Labour Rights Eroded, as Collusion and Suppression Persist
Please click [Here] for the full report
Since 2014, HKCTU has been observing the operation of Hong Kong-invested enterprises in China closely. To expose the labour exploitations and the related collective actions in these enterprises, HKCTU released two “Monitoring Report on Collective Labour Disputes of Hong Kong Enterprises in China” (hereafter: Monitoring Report) in 2015 and 2016 respectively. The project continued in 2017 and on 29 December, the latest Monitoring Report was released.
Between May 2016 and April 2017, HKCTU recorded 23 collective actions in Hong Kong-invested enterprises in China and interviewed certain related individuals, in order to deliver a detailed analysis of the causes and trends of these collective actions. A 30% decline in the number of collective actions and a decrease in the number of the affected workers this year might appear promising, but the interviews revealed the other side of the story. The “promising statistics” might just be the rosy picture the Chinese Government painted as a result of its ongoing crackdown against civil society.
Monitoring Report 2017 indicates that over 70 % of the collective actions (17 out 23) in Hong Kong-invested enterprises were caused by dismissals, factory relocations and closures, while most of them took place in small/medium-scale enterprises (SMEs) with a workforce of under 1,000 workers. This phenomenon is caused by the so-called industrial upgrade in the coastal provinces in recent years, leading low-end manufacturing enterprises to move further to inland provinces or relocate to Southeast Asian countries. According to a research of the Federation of Hong Kong Industries, “Small-and-medium enterprises (SMEs) still form the majority of Hong Kong manufacturers in the PRD, with over a half of them making an annual turnover of HK$ 50 million or less.... A considerable number (about 20 per cent) of the surveyed Hong Kong manufacturers with an annual turnover of over HK$100 million have invested, established factories and set up sales departments in provinces outside Guangdong and in Southeast Asia. This shows that only when a manufacturer has reached a certain scale that it can have enough resources to explore markets outside the PRD and promote production expansion or relocation.”. In just a few years, the number of foreign-invested (including Hong Kong-invested) enterprises has decreased from 20258 (2008) to 13380 (2015).  As a result, most of the collective industrial actions of the past years took place in large-scale enterprises during the relocation process and now, as most of the large-scale enterprises have gone, collective actions are taking place in SMEs. Such a change is reflected in the Monitoring Report 2017: while the number of collective actions remains stable (23 in 2017 and 25 in 2015), the number of affected workers decreases sharply (150,000 in 2015 and 10,000 in 2017). It suggests that the labour conditions in Hong Kong-invested enterprises have remained unchanged, and the decrease of affected workers simply indicates that the wave of factory relocation and closure is now hitting workers in SMEs. The usual cooperate misconducts, such as dismissals, relocation, missing wages, unpaid severance pay and social insurance premiums continues to be common issues experienced by workers in Hong Kong-invested enterprises.
Another factor contributing to the decline in collective actions is Xi Jinping's ongoing crackdown against civil society and labour rights activists, as Lee Cheuk-yan, General Secretary of HKCTU pointed out at the press conference. In recent years, Chinese Government revised its regulations to tighten public's freedom of expression and right to know and restrict the development of civil society in China. Chinese Government issued new regulations to restrict “9 types of messages” shared among WeChat users, causing people to feel reluctant in sharing news of protests and collective actions, as the latest example of internet censorship. Other laws, such as the “Charity Law”, and “Law on the Administration of Activities of Overseas Non-Governmental Organizations within the Territory of China”, to restrict the source of funding of civil society organizations, were passed to crack labour activists and researchers who investigate collective actions down. The government continues to suppress collective actions, such as strikes. The Monitoring Report 2017 illustrates that the local governments are acting more proactively, to interfere at the start of labour disputes and work with the employers with carrot-and-stick to “settle” labour actions. Such a collusion does not only sacrifice workers' fundamental rights, but its brutal suppression also caused workers to get arrested or injured during their actions.
HKCTU believes that labour rights, especially grassroots workers' rights, are often the first to be sacrificed when capitalists and the authoritarian regime work together. While labour exploitations due to Hong Kong investors' irresponsible capital withdrawals, factory relocations and dismissals continue to occur, government's collusion with capitalists to further suppress workers' voice would pose desperate hardship to workers. Thus, HKCTU lists the following demands and recommendations, urge different parties to safeguard workers' fundamental rights in their power:
1. Multinational Companies (MNCs)
- to genuinely implement the OECE Guidelines for Multinational Enterprises, supervise its subsidiaries and producers, to ensure that they abide the local labour legislations;
- to instruct suppliers to respect the three fundamental labour rights (right to strike, right to organize, right to collective bargaining), to develop mechanism in monitoring and investigating the implementation of labour rights in their supply chains;
- as the owner of the final products, MNCs should take the responsibility in paying missing wages and related compensation when suppliers fail to compensate workers at factory closures.
2. Chinese Government
- to ratify and implement the three fundamental labour rights as stated in the ILO Conventions;
- to halt the collusion between police and employers, to stop solving labour disputes through brutal suppression;
- to respect public's right to know and stop restricting their freedom of expression;
- to withdraw charges or surveillance against labour activists, to release detained labour activists.
3. Securities and Futures Commission (SFC), Hong Kong Stock Exchange (HKSE)
- to demand listed companies to disclose collective actions in their enterprises in the companies' annual report, or the “Environmental, Social and Governance Reporting Guide”. Information disclosure should include an explanation of “non-compliance”, in order to give enterprises more pressure in being transparent and respecting investors' and public's right to know;
- to set up a disciplinary mechanism: when a listed company or its subsidiaries have violated local labour legislations and fundamental labour rights repeatedly, SFE and HKSE should fine, temporarily or permanently revoke its business license, to ensure listed companies to abide local labour legislations;
- to establish a clearly defined complaints procedure to hear complaints relating to listed companies' operation and production, and ensure the complaints would be handled openly and transparently.
4. Major Business Associations
- to set up a clearly defined disciplinary mechanism to handle labour disputes complaints against their members, members who repeatedly or severely violate labour rights would be expelled from the association;
- to disclose the list of membership, in order to protect the public's right to know and allow the public to monitor the operations of their members. This can help their members to respect local legislations and labour rights in the future.
 Made in PRD Study:Hong Kong Industry: The Way Forward, Federation of Hong Kong Industries, Website: https://www.industryhk.org/upload/news/attachment/fb03706932c6044b6c5169d03a05a87a.pdf
 Monitoring Report on Collective Labour Disputes of Hong Kong Enterprises in China, HKCTU, Website: http://www.hkctu.org.hk/cms/images/userfile/file/2015-16%20Labour%20Rights%20Violation%20Report_Chi_Final.pdf