INSIDE TRACK: Sewing a seam of worker democracy in China

By Alison Maitland
Financial Times (London)
December 12, 2002, Thursday London Edition 1

A hush descends on the huge crowd of workers in the canteen at the Fu Luh factory in southern China that makes sports shoes for Reebok . Candidates in the first free elections to the factory's trade union are about to make their campaign speeches.

Many of the self-nominated candidates are shy. Some are so awed by the occasion that they cannot complete their speeches. Some read prepared texts. The bolder ones speak without notes. A brave few criticise the unelected, outgoing union officials for doing little to protect workers' rights and improve conditions. The audience, most of them young women workers from rural areas, listen intently.

When the voting slips from the secret ballot are counted in the factory courtyard, candidates who have spoken out for workers' interests emerge strongly represented among the 19 female and 12 male winners. The incumbent chairwoman, who is supported by local officials of the state-controlled union, has been voted out.

This experiment in worker democracy at the Taiwanese-owned factory in Fujian province two months ago, together with a similar election last year at a Reebok shoe manufacturer in neighbouring Guangdong, is thought to be unprecedented in mainland China.

"They are the first two foreign investment companies to have open union elections, with the brand company and factory support, as well as outside organisations as observers," says Monina Wong of the Hong Kong Christian Industrial Committee, a labour rights campaigning organisation that witnessed both elections.

Chinese labour and union law are weak in their application to foreign- owned enterprises, she says. "If the local government did not press foreign enterprises to form a union, few companies would organise unions themselves." The elections illustrate how commercial imperatives are overturning long-standing communist practices as China rushes to attract foreign investment. At the same time, they highlight the pressures on multinational companies to find better ways to improve working conditions among their overseas suppliers.

The managers of the two factories arranged the elections at the behest of Reebok , their US client. "If Reebok wanted it and Reebok was pushing for it, they were going to go along with it," says Jonathan Unger, director of the Contemporary China Centre at the Australian National University (ANU). Mr Unger spent 13 days observing the Fu Luh election process and interviewing participants with his wife Anita Chan, a fellow China labour specialist, and two Chinese research assistants.

Local governments are competing fiercely to attract foreign companies, which can threaten to move elsewhere if they encounter bureaucratic or financial obstacles, Mr Unger notes. Fu Luh's Taiwanese owners are influential in the foreign investment zone of Fuzhou, a city in which they employ nearly 80,000 people to produce shoes for Adidas as well as Reebok . This helps explain why the authorities did not interfere: "We don't believe we have had this type of election before anywhere in China for an enterprise union, though no one can be sure."

Reebok is now speaking publicly about the initiative for the first time. Last year's election at the Hong Kong-managed Kong Tai plant in Guangdong was the first of its kind for the company. "We were reluctant to do anything that might jeopardise its success," explains Doug Cahn, Reebok's director of human rights programmes.

Provincial officials of the state-controlled All China Federation of Trade Unions were aware of what was happening, he says. Negotiations with factory managers generally went smoothly, although at one point the Kong Tai management feared local officials might be alarmed by the number of visitors to the factory.

At Fu Luh, it took months of negotiations between Reebok , the Taiwanese management and the official district trade union to agree a new constitution and election procedure. "It was no easy task," says Ms Chan. The complicated election used proportional representation to reflect the number of workers in each of the factory's seven departments. It went a step further than Kong Tai, where the office of union chairman was not contestable.

Reebok says its aim with these elections is to produce a sustained improvement in working conditions by promoting better communication between management and the shop floor. Multinational footwear and clothing brands find it notoriously difficult to ensure round-the-clock compliance with their codes of conduct on labour standards and human rights and are vulnerable to attack over abuses by their overseas suppliers.

"We have a code of conduct that says we will respect the rights of workers to freedom of association and collective bargaining," says Mr Cahn. "We can throw up our hands in China and say: 'The ACFTU is government-controlled and therefore we can do nothing.' Or we can engage in experiments like this in democratising the union in the hope that workers will take advantage of the opportunities this provides them."

Some employers might consider it strange that Reebok wants to promote active unions in overseas factories on which it depends for its supplies. Mr Cahn argues that it is good for business. Better working conditions should strengthen the loyalty of the workforce, which in turn should help the management. He wants other multinationals to follow suit.

"In this part of our business, we don't seek to compete but to collaborate. Our ability to be successful in implementing a code of conduct is enhanced when there's a critical mass of multinational corporations or brands that are like-minded and are sending similar messages to the manufacturing community," he says.

This is not about gaining a competitive edge in the market, he insists. "I don't know that anybody has bought a pair of Reebok shoes because of its human rights programme. But we're a global corporation and we have an obligation to give back to the communities in which we live and work." Mr Cahn acknowledges that Reebok would benefit from "a level playing field" with other big brands. It costs money to improve health and safety and make life more comfortable for workers. But he argues that there can be savings too, in reducing accidents and labour turnover.

Chief among the grievances that Chinese workers report to Reebok staff through confidential channels are abusive supervisors and excessive overtime hours. "It's our hope that issues can be taken up by the worker representatives," says Mr Cahn. "We have inspections of factories, both announced and unannounced. But you just don't have the assurance that things will be the same the next day. Factories in China are incredibly sophisticated at finding ways to fool us. The best monitors are the workers themselves."

Reebok has arranged training for the Kong Tai worker representatives with organisations such as aid agencies, to learn how to handle union matters such as conducting meetings and recording grievances. The Fu Luh representatives are due to have similar training.

Ms Chan and Mr Unger say the newly elected officials may be hampered by their inexperience, their lack of role models and the high workforce turnover. It may take time for them to make their voices heard. Nonetheless, they see the elections as a big step forward. Shortly after the elections at Fu Luh, workers were approaching the new committee for help, says Mr Unger. "Some of them are pretty strong people and they would go to management and say: 'Look, what you're doing here is illegal.' "

Both new unions are officially affiliated with the ACFTU. The challenge now for Reebok and the factory management, says Ms Wong, is to respect them for what they are: independent representatives of workers' interests.

Anita Chan
Senior Research Fellow
Australian Research Council

Contemporary China Centre
9 Liversidge Street
Australian National University
Canberra 0200 Australia

Tel. (61) 2 61254260
Fax (61) 2 62573642

http://rspas.anu.edu.au/~anita/