A Response to Maersk’s January Statement (REVISED on 30 Mar 2009) Globalization Monitor March 19, 2009
In response to Globalization Monitor’s January report and the related Danish news report on the deplorable working conditions at the Dongguan Maersk plant, Maersk released a statement on 12th January, refuting nearly all of the charges.
This statement aims at clarifying the truth. It will be followed by a full report in due course.
Barrack like factory regime: more and more unjust penalty clauses
Maersk’s statement begins by reiterating its supposed “high standards” regarding the working conditions and environment at the Dongguan plant. Unfortunately the opposite is true. In certain sense Dongguan Maersk’s working conditions are worse than others. It has an employee handbook that contains 73 penalty clauses, many of them seriously violating basic human and labour rights as stipulated by both ILO conventions and Chinese laws. Our investigation suggests that CIMC (China International Marine Containers (Group) Co. Ltd) plant in Xinhui (hereafter Xinhui CIMC), which is also container manufacturer and business partner of Dongguan Maersk, has an employee handbook (2006 version) containing only19 penalty clauses and none of them explicitly violate basic human and labour rights. We are not sure if the Xinhui CIMC has any internal and confidential penalty clauses, unknown to us, that are as bad as Dongguan Maersk’s. We welcome any correction here. We are, however, very much sure that in Dongguan Maersk, the barrack like factory regime goes from bad to worse. Just compare the 2006 version of Dongguan Maersk’s employee handbook with the 2008 version. One will immediately find out that whereas the former “only” contains 52 penalty clauses, the management found it necessary, after two strikes which reveal the depth of workers’ discontent, to further increase the number to 73! The parts the new managing director has added include the clause on penalizing workers for not queuing up properly in the canteen or failing to put back used utensils.
Bad-mouthing workers
The Maersk statement comes to the management of Dongguan Maersk’s defense by saying that, “many employees are former rural workers who are not used to working in a factory where many people eat together in a canteen. One of the episodes that resulted in a strike was in fact caused by a lack of proper queue behavior.” Apart from insulting the workers for the nth time, Maersk has apparently sought advice from the wrong people as far as the behavior of Chinese rural migrant workers is concerned. Chinese peasants are accustomed to “many people eating together”, as a matter of fact. In Hong Kong, although many of the rural areas have long since become sub-urban land and the overwhelming majority of the indigenous rural population has abandoned farming altogether, the residents of whole villages eating together at big feasts is still common during festivals. It does not take much effort at all to find out the truth. As for the supposed lack of “behaviour queuing up,” the Maersk statement simply leaves out its own responsibility: before May 2008, the workers had only a 30 minute lunch break. Walking from the respective work stations to the canteen, going through the long queue which is always “S” shaped because there are so many people etc, often takes workers 8-10 minutes if not more, hence the rush to queue up and eat. The gangster like behavior of security guards, who always want to fine and bully workers, only make things more difficult for workers. To blame the workers’ alleged lack of “behavior of queuing up” for their strike is simply blaming the victims.
Increasing work injuries, long working hours, low pay
The Maersk statement denies that Dongguan Maersk had daily work injuries and claims that in 2008 there were only 34 injuries. This is not true. We have at hand part of a list of work injuries indicating that in August 2008 alone there were at least 30 injuries, in July there were at least 21 injuries. The sum of these two months alone, therefore, already far exceed the Maersk yearly figure. Why the high work injuries rate? It is because since Mr. Hultengren joined Dongguan Maersk, the management had increased production target from 150 containers to 180 per day. Most injuries happened when workers rushed to attain the required output. This was without any regard to workers’ health. In addition to this, there was long working hours until the end of 2008: 11 hours a day, six days a week. For a month with 26 working days, it meant a total of 286 working hours, including around 100 hours overtime. This far exceeded the 196 monthly working hours (40 hours per week plus a maximum of 36 hours of overtime a month) permitted by the Labour Law. It is a gross violation of law. Workers do not complain about long working hours too much, though. This is not because they are supermen but because their basic wages are miserably low and if they eventually earn higher wages it is because they work overtime. After the Lunar New Year holiday working hours were cut in Dongguan Maersk, not because of any consideration to abiding the laws, but because of declining orders as a result of the economic crisis. Now only half of the workforce is still on duty and “only” work 9 hours a day. The other half is on “paid” leave but is paid only with its basic wages, which range from 600-1,059 yuan per month. This is little more than Dongguan’s statutory minimum wage of 770 yuan. After deductions are made for paying social security insurance and into pension funds, wages might actually be as low as 400 yuan.
Workers suffer from hearing loss
Dongguan Maersk does not perform any better in the prevention and treatment of occupational diseases. The Maersk statement denies that there has been any “permanent hearing damage”. This is misleading, if not totally wrong. According to our investigation, there are dozens of cases where the hearing of workers has been damaged to different degrees. The initial diagnosis of Wang Dapeng shows that the victim’s hearing loss reaches 68 dB; for Yuan Dayong it is 40 dB, which far exceeds the normal level of 25dB. The most serious case of hearing loss that we have found is 77dB. Whether any of these cases will be eventually diagnosed as “permanent damage” depends on follow up treatment and diagnosis. This in turn depends on whether the management has acted in accordance to laws governing occupational diseases treatment and compensation to provide necessary information. Numerous evidence points to the fact that Dongguan Maersk has failed to do so:
--- Medical investigation results were withheld, and not released to workers identified as suspected of being victims of occupational disease.
--- Repeated delay in sending relevant documents to the occupational diseases hospital for diagnosis.
Using excuses to dismiss occupational disease victims who were identified by the hospital as “placed under observation,” in order to evade treatment and compensation responsibility, despite the fact that according to the law this category of victim workers cannot be dismissed (for instance, Yuan, Wang and others). The dismissed victims were hence being robbed of the right to further treatment and diagnosis, along with their right to compensation. The Maersk statement denies that there is a lack of ear plugs, and claims that “our employees can at any time and without limitation replace worn or damaged safety equipment.” The workers said otherwise, however. They said that before the strike in January 2008 they were allocated one pair of ear plugs, model 3M1100, per month. After the strike, in April 2008 this was increased to two pairs a month, and then after the May strike it further increased to four pairs a month. According to the staff of 3M company, Hong Kong, model 3M1100 may not effective enough as a protective device in a noise environment reaching 105-6 dB. Additionally this model will only effective when changed at least daily, and workers get proper training in using it. Making workers use the same plug for a whole week, let alone a whole month, will subject workers to exceedingly high noises.
Corruption
The Maersk statement denies any corruption and monetary gifts to middle management, or managers buying their positions. “We have procedures to prevent this”, it reassures us. A more qualified consultant might have advised Maersk that in China usually what counts are not laws nor rules, but the laws of jungle plus guanxi, or personalized networks of influence and social relationships. It is not unusual to see that company managers, mostly Chinese but also include other nationalities, tend to bring in their own guanxi in the pursuit of personal benefit. In companies where corruption are rampant, relatives and cronies of these managers get hired not because of their own merit but because of their guanxi, or after they paid their bribes. In the worst cases it consolidates into a mafia like sect who practically hijack at least a part of the company in the pursuit of their own interest, and grafts and corruption becomes widespread. If top management turn a blind eye to lower level management’s irregularities as long as the latter can squeeze enough sweat from workers, then the worst scenario will be inevitable. If Maersk is serious about its own promise of “zero tolerance to bribery and corruption,” what Maersk or its “independent auditor” should look into first is not only “procedures” but ask the correct questions: are the same things happening in Dongguan Maersk? Last but not least, is Maersk prepared to put in enough time and money and the suitable persons to make such a back breaking investigation? Does Maersk think that a one week investigation is enough to find out all the carefully guarded secrets, if any? In the final analysis, even if Maersk comes up with more knowledge about Dongguan Maersk, how can it ascertain that it is already the whole truth and not just a small part of the truth? How does Maersk know if there are still things that it does not know?
Prohibiting employees to give information about their own salaries
The Maersk statement claims that their employee handbook “only prohibited (employees) from giving information about their own salaries, and the current edition of the employee handbook does not state this.” This is not the case. Clause 53 of the penalties explicitly states that anyone “Leaking or ferreting out employee salary information, or publicly spreading the salary details of others or oneself” will be dismissed for the first offence. In Romanized Chinese it is “Xielu huo tanqu gongsi yuangong xinchou ziliao huo chuanbo tar en he ziji gongzi qingkuang de”, and “ziji” means “oneself or myself”. There should be no misunderstanding about it. The Maersk statement reassured us that they will work with the workplace union to make things right. It does not really make us feel more comfortable because it is just a yellow union. It does not enjoy any credibility. If Maersk is serious about respecting labour rights, it should directly open dialogue with all workers or former workers who have been unjustly treated by Dongguan Maersk.
A Terrorized Working Environment
Maersk had mistaken that strikes are illegal in China. The statement promises to look into the matter more closely without directly acknowledged the truth. We must point out that not only Maersk must acknowledge that strikes are not illegal openly, it should reinstate all workers who have being fired -- the number of them may be close to hundred -- because of involvement in allegedly “illegal” strikes. Dongguan Maersk is virtually in a spirit of terror. Not only are workers who dare to stand up for their rights being victimized by the management, and often dismissed, but also the local government is seriously biased towards the company and in many ways helps the company to repress the workers. In fact, local police have recently threatened one of the workers who wanted to make their voice heard. No one should be treated like a suspect criminal simply for voicing their grievances.
We appeal to the international labour movement to closely monitor the situation and to protest against any repression of workers. Our Proposal The headquarters of Maersk should send representatives with full power, bypassing Dongguan Maersk, to Guangzhou to open direct negotiation with all workers who have been treated unjustly. Once appointed, these representatives must make public where and when they are prepared to meet up with all workers and former workers who have grievances. The message for open and honest dialogue must be sent to all workers and former workers, and all efforts for ensuring the safe passage of workers to the venue of negotiation be made by the representatives. All former workers who come to the venue should have their travel expenses, food and accommodation allowances paid by the company. We request that Maersk gives us a reply in two weeks. We also request that Maersk replies to us concerning workers’ demands, in two weeks, that are stipulated in the appendix. The above request and the workers’ demands was presented to Ms. Annette Stube, Director of Corporate Social Responsibility of Maersk, and Mr. Irving A.Hultengren, Managing Director of Dongguan Maersk, in the morning of 19 March 2009.
Appendix
Demands of Dongguan Maersk Workers and Former Workers:
1. Reinstate all unlawfully dismissed workers, including but not confined to the following categories:
a. 29 workers dismissed for alleged invovlment in the 10 May 2008 "illegal" strike.
b. 17 workers dismissed for alleged involvement in 16 May 2008 "illegal strike”.
c. Wang Dapeng, Yuan Dayong and many others who were either put under observation by the occupational diseases hospital for suspected occupational diseases or having symptoms of which and were dismissed under various pretext.
d. Zhao Hongwei, who was beaten up by security guards in January 2008 triggering a protest and then a strike by his fellow workers. He was not treated fairly after he was injured, and was forced to leave the company after his superiors repeatedly made things difficult for him.
e. Workers who were dismissed for complaining to the company.
2. Make public the environmental investigation report and occupational hazards report.
3. All medical investigation reports of employees must be released to the latter immediately when the company gets them from the occupational diseases hospital.
4. Workers who have been on paid leave now should be paid in accordance to their average wages rather than the present arrangement of basic wages plus a 13.5 yuan daily subsidy, with which workers are not able to live on.
5. Workers who have been on paid leave now should have their severance pay calculated in accordance to their average wages rather than the present basic wages, if the company decides not to renew their contracts when they expire.
6. Workers who have medical investigation in hospitals other than the occupational diseases hospital should have their results recognized by the company.
7. Workers who are still on duty should have their wages raised because with a 9 hour working day the wages they get now are too low to survive on.
8. Maersk must deal with corruption and graft impartially.
9. Abolish all penalty clauses which are unlawful and unreasonable.
10. One month notice should be given to workers if the management decides not to renew their contracts when they expire.
11. The management of Dongguan Maersk must maintain open and fair dialogue with workers and Chinese must be used as the medium language.
12. The headquarters of Maersk must open negotiation with workers.
13. Maersk Dongguan had been charging workers with fines which were unreasonable and unjustifiable. The fines that had been charged should be returned to workers together with the interest.
14. The 15- minutes’ meeting before work should be paid as overtime payment.
15. Regarding the dismissal of workers on 16 Apr 2008 (as in the above mentioned point 1b, Maersk should openly apologize for the dismissal of workers.
