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«HEARING BEFORE THE CONGRESSIONAL-EXECUTIVE COMMISSION ON CHINA ONE HUNDRED TWELFTH CONGRESS SECOND SESSION JULY 31, 2012 Printed for the use of the ...»

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WORKING CONDITIONS AND WORKER RIGHTS IN

CHINA: RECENT DEVELOPMENTS

HEARING

BEFORE THE

CONGRESSIONAL-EXECUTIVE

COMMISSION ON CHINA

ONE HUNDRED TWELFTH CONGRESS

SECOND SESSION

JULY 31, 2012 Printed for the use of the Congressional-Executive Commission on China ( Available via the World Wide Web: http://www.cecc.gov

U.S. GOVERNMENT PRINTING OFFICE

:

WASHINGTON 2012 76–387 PDF For sale by the Superintendent of Documents, U.S. Government Printing Office Internet: bookstore.gpo.gov Phone: toll free (866) 512–1800; DC area (202) 512–1800 Fax: (202) 512–2104 Mail: Stop IDCC, Washington, DC 20402–0001

CONGRESSIONAL-EXECUTIVE COMMISSION ON CHINA

LEGISLATIVE BRANCH COMMISSIONERS

House Senate CHRISTOPHER H. SMITH, New Jersey, SHERROD BROWN, Ohio, Cochairman Chairman MAX BAUCUS, Montana FRANK WOLF, Virginia CARL LEVIN, Michigan DONALD A. MANZULLO, Illinois DIANNE FEINSTEIN, California EDWARD R. ROYCE, California JEFF MERKLEY, Oregon TIM WALZ, Minnesota SUSAN COLLINS, Maine MARCY KAPTUR, Ohio JAMES RISCH, Idaho MICHAEL HONDA, California

EXECUTIVE BRANCH COMMISSIONERS

SETH D. HARRIS, Department of Labor MARIA OTERO, Department of State ´ FRANCISCO J. SANCHEZ, Department of Commerce KURT M. CAMPBELL, Department of State NISHA DESAI BISWAL, U.S. Agency for International Development PAUL B. PROTIC, Staff Director LAWRENCE T. LIU, Deputy Staff Director (II)

CO N T E N T S

STATEMENTS

Page Opening statement of Hon. Christopher Smith, a U.S. Representative from New Jersey; Chairman, Congressional-Executive Commission on China....... 1 Brown, Hon. Sherrod, a U.S. Senator from Ohio; Cochairman, Congressional- Executive Commission on China

Kernaghan, Charles, Executive Director, Institute for Global Labour and Human Rights

Li, Qiang, Executive Director and Founder, China Labor Watch

Wu, Harry, Founder and Executive Director, Laogai Research Foundation and Laogai Museum

Lee, Thea, Deputy Chief of Staff, AFL–CIO

Gallagher, Mary, Associate Professor of Political Science and Director, Center for Chinese Studies, University of Michigan

Brown, Earl, Labor and Employment Law Counsel and China Program Director, Solidarity Center, AFL–CIO

APPENDIX

PREPARED STATEMENTS

Kernaghan, Charles

Li, Qiang

Wu, Harry

Lee, Thea

Gallagher, Mary

Brown, Earl

Smith, Hon. Christopher

–  –  –

CONGRESSIONAL-EXECUTIVE

COMMISSION ON CHINA,

Washington, DC.

The roundtable was convened, pursuant to notice, at 2:30 p.m., in Room 2200, Rayburn House Office Building, Hon. Christopher Smith, Chairman, presiding.

Also present: Senator Sherrod Brown.

OPENING STATEMENT OF HON. CHRISTOPHER SMITH, A U.S.

REPRESENTATIVE FROM NEW JERSEY; CHAIRMAN, CONGRESSIONAL–EXECUTIVE COMMISSION ON CHINA

Chairman SMITH. The Commission will come to order.

I want to welcome our very distinguished witnesses to this hearing on the important topic of the appalling state of working conditions and worker rights in China, a significant human rights abuse that requires greater examination, analysis, and, certainly, bolder action.

Worker rights are systematically violated and are among the many human rights abuses committed by Chinese Government officials at all levels.

Today, the Commission hopes to continue to draw attention to these critical issues in order to push the Chinese Government to reform and to respond to the legitimate concerns of its own citizens, all of whom are entitled to well established, universally recognized labor rights.

As a member of the World Trade Organization, China has experienced tremendous economic growth and integration into the global economy. But as this Commission’s most recent annual report documents, China continues to violate the basic human rights of its own people and seriously undermines the rule of law.

Workers in China are still not guaranteed, either by law or in practice, fundamental worker rights in accordance with international standards. Despite legislative developments that purport to ensure some labor protections in China in recent years, abuse and exploitation of Chinese workers remains widespread.

Conditions in Chinese factories continue to be incredibly harsh.

Workers are routinely exposed to a variety of dangerous working conditions that threaten their health and their safety. Low wages, long hours and excessive overtime remain the norm.

Chinese workers have few, if any, options to seek redress and voice grievances under these harsh conditions. If workers step out (1) 2 of line, they may be fired without payment of back wages. Workers have no collective bargaining power, no collective bargaining rights whatsoever to negotiate for higher wages and a better working environment.





The Chinese Government continues to prevent workers from exercising their right to freedom of association, and strictly forbids the formation of independent unions. Attempts to organize are met with dismissal, harassment, torture, punishment, and incarceration.

Workers are ‘‘represented’’ by a government-controlled union, known as the All-China Federation of Trade Unions [ACFTU], a phony, fake, and fraudulent workers organization.

The recent crackdown on authentic labor, non-governmental organizations in Shenzhen in 2012 and the mysterious death of labor activist and 1989 Tiananmen Square demonstrator Li Wangyang in June are but a few examples of Chinese authorities’ continued attempts to crush labor activism.

While touting itself as an economic superpower, China continues to violate workers’ rights with impunity. With no institutions capable of protecting their interests, Chinese workers are nevertheless taking matters into their own hands.

In the past few years, there has been a dramatic rise in the number of labor-related protests in China, an estimated 30,000 laborrelated protests in 2009 alone, and there are no signs that this positive trend has or will abate.

The increase in labor-related demonstrations not only represents the glaring lack of institutional capacity for fair labor negotiation, but also reflects the rise of a new generation of workers in China who are better educated, tech-savvy, rights conscious, and more willing to protest and endure the consequences.

The deplorable state of worker rights in China not only means that Chinese women, men, and children in the workforce are exploited and put at risk, but it also means that U.S. workers are severely hurt by profoundly unfair labor practices, an advantage that goes to those corporations who benefit from China’s heinous labor practices.

As good corporate citizens, multinational corporations such as Apple and Microsoft, must ensure that international labor standards are being implemented in their factories and supply chains in China.

In the glaring absence of Chinese Government efforts to bring its labor laws and enforcement up to International Labour Organization standards, multinational corporations can and must play a unique role in advancing labor rights and industry standards throughout their operations in the People’s Republic of China.

Again, I want to welcome our very distinguished witnesses.

I yield to my friend and colleague, Cochairman Senator Brown.

[The prepared statement of Chairman Smith appears in the appendix.] 3

STATEMENT OF HON. SHERROD BROWN, A U.S. SENATOR

FROM OHIO; COCHAIRMAN, CONGRESSIONAL–EXECUTIVE

COMMISSION ON CHINA

Senator BROWN. Thank you very much, Chairman Smith, for your work in this commission. And thanks especially to the staff for the terrific work they do on this commission to prepare the annual report, which they are working on now, which is, in many ways, both a guide and sort of a clarion call for what this commission needs to do and what our government needs to do and what U.S. businesses ought to be doing.

Special thanks to both panels. On this first panel, I appreciate the work of all three of you and what you have done to advance labor rights in China and really all over the world.

Mr. Kernaghan, Mr. Wu, thank you. And, Mr. Qiang, thank you very much. And the second panel, too, thanks very much.

When Congress debated permanent normal trade relations with China more than a decade ago, concerns about human rights and labor conditions were met with expert opinion that conditions would improve with more unrestricted and unfettered trade. That is what we were told by CEOs and editorial writers and pundits and economists and so many people in this institution over and over as Congressman Smith and I were working on this.

But we know that any improvement in labor conditions have not kept pace—even close to keeping pace with the extraordinary trade deficits we have mounted with China. More and more of the goods we buy are made by Chinese workers. In 2011, our trade deficit— our bilateral trade deficit reached an all-time high of $295 billion.

The first five months of 2012, the trade deficit was $118 billion, on pace to exceed last year’s.

The trade deficit has cost American workers millions of jobs. Chinese workers are not just making our iPads and our iPhones and our laptops, but, also, innovating on the shop floor.

When the innovation happens here and is outsourced for production somewhere else, the innovation, both in terms of process and in terms of the product, happen somewhere else, and we, as a Nation, tend to lose our innovative edge.

They are making our auto parts, our food, our drugs, even our Olympic uniforms.

We learned a few weeks ago, of course, that the accomplished athletes of Team USA would be wearing Chinese-made uniforms at the opening ceremonies. Members of both parties, including those who had voted for PNTR [permanent normal trade relations], were outraged. I was joined by a number of other Members of both Houses and sent letters to the U.S. Olympic Committee. I met with the CEO, who promised that by 2014, these uniforms will be made here.

These products should be made here. Hugo Boss has a facility in Cleveland, Ohio. They make high quality and affordable clothing for Americans and for export.

It is not because American workers cannot compete, but American workers do not often stand a chance against Chinese workers who are underpaid and overworked, who are victims of non-enforcement even of Chinese labor law, and workers who have few rights.

4 Chinese workers making some of our most popular products— cordless phones, iPhones, iPads—toil under the harshest conditions, as Chairman Smith said. They make a little over $1 an hour.

They stand all day. They work overtime that far exceeds Chinese law. Management humiliates them, sometimes forcing them to clean toilets as punishment. They live and they work in far too squalid and dangerous environments.

We learned from a labor rights group in Hong Kong that Chinese workers making Olympic merchandise worked excessive overtime, were docked a half-day’s wage for being a few minutes late, and had to bring their own masks to work.

Fundamentally, why do these injustices continue? Because Chinese workers have no bargaining power. In China, there is no freedom of association; there are no independent trade unions. Instead, workers are represented by a state union that, to quote a worker from one report, ‘‘everybody knows is controlled by the company.’’ Like our workers, Chinese workers are willing to fight for their rights. Strikes in China have grown, as Chairman Smith said, to an estimated 30,000 a year. The new generation of Chinese workers is better educated, more tech savvy, more willing to stand up against injustice. All encouraging developments, of course, but imagine how much more Chinese workers could gain if they had the right to organize freely and bargain collectively.

We call on the Chinese Government to abide by international law and guarantee freedom of association, including organizing and bargaining collectively. We call on China to follow the rule of law by strengthening its labor laws and enforcing the laws on the books.

Let us continue to do all we can here to support our workers against China’s unfair labor and trade practices. That is why I have introduced three bills over the last couple of years—the Wear American Act of 2012, the All-American Flag Act, and, the most important, of course, the Currency Exchange and Reform Act.

We have great responsibility in this. We must hold U.S. companies accountable for working conditions in their supply chain, something that Mr. Kernaghan has particularly shown a lot of leadership in pushing.

That is why today I sent a letter to Apple regarding factories in China. I urged Apple to fulfill the promises it made following that New York Times story and, since, following an investigation by the Fair Labor Association.

I have asked Apple to keep us informed, this commission, my office, and the American public informed and updated on its progress. I have urged Apple to strengthen its engagement, if you will, with the U.S. Department of Labor.

Companies like Apple are in a unique position to improve working conditions in China, while maintaining their bottom line. I hope they will do the right thing.

Thank you, Mr. Chairman.

Chairman SMITH. Thank you very much, Senator Brown.

I would like to now introduce our first panel, beginning with Charles Kernaghan, who is the Executive Director of the Institute for Global Labour and Human Rights, a prominent anti-sweatshop advocate and director of the nonprofit organization.



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