrinking in part because
jobs are
moving to China.
But it is not only the developed countries that are losing jobs to
China. Developing countries also are losing a growing number of jobs to
China and this process is accelerating. There is a UNDP estimate, for
example, that Bangladesh will lose more than a million jobs to China
once the Multifiber Agreement on Apparel expires in 2005. For these
reasons, we are watching with keen interest developments that may
contribute to arresting ``the race to the bottom,'' as many have
characterized the shifting of much of the world's production to China.
We see some opportunity in the efforts made by some companies to
enforce their codes and we will continue to evaluate such efforts based
on our knowledge of what the realities are for Chinese workers on the
ground. However I want to emphasize that companies with codes are only
a small proportion of companies doing business in China and these
companies remain confined overwhelmingly to the soft-goods industries.
Moreover companies that take their codes seriously are in our view a
very small subset of this
already very small number.
So let me turn to how the ILO defines Freedom of Association and
the Right to Organize and Bargain Collectively, subjects with which I
am intimately familiar given my years of membership on the Committee on
the Application of Conventions and Recommendations at the ILO. You can
find the definitions in ILO Conventions 87 and 98. The former has been
ratified by 142 of the 176 member countries of the ILO or over 80
percent while 153 member countries or 87 percent has ratified the
latter. I should note that the voluntary ratification of an ILO
Convention such as C. 87 has the force of an international treaty. It
obligates a country to adhere to the specific provisions of the
ratified instrument in both law and practice and subjects it to the
ILO's standards enforcement machinery. Sadly, two of the countries that
have refused to ratify C. 87 and C. 98 are China and the United States.
I have attached to my written testimony a copy of C. 87 and C. 98,
which like all ILO instruments were drafted on a tripartite basis with
the full participation of government, worker and employer
representatives. The language in both Conventions is quite simple and
straightforward. C. 87 states that workers and employers, without
distinction whatsoever, have the right to establish and to join
organizations of their own choosing with a view to furthering and
defending their respective interests. Such organizations have the right
to draw up their own constitutions and rules, to elect their
representatives in full freedom, to organize their administration and
activities and to formulate their programs. Public authorities shall
refrain from any interference which would restrict this right or impede
the lawful exercise of this right. The organizations shall not be
liable to be dissolved or suspended by administrative authority.
Organizations have the right to establish and join federations and
confederations which shall enjoy the same rights and guarantee. The
Convention also provides for the right to affiliate with international
organizations. The acquisition of legal personality by all these
organizations shall not be subject to restrictive conditions. In
exercising the rights provided for in the Convention, employers and
workers and their respective organizations shall respect the law of the
land. The law of the land and the way in which it is applied, however,
shall not impair the guarantees provide for in the Conventions.
The key provisions of C. 98 focus on the need for workers to enjoy
adequate protection against acts of anti-union discrimination,
specifically against refusal to employ them by reason of their trade
union membership and against dismissal or any other prejudice by reason
of union membership or participation in union activities. This
protection is extended in particular against acts designed to promote
the domination, the financing or the control of workers' organizations
by employers. C. 98 also call for measures to be taken to encourage and
promote the development and utilization of voluntary collective
bargaining to regulate terms and conditions of
employment.
Decades of review and comment by the ILO's standards enforcement
machinery\2\ have defined what these words mean in real situations in
countries and workplaces around the world. There is very little
controversy or disagreement, therefore, over what C. 87 and C. 98 mean
given the voluminous jurisprudence developed on a tripartite basis over
the years. And taken together, conventions 87 and 98 comprise one of
the four core areas of fundamental worker rights identified in the
ILO's Declaration of Fundamental Principles and Rights at Work adopted
in 1998.
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\2\ The Committee on Freedom of Association, the Committee of
Experts and the Committee on the Application of Conventions and
Recommendations in particular.
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Based on this jurisprudence, it is clear beyond any doubt that
China's laws and practice are in fundamental contravention with both of
these core labor conventions and the principles they embody. Freedom of
association and the right to organize and bargain collectively as
defined by the ILO simply do not exist in China. It is also quite clear
that any notion of ``parallel means'' in and of itself does not satisfy
the ILO definition of freedom of association.
There are differing views regarding the significance of the changes
to the trade union law introduced in 2001 and it is too soon for a
definitive assessment. A couple of things seem clear. First, the
changes were designed to strengthen the role of the ACFTU in private
sector work places. There are many reasons for this. Clearly the old
ACFTU--an ACFTU confined to dying State enterprises--was becoming an
irrelevant organization. Second the government was clearly embarrassed
by repeated stories of exploitation, and finally, and perhaps most
importantly, the Party needed a means to prevent the organization of
independent worker organizations and a growing number of spontaneous
work actions.
At the same time, the State and party bolstered its hold on the
ACFTU. The trade union law as amended in 2001 maintains the trade union
monopoly enjoyed by the ACFTU (article 10) and strengthens the link
between the ACFTU structure, the Chinese Communist Party (CCP) and the
government, clearly identifying in more specific language than before
the unions' obligation to follow the leadership of the CCP (article 4)
and to assist in maintaining the state's monopoly of power (article 5).
Article 11 stipulates that ``the establishment of basic-level trade
union organizations, local trade union federations, and national or
local industrial trade unions shall be submitted to higher-level trade
union authority organizations for approval.'' Not only is this in clear
violation of C. 87, which states that workers should be able to
organize into unions of their own choosing but it also is a major
obstacle to independent attempts to organize trade unions. The only way
such efforts can ``succeed'' under the law is by submitting to the
authority of the ACFTU. This is further strengthened by the fact that
company level unions are totally dependent on higher-level ACFTU
structures for income. Companies are required to pay the equivalent of
2 percent of payroll in union dues to the higher ACFTU structure, which
then in turn is supposed to return a percentage back to the factory
level union, at least in theory. So under the current law a factory
union is wholly dependent on the higher-level ACFTU to receive even a
percentage of the dues paid by its own members.
Even if you accept the view that there are provisions of the trade
union law as amended that show some promise for the possibility of
creating space for more independent and democratic worker
representation, the actual practice in this regard suggests another
picture. We should first remember the leaders of most units
organized by the ACFTU in the private sector are management personnel.
And the ``collective bargaining agreements'' that exist are documents
that neither rank-and-file workers nor their democratically elected
representatives have had any part in negotiating.
The well-known case of the workers in Liaoyang Province protesting
widespread corruption is but the latest example that independent worker
activity will not be tolerated. Two of the leaders of the large
demonstrations that took place last year have been sentenced to 4 and 7
years in prison for ``subverting the state.'' Their appeals were just
rejected last week in an opaque process not even their defense lawyers
knew about. The ACFTU refused to play any role defending the interests
of the Liaoyang workers or even to defuse tensions. One of its top
leaders even called one of the worker leaders a ``car bomber'' which is
a serious accusation post September 11.
In March of this year the Governing Body of the ILO adopted the
report of the Committee on Freedom of Association in which serious
abuses committed by the Chinese government were cited concerning its
detention and prosecution of worker leaders in Liaoyang. The Governing
Body called on the Chinese authorities to release all workers still in
detention, drop any charges against them and institute an impartial and
independent investigation into the detentions. These recommendations
have been completely ignored despite the fact that China is a member of
the ILO Governing Body.
That the ACFTU's major preoccupation is to strictly enforce its
trade union
monopoly was clearly demonstrated regarding the establishment of at
least two
associations to assist migrant workers address work-related grievances
such as non-payment of wages. Ruian city in the coastal province of
Zhejiang has a migrant population of 230,000. Concerned that they did
not have the structures to control and administer such a large number
of ``outsiders'', the local authorities allowed the setting up of what
appeared to be a semi-independent labor association. The hope was that
it could help to avoid or settle labor disputes between the migrant
workers and their local employers before they became a threat to social
stability. The association also hoped to head off major collective
disputes by representing workers in cases of illegal fees charged by
employers and wage arrears. Even the local police approved and the
experiment was extended to the nearby city of Tangxia. While certainly
not trade unions, these associations were viewed as a protector, if not
representative of migrant workers and there are documented cases of
them intervening on behalf of workers in at least three labor disputes.
This sanctioned approach was initially greeted in the media with
enthusiasm and a major newspaper in Guangdong ran an article headlined,
``Setting Up of Autonomous Organizations by Migrant Workers Deserves
Encouragement.'' This was not a view shared by the Guangdong Federation
of Trade Unions, the provincial arm of the ACFTU. It was reported in
the international press including the Washington Post that both efforts
were abandoned
because the ACFTU objected to them citing the provisions of the trade
union law that gave it the sole authority to approve of the
establishment of any worker organization.
In sum, that the current trade union law specifically provides for
a trade union monopoly to the All China Federation of Trade Unions,
that the program and activities of the ACFTU are subordinate to the
wishes of the party and state, that questions of affiliation to
international trade union bodies are subject to the approval of the
state, that workers who attempt to organize independent trade unions or
carry out what we would define as normal trade union activity such as
participating in protest--all of these things and many others
demonstrate the distance China must travel in order for freedom of
association and free collective bargaining to be respected in both law
and practice.
This is not to say, of course, that good, well meaning people
cannot be found within the ACFTU structure. It is to say, however, that
institutionally the ACFTU is a creature of the Chinese State and
Communist Party and is obligated by its own rules to act as a
transmission belt for party and State policy. I want to emphasize that
the International Confederation of Trade Unions, which represents 158
million workers in 150 countries, shares this view. I am attaching the
China section of the ICFTU's recently released 2003 Survey of Trade
Union Rights Around the World. I also want to emphasize that
differences among various trade union organizations do not focus on the
nature of the ACFTU as a government entity--on this point most are
quite clear--but on whether or not the ACFTU can be reformed. Indeed
the fact that the ACFTU is widely viewed as a government entity is
precisely why most codes of conduct have included in them the concept
of ``parallel means.''
With this in mind let me turn to company efforts to enforce labor
rights through their codes and through various monitoring schemes such
as SA8000. Wages in China's labor-intensive export sector are
artificially depressed with no mechanisms for amelioration in place.
Concerted action among employers, local government, police, the central
government and the ACFTU unfortunately keeps wages depressed and
insures work force discipline. This is precisely why foreign companies
locate their production in China in the first place. Getting any
lower--Haiti, Burma, parts of South Asia, for example--puts companies
out of range of acceptable infrastructure and often into politically
unstable situations. China has installed good infrastructure for
exporting industries. This infrastructure together with depressed wages
and apparent political stability attracts companies. Two features of
China's labor market contribute to the depression of wages. First,
workers do not have the unfettered right to exit from unacceptable
employment situations. Second, workers have no voice mechanism for
affecting wages and other conditions at work.
Chinese labor especially migrant labor is not free even in the
minimal sense of being able to exit unacceptable employment. Residency
(hukou) rules make the predominately rural migrant labor force in the
export industries beholden to the employer so that freedom of movement
is impeded. The employer will often keep the workers' papers. Without
these papers, workers are subject to arrest. To this extent, the hukou
system operates like the pass system in apartheid South Africa.
Furthermore, most employers routinely withhold at least 2 months of
wages (one sixth of the yearly wage). This keeps workers from leaving;
they hope to get those wages back. Finally, workers cannot exert wage
pressure via trade unions due to the absence of freedom of association.
Despite this, workers in the export sector often strike simply because
they have no legal way to remedy their situation. These strikes are
brutally suppressed. We have no way to know how many strikes there have
been because in China the lack of a free press means they are hardly
ever
reported.
In regard to monitoring, it is our view based on our own experience
here in the U.S. as well as working to strengthen relations with
workers in developing countries for many decades that the most
effective way to monitor factory compliance with national law,
international standards, and company codes is by empowering workers
themselves to play this role collectively and independently in an
atmosphere absent of fear and intimidation. The Fair Labor Association
seems to have come to a similar conclusion stating in its recent report
that ``freedom of association is essential to the resolution of many
other compliance problems, in that the most sustainable approach to
compliance lies in developing the capacity of workers and employers to
regulate their own workplaces.'' \3\ Workers have an obvious interest
in ending abuses and violations as a way to improve their daily lives
and can provide the daily continuity necessary for monitoring to be
truly effective. It is virtually impossible to monitor workplaces
effectively without such continuity. What meets standards in a factory
one day can be quite different 3 months later unless there is daily
vigilance. This has been demonstrated by the fact that SAI and other
monitoring groups have had to remove certification of several
facilities when it was disclosed that they did not in fact meet the
standards. In most if not all of these cases reported in the press, it
was outside ``watchdog'' NGOs such as the National Labor Committee that
uncovered the labor rights abuses and only when they went public were
the factories decertified. We find this troubling especially when
combined with the fact that over one third of the factories certified
under SA8000 are located in China and Vietnam where freedom of
association does not exist and where independent NGOs with the freedom
and wherewithal to contact workers are not tolerated.
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\3\ Fair Labor Association First Public Report: Toward Improving
Workers' Lives, August 1, 2001--July 31, 2002.
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According to SAI, ``parallel means'' is designed to encourage
nascent forms of worker self-representation in countries like China
where independent unions are prohibited.\4\ While we look upon such
efforts with interest, we remain skeptical as to where such efforts
actually lead. The limited experience that we have in China seems to
demonstrate that if a parallel organization formed in China is to
survive, let alone lead to real freedom of association, then a
sustained effort must be made to nurture the organization through the
provision of training and a commitment to maintaining the space in
which the parallel organization can operate. We have not yet seen more
than a handful of companies such as Reebok make such a commitment and
it is unclear even then that they will succeed in individual
workplaces, let alone influencing what happens outside them. I do want
to note with particular interest the two elections at facilities
producing for Reebok. While we see some problems such as the insistence
by the ACFTU at the second facility to provide all worker education and
training rather than respected NGOs in Hong Kong, as was the case at
the first facility, we hope that the empirical evidence begins to
emerge that such experiments lead to freedom of association.
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\4\ SAI has applied the notion of ``parallel means'' to factories
in Bangladesh, a country that protects freedom of association in its
labor code except in Export Processing Zones. This creates concerns
that ``parallel means'' as a substitute for freedom of association
rather than a process for advancing it as claimed.
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The experiences of countries like South Korea and Indonesia suggest
that workers became empowered only after both countries underwent real
political change despite long time support by the international trade
union community. In other words, only when South Korea began to rapidly
move toward democracy in the 1980s and transition from Suharto was well
underway and irreversible did freedom of association for workers begin
to emerge. So the value of ``parallel means'' absent similar such
political change in China is problematic. Without empirical evidence
that notions like ``parallel means'' leads to real freedom of
association, it is our view that companies operating inside China with
a code of conduct that includes freedom of association are in
fundamental violation of their own codes. Furthermore, until such
evidence begins to emerge, there will be continuing concern that at the
end of the day improving labor standards without legitimate trade union
representation is an acceptable, even preferred, outcome to companies
involved is such schemes.
Let me conclude by saying that we believe that inevitably workers
will win the right to freely associate in China. We do not expect that
this right to be handed to them by the business community--that has
never been the case anywhere. In Taiwan and Indonesia, workers won that
right by challenging tired, old state-run organizations that neither
had the energy or the interest in representing worker interests. In
China we are seeing that happen now in the old State enterprise sector
where workers are challenging the ACFTU on almost a daily basis.
Similarly, representative groups are beginning to develop in the
private sector where workers are beginning to organize. American
companies can help by finding effective ways to support these groups
and resisting the temptation to adopt schemes that only
pretend to meet the obligations of their own codes of conduct.