tricky footwork - eettisen kaupan puolesta ry · prospects of the european footwear industry (rpa...

Tricky FootworkThe Struggle for Labour Rights in the

Chinese Footwear Industry

CHANGE YOUR SHOESCHANGE YOUR SHOES

Anton Pieper, Felix Xu

Change Your Shoes

Table of contents

31 Introduction

2 The European Leather and Footwear Industry 4

2.1TheEuropeanLeatherIndustry 4

2.2TheEuropeanFootwearIndustry 5

3 The Chinese Leather and Footwear Industry 6

3.1TheChineseLeatherIndustry

3.2TheChineseFootwearIndustry

3.3Prospects:StrengthsandWeaknessesofthe

ChineseLeatherandFootwearIndustry 16

4 Labour Rights in China: National Legislation 17

4.1TheLabourContractLaw 17

4.2SocialSecurityLaw 17

4.3TradeUnionLawandFreedomofAssociation 18

4.4RegulationsonCollectiveNegotiationsandCollectiveContracts

forEnterprisesinGuangdongProvince 18

5 Labour Rights Violations in the Chinese Footwear Industry 19

5.1WorkforceStructure 24

5.2TheResultsoftheInterviews 25

5.3Conclusion 29

6 Recommendations 30

7 Bibliography 32

List of Abbreviations

ACFTU All-ChinaFederationofTradeUnionsASEAN AssociationofSoutheastAsianNationsCLIA ChinaLeatherIndustryAssociationCNY ChineseYuanDongguanCDC CenterforDiseaseControlEC EuropeanCommissionFOA FreedomofAssociationProtocolGDP GrossDomesticProductGSP GeneralSchemeofPreferencesILO InternationalLabourOrganizationMOHRSS MinistryforHumanResourcesandSocialSecurityMSI Multistakeholder-InitiativeOSHA OccupationalSafety&HealthAdministration

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ThefollowingstudyfirstgivesanoverviewofrecentdevelopmentsintheEuropeanleatherandfootwearindustry(Chapter2)thengoesontolookatthestructures,geographyandlegalframeworkoftheChineseleatherandfootwearindustry(Chapter3).Chapter4takesacloserlookattheChineselegislationrelevanttolabourrights.ThisunderstandingofthelegalframeworkaidsanalysisoftheinterviewswithindustryworkerspresentedinChapter5.Weinterviewed47workersfromthreefootwearfactoriesinGuangdongProvince,oneofthemostheavilyindustrialisedregionsofChinaandtheheartlandofChinesefootwearproduc-tion.Theseinterviews,conductedinlate2015,provideaclearpictureofcurrentdevelopmentsinthefootwearindustry.Thestudyendswithrecommendationsonhowvariousstakeholdersmightimprovesocialandenviron-mentalconditionsintheChineseleatherandfootwearindustry(Chapter6).

Inthepast,thebranchhasachievedrecordgrowthwhileignoringinternationalstandardssuchasthecorelabourstandardsoftheInternationalLabourOrganisation(ILO).Thishasledtoanincreaseinlabourdisputesinrecentyears,manyofwhichwereendedviolently.Atthesametime,Chineselawhaschangeddramaticallyinrecentyearsinfavourofworkers’rights,andtherearemanysignsthatworkersarebecomingmoreorganised.Thegainsmadebycivilsocietyprotestspresentedinthestudyathandareaclearsignthatthisisso.

1 Introduction

‘Duringthestrike,thepolicesettheirdogsonusandcommandedthemtobite.’

‘WhenIcamebackfromthefactory,wheremyforemanhadsentme,hetoldmeIwasfiredforbeingabsentfromworkwithoutreason.’

‘Sometimesworkerswerefinedbetween30and50yuanbecausethelunchlinehadn’tbeenorderly.’

ThesestatementsweremadebyworkersfromthreedifferentChinesefootwearfactories.Collectedininter-viewsconductedin2015forthisstudy,testimoniesliketheaboveattesttothefactthatlabourlawviolationsarestillacommonphenomenonintheChineseleatherandfootwearindustry.ThepeoplewhoworkatthefactoriesthatsupplyEuropeanbrandssuchasAdidas,ClarksandECCOtoldusof,amongotherinfringements,salariesthatarefarbelowalivingwage,involuntaryovertime,insufficientprotectionfromhealthandsafetyrisks,stateviolencetosuppressstrikes,unpaidsocialinsurancecontributionsandinsufficientseverancepayments.

AlloftheaboveishappeningdespitethefactthatChinahasveryprogressivelabourlaws,especiallyincompari-sonwithotherproducingcountries.Workersenjoymanyprotections,atleastonpaper,althoughnotfreedomofassemblyorfreedomofassociation.Whatismore,mostlargefootwearcompaniestodayhavecodesofconductmeanttocurblabourlawinfringementsbysuppliers.ThepresentstudytakesacloserlookatlabourrightsintheChineseleatherandfootwearindustry.Whicheco-nomicandpoliticalchangeshavebeenmadeinrecentyearsinbothsectors,andhowhavethesedevelop-mentsaffectedthesituationofindustryworkers?

Chinais,byawidemargin,thetopglobalproducerandexporteroffootwear.TheEuropeanUnionisinturnthelargestimporter–andChinaisitsmostimportantsuppliercountry.Soanyonewhowantstoknowaboutthesocialandenvironmentalconditionsunderwhich(leather)footwearsoldinEuropeisproducedmustlookatChina.

ThisstudyisaproductoftheinternationalcampaignChangeYourShoes.EighteenEuropeanandAsianorganisationshavecometogethertoraiseawarenessaboutproblemsintheproductionofleatherandfoot-wear.ResearchforthecampaignwasconductedinChina,India,Indonesia,EasternEurope,ItalyandTur-key,withtheaimofimprovingsocialandenvironmentalconditionsinthegloballeatherandfootwearindustry.

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TheEUisthelargestimportmarketforleatherandfootwearproducedinChina.FortheEuropeanmarketandEU-basedindustries–whichareincreasinglydefinedbyglobalisationandrestructuring–theriseoftheChinesefootwearindustryhasbeenofpivotalimportance.

2.1 The European Leather Industry

RelocationoftheEuropeanleatherindustrytoso-calleddevelopingorthresholdcountries,firstandfo-remosttoChina,hasbeenunderwaysincethe1970s.Theappealofthemovelayinlowerproductioncostsandlessstringentenvironmentallegislation.Presently,Europeantanneriesproduceleatherasanintermedia-teindustrialproductthatisusedindownstreamsectorsofconsumerproduction,inparticularinthefootwearindustry.

Fig. 1: The most important markets for leather from European tanneries

2 The European Leather and Footwear industry

TheEuropeanCommissionnotesthatin2015,theEuropeanleatherindustryandrelatedindustriescom-prisedroughly36000businesseswithoverallannualsalesofmorethanEUR48billionandaround435000employees(EC2015a:n.p.).Thetannerysector,arelativelyminorpartoftheEuropeanleatherindus-try,comprisedalmost1800businesseswith34500employees.Thefollowingdiagramillustratesdevelop-mentsoverthelastdecade,duringwhichtherehasbeenasharpdeclineinthenumberbothofcompanies(-25%)andemployees(-36%)(CotanceandIndustri-All2012:10).

Intermsofworkforcesize,theleatherindustryhasclearlyshrunk.Europeantanneriesnonethelesscontinuetoplayamajorroleontheglobalmarket.Thus,intheglobalproductionofsemi-finishedandfinishedleatherin2014,forexample,Chinaalonehadalargershare(29.5%)thanEurope(26.7%)(Cotance/IndustriAll2012:10).

MostEuropeantanneriesarefamilybusinesses.Theleatherindustrytypicallyevinceshighregionalconcen-trationandplaysanimportantroleinthelocaleconomy,sinceitisfrequentlyaregion’sprincipalemployer.Europeantanneriesareextremelydependentonaccessbothtoprimaryrawmaterialsuchasrawhide,andtoexportmarkets.TheEuropeantanningindustryisnonethelessstilltheworld’sleadingsupplieroffini-shedleather.Europeantanneries’shareintheglobalmarketisindecline,however,inparticularowingtotheriseofleatherindustriesinChinaandotherAsiancountries(CotanceandIndustriAll2012:10).ResearchontheleatherandfootwearindustrybytheIMUInstitute(DispanandStieler2015)statesthatwhilethecontinuedexistenceofEuropeanleatherfactoriesisnotunderthreat,leatherproducersaresteadilylosingtheircompetitiveedge,inparticulartorivalsinproducercountriessuchasChina.Inaddition,competitionwithcountriesthatinadequatelyenforcesocialandenvironmentalstandardsiscausingsocio-economicdamagecomparabletodumping.

TheEUisstillthemajorsalesmarketforEuropeanleather,absorbingtwothirdsofthetotalEuropeanleathersales.Traditionally,ItalyhasbeentheunrivalledleaderinEuropeanleatherproduction,followedbySpainandGermany.TheEuropeanleatherindustry’sUSPsontheglobalmarketarethepremiumqualityandvalueofitsproducts,mostlynicheproductlinessuchasspecialoccupationalfootwear,children’sfoot-wearorsnowboardingshoes(CotanceandIndustriAll2012:13).

n Footwear

n Furniture

n MotorIndustry

n LeatherGoods

n Clothing

n Other

Source: EC 2015a

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2.2 The European Footwear Industry

TheEuropeanfootwearindustryconsistsinthemainofsmallandmedium-sizedenterprises(SME),eachofwhichaverages10-15employeesandhasannualsalesofEUR1million.Mostsuchenterprisesarelocatedinregionswithlittleindustrialdiversification.Employmentlevelshavedeclinedsteadilysincethe1970s,whenfootwearmanufacturersbeganoutsourcingproductiontolower-costregions,initiallywithinEuropebutlaterfirstandforemosttoAsia.TheEuropeanfootwearsectorisstillfacingaforeigntradedeficityetexportrateshavesteadilyimprovedoverthelastfewyears.Thusexportsclimbedby48%between2010and2013,withexportstoChinashowingthefastestgrowth(EC2013:n.p.).

MostofthefootwearsoldintheEU–morethanhalfin2013–isproducedinChina.Vietnamtooksecondplacethatyear,withanimportshareof13%(EC2013:n.p.).ButproducingfootwearinChinaissteadilybecomingmoreexpensive,owingtorisingwagelevelsandmaterialcosts.Inaddition,thedevelopmentoftraderelationsbetweentheEUandChinahasbeeninfluencedinrecentyearsbyashiftintheEU’sgeneralschemeofpreferences(GSP)(EC2015b:n.p.).Thistariffagreementmadespecialregulationstobenefitleastdevelopedcountries,whichwereguaranteeddutyandquota-freeaccesstoEUmarketsforalmostallproducts.Inconsequence,Chinesefootwearhasbeensubjecttohigherimportdutiessince2014.CountriessuchasBangladesh,Indonesia,VietnamandIndia,whichstillenjoythelowerimportduties,werethusabletoincreasetheirfootwearexports,someofthemsubstantially(CBI2015:n.p.).

From2010to2014,footwearimportstotheEUrosecontinually,reachingavolumeofEUR40.8billionby2014,29%morethanthefigurefor2010.Germanyisthemajorimporter,accountingfor19%ofthetotalEUimports,followedbyFrance,ItalyandtheUK.

ChinaretaineditsoutstandingpositionasleadingexportertotheEU,eventhoughtheexportgrowthrateshrankfrom23%in2010to20%in2014(CBI2015:n.p.).

ManyEuropeanfootwearcompaniesinitiallycooperatedwithChinesesuppliersinordertoreduceproductioncosts.Thissamemotiveisnowdrivingtheshiftinpro-ductionfromChinatoEastEuropeancountries,suchasBulgaria,RomaniaandHungary(RPA2012:44ff.).

2.2.1 Restructuring in the European Footwear Industry In2010theEuropeanCommissioncommissionedacomprehensivesurveyofthecurrentsituationandprospectsoftheEuropeanfootwearindustry(RPA2012:n.p.).ThesurveyconcludedthattheEuropeanUnion,intermsofvalue,isthelargestfootwearmarketintheworldand,intermsofvolume,thesecondlargestafterAsia(DispanandStieler2015:37).Thehighlyglobalisedfootwearindustryischaracterisedbystrongcompetition,inparticularbetweenEuro-peanandAsianproducers.ThepersistentpressureofcompetitionhasledtocomplexrestructuringmeasuresintheEuropeanfootwearindustry,includingnumerousfactoryclosuresandtakeovers.Thecompanies’mainmoveshaveincluded:

• Strongerorientationtonichemarketsandfashionlines.

• Developmentofnewdistributionnetworksandnewmarkets.Ontheonehand,footwearmanufacturerssuchasEcco,AraorGaborhavemovedintoretailandopenedtheirownstores;ontheother,largefootwearretailerssuchasDeichmannhavemovedintofootwearproduction.

• Probablythemostimportantrestructuringmeasurehasbeentooutsourceproductiontoso-calledlow-wagecountries,withinEuropeandinternationally,wherebythereseemstobeatrendtoreturnopera-tionstoEurope(RPA2012:44).

2.2.2 A Look at GermanyThedevelopmentofthefootwearandleatherindustryinGermanycanserveasanexampleofthedevelop-mentoftheindustryinthewholeofWesternEurope.ThestructureofthefootwearindustryinGermanyandindeedinlargeareasofEuropeisbasedonregionalconcentrationandspecialisationinspecificproductiontechnologies(Schamp2012:94-103).Inthisway,PirmasensevolvedasGermany’sfootwearmetropolisinthenineteenthandtwentiethcenturies.Sincefoot-wearmanufacturingdeclinedintheregion,PirmasenshasbecomeoneofthestructurallyweakregionsofGermany.

Thefootwearindustryranksamongthesectorsthatpioneeredandradicallyamplifiedtheinternationaldivisionoflabour.Thesectorrepresentsthevanguardofeconomicglobalisation,foritbegantooutsourceproductionasearlyasthe1960s.Forexample,theGaborfootwearcompanymovedproductiontoAustriain1960,alsobecausewagestherewere25-30%lowerthaninitsnativeGermany.In1975,itbeganincreasinglyrelocatingproductiontoYugoslavia(boot

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shafts)andthenonagrandscaletoPortugal(DIW1997b:n.p.).Thusfromthe1970sto2000,outsourcingproductionwroughtprofoundstructuralchangeintheGermanfootwearindustry,includingnumerousfactoryclosuresandtheattendantmassredundancies(Dis-panandStieler2015:34).Thevolumeoffootwearandthenumberofemployeesshranksubstantiallyinthisperiod,morethaninanyothermanufacturingsectorinGermany(BMWi2015:n.p.).Inrecentyears,boththeeconomicsituationofthefootwearindustryandthesizeofitsworkforcehavestabilised.

TheannualsurveyoftheGermanyFederalMinistryofStatisticsfor2013statesthatcirca17400employeesin135enterprisesmadetotalannualsalesofaroundEUR3.2billion(Statista2015a:n.p.).

Atalmost32%,theexportquotaofthefootwearandleatherindustryisbelowtheaveragequota(46.3%)in

otherproductionsectorsinGermany(StaLABW2015:n.p.),andhassteadilydeclinedsince2009(Statista2015b:n.p.).Inrecentdecades,Germanyhasceasedtobeafootwearproductionbaseandhasbecomeinsteadatypicalfootwearimportercountry:thevalueofitsimportsisnowmorethantwicethatofitsexports(Statista2015d:n.p.).

In2014,around20millionpairsofshoeswereproducedinGermany.Thisequalsaround5%ofthetotalnumberofshoesonsaleinGermany(circa400millionpairs;BMWi2015:n.p.).

ChinaisbyfartheGermanfootwearmarket’sleadingsupplier,intermsofbothvolumeandvalue(Statista2015e:n.p.).In2013,Germanyimportedalmost300millionpairsofshoesandbootsfromChina,whichmeansthatfarmorethaneverysecondpairimportedtoGermanywasproducedinChina(Statista2015a:n.p.).

3 The Chinese Leather and Footwear Industry

Formanyyearsnow,Chinahasbeentheunrivalledgloballeaderinleatherproductionandleatherexport(ConsulateGeneralofPakistan2011:2f.).1AlthoughtheChineseleathersectorisnowfacingmajorchan-ges,itisunlikelytolosethismarketedgeinthefore-seeablefuture(FMAG2015:n.p.).

In2013,Chinaproducedover613millionsquaremet-resofleatherandin2014,over590millionsquareme-tres–morethanallotherleather-producingcountriescombined(ABMA2014:n.p.).Chinaisalsobyfarthegloballeaderinfootwearproduction:itturnedoutover15.7billionpairsofshoesin2014alone(fig.2).Thatsameyear,Chinaalsobecametheworld’sbiggestconsumeroffootwear,with3.65billionpairs,whiletheEUconsumed2.8billionandtheUSA2.3billionpairs(fig.3).

However,theaverageconsumptionoffootwearinChinastandsat2.9pairspercapitaperyear,asopposedto7.6pairsintheUSAand5.8pairsinEurope(APICCAPS2014:48).IfpercapitafootwearconsumptioninChinaweretodoubleoverthenexttenyearsandthuscometoequalthatoftheEU,itwouldamountto7billionpairsperyear.

Anindustryofsuchmagnitude,whichemploysbetween4and7millionindividuals2,hasanenormousimpactbothonthecreationofsustainablesupplychainsandthepromotionandprotectionoflabourrights.ThischapterthereforeaimstogivethereaderageneraloverviewoftheChinesefootwearandleatherindustry.

1 Theterm‘Chinese leather industry’coversvarioussectors, includingtheproduction of leather and furs, chemicals,machineaccessories,and leathergoods for the footwearandgarment industries. Inotherwords, thefootwear industry inChina isregardedasasub-sectoroftheleatherindustry.

2 Statisticsfluctuate,butonecan reckonwithcirca4 to6millionem-ployees in the leather industry, and circa1.6million in the footwearindustry(seeChapter3.1and3.2).

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Fig. 2: Top 10 Footwear Producers (2014)

Fig. 3: Top 10 Footwear Consumers (2014)

Country Pair (Mio.) Global Market Share (%)

1 China 15700 64.6

2 India 2865 8.5

3 Vietnam 910 3.7

4 Brazil 900 3.7

5 Indonesia 724 3.0

6 Pakistan 386 1.6

7 Turkey 320 1.3

8 Bangladesh 315 1.3

9 Mexico 245 1.0

10 Italy 197 0.8

Source: APICCAPS 2015

Country Pair (Mio.) Global Market Share (%)

1 China 3646 18.8

2 USA 2295 11.8

3 India 2048 10.5

4 Brazil 907 4.2

5 Japan 607 3.1

6 Indonesia 548 2.8

7 GreatBritain 523 2.7

8 Germany 435 2.2

9 France 434 2.2

10 Russia 411 2.1

3.1 The Chinese Leather Industry

In2014,majorChineseleatherproducerswithoverallannualsalesinexcessofCNY20million(circaEUR2.8million)recordeddomesticannualsalesofoverCNY1.3trillion(CLW2015a:n.p.).3Itisdifficulttodeterminetheproportionofthegrossnationalproduct(GNP)thisrepresents,butinalllikelihooditisrelativelysmall;giventhatin2010,forexample,theChineseleatherindustry’sgrossoutputwasaroundUSD115

billionandthatoftheChineseeconomyoverallcircaUSD6trillion(WorldBank2015:n.p.).

3 Chinesecurrency(Chineseyuan)isinternationallyabbreviatedtoCNY.Thesumsdetailedinthisstudyarebasedontheexchangeratecitedatwww.oanda.comfor31.12.2015:CNY/RMB1=EUR0.13,EUR1=CNY/RMB7.48.Giventhatexchangeratesfluctuates,sumsareoftencitedhereinyuantoassuregreateraccuracy.

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Region Export Share in %

1 USA 23.22 EU 21.23 ASEAN 7.3

Source: CLW 2015b

However,astheViceGeneralSecretaryoftheChinaLeatherIndustryAssociation(CLIA)explainedatapressconferenceinApril2015:‘Theleatherindustry’sexportgrowthrecordedadeclineforthreeconsecutiveyears(2012-2014)andtheexportsoftheindustryin2014fell1.8%intermsofgrowthrate’(CLW2015a:n.p.).Despitethisdeclineinexportgrowth,theChineseleatherindustry’sexportsincreasedoverallby7.2%toUSD88.9billion.Importsincreasedby10.7%toUSD9.4billion(CLW2015a:n.p.).

In2014,thecountry’s644mediumandlargetanneriesproducedabout590millionsquaremetersofleather.Thevolumethusmoreorlessstagnated,showingonlyaminimalriseof0.6%in2013.Exportsof‘finished’(i.e.fullyprocessed)leatherdevelopedfavourably:33000tonsatatotalvalueofUSD590million,henceariseinvolumeof12%andinvalueof18.7%.Inparal-lel,importsoffinishedleathershrankinvolumeby5%andinvalueby3.9%(Schuhkurier2015:n.p.).

ThesefiguresattestthattheChineseleathersectoroverallisgrowingmoreslowlythaninpreviousyears.Yetthisdropinproductionisnottobeattributedtothestricterenvironmentalstandardsinplacesince2014(seeGovernmentPolicy).Infact,thenewstandardshaveledtoahigherqualityofgoodsandsoareindirectlyresponsibleforexportgrowth,atleastinthefinishedleathersector(CLW2015c:n.p.).

ChinaacquiresmostofitsleatherfromtheEU,BrazilandtheASEANstates–60.5%in2014.ImportsofleatherandleathergoodsfromItalyalone,theChineseleatherindustry’sleadingsupplier,amountedto23.4%in2014,whileBraziltooksecondplace(CLW2015b:n.p.).

3.1.2 Production HubsChinahasvariousregionalproductionhubsforleather,manyofwhichhavespecialisedinparticularproducts.ThusBaigou,inHebeiprovince,producesleatherexclusivelyforbagsandsuitcases,andHaining,inZhejiangprovince,forgarmentsandseatcovers.Xingji,likewiseinHebei,isrenownedforitsfurcoats(CLW2015d:n.p.).

In2014,thefiveprovincesZhejiang,Henan,Hebei,JiangxiandFujiaproducedmorethan75%ofallleathertannedinChina.Zhejiangprovinceledthewaywitharound148981millionsquaremetresoftannedleather,whichrepresents25.53%ofChineseproductionoverall(CLW2015e:n.p.).

3.1.3 Structure of the IndustryLeatherproductionisanextremelyresource-intensiveandlabour-intensiveindustry.Technologicalrequi-rementsarefairlyminimal,however,andsoagreatnumberofsmallleatherproducershavesprungupalloverChina.Newfactoriescontinuetoopenwhileothersclose,makingitverydifficulttokeepcountofallthefactoriesinChina.However,thenumberoflargecompanies(withannualsalesofoverEUR2.7million)conveysaprettyclearpictureoftheleatherindustrylandscape.InDecember2014,therewere8309suchcompanies(GSN2015:n.p.).Thatwasasignificantincreaseoverthepreviousyear,whenonly7528companiesfellintothiscategory(seetable3).Theannualsalesoftheselargecompaniesin2014amountedtoaboutEUR176billion(CLW2015a:n.p.).ThelargeleathercompaniesaregenerallyinChinesehands.Amere12.5%ofthemhaveforeignowners(CLIA2013:n.p.;seealsotable4).

In2014,China’sshareingloballeatherexportswasaround41%(CLW2015a:n.p.),anditsvalueaccor-dinglyalmostUSD89billion(FMAG2015:n.p.).MostChineseleatherisexportedtotheUSAandEuropeorsoldwithintheASEANFreeTradeArea(AFTA).Thesemarketstogetherabsorbed51.7%ofChineseleatherexportsin2014(CLW2015b:n.p.).

Table 1: China’s Major Trade Partners

Region Total Import Share in %

1 EU 33.3thereofItaly23.42 ASEAN 17.23 BRAZIL 10.1

Source: CLW 2015b

Table 2: Chinas Major Import Markets

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Source: China leather 2015e

Fig. 5: Regional Distribution of Leather Production in China

Zhejiang 25.53 %

Other 6.2 %

Guangdong 2.48 %Guangxi Zhuang 2.03 %

Sichuan 2.72 %Jiangsu 4.36 %

Shandong 5.63 %Fujian 10.12 %

Jiangxi 10.46 %

Hebei 11.14 %

Henan 19.34 %

Table 3: Ownership Structure of Large Footwear Companies in China (2013)

Land Amount %

China 5279 70.1Taiwan,Hongkongu.Macao 1306 17.4Abroad 943 12.5Total 7528 100

Source: CLIA 2014

23.2 %

21.2 %

33.3 %

10.1 %

7.3 %17.2 %

North America

Europe

South America

Southeast Asia

Fig 4: China’s Leather Imports and Leather Exports

n LeatherimportstoChina(majorimportmarkets)n LeatherexportsfromChina(majorexportmarkets)

China’sfourmajorregionsofmanufacturing

Zhejiang25.5%

Henan19.3%

Hebei11.1%

Jiangxi10.1%

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3.1.4 Government PolicyTheleatherindustryranksamongtheworld’smostpollutingindustries.InChinaitisadirectcauseofdirehealthhazardsandenvironmentalproblems(CWR2014:n.p.).ThenewEnvironmentalProtectionLaw,whichcameintoeffect1January2015,clearlyatteststhegovernment’sendeavourtotackleitsmanyenvironmentalproblems.TheleatherindustrycertainlyranksamongthesectorsnowintheLaw’ssights.Pollutersmustnowreckonwithsubstantiallyhigherfinesandmorestringentcriminalproceedings.Inconsequence,companiesthatcannotaffordhigherenvironmentalstandardsarebeingpushedoutofthemarket(CLW2015f:n.p.).

ThereweresomeforerunnerstotheEnvironmentalProtectionLaw.E.g.,aregulationadoptedin2010stipulatesthattanneriesmusttreatchromium-contaminatedwaterseparatelyfromotherwastewater.Tothisend,itprescribesnewcriteriaformodernandcleantechnologies.In2014,theMinistryofIndustryandInformationTechnologypublishedStandardConditionsfortheTanningIndustry,mandatinginteraliahowtheindustryshoulddealwiththetanningprocess,technologyandequipment,environmentalprotection,andoccupationalhealthandsafety(Lexis-Nexis2014:n.p.).Thissamedocument,instipulatingthatanynewlyfounded,renovatedorexpandedtanne-rymusttreat(i.e.turnintofinishedleather)atleast300000rawhideseachyear,also explicitlyproscribes the establishmentofsmallertanneriesandmenacesthesurvivalofexistingones.

ItisevidentthattheChinesegovernmentwantstoabolishallthetechnologicallyout-datedandthusextremelypollutingtanneries.Suchmakeshift,oftenfamily-runbusinessessetupinthebackyardsofprivatehomeswillthereforeprobablysooncompletelyvanish.

3.1.5 Workers and Working ConditionsEstimatesofthesizeofChina’sleatherindustryworkforcerangefromcirca4to6million.Onestudyclaimedtheleatherindustryemployed6millionworkersin2010(ConsulateGeneralofPakistan2011:p. 2f.).AreportfromtheChineseNationalBureauofStatisticsputtheoverallnumberofemployeesintheleather,fur,featherandfootwearindustriesataround4.4millionin2013(NBSofPRC2014:n.p.).

Thegreatmajorityofemployeesintheleatherandfootwearindustryaremigrantworkers,apopulationgroupofcirca270millionpeople,accordingtotheNBS.MigrantworkersarethosewholeavetheinnerprovincesofChinatoseekworkintheindustrialheart-landsoftheSpecialEconomicZones(SEZ),whicharestrungmainlyalongtheeastcoast.However,China

hasnowreachedtheso-calledLewisTurningPoint,namelythatpointineconomicdevelopmentatwhichsurplusrurallabourisnolongerprofitable(FinancialTimes2015:n.p.).Theconsequenceisalabourshortageinmajoragglomerations,whichinturndrivesupwagelevels,regardlessofwhetherdemandforcheaplabourstagnatesorcontinuestogrow(RFA2013:n.p.).

Employerscancounterthisdevelopmentwithoneoftwostrategies:eithertheyimproveworkingconditions(e.g.raisewages)ortheyoutsourcetheirproductiontolower-wageregions.Manycompaniesthatoutsourceproductionfailtofulfiltheirstatutoryobligationstotheirworkers,suchaspayingcompensations(e.g.severancepay)orsocialinsurancecontributions(YGO2015:n.p.).Andwhilealabourinspectionssystemis,intheory,onhandtosupportemployeesinsuchcases,itischronicallyunderstaffed(seealsoChapter3.2).Thatiswhysuchviolationsfrequentlyleadtoindustrialaction.ThestrikeintheLideFootwearFactory(seeChapter5)isonesuchexample(InternationalView-point2015:n.p.).Admittedly,militantactionbyworkersmayalsobeusedtojustifydivestmentandfactoryclosures(WealthMagazine2015:n.p.).

3.1.6 Environmental Issues and Occupational Diseases and DisordersTheexcessiveuseofchemicalsinleatherproductionisaparticularlygraveenvironmentalproblem–anditalsohasasevereimpactonworkers’health.Equallyproblematicarethelargequantitiesofsolidwasteandwastewater.Onetonofrawhideisrequiredtoproduce200kgofleather.Asarulethelattercontains3kgofchromium.Thetanningprocessalsogenerates250kgofnon-tannedsolidwaste,200kgoftannedsolidwaste(alsocontaining3kgofchrome),and50000kgwastewatercontaining5kgchrome(Hüffer2004:423–428).In2010,forexample,theChineseleatherindustryproducedapproximately100milliontonsofwastewater(LeatherHC3602012).Amere20%oftherawmaterialendsupasleather.Morethan60%ofthechromelandsinsolidandliquidwaste(Kolomaznika2008:514–520).

Significantquantitiesofthehighlytoxicchemicalhexa-valentchromium–Cr(VI)or,morecommonly,Chro-

mium VI– canthereforebefoundintanneries’waste-water and solidwaste.Sinceabroadrangeofchemi-cals is usedintanning,theindustry’swastewateroftencon tainsotherpollutantsaswell(Mwinyihija2010:2).TheaforementionedstrictStandardConditionsfortheTanningIndustry,whichcameintoeffectinJune2014,weremeanttoputanendtothiskindofenvironmentalpollution.Somelocalauthoritiesbeganevenearliertoclosedownsmallertanneriesthatwerelikelytofailto

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meetthenewstandards(ILM2014:n.p.).Theenviron-mentalbenefitsofthisdevelopmentarecertainlywelcome.Butsincemostofthefinishedtannedleatherandsemi-finishedleatherproductsprocessedinChinaareimported(CLW2015b:n.p.),thepollutioninthesupplychainlargelyoccurselsewhere,atthepointoftanning.

Quiteregularly,footwearproducedinChinaisnotadmittedtotheEuropeanmarketorhastoberecalledbythemanufacturer,mainlyowingtoChromiumVI-contaminationoftheleather–60%ofthecasesofnon-admittanceoffootwearin2014occurredforthisreason(CLW2015g:n.p.).Since1May2015,theuniversalChromiumVIlimitinallgoodsmadeoforcontainingleather,andproducedinorimportedtotheEUis3mg/kg(0.0003%perkilogram)(EU2014:n.p.).Previously, the limit was 1000 mg/kg. Unless the Chineseindustryradicallyimprovesitsproductiontechnology,inparticularinitstanneries,andexactshigherstandardsfromitssuppliers,EUmarketsarelikelytoturnawayevenmoreChineseleatherproductsinthefuture.Theexcessiveuseofchemicalsimpactsnotonlytheenvironmentseverely.Thishighlytoxicindustryisalsoaserioushealthhazardfortheworkerswhocomeintodirectcontactwithchemicalsandinevitablycausesvariouswork-relateddiseasesanddisorders.TheEncyclopaediaofOccupationalIllnesses(ILO2011:n.p.)liststhefollowingrisksfortheleatherindustryworkforce:

1. Biological: Rawhidesarebreedinggroundsformicroorganismsthatmaycausecontagiousdisea-ses.Themostcommondiseasesarebrucellosis(ahighlycontagiousbacterialdisease),anthraxandtyphus.

2. Chemical: Tanneryworkers’exposuretonoxious chemicalsintheabsenceofsafeguardsmayhave amostdrasticeffectontheirhealth.Forexample, Formaldehyde, which is carcinogenic and traditionally mainly used as crosslinking agent in finishing but also as tanning agent.TheAmericanMinistry ofLabor(OSHA–OccupationalSafety&Health Administration)hasnamedseveralhealthhazards toworkers handling Formaldehyde.Theserangefromrespiratoryandeye diseasestoskindisordersandvariousformsof cancer(OSHAFactSheet2006:n.p.).

3. Physical: Theseeffectsensuefromtheoftendireworkingconditionsandintensiveproductionrates.Forexample,workinginapermanentlyhumidenvironment,suchasthewaterbathsofatannery,maycauserheumatoidarthritis.Workingwithdan-

gerousmachineryinadustyandloudenvironmentmaylikewisecausesicknessorinjury.Intensiveproductionmayleadtobackache,sprainsand/ortoRaynaud’sphenomenon,anextremediscolorationofthefingersandtoescausedbyvasospasmsthatdecreasebloodsupplytotheaffectedregions(ILO2000:n.p.).

Theleatherindustryisthereforeoftenatoxicbusi-ness.Allovertheworld,peopleandtheenvironmentaresufferingonaccountofthehazardoussubstancesusedintheleatherindustry.Workerssufferoccupati-onaldiseases,theenvironmentisincreasinglybeingpollutedandpeoplewholiveclosetotanneriesnowconsumewaterandfoodstuffsfulloftoxinsthatenterthefoodchainviacontaminatedlandandrivers.Andevenend-consumers,thepeoplewhobuyapairofleathershoes,maysufferskinproblemstriggeredbyresidualtoxins.

3.2 The Chinese Footwear Industry

3.2.1 Chinese Footwear on the Global MarketThefootwearindustryisbyfartheChineseleatherindustry’smostimportantbuyer(CLIA2013:n.p.).TheChinesefootwearindustryin2014wasestimatedtobeworthcircaEUR94billion(CLW2015h:n.p.).

Thefootwearsectorranksamongthemostexport-orientedbusinessesinChina.In2013,thecountryexportedaround75%ofitsfootwearatavalueofaroundUSD48billion.ThatmeansthatthreeoutofeveryfourpairsofshoessoldintheworldthatyearwereofChineseorigin.Inotherwords,Chinawithitsalmost10billionpairsofexportedshoeshadacquiredmorethan73%oftheglobalexportmarket,asopposedto62%in2010(APICCAPS2014:8).

ThemajorimportmarketsforChinesefootweararetheUSA,Russia,JapanandthecertainEUmemberstates(APICCAPS2015:48).TheUSAaloneaccountsfor16%ofChinesefootwearexports,whichrepresents26%oftheoverallexportvalue(APICCAPS2015:48).Alltheothermajortradepartners,interaliaGreatBritainandGermany,eachimport4-5%ofChinesefootwearexports(APICCAPS2015:48).

Owingtopersistentpricepressureintheglobalfoot-wearmarket,growthintheChinesefootwearsectorhasslowedcontinuallyinrecentyears.Whilethegrowthrateclimbedalmost27%annuallyafewyearsago,itslowedtocirca8%in2013and2014.Footwearexportsin2013werecirca8.5%higherthaninthepreviousyear(APICCAPS2014:46).In2014theincreasewasabout8%,makingatotalvalueofalmostUSD54billion(APICCAPS2014:48).

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Butnotonlyexportsareontherise,forChinaisimportingfootweartoo.WhilethetotalvalueofitsimportswasstillaroundUSD1.7billionin2013,itrosetooverUSD2billionin2014.Intermsofvolume,Chinaimported56millionpairsofshoesin2013and71millionpairsin2014(APICCAPS2015:48;APICCAPS2014:46).Butdespitethisgrowthrate,Chinadoesnotyetrankamongthetoptenfootwearimporters.

Intermsofprice,Chinaisanexporteroflow-costshoes,averagingUSD4.44apairin2014;andanimporterofexpensiveshoes,averagingUSD28.70apairthatsameyear(APICCAPS2015:48).Therelativelyhighproportionofleathershoesamongtheimports–wellover40%–mayhavecontributedto

thishighaverageprice.In2014,Chinaimported31.6millionpairsofleathershoeswithatotalvalueofUSD1.4billion(Schuhkurier2015:n.p.).

LeatherfootwearproductionrepresentsonlyatinysegmentoftheChinesefootwearindustry,namely7%–yetsalesof4.5billionpairsin2014spelled3.1%growthonfiguresfor2013.Ofthissalesvolume,965millionpairs(21%)wereexported(ReportBuyer2015,n.p.).Leatherfootwearproductionisaccordinglyconsiderablylessexport-orientedthanthefootwearmarketoverall.Therubber,plasticandtextilefootwearsectorsareofmuchgreaterimportanceforexport(seefig.6).In2014,theaverageexportpriceforapairofleathershoeswascircaUSD14,andtheimportpricecircaUSD43(ReportBuyer2015,n.p.).

Fig. 6: Leading Producer Nations of Leather Shoes

Fig. 7: China’s Footwear Exports By Material

Source: FAO 2015

Other 30.3 %

China 41.5 %

Mexico 6.7 %Italy 5.0 %

Brazil 4.1 %India 4.1 %

Indonesia 3.2 %Vietnam 3.1 %

USA 2.0 %

Textile 23 %

Rubber and Plastic 66 %

Leather 7 %

Waterproof 1 %Other 3 %

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3.2.2 Production HubsThemajorfootwearproductionhubsweretraditionallytobefoundinthecoastalprovincesofGuangdong,FujianandZhejiang(Pan2012:7ff.).Yetrisingproductioncostsinthecoastalregionhaveledmanyfootwearcompaniestorelocateinland,toSichuanProvinceforexample.Numerousnewfootwearproductionhubshavemushroomedthere(PRNewshire2015:n.p.).

Source: Own Research

Nonetheless,GuangdongisstilltheprimarylocationofindustrialprocessinginChina,alsoforthefootwearsector.MostofthefootwearfactoriesinGuangdongareclusteredinthePearlRiverDeltaregion.ThemostimportantproductionhubsthereareHeshan(CLW2013a:n.p.),Huidong(CLW2013b:n.p.)andDongguan(ChinaBriefing2013:n.p.).YueYuenIndustrialHoldingsLimited,theworld’slargestmanufacturerofbrandsportsandleisurefootwear,haslikewiseopenedthemajorityofitsfactoriesintheDongguanregion(YueYuen2015b:n.p.).

Fig. 8b: The Major Footwear Producing Regions in Guangdong Province

Fig. 8a: Chinas Major Footwear Producing Provinces

Guangdong

Fujian Zhejiang

Heshan

DongguanHuidong

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Unfortunately,statisticsontheregionaldistributionoftheindustryareavailableonlyfor2010.Atthetime,almost75%ofleatherfootwearproducers,respectivelyofthe2660footwearcompanies,werelocatedinthreeprovinces:Zhejiang(1130),Guangdong(772),andFujian(758)(Pan2012:p.408-409).

GuangdongProvincemaybetheheartofthefootwearindustrybutitplaysnosignificantroleinleatherprocessing.Itsoutputin2014amountedtobarely2.48%ofChineseleatherproductionoverall(CLW2015e:n.p.).Thatsameyear,however,GuangdongProvincebecameChina’sleadingimporterofleatherproducts.Rawmaterials,semi-finishedgoodsandfinishedleatheraccountfor86%oftheseimports(CLW2015a:n.p.).ThusthefootwearproducersofGuangdongdonotappeartoacquiremanyrawmaterialsfromtheirownprovince.4

3.2.3 The Structure of the IndustryIn2014,theproductionsectorofthefootwearindustrycomprisedcirca192largeand1356mediumcom-panies,representingalmost4.4%resp.32%ofallfootwearproducersinChina(CLW2015i:n.p.).Mostofthesecompanies,aboveallthelargerones,areheadquarteredinTaiwanorHongKong,andmainlysupplyinternationalbrands.ThusbothYueYuenIndustrialHoldingsLimitedandStellaIndustrialHoldingsLimitedhaveHQsinTaiwanandarelistedontheHongKongstockexchange.YetChinesecom-paniesheadquarteredinmainlandChinaarealsoinevidence,includingBelleInternational,China’slargestproducerofwomen’sshoes(FashionNetAsia2013:n.p.).

3.2.4 Government PolicyLikeotherlabour-intensivesectorsinrecentyears,thefootwearindustryhasfounditselfincreasinglyunabletoattractsufficientnumbersofworkerswillingtocarryoutextremelydemandingtasksinprecariousworkingconditions.Manycompaniesarethereforenowseekingtechnologicalsolutions–andinthemainproductionhubstheyenjoypoliticalsupportforthisstrategy(ChinaDaily2015:n.p.).Forexample,theCityofQuanzhouagreedtosubsidisecompaniesinFujianProvincetothetuneofcircaEUR270000,onconditionthatthemoneybeinvestedinautomatedproductionlines(CLW2015k:n.p.).Therearealsosignsthatthecentralgovernmentisusingthisformofdirectsubsidytodriveindustrialmodernisation(XinhuaFinanceAgency2015:n.p.).

3.2.5 Workers and Working Conditions

Fig. 9: Footwear Industry Employees By Sector (2010)

In2010,therewereover2millionpeopleemployedintheChinesefootwearindustry,byfarthevastmajorityintheleatherfootwearsector.In2014,therewerearound1.6millionpeopleintheChinesefootwearindustry(Quianzhan2015:n.p.).Thefootwearindustryusedtoalmostexclusivelyemploywomen,sinceitconsideredthemmorepatientanddocile,asinteraliasociologistAnitaChan(UniversityofSidney)reportedinherstudyofgenderrelationsinChina’smanufactu-ringindustries(YGO2015:n.p.).However,theinter-viewsonwhichthispresentstudyisbasedrevealedthattheindustrynowadaysisincreasinglyemployingmen.AccordingtoChan,thisshiftingenderstructureiscurrentlyacommonphenomenoninChinesemanufacturing(YGO2015:n.p.).Yettheinterviewsalsorevealedthatthefootwearworkforceisstillpredominantlyfemale,eventhoughtheproportionofwomenworkersisnowshrinking.

Childlabourlikewiseusedtobeverycommoninthefootwearindustry(IHS2015:n.p.).A13-year-oldchilddiedofexhaustioninafootwearfactoryinDongguanasrecentlyas2014(ChinaLabourWatch2014:n.p.).Thiswastragicproofthatcertainfactoriescontinuetoillegallyemploychildren.Reportspublishedin2014onchildlabourinDaliangshan,aremoteregionofSichuanProvince,revealthatchildrenfromthepoorerregionsofChinastillflocktothefactoriestosupplementtheirfamily’sincome(ChinaNews2014:n.p.).Chinahasbothratifiedinternationalconventionsproscribingchildlabourandpassedlawsofitsowntothissameend.

Source: Pan 2012

4 Theaccuracyofthisassumptionwasconfirmedinthecourseofourin-terviews.Oneworkeremployedasahide-cutteratStellaInternational’sleathershoefactoryreportedthatupto70%oftheleatherprocessedat the factory comes from overseas, because the leather tanned inChinaisdeemedinferior.

Leather Footwear 1 520 000

Rubber and Plastic Footwear370 000

Textile Footwear165 000

Footwear Overall 2 055 000

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Fig. 9: Footwear Industry Employees By Sector (2010)

Todeterminetheextenttowhichthesearerespectedresp.enforcedisagoalofthepresentstudy.

3.2.6 Labour InspectionsChineselabourlawstipulatesthattheresponsibilityforlabourinspectionslieswiththeso-calledlabourinspectorate,thevariousteamsofwhichreporttotheMinistryofHumanResourcesandSocialSecurity(MOHRSS).Labourinspectionsareofemployersalone,whomaybeorderedtoimproveworkingconditionsormake(over)dueworker’sinsurancepayments.Inspectionteamsmayalsoimposefinesfornon-compliance(Xie2015:123-125).

Logistically,labourinspectionsareastraightforwardalternativetoarbitrationtribunalsorlabourcourtsand,moreimportantly,theyaremuchlessexpensiveforworkersembroiledinlabourdisputes.In2013,inspectionteamsinChinadealtwith419000casesoflabourlawviolation,thushelpingmillionsofworkersreceivetheirduewagesorotherformsofstatutorycompensation(Wie2015:125).

Yetinspectorsareinacutelyshortsupply.Inlate2013,only3291labourinspectionteamsandcirca25000inspectorswereavailabletoChina’s770millionemplo-yees.Inconsequence,inspectionteamsarerarelyinapositiontoinitiatespotchecksoffactoriesandcompanies.Theytakeactiononlyinresponsetoworkers’reportsofviolations(Xie2015:127-128).

3.2.7 Environmental Issues and Occupational Diseases and DisordersEnvironmentalpollutionofthemostnoxioussortensuesfromtheuseofadhesivesandcleansingsolventsinfootwearproduction,whichfrequentlycontainhighlytoxicchemicals,suchasbenzene,hexaneanddichloroethane.Suchsubstanceswhenvolatilebecomeair-borne,andtheymayalsoconta-minategroundwatersuppliesifimproperlydisposedof.Buttheconsequencesareworse,byfar,fortheworkerswhocomeintodirectcontactwiththem.Somesixteenyearsago,thereport‘BenzeneinShoeManufacturing’(Gessenhofen2000:n.p.)clearlystatedthatregularcontactwithbenzenemayleadtoleukaemia.

Healthproblemsofworkersinshoeproductionareoftenlinkedtotheuseofhazardouschemicalsandinadequateprotectiveclothing,photo:Fritz Hofmann

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Benzenepoisoningisinfactthemostcommonoccup-ationalhealthhazardintheChinesefootwearindustry.OfficialstatisticsattestthatcontactwithbenzeneisthecommonestcauseofoccupationalpoisoninginChina,andalsoresponsibleforover60%ofallwork-relatedcasesofcancer(BanBenzeneCampaign2015:n.p.).

InDongguanbetween2008andAugust2015,aChi-neseNGOinterviewed85workerswhohadcontractedleukaemia,nineofwhomhadpreviouslyworkedinfootwearfactories.Between2003and2012,theDong-guanCenterforDiseaseControldocumented895casesofoccupationaldisease,97ofwhich(10.8%)werecasesofleukaemiabroughtaboutbybenzenepoisoning(SouthCN2015:n.p.).

3.3 Prospects: Strengths and Weaknesses of the Chinese Leather and Footwear Industry

China’sleadingpositioninthegloballeatherandfootwearindustryisstillunrivalled,eventhoughothermanufacturingnations,aboveall,Indonesia,VietnamandIndia,havebeguntoclosethegapinrecentyears.

Yetwhenitcomestofootwearandleather,Chinastillhasseveraldistinctadvantages:

1. Chinahasatitsdisposalanimpressivenumberofexperiencedandfinanciallypowerfulleatherandfootwearcompanies.

2. Chinahasextensiveinfrastructureatitsdisposal:roadandrailnetworks,ports,etc.

3. Chinaisendeavouringtocloseloopholesinitslegislationonenvironmentalprotectionaswellastointensifyenforcementthereof.

4. Chinahasawell-educatedworkforceatitsdisposal.

5. Chinahasadvancedscientificresearchatitsdispo-sal(GlobalFootwear2015:n.p.).

Inconsequence,noothercountrywillbeabletochallengeChina’sleadingroleinthegloballeatherandfootwearindustryintheforeseeablefuture.ThatwastheconclusionreachedbytheAmericansectorexpertPeterMangionewhencomparingChinawithnascentfootwearproducercountries(FashionNetAsia2014:n.p.).

ItmustbepointedoutnonethelessthatChina’sleatherandfootwearindustryispresentlyfacinganumberofchallenges:

1. Theriseinproductioncosts,particularlyonaccountofpayincreasesandmorestringentenvironmentallegislation,areleadingsomecompaniestorelocatetolower-wagecountries,suchasVietnam(TuoitreNews2014:n.p.).

2. China’sstrongcurrencyinevitablypushesupexportprices,alsoforshoes,andconsequentlydrivesdownexportquotas(TheWallstreetJournal2015a:n.p.).Chinahastakencertainmeasures–itintro-duceddevaluation,forexample–yetthesinkingvalueofitsrivals’currencieswipedoutthepositiveeffects(TheWallstreetJournal2015b:n.p.).

3. AmajorproblemfortheChineseleatherandfoot-wearindustry,thefootwearproductioncapacityofwhichbyfaroutstripsitsleatherproductioncapacity,isthedirelackofhigh-qualityrawhideoflocalorigin.Tomaketopqualityleathergoods,Chinaisobligedtoimportrawmaterial–itsrawhideimportsin2014amountedtoUSD9.4billion(CLW2015a:n.p.).Accordingly,thecontinuallyrisingcostofrawhideworldwidehasadverselyaffectedChina’sleatherindustryinrecentyears(GlobalFootwear2015:n.p.).

RecentresearchpublishedbyTheNetherlands’ForeignOfficeemphaticallyconcludedthatsuchchallengesaremakingChinatooexpensiveforEuropeanfootwearbuyers.Investmentinalternativeproductioncentresisthereforeontherise(CBI2015:n.p.).TheChineseLeatherIndustryAssociation(CLIA)likewiseremainscautiousabouttheindustry’sfutureprospects,giventhegeneraldropinprofitabilityandgrowthrates.ProfitsmarginsinrecentyearshaveshrunkaboveallinChina’seasterncoastalregion,thetraditionalheartlandoffootwearproduction(Schuhkurier2015:n.p.).

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4 Labour Rights in China: National Legislation

InChapter3,wetoucheduponrecentgovernmentlegislationrelevanttotheleatherandfootwearindustry.Evidently,theprimarypurposeofsuchlegislationistolimitenvironmentalpollutionorincreaseproductivity,andnottostrengthenworkers’rights.Yetalthoughitmainlyservestheinterestsofthestateandindustry,itofcoursealsohasanimpactonworkers.Forexample,thestricter–andwelcome–environmentalregulationoftanneriesleadstotheclosureofcompaniesthatareunabletomeetthenewstandards.Thisentailsjoblossesontheonehand,butalsoadropintheincidenceofoccupationalhealthhazards,suchaschromiumpoisoning,ontheother.Nonetheless,leatherandfootwearindustryemployeeswillfindthatbasiclabourrightsandregulationsaremuchmoreeffectivethanenvironmentallegislationwhenitcomestodefendingtheirownrightsandinterests.Thefourmostimportantlabourlawsaredetailedbelow:

4.1 The Labour Contract Law

Until1995,thePeople’sRepublicofChinahadnolabourlawsatall.Firstendeavourstodraftsuchlegislationwereundertakenin1979,shortlyaftertheCommunistPartydecidedtoinitiateeconomicreform,butittookanotherfifteenyearsforittobeadoptedandimplemented.ThedaytheLabourLawcameintoeffectwasawatershedinthehistoryofChineseworkers’struggleforrights:the8-hourday,maternityleave,non-discriminationoffemaleworkers,higherpayratesforovertime,therighttopublicholidays,specialprotectionsforunderageworkersandpaidannualleave,etc.werenowenshrinedinlaw.

Yetasfar-reachingasthelegislationwas,itfailedtoelaborateontheenforcementofitsvariousarticles.Morespecificlawsandregulationswerethereforesubsequentlypassed,includingforexample:

• LabourContractLaw• EmploymentPromotionLaw• Regulationsonpaidannualleave• LawontheMediationandArbitrationofEmploymentDisputes

• SocialSecurityLaw• Regulationsonspecialprotectionsforwomenworkers

Themostcomprehensiveofallthese,andthelawwiththemostimpact,istheLabourContractLaw.

TheLabourContractLawcameintoforcein2008inresponsetotheproliferationofprivatesectorindustrialrelationsaftertheturnofthemillennium.Itinitiallysowedgreatpanicamongemployers,whoconsidereditoverlyadvantageoustolabour.Forexample,itsti-pulatesthatemployeeswhocompletetenconsecutiveyearsofservicewiththesamebusinesshavetherighttoapermanentcontract.Moreover,itsetsoutalegalframeworkforcollectivebargaining.

TheoriginalLabourLawof1995isstillineffect,yetthemorerecentLabourContractLawprevailsifindividualarticlesprovecontradictory.TheLabourContractLawof2008isthereforetheprimarylegalrecourseforworkersseekingtodefendtheirrightsandinterests.ThemajorprovisionsareArticle14,regardingthedurationofemploymentcontracts;5Article42,regar-dingprotectionagainstwrongfuldismissal,interaliaincasesofmaternityleaveoroccupationalaccidentsandhealthhazards;Article85,regardingpaymentofwagesandvarioustypesofcompensation;andArticle88,regardingcriminalprosecutionincasesofdiscrimi-nation,poorworkingconditionsandthelike.

4.2 Social Security Law

InApril2014,morethan30000employeesatthefoot-wearfactoriesofYueYuenIndustrialHoldingsLimiteddownedtoolsforalmosttwoweeksinastrikeregardedasthelargestindustrialactioninChina’srecenthistory(TheGuardian2014:n.p.).Itwasofparticularimpor-tancetotheleatherandfootwearindustry.OnereasonforthestrikewasthatYueYuenhadmadeinsufficientcontributionstothesocialsecurityandpensionfund– andsomeemployeeshadfoundout.Andalthoughpoliceviolentlyendedthestrike,theChinesegovern-ment,includingthegovernment-controlledAll-ChinaFederationofTradeUnions(ACFTU),hadtoconcedethatthecompanyhadactedillegally(CPPCC2015:n.p.).

TheworkersbasedtheirappealmainlyonprovisionsoftheSocialSecurityLawthatcameintoeffectin2011andrepresentsafirstendeavourtoinstigateacomprehensivesocialsecuritysystem.Thelawsets

5 Art.14alsostipulatesthatifnowrittencontractissignedwithinthefirstyearofaperson’semployment,theemploymentmustberegardedascontractuallybindingandpermanent(Münzel2012a:2f.).

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outextensiveprovisionsregardingpensionsaswellasinsuranceincaseofillness,occupationalaccidents,unemploymentormaternityleave.6

Ofallthese,theuniversalrighttoapensionismostoftenatthecentreofindustrialdisputes(seeChapter5.3.1).Fromthedaytheyretire,allworkerswhohavepaidintothefundformorethan15yearsareentitledtothebasicpensionfortherestoftheirlives.Companiesthatfailtomakestatutorycontributionstothesocialinsurancefundsaveagreatdealofmoney.Tocoverthefivetypesofsocialinsurance,inlinewithprovin-cialregulations,YueYuenwasrequiredtocontributetheequivalentof11%ofeachworker’swage.YettheChinesedailynewspaperWenweiporeportedthatforoneworker,YueYuencontributedonlyCNY27.15(EUR3.67)permonth.GiventhathiswageswereCNY3000(EUR405),thecompanyshouldhavebeencontributingCNY330(EUR44.57).Ifthecompanywassimilarlywithholdingsocialinsurancecontributionsforallemployees,theyweresavingmorethanEUR4millioneachmonth(Wenweipo2014:n.p.).

NorisYueYuenanisolatedcase.Theinterviewsonwhichthisstudyisbasedrevealedthatotherfootwearfactoriespursuesimilarillegalpractices(seeChapter5).

4.3 Trade Union Law and Freedom of Associa-tion

AlltradeunionsinChinamustbelongtothegovern-ment-controlledAll-ChinaFederationofTradeUnions(ACFTU).Independenttradeunionsarenotpermitted.ThisislaiddowninArticles4,10and11oftheTradeUnionLawpassedin1992andamendedin2001.ThelawdoesnotgivetheACFTUtherighttoinitiateanyformofindustrialaction,suchasstrikes.7ItisthereforedifficulttomeasuretheACFTUagainstinternationallyrecognisedtradeunionstandards.Particularlyinviewofeconomicandsocio-politicalreform,thewagestrikesandindustrialdisputesofrecentyearscallintoquestiontheroleoftheACFTU.TowhatextentdoestheACFTUhelpworkersexercisetheirrighttofreedomofassembly?

IfoneexaminesChineseTradeUnionLawwithres-pecttothetasksthatfalltotheACFTU,itbecomesclearthatitdrasticallylimitsbothitsdutiesanditsscopeofaction.8Regardingworkers’righttofreedomofassociation,itisstrikingthatalthoughtheTradeUnionLawforbidsworkersfromfoundingindependenttradeunions,Article9explicitlystatesthatunionre-

presentativesmaybedemocraticallyelectedorvotedoutofoffice.ThatmeansthatwidespreaddemandsfordemocratisationoftheACFTUareactuallylegitimate.Andworkersrecurrentlycallfordemocraticallyelectedunions,asforexampleduringtheYueYuenstrike,provingtheyarenotyetthegeneralrule(seeChapter5.3.5).However,aslongastradeunionrepresentati-vesarenotdirectlyelectedbyandanswerabletotheworkers,whoarethusdeniedindependentorganisati-on,genuinecollectivebargainingisnotpossible.ThatisthereasonwagepolicyinChinainrecentyearshasbeenshapedalternatelybywagestrikesandraisesinthestatutoryminimumwage.

4.4 Regulations on Collective Negotiations and Collective Contracts for Enterprises in Guang-dong Province

InChina,provincialadministrationshavetherighttoimplementparticularlabourlawsandregulations,aslongasthesedonotconflictwithnationallegislation.AstheworkersinterviewedforthepresentstudyareemployedinGuangdongProvince,thelocalagree-mentsoncollectivebargainingadoptedin2015areofrelevancehere.

Therighttocollectivebargainingisclearlystipulatedinvariousnationallaws.Forexample,theLabourContractLawof2008setsthelegalframeworkforpaytalks.9However,itfailstostateexactlyhowcollectivebargainingshouldbecarriedout.

Asmentionedearlier,GuangdongProvinceisoneofthemostheavilyindustrialisedregionsofChina.Accordingly,industrialdisputesoccurthereoften.TheprovincialgovernmentofGuangdong,withthesupportofcertainworkers’rightsorganisations,introducedacomprehensiveframeworkforcollectivebargainingwithaviewtopreventingwildcatstrikesandfosteringeconomicstability.However,industriallobbyistsandassociations,firstandforemostHongKong’smajorChambersofCommerce,rejectedtheprovisionsthatsoughttomakecollectivebargainingeasiertoconduct

6 Cf.§10,12,16,23,33,36,44,53,56SocialSecurityLaw2011(Mün-zel2012b:2-9).

7 AlthoughoriginallyenshrinedintheConstitutionofthePRC,therighttostrikewasrevokedin1982,amovejustifiedbytheclaimthatundersocialism,therearenoproblemsbetweentheproletariatandmanage-ment.TheTradeUnion Lawof 1995 contains provisions for conflictresolution, including arbitration tribunals and labour court appeals.However,itdoesnotrecognisetherighttostrike(Geffken2005:89ff.).

8 SeeArt.22,TradeUnionLaw2001.9 Cf.Art.51,54and56,LabourContractLaw2008(Münzel2012a:8f.)

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(ChinaLabourBulletin2014).Thelobbyingwasulti-matelysuccessful;severalcontroversialarticleswererevised,watereddownorevenrejectedoutright,andnewmoremanagement-friendlyarticleswereadopted(Lexology2014).Thisiswhythefinalversionofthelaw,effectiveasof1January2015,turnedouttobefarlessprogressivethanlabourrightsorganisationshadhoped.

Oneparticularsorepointforworkers’rightsorganisa-tionsisthatstrikeactionisproscribedforthedurationofanycollectivebargaining.Workershavethusbeendeprivedoftheirmosteffectivemeanstogainleverageatthenegotiationtable.

SinceJanuary2015,experiencehasquicklyshownthatmanycompaniesarewillingtofloutthelaw.Forexample,Article19stipulatesthatcompaniesmustrespondtoworkers’demandsforwagenegotiationswithinthirtydaysandinwriting.Inpractice,workers’demandsareoftencompletelyignored.

LocalprovisionsoncollectivebargaininginGuang-donghaveaccordinglyledneithertoimprovementsinworkers’circumstancesnortoadropintheincidenceofindustrialdisputes.

5 Labour Rights Violations in the Chinese Footwear Industry

Whataretheday-to-dayworkingconditionsinGuangdong’sfootwearfactories?Tofindout,weinterviewed47workersfromthreeshoefactoriesinGuangdongProvinceinlate2015.Allbutoneofourinterviewpartnersworkedatoneofthefollowingthreefactories:YueYuenIndustrialHoldingsLimited,StellaInternationalHoldingsLimitedorPanyuLideShoesIndustryCo.Ltd.

Unfortunately,wedidnothavesufficientprojectfundingtoalsointerviewtanneryworkers.Firstly,thecentreofleatherproductionisfarfromGuangdong,makingitprohibitivelyexpensivetoinvestthetimene-cessarytoestablishcontactwithindustryworkers.Se-condly,whiletherearesmalltanneriesinGuangdong,itwasnotpossibletoestablishcontacttotheirworkersthroughlocalactivists.Ittakestimeforactiviststobuildtrustwithworkers–unlesstheyhaveworkedtogetherinlabourdisputes.Andtrustiskey,especiallyforthistypeofdatacollectioninanenvironmentwherelabourrightsareatrisk.

Theinterviewsdrewonaquestionnairedevelopedwithinthe‘ChangeYourShoes’projectandincorpo-ratingfundamentalInternationalLabourOrganisation(ILO)standards.Thesamequestionnairewasthebasisfordatacollectioninotherproducingcountries,forexampleIndiaandIndonesia.MostquestionsareinformedbytheILOconventions.Otherquestionsgatherpersonalinformationabouttheintervieweeandonesectiononlegallybindingemploymentcontractsfollows‘CleanClothesCampaign’guidelines. 10 Vgl.Artikel24,LokaleBestimmungenzuTarifverträgeninGuangdong

2015(Labornotes2013:6)

Asthetotalnumberofintervieweesisnothigh,andallofthosesampledworkinthePearlRiverDeltaecono-miczoneofGuangdongProvince,theresultsarenotrepresentativeoftheoverallsituationintheChinesefootwearindustry.Forexample,averageannualsala-riesinGuangdongProvincearethesecondhighestinallofChina(CCTVAmerica2015:n.p.).ThuslittlecanbededucedaboutwagelevelsintheChinesefootwearsectorasawholefromthewagesofourinterviewpartners.

Whenmorethan50%ofintervieweesgavethesameanswertoaquestiontheanswerwascategorisedas‘frequent’.Conformityofmorethan75%wasconside-red‘veryfrequent’andover90%‘extremelyfrequent’.Accordingly,conformitybelow50%wasjudgedtobe‘notfrequent’,below25%,‘rare’andbelow10%,‘veryrare‘.

>> CASE STUDIES

Thischapterbeginswithadescriptionofthecompa-niesthatownthefactoriesinwhichintervieweeswereemployed,followedbyadetailedintroductiontotwoofourinterviewpartners.

Change Your Shoes

In addition to national legislation, China has ratified the following ILO core labour standards:

C100 Conventiononequalremunerationformenandwomenworkersforworkofequalvalue (adoptedbyILOin1951;ratifiedbyChinain1990)C111 Discrimination(EmploymentandOccupation)Convention(1958;2006)C138 MinimumAgeConvention(1973;1999)C182 WorstFormsofChildLabourConvention(1999;2002)

China has not ratified the following four core labour standards:

C029 ForcedLabourConvention(adoptedbyILOin1930)C087 FreedomofAssociationandProtectionoftheRighttoOrganiseConvention(1948)C098 RighttoOrganiseandCollectiveBargainingConvention(1949)C105 AbolitionofForcedLabourConvention

The following additional ILO-Conventions are relevant for this study:

C001 HoursofWorkConvention(1919;notratified)C026 MinimumWage-FixingMachineryConvention(1928;1930)C131 MinimumWageFixingConvention(1970;notratified)C155 OccupationalSafetyandHealthConvention(1981;notratified)

TheILOcorelabourconventionsareinternationallyrecognisedassocialstandards,havingthenatureofuniversalhumanrightsthatarebindingforallstates.

Therighttoemployment,tojustandfairworkingconditions,freedomofassociationandtheeffectiverecognitionoftherighttocollectivebargainingarealsoenshrinedintheUNInternationalCovenantonEconomic,SocialandCulturalRightswhichwasadoptedin1966.Therighttosocialsecurityandtherighttotheprotectionofthefamilyandanadequatestandardoflivingarealsopartoftheseestablishedhumanrights.

The ILO conventions, also called core labor standards or core conventions of the International Labour Organisati-on, are social standards within the world trade order, which are to ensure decent working conditions and adequate protection. They were laid down in a declaration of the International Labour Organisation (ILO) in 1998. The ILO is a specialized agency of the United Nations. In ILO Conventions numerous conventions to „fundamental principles and rights” (see ILO 1998: n.p.) are established.

Change Your Shoes

YueYuenisparticularlyimportanttothestudyathandbecauseworkerswentonstrikeatsixofitsDongguanfactoriesinApril2014(BBC2014:n.p.).Onereasonforthestrikewasthecompany’snon-paymentofbene-fits.Workersarestillwaitingforback-paymentoftheirpensionplansandbenefits.FailuretopaystatutorysocialsecurityandemployeebenefitsseemstoberestrictedneithertoYueYuen’sChinesefactoriesnortoYueYuenitself.Oneyearlater,similarstrikesbrokeoutinVietnam(BBC2015:n.p.).

Theseblatantlabourlawviolationsinthecompany’sfactoriesoccurdespitethefactthatYueYuenhasaCSRpolicy(YueYuen2015a:n.p.)andhasalsoparticipatedinseveralmulti-stakeholderinitiatives(MSI),includingthe2008‘PlayFair’campaignand,inSeptember2013,anMSIdialogueinJakarta,Indone-sia.YueYuen´sIndonesianfactoriesarealsoboundtoadheretotheFreedomofAssociationProtocol(FOAProtocol:n.p.),whichmanypurchasers(forexampleAdidas)havesigned.

Fig 10: Investigated Sites

Guangzhou

Fabriken Stella

FabrikenYue Yuen

Shenzhen

Hongkong

>> Yue Yuen Industrial Holdings Limited

YueYuenhasitscompanyheadquartersinHongKong.Itisasubsidiaryoftheworld’slargestfootwearmanufacturer,theTaiwanesePouChenGroup.In2014,YueYuenhadmorelong-termassetsinChinathaninanyothercountry,andstillownsfactoriesinmanyChineseprovinces.Italsohasnumeroussubsi-diaries.YueYuenitselfalsoholdslargermanufacturingplantsinIndonesiaandVietnam,andsmalleronesinHongKong,Bangladesh,CambodiaandTaiwan(YueYuen2015c:n.p.).WithannualsalesofoverUSD8billionin2014,YueYuenistheworld’slargestmanufacturerofsportsandleisurefootwear(YueYuen2015c:n.p.)andhasanestimated20%shareoftheglobalmarket.YueYuenwasfoundedin1988andlistedontheHongKongstockexchangein1992.Thecompany’sfactoriesmanufactureshoesformanyleadingsportsbrands,includingNike,Adidas,Crocs,Reebok,Asics,NewBalance,Puma,TimberlandandRockport.Italsohasitsownbrand,YYSPORTS,anditsownretailstructures.

Change Your Shoes

>> Stella International Holdings Limited

TheshoemanufacturerStellaInternationalHoldingsLimitedisaTaiwanesecompanyheadquarteredinHongKong.ItslargestsubsidiaryisStellaInternationalLimited,whichhasitsseatinDongguan,GuangdongProvince.StellaInternationalLtd.hasmorethan30subsidiariesofitsowninvariouscountries(includingIndonesia).However,mostofitsfactoriesareinChina(Stella2015a).Stellaalsodoesitsownretailbusiness,withbranchesin,amongotherplaces,France,thePhilippines,andtheUnitedArabEmirates.AnnualsalesofmorethanUSD1.66billionin2014makesStellaoneoftheworld’stenlargestshoemanufacturers(Stella2015a:n.p.;WenkuBaidu2015:n.p.).Thecompany’smainproductisleatherfootwear,whichitmanufacturesformanybrandsincludingsixofthetenlargestcasualfootwearcompanies(Clarks,Deckers,ECCO,Rockport,TimberlandandWolverine).StellahasbeenlistedontheHongKongstockexchangesince2007.

AlthoughthecompanyhasaCSRpolicy(Stella2015b:n.p.),therehavebeenmultipleviolationsoflabourrightstodateinitsDongguanfactories.InMarch2015forexample,between5000and8000factoryworkerswentonstriketodemandthatStellapayitsstatutorycontributionstoChina’shousingfund(Reuters2015:n.p.).In2011,Chinapassedasocialsecuritylawmandatingemployerspayatleast5%oftheave-ragemonthlysalaryintothisfund,whichismeanttopromotetheconstructionofprivatehousing(ChinaBriefing2010:n.p.).Thestrikewasbrutallyendedbythepolice.Manyactivistswerearrestedandsomewerehospitalisedwithdogbitewoundsorinjuriesfrombeatings.

Since2011,alargenumberofDongguanfactoryworkershavecontractedbenzenepoisoning.Manyofthemdiedwithouttheirillnesseverhavingbeenrecog-nisedasoccupationalrelated.Tothisday,Stellahasyettopayadequatecompensation.

InNovember2004,sevenworkers,threeofthemminors,werearrestedinDongguanfactoriesandsentencedtouptothreeandahalfyearsforthedestructionofmachinery.Afterinternationalcivilsocietystakeholdersincludingthe‘CleanClothesCampaign’putpressureonthebigbrandsforwhichStellaproduced,thesecompaniesappealeddirectlytotheChinesegovernment.Inthiswaytheprisoners’releasecouldbesecured.

>> Panyu Lide Shoes Industry Co. Ltd

PanyuLideShoesIndustryCo.Ltd.isaTaiwanesecompanyheadquarteredinTaipei.InMay2015,LidecloseditsPanyufactoryandrelocateditsentireproductiontoNanshainGuangzhouCity.ThenewfactoryinNanshaisnamedLida.ItisontheoutskirtsofGuangzhou,aboutanhour’sdrivefromtheoldfactory.ThenamePanyuLideShoesIndustryCo.isatranslationfromtheChinese.ThecompanydoesnothaveanEnglishwebsite.SincethePanyufactorywasclosed,wecanassumethatthenamehasnowbeenchangedtoNanshaLidaShoesIndustryCo.Ltd.ConflictsbetweenworkersandmanagementprecededtheclosureofthePanyufactory.AlloftheLideworkersinterviewedforthisstudyareformerPanyufactoryemployeeswhowereinvolvedinthelabourdisputespriortothecompany’srelocation.

SolidaritywithChineseworkersonstrike,photos:SACOMHongKong/Flickr.com

Change Your Shoes

NotnearlyasmuchinformationisavailableaboutLideasforthemuchlargercompaniesYueYuenandStella.Neitherafiscalreportnoranannualfinancialstate-mentorthelikeispubliclyavailable.Thecompanywasfoundedin1971andisgearedtotheexportmarket,producingforcompaniesthatincludeCalvinKleinandCrocodile.Asareactiontorelocationplans,workersorganisedthreestrikesin2014and2015.Theydemonstratedagainstunpaidsocialsecuritycontributionsandforcompensationforthosewhowouldlosetheirjobsowingtothemove.Duringthelaststrike,inApril2015,workerspicketedaroundtheclocktomakesurethatmachinerywasnottakenoffsite(ESSF2015:n.p.).Thestrikewasendedonlythroughalargeandviolentpoliceoperation.Onelocalactivistwasarrested.Nevertheless,thestrikewasconsideredasuccess,asworkersgainedsignificantcompensationpayments.Thishasmadeitanimpor-tantsymbolfortheChineselabourmovement.Theconflictisoftennamedasanexampleofsuccessfulcollectivebargaining,asanagreementwasultimatelyreachedinintensenegotiations.Butitshouldbestressedthatnoagreementwouldhavebeenreachedhadthemassstrikesnottakenplace.

>> Case Study of a Male Worker

Huis42yearsold.HeworkedforfiveyearsinoneofYueYuen’sDongguanfactories.Afterthe2014strikehewasdismissedwithoutnotice,inviolationofChineselabourlaws.

Hiswifeworksinthesamefactory.Theyhavetwochildren,bothofwhomgotoschool.TheirolderchildlivesintheirhometowninSichuanProvince;theyoungestliveswiththeminDongguan.Hu’sworkwastospray-paintshoes.Asaqualifiedworker,hismonthlysalarywasaroundCNY2900(EUR391).Toearnthatamount,hehadtowork212hourseachmonth(inclu-ding36hoursofovertime).Spray-paintingisdifficult,dirtyanddangerouswork,asthepaintsandvarnishescontainpoisonoussubstances.Hehadtostandonhisfeetalldayinthepoisonousfumes.Onsomedays,Huandhisco-workertogetherpainted2800shoes.Oneofhisco-workershasmeanwhilecontractedleukaemia.

On14April2014,whentensofthousandsofYueYuenworkersinDongguanlaydowntoolstodemonstrateinfrontofthefactories,Huwasonthesidewalkandobservedoncomingpoliceofficersbeatingthestrikingworkers.11Whenhetookhiscellphoneoutofhispocket,apolicecameramansuspectedhimoftakingphotos.Thatresultedinfiveorsixpolicemendragginghimaway,kickinghimandhittinghimwiththeirbatons.Thenhebecameunconscious.

Hefirstrecoveredconsciousnessatthepolicestation,hishandsandfeetcuffed.RatherthangivingHufirstaid,policeagainbeathimbrutally.Thebythattimebadlywoundedmanwasthenbroughttohospital.There,itwasfirstdeterminedthathisinjurieswerenotlifethreatening.Next,policeofficerschainedhimtothebedandforbadehospitalpersonneltoattendtohiswounds.WhenHudemandedtobetreated,apolice-manhithimintheheadsohardthathelostconscious-nessagain.

Ontheeveningofthesameday,Huwasbroughttothepolicestationforquestioning.Duringthisinterroga-tion,hewassubjecttonumerousverbalassaults.UnabletogetanyinformationfromHu,thepolicebroughthimtoapsychiatricclinic.

There,hewasfirstheldforhoursoutsidethebuilding.Hewasnotgivenanywater.Tostillhisthirsthehadtodrinkhisownurine.Intheclinic,hewasagainbrutallymistreatedbypoliceandclinicpersonnel.Hewaschainedtoabedfortheentirenightandcouldnotdrink,eatorgotothetoilet.Hewasnotreleaseduntillateafternoonthenextday,afterhiswifeandbrother-in-lawmanagedtofindhim.

WhenHuarrivedbackatthefactory,hewasaccusedofbeingatroublemakerandastrikeleaderandwasfiredon29May2014.Heneverreceivedcompen-sationfromeitherthefactoryorthepolice.Giventhesensitivenatureofhiscase,Huhasbeenunabletofindalawyerwhodarestotakeiton.

Tothisday,Husuffersfromhisinjuries.Thephysicallimitationscausedbyhismistreatmentpreventhimfromfindinganewjob.Almosttwoyearsafterthefact,heisstilloftenhauntedbynightmares.

>> Case Study of a Female Worker

MsWeiis51yearsoldandworksinaStellafactoryinDongguan.SheisamigrantworkerfromanotherregionandlivesapartfromherhusbandandchildbecausetherearemoreworkopportunitiesinDongguan.

Initially,hertaskatthefactorywastoremoveglueresiduefromshoes.Duringherfirstyears,sheworked11hoursperdayforanaveragemonthlysalaryofCNY3300(EUR445).However,shebelievesthatherovertimewasnotcorrectlycalculated.AccordingtoChineseLabourLaw,sheshouldhavereceivedtime

11 Soasnottofurtherendangerhimself,Hunevertoldushisexact functionduringtheaction.Wecanonlysurmisethathewasactively involvedinthestrike.

Change Your Shoes

andahalf(150%ofherregularhourlyrate)forweek-dayovertimeanddoubletime(200%ofherregularhourlyrate)forweekendovertime.However,thefactorycalculatedovertimebasedontheminimumwageratherthanitsworkers’actualsalaries,whichalsoincludesenioritywagesandperformancebonuses.Weithereforeobjectsthatherovertimewasremuneratedataratefarunderthelegalstandard.

Neitherwasshegivenadequateprotectiveclothing.Forexample,formanydaysinarowshehadonlyasinglerespiratorymaskthatwasintendedfornomorethaneighthours’use.Whatismore,until2014,thechemicalswithwhichshecameincontactwerenotlabelled,soshehadnowayofinformingherselfaboutprotectionfrompossiblerisks.

In2014,Weisufferedincreasinglyfromheadaches,dizzyspellsandnausea.Factorymanagementsetupadoctor’sappointmentforher,butshewasnevergiventheresults.Weibeganworkinanotherdepart-mentwhereshehadnodirectcontactwithchemicals.Butwhenhersymptomsabatedafterseveralmonths,shehadtogobacktoherprevioustask.

Soon,hersymptomsreappeared.Oneofherco-workerstoldherthattheywereindicativeofbenzenepoisoning.Shethereforewenttoanotherhospitaltobeexamined,wherethediagnosiswasinfactsuspectedbenzenepoisoning.Thedoctorsuggestedshebehospitalisedforthreemonthsinordertoobtainanexactdiagnosis.

AccordingtocurrentChineselaw,chronicbenzenepoisoningcanonlybeclassifiedasanoccupationaldiseaseafterathree-monthreviewperiod.Duringthisperiod,WeijoinedagrouporganisedbyalocalNGOthatworksonlabourrightsinChina.Withhernewlygainedknowledge,Weidecidedtousethelawtofightforherrights.

Afterthreemonths,shewasdiagnosedwithoccupa-tionalbenzenepoisoning.Nowsheisfightinginthecourtsforcompensationfromthefactory.Averdicthasnotyetbeenreached.

5.1 Workforce Structure

Ofourinterviewees,79%werewomen.Weinterviewedonlyworkersinlargefactories,someofwhichemploytensofthousandsofpeople.Withthosenumbersandnoaccesstomanagementfigures,itisdifficulttoassesstheexactgenderbalanceatthesefirms.Intervieweesmadeonlyroughestimates,puttingthepercentageofwomenintheworkforceat60-80%.We

canthusassumethattherearestillmorewomenthanmenintheworkforce,evenifthenumberoffemaleemployeesinChinesefootwearfactoriesisdecreasingoverall(seeChapter3.5.2).

Theaverageageofourintervieweeswas42;theyoungestwas18andtheoldest53.Somerespondentsmentionedthatolderpeopleareincreasinglybeinghiredbecausethefactoriesnowhaveahardtimeattractingyoungworkers.WeforexamplespokewitheightYueYuenfactoryworkerswhohadbeenthereonlyafewmonthsatthetime.Sevenofthemwerebetween40and50yearsold.Theaverageageofwor-kersthusseemstobeontherise.Thatmightexplainwhyindustrialactionhasincreasinglyfocusedontheissueofsocialsecurity,inparticularpensions.

Mostrespondents(43;91%)12weremarriedandhadchildren(39;83%).13DespiteChina’sone-childpolicy,inforcesincethe1980s,15intervieweeshadtwochildrenandfourothershadthreechildren.Thoseworkersneededmoretimeofftoraisetheirchildren.Theyalsoneededmoremoneytosupportthem,whicheffectsthecalculationoftheirindividuallivingwage.

5.2 The Results of the Interviews

5.2.1 Prohibition of Forced LabourILOConvention29,adoptedin1930,definesforcedlabouras‘allworkorservicewhichisexactedfromanypersonunderthemenaceofanypenaltyandforwhichthesaidpersonhasnotofferedhimselfvoluntarily’(ILOC29:n.p.).Convention105forbidsanyuseofforcedorcompulsorylabour‘asamethodofmobilisingandusinglabourforpurposesofeconomicdevelopment’(ILOC105:n.p.).Itfollowsthatinvoluntaryovertimeisaviolationoftheseconventions.

WhileChinahasnotratifiedeitherconvention(ILORfC:n.p.),theChinese1995LabourLawdoesstatethatworkinghoursshouldberestrictedtoamaximumofeighthoursperdayand44hoursperweek.Inaddition,workersmayputinvoluntaryovertimeofthreehoursperdayforamaximumof36hoursmonthly.14

Chineseworkersthereforehavetherighttorefuseovertime.Nevertheless,25(52%)ofthosequesti-onedstatedthattheywereforcedtoworkovertime.

12Tworespondentsdidnotanswerthequestionaboutmarriageandtwo answeredthattheyweresingle.13Onthequestionaboutchildren,4of47didnotanswerandfourothers statedthattheyhadnochildren.

14SeeArt.36,41LabourLaw1995(Münzel2012c:5).

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Punishmentsforrefusingtodosoincludeddisciplinarywarnings,thedeductionofallowances,demotionandverbalabuse.Manystatedthattheydependedonthemoneyfromadditionalhoursandconsidereditasubstantialpartoftheirregularsalary.Forthatreason,someintervieweesdidnotfeelliketheywereforcedtodoovertime,evenwhentheywereworkingmorethan30hoursextrapermonth.Almostallofthoseweaskedsaidthatthetendencyistowardslessovertime,becausetheirfactoriesarereceivingfewercontracts.Thereductionofovertimeisalsousedasameansofpunishment.Regularsalariesaresolow,limitingover-timemeansasignificantreductionofwages.

5.2.2 Prohibition of Child LabourChinahasratifiedILOConvention138whichforbidschildlabourandspecifiesaminimumageof15foradmissiontoemployment(ILORfC:n.p.).TheChineseLabourLaw(1995)andRegulationsBanningChildLabour(2002)goevenfurther.Thesedefinetheemploymentofchildrenundertheageof16aschildlabour–thusforbiddingthesame.

However,34interviewees(72%)saidthatnochildrenundertheageof16workedintheirfactories.Teninterviewees(21%)werenotsure,andonlythree(6%)werecertainthattherewaschildlabourintheirfactories.Thuschildlabourisnotcommonpractice,atleastnotinthefactoriessampled.

Chineselawdefines‘youngworkers’as16to18yearolds.ChinahasratifiedILOConvention182,andthusalsotheaccompanyingILORecommendation190,whichamongotherthingsinsistsuponspecialprotec-tionforworkersage16to18(ILOC190:n.p.).How-ever,neithernationalChineselawnortheprovinciallawsofGuangdongProvinceincludeprohibitionsorlimitationsforyoungworkersregarding,forexample,overtimeornightshifts.OtherChineseprovinces(forexampleZhejiangandJiangsu)haveinstatedsuchlimitationsforyoungworkers.

Sixworkers(13%)statedthatyoungworkersintheirfactoriesworkednightshifts;16(34%)didnotknowtheanswertothatquestion.Butthissuggeststhatnightshiftsforyoungworkersarenotcommonpractice.However,20interviewees(43%)statedthatadolescentsdidworkovertime,while27(57%)werenotsure.ThusitdoesseemthatyoungworkerscommonlyworkexcesshoursintheGuangdongfootwearindustry.

5.2.3 Non-discrimination in the WorkplaceChinahasratifiedbothILOConvention100andILOConvention111.15Convention100states:‘thetermequalremunerationformenandwomenworkersforworkofequalvaluereferstoratesofremunerationestablishedwithoutdiscriminationbasedonsex’(ILOC100:n.p.).InConvention111,discriminationisdefinedas‘anydistinction,exclusionorpreference[…]whichhastheeffectofnullifyingorimpairingequalityofopportunityortreatmentinemployment[…]’(ILOC111:n.p.).

Ourquestionnaireaskedonlyaboutdiscriminationonthebasisofgender.Forty-threeinterviewees(91%)statedthatwiththeexceptionofsomehardphysicallabour,menandwomendidthesametasks.Onlytwo(4%)saidthatmenandwomenwerepaiddifferentlyforthesamework.Twointervieweesalsosaidthattherehadbeencasesofsexualharassment.Allrespondentsconcurredthattherehadbeennoillegaldismissalofpregnantworkers.

However,theanswerstootherquestionswerelessheartening.Only25respondents(53%)saidthatwomenaregrantedpaidmaternityleave.Andnineofthose25statedthat,duringmaternityleave,salarieswerecalculatedasapercentageoftheminimumwageratherthanoftheaveragewageasstipulatedbylaw.Nineinterviewees(19%)saidthatmanagementdidnottreatwomenandmenequallyand14ofthosequestioned(30%),12ofthemwomen,saidtheythemselveshadbeensubjecttoverbalabuse.

Despitethefactthatthereislittle‘official’discrimina-tionofwomeninthefootwearindustry,thereismuchroomforimprovement.Womenshouldnotbearthebruntofunfairmanagementmethodsandtheyshouldreceiveadequatesalariesduringmaternityleave.

5.2.4 The Right to Association and the Right to Collective Bargaining ChinahasratifiedneitherILOConvention87(1948)ontherighttoassociationnorILOConvention98(1949)oncollectivebargaining(ILORfC:n.p.).China’stradeunionlegislationandGuangdong’sregulationsoncollectivebargainingwerepresentedinChapter4.ThemostimportantdifferencebetweenChineselawandtheILOconventionsisthatthelatterstipulateworkers’‘righttodrawuptheirconstitutionsandrules,toelecttheirrepresentativesinfullfreedom,toorganisetheiradministrationandactivitiesandtoformulatetheirpro-

15Ibid.

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grammes’(ILOC087:n.p.).AsdiscussedinChapter4,Chineseworkerscannotfoundindependentunions,butonlyjointhegovernment-controlledAll-ChinaFederationofTradeUnions(ACFTU).

Furthermore,werealisedduringtheinterviewsthatmostoftheintervieweesdidnotknowwhatatradeunionissupposedtoachieve.Sixteeninterviewees(34%)statedthattherewasnounionintheirfactoryandafurther15(31%)werenotsurewhetherornottherewasatradeunion.

43respondentssaidtheydidnotknowhowunionrepresentativeswerechosen.Thirty-sevenofthem(79%)havewitnessedstrikesandpoliceinterventionattheirfactories.However,thetradeuniondidnotplayaleadingroleineithertheorganisationofthestrikeorinsupportingworkerswhowerecriminalisedasaresultofparticipationintheaction.

AsdescribedinChapter4.4,GuangdongProvincedoeshavebindingregulationsoncollectivebargaining.However,theunionbranchesinthefactoriesstudiedhaveasyetmadenoattempttobegincollectivebar-gainingproceedings.Theresultsofoursurveyshow,thattheACFTUiseithernotpresentinthefactoriesexaminedorignoresitsstatutoryduties.

Afterrespondentsinformedthemselvesabouttherightsanddutiesofrealtradeunions,34(72%)agreedthattheyneededbothatradeunionandcollectivebargainingintheirfactoriestoenablethemtofightforhighersalariesandbetterworkingconditions.

5.2.5 Living WagesChinahasratifiedILOConvention28(1928)onmini-mumwagesandincludedaparagraphonminimumwagesinits1995LabourLaw(ILORfC:n.p.).16

IntheYueYuenandStellafactories,monthlysalariesconsistofthreeparts:thebasesalary,overtimeandvariousallowancesmandatedbylaw.Thebasesalaryisusuallyclosetotheregionalminimumwage.In2015,themonthlyminimumwageinthecityofDong-guaninGuangdongProvincewasCNY1510(EUR203)andthebasesalaryatYueYuenwasalsoCNY1510.IntheStellafactory,thebasesalarywasCNY1600(EUR216).

Sincethereisincreasinglylessovertimeduetodimi-nishingorders,andsinceallowancescanbecutasadisciplinarymeasure,workers’salariescanvarygreatly

frommonthtomonth.Furthermore,thecalculationofallowancesiscomplicatedanddoesnotappearonthepayslip,makingitdifficultforworkerstoascertainwhethertheyhavebeenpaidcorrectly.

TheLidefactoryusedadifferentsalaryscheme.Workerswereeithergivenafixedmonthlywageorpaidbythepiece.Forthisreasonworkerswerenotpaidtimeandahalfordoubletimeforadditionalhours,evenwhentheirworkdaywaswellovereighthours.

TheaveragemonthlysalaryofrespondentswasCNY3033(EUR410);themedianwasCNY3000.Allintervieweesstatedthattheyreceivedtheirpayslipsandtheirmonthlywagesontime.Manydidhoweversaythatovertimewageswerecalculatedbasedonthelegalminimumwagewithoutallowances(seeChapter5.2.4).

MostrespondentsdidnotknowthatthispracticewasaviolationofChineselaw.AlocalactivisttoldusthattheregionalgovernmentofDongguanhadpassedspecialregulationsallowingcompaniestocalculateovertimeinthismanner.ForworkersinDongguan,thismeansthatitiscurrentlyimpossibleforthemtotakelegalactionagainstthispaymentpractice,eventhoughtheregulationsareincommensuratewithfederallaw.

Asaresultoftheriseinindustrialactioninrecentyears,especiallyintheregion’slargefactoriesin2014and2015,mostfactoriesnowmakecontributionstoworkers’socialsecurityandpensionfunds.Forty-five(96%)ofrespondentsconfirmedthatcontributionshadbeenpaidtotheirsocialsecurityscheme.Ifhoweverwelookatpreviouslyunpaidcontributions,thepictureisquitedifferent.Manyintervieweesstatedthattheirfactorieshadnotyetmadeanyback-payments.Butthisisessentialtotheirwelfare,inparticularinthecaseofolderworkers.Forexample,China’s2010SocialSecurityLawstipulatesthatonlyretireeswhohavepaidintothegovernmentpensionplanforatleast15yearswillreceiveagovernmentpension.

ChinahasnotratifiedILOConvention131(1970)onfixingminimumwages(ILORfC:n.p.).The1995LabourLawstatesonlythatfixingandadjustingtheminimumwageshouldtakeintoconsiderationthecostofliving,theaveragesalaryofthesociety,productivity,employmentsituationandregionaldifferences.17Butneitherthecurrentminimumwagenortheaveragesalariesdepictedabovecomeclosetofulfillingtheneedsanddesiresoftheworkers.

16SeeArt.48LabourLaw(Münzel2012c:6)17SeeArt.49LabourLaw1995(Münzel2012c:6)

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Theinterviewsshowedthattocovertheirbasicneeds,workerswouldneedanaveragelivingwageofCNY4349(EUR590)permonth.ThisisfarmorethancalculatedbytheAsiaFloorWageCampaign,whichsetthelivingwageatCNY3132(EUR425)(CCC2013:n.p.).However,thatcalculationwasforChinaasawhole.ThecostoflivinginGuangdongishigherthanthenationalaverageandfurthermorehasrisenoverthepasttwoyears.

5.2.6 Working HoursWhileChinahasnotratifiedanyoftheILOconventionsonworkinghours,Chineselawismuchstricterthan,forexample,ILOConvention1,whichstipulatesnomorethana48-hourweek(ILOC001:n.p.).

Inrespecttoovertimeaswell,ChineselawismoreprogressivethanILOConvention1,whichprescribesaminimumof125%ofthebasesalary.18Chineselawstipulatesanovertimerateof150%oftheregularwageonweekdays,200%onweekendsordaysoffand300%onpublicholidays.

Inpractice,however,factoriesregularlyfailtocom-plywiththeseregulations.Onaverage,respondentsworked10.6hoursperday;themedianwas11.Onlynine(19%)hadaneight-hourdayand10(21%)workedmorethan11hoursperday.

5.2.7 Health and SafetyIn1981,ChinaratifiedILOconvention155onoccu-pationalhealthandsafety(ILORfC:n.p.).Thecon-ventionaimsto‘preventaccidentsandinjurytohealtharisingoutof,linkedwithoroccurringinthecourseofwork,byminimising,sofarasisreasonablypracti-cable,thecausesofhazardsinherentintheworkingenvironment’.The1995LabourLawalsocontainsfar-reachingoccupationalhealthandsafetyregulati-ons.19Further,moredetailedrulescanbefoundin,forexample,theLawonWorkSafetyandthePreventionandControlofOccupationalDiseases.

However,implementationofthatlawinthefootwearindustryisusuallylax.Thirty-sixrespondents(77%)saidtheirworkingconditionswereundesirablebecauseoffactorssuchassmell,insufficientaircirculation,heat,noiseanddangerousmachinery.Twenty-nineinterviewees(62%)hadtoworkeitherinstandingorseatedonuncomfortablefurniture.Thisindicatesthatpoorworkingconditionsarecommoninthefactoriessampled.

ChinahasalsoratifiedILOConvention170(1990)ontheuseofchemicalsatwork(ILORfC:n.p.).Ofthoseinterviewed,31(61%)workedwithchemicals.But

only16(34%)wereinformedaboutthepossiblerisksinvolvedinhandlingthosechemicals.Whatismore,workersattheStellafactorystatedthatthechemicalswerenotlabelled.

Only8respondents(17%)weregivenregulartrai-ningsonoccupationalhealthandsafety.Furthermore,protectiveclothingisofteninsufficient.Respiratorymasks,forexample,shouldnotbeusedforlongerthaneighthours.However,intervieweesfromtheStellafac-torysaidtheyweregivenonlyoneortwomaskseachweek(seealsoChapter5.2.5).

26respondents(55%)statedthattheyortheirco-workershadalreadyhadoccupationalhealthprob-lems.Themostcommonoccupationaldiseaseswerebenzenepoisoningandskindiseasesfromregularcontactwithchemicals.Thirtyrespondents(64%)saidthattheythemselvesoraco-workerhadsufferedwork-relatedinjuries.Themostcommoninjuriesweretothehandandcausedbyshoe-makingmachinery.Only13respondents(27%)statedthatmeasureshadbeentakentoimprovehealthandsafetystandardsintheirfactories.

Allintervieweeslivedoutsidethefactories,butateinthefactorycanteenonworkdays.Thirty-fourres-pondents(72%)hadtopayfortheircanteenmealsthemselvesand36(77%)saidthatthefoodwasnotgood.Elevenrespondents(23%)complainedaboutunsanitarytoiletsandseven(15%)saidtheirfactorydidnotprovidedrinkingwater.

5.2.8 Legally Binding Labour ContractsChina’s2008LabourContractLawstipulatesthatworkershavearighttoanopen-endedlabourcontractwhentheyhavebeenworkingforthesameemployerforatleast10consecutiveyears.Allrespondentshadwrittenlabourcontracts.WorkersintheYueYuenandStellafactorieswhohadbeenemployedforover10yearsallhadopen-endedcontracts.ThatwasnotthecaseintheLidefactory.AfterthefactoryinPunyawasclosed,noneoftheformerworkersweretakenoninthenewfactoryinNansha,aboutonehouraway.

The2008LabourContractLawforbidsemployerstochargeanyfeeswhatsoeveratemployment.Howevereightrespondents(17%)reportedhavingtopayfees,mostlyformedicalexaminations.

18‘[…]therateofpayforovertimeshallnotbelessthanoneandone-quartertimestheregularrate’(ILOC001:n.p.).

19 SeeArt.52LabourLaw1995(Münzel2012c:7).

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5.2.9 Relocation CompensationThequestionofrelocationisrelevantinthemaintotheLidefactory.20Workersfirstheardabouttherelocationplansin2014.Theywerenotofficiallyinformed;rather,theinformationwasleaked.Inreaction,workerswentonstrikefromDecember2014toApril2015todemandreasonablecompensation,whichtheywereinthemainabletoobtain.Thereweremanyinternationalmediareportsaboutthisstrike,whichwaswidelyregardedassuccessful.ForthisreasonweshallnowlookmorecloselyatthesituationoftheLideworkers.

Weinterviewed13Lideworkers(10womenand3men)withanaverageageof42.RetirementageforChinesewomenis50,and55forChinesemen.De-spitetheslowgreyingofworkerdemographicsinthefootwearindustry,itisdifficultforolderworkerstofindemployment.Thatiswhygovernmentpensionsandcompensationaremajorissuesfortheseworkers.

Asmentionedabove,onlypeoplewhohavepaidintothestatepensionfundforatleast15yearsareeligibleforstatepensionschemes.SinceLidedidnotpaycontributionsformanyofitsworkers,strikersdeman-dedthatthefactoryfulfilitslegalduty,mandatedbytheSocialSecurityLaw,andpaythemissingshare.Workerswereworriedthattheownerswouldfoundanewcompanyafterrelocationanddefaultontheirresponsibility.

Chineseregulationsoncompensationaredefinedinthe2008LabourContractLaw,whichforexamplestatesthatworkershavearighttocompensation.Foreveryyearworked,employeesmustpayonemonth’ssalaryattherateoftheworker’saveragesalaryinthelastyearbeforedismissal.21

Lideagreedtocompensation,buttriedtopayaslittleaspossible.Atthebeginning,thecompanyinsisteduponpayingcompensationfornomorethanfiveyearsofworkattherateofEUR68peryear.NotuntilthesecondstrikedidLideagreetopayforuptosixyearsataratebasedontheaveragemonthlyincome.Inaccordancewithnationalandregionallaws,someworkersdemandedadditionalcompensationforva-riousunpaidallowances;forexample,forworkingathightemperatures,forthehousingfundandforpaidannualholidays.Thecompanydidnotacquiescetoallthesedemands,buttheworkersagreedunanimouslythattheyweresatisfiedwithnegotiationresults.TheLideworkers’industrialactionisthereforeagoodexampleofasuccessfulcivilsocietyprotest,bolsteredbylabourlaw.

TheLidecaseisalsoaclearillustrationofhowcom-paniestrytouserelocationandfactoryclosuresto

abdicateontheirresponsibilitiestotheirworkforce.Workersneedtouseallmeansattheirdisposaltodefendtheirduerights:bothlegalavenuesandstrikes.

5.3 Conclusion

Ofthethreefactoriessampledforthisreport,workingconditionswereclearlyworstattheLidefactory.Howe-ver,sincethatfactoryhasmeanwhilebeenclosedandtheworkershavereceivedreasonablecompensation,thecasecanbeconsideredclosed.

Nevertheless,improvementsinworkingconditionsaresorelyneededintheotherfactoriesandinthefootwearindustryasawhole.AsshowninChapter5.3,manyproblemareasremain:involuntaryovertime,illegallylowpayratesforovertime,insufficientprotectionforyoungworkers,disrespectfultreatmentofworkers,norighttoassembly,incompetentstateunions,theuseofstateforcetoputdownlabourdisputes,lowwages,badworkingconditions,insufficientoccupationalhealthandsafetyprotection,lackofworkertrainingsinthisarea,unpaidsocialsecuritycontributionsandunfaircompensationpayments.

WethereforeurgentlyrecommendthatChinaratifyandimplementILOConvention87onfreedomofassoci-ationandILOConvention98ontherighttocollectivebargaining.Workersshallreceivealegallyguaranteedrighttofoundandrunindependenttradeunions.WefurtherrecommendthattheregionalgovernmentofGuangdongprovidebetterprotectionforyoungworkers,forexampleprohibitingovertimeforyoungpeople,asimplementedinZhejiangandJiangsu.TheproblemofforcedlabourcaninouropiniononlybesolvedifworkersinChina’sfootwearindustryrecei-vealivingwageforaneight-hourworkday.

OnthepositivesideitshouldbesaidthattherearenowanumberoflawsandregulationsinChinathatoftenmakeitpossibleforChineseworkerstoobtainlegalredressforinfringementsoftheirrights.Further-morewefoundthatmenandwomeningeneralreceiveequalpay,thatchildlabourisnolongercommonpracticeinthefootwearindustryandthatmostworkershaveproperlawfulcontracts.

20After thefinalizationof the interviews,Stella factories inDongguancloseddowninFebruary2016,outsourcingtheirproductiontootherSoutheast Asiean countries (Xinhuanet 2016: n.p.). 1900 workersweredirectlyaffectedbythisclosure,amongthemalsoworkerswhohavebeeninterviewedforthisreport.Atthetimeofeditoraildeadlineofthisreport, itwasnotyetforeseeabletowhatextenttheworkershavereceivedadequatecompensationpayment.

21SeeArt.47LabourContractLaw2008(Münzel2012a:8).

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6 Recommendations

TheresearchresultspresentedinChapterfiveclearlyshowthatlabourrightsviolationsarewidespreadintheChinesefootwearindustry.Theonlywaytoimprovesocialandenvironmentalstandardsandensuretheyarerespectedlong-termistotackletheentiresupplychain.Wethereforestronglymakethefollowingrecommendationstofivedifferentgroups:footwearfactories,brands,multi-stakeholderinitiatives,theChinesegovernment,andtheEUresp.thenationalgovernmentsofEUmemberstates.

Recommendations for Footwear Factory Management:

1. Thebasesalaryforaneight-hourdayshallberaised.Workersshallnotbedependentuponover-timetomakealivingwage.

2.Allstatutoryallowancesandbenefitsshallbepaidwithoutexception.

3.Salarycutsshallnotbeusedasadisciplinarymea-sure.

4.Verbalandphysicalabuseshallbepursuedandpenalised.

5.Allformsofsexistbehaviourshallbebannedatfactories.

6.Allchemicalsusedinproductionshallbelabelledtoprovideessentialinformationaboutclassificationandpossiblerisks.Allrelevanthealthandsafetyprecautionsshallbetaken.

7.Workersshallreceiveadequateoccupationalhealthandsafetytraining.Workersshallbeprovidedwithsufficientandadequateprotectiveclothing.

8.Workerssufferingfromoccupationaldiseasesand

injuriesshallbeproperlytreatedandadequatelycompensated.

9.Factorycanteenfoodshallbeaffordableandhealthy.Livingquartersshallmeetbothworkers’needsandhygienicstandards.

Recommendations for Brands:

1. Brandsshallurgetheirsupplierstoactontheaboverecommendations.

2.Brandsshallactwithduediligenceintheirglobalsupplychains.FollowingtheUNguidingprinciplesonbusinessandhumanrights,businessesshallidentifyandaddressanynegativeimpactfromtheirbusinesspractices.

3.BrandsshalltaketheinitiativeinworkingtogetherwithlocaltradeunionsandNGOstomonitorinfrin-gementsoflabourlaworenvironmentallawintheirsuppliers’factories.

4.Brandsshallpressuretheirsupplierstopayalivingwageandintegratethispolicyintheirownpricing.

5.Brandsshallprovideassistancetoworkerswhosufferinjusticesintheirsuppliers’factories.

6.Brandsshallurgegovernmentsnottorepressindustrialactionwithpoliceviolence,orbyprosecu-tingandcriminalisingactivists.

Recommendations for Multi-Stakeholder Initiatives (MSI):

1. MSIthatmonitorinfringementsoflabourandenvironmentallawshallurgegovernments,factorymanagementandbrandstoimplementthepolicyrecommendationslistedabove.

2.MSIshallestablishregularcontactwithlocaltradeunionsandNGOstoensureconstantmonitoringofthepracticesofgovernments,factorymanagementandbrands.

3.MSIshallprovideassistancetoworkerswhosufferinjusticesinsupplierfactories.

4.MSIshalllaunchinternationalandregionalcam-paignstoexposetheillegalpracticesofgovern-ments,factoriesandbrands.

5.MSIshallprovidetrainingsthatempowerworkerstostandupfortheirrightsandinterests.

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Recommendations for the Chinese Government:

1. Existinglawshallbefullyimplemented.Tothisend,thefollowingmeasuresshallbetakentoenableworkerstoclaimtheirduerights:

• Allworkersshallhaveaccesstofreelegalservi-ces,providedbyeithergovernmentinstitutionsorNGOs.

• Regionallawsandregulationsthatconflictwithfederallawandburdenworkersshallberepealedimmediately.

• Improvementsshallbemadeintheenforcementofcourtrulings,particularlyregardingworkercompensation.

2. Thedepartmentsoflabourandenvironmentinspectionshallbeprovidedwithmoreresources,bothfinancialandpersonnel.Inspectionteamsshallreceivegreaterpowerofenforcement.

3. Regulationsbanningovertimeforyoungworkersshallbeembeddedinlabourlawaswellasinfurtherrelevantlawsandregulations.

4. WorkersshallbeexplicitlyallowedbylawtofoundandruntradeunionsindependentlyoftheACFTUandotherstateorstate-controlledinstitutions.

5. Workersshallhavetherighttostrike.Police violenceagainststrikesshallbecondemned.

6. Minimumwagesshallberaisedtoenableahigherstandardoflivingandensurealivingwagefor

workers.

7. Locallabourandsocialsecurityofficesshalldemandthatfactoriespayalloutstandingsocialsecuritycontributions.

8. Specialregulationsshallstipulateclearrulesforout-sourcingandrelocationtobetterprotecttherightsandinterestsofworkers.

Recommendations for EU Member States:

1. EUMemberStatesshallimplementtheUNguidingprinciplesonbusinessandhumanrights.

2. EUMemberStatesshallcreatenationalactionplansobligatinggovernmentandbusinessestoprotecthumanrights.

3. EUMemberStatesshallreformtheirOECDnationalcontactpointsformultinationalenterprisestomeethumanrightsstandards.

4. EUMemberStatesmustcreateorimprovegrie-vancesandcomplaintsproceduresforthevictims

oflabourandhumanrightsviolations.

5. EUMemberStatesshallcreatealegalframeworktotakeactionagainstillegalbusinesspracticesaswellasinfringementsofcorporatecriminallawbymultinationalcorporations.

6. EUMemberStatesshalltaketheinitiativein creatingMSIfocusedonleatherandfootwear production.ThePartnershipforSustainableTextiles

inGermanycanserveasamodelforsuchan initiative.

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Change Your Shoes

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Lowwages,involuntaryovertime,insufficientprotec-tionfromhealthandsafetyrisks–theseshortcomingsarecommonintheglobalfootwearsupplychain.ThepresentstudyanalyseslabourconditionsinChine-sesupplierfactorieswhichproduceshoesforseveralEuropeanbrands.

Theanalysisofinterviewswithworkersinthreefoot-wearfactoriesinGuangdongProvince,whichhavebeencarriedoutbySÜDWIND-partnerGlobalizationMonitorattheendof2015,giveanalarmingpictureoffootwearproductioninChina,wherestateviolencetosuppressstrikesforbetterlabourconditionsisnotunusual.

ThepresentstudyisaproductoftheinternationalcampaignChangeYourShoes.EighteenEuropeanandAsianorganisationshavecometogethertoraiseawarenessaboutproblemsintheproductionofleatherandfootwear.Researchforthecampaignwasconduc-tedinChina,India,Indonesia,EasternEurope,ItalyandTurkey,withtheaimofimprovingsocialandenvi-ronmentalconditionsinthegloballeatherandfootwearindustry.

ChangeYourShoesisapartnershipof15Europeanand3Asianorganizations.Webelievethatworkersintheshoesupplychainhavearighttoalivingwageandtosafeworkingconditions,andthatconsumershavearighttosafeproductsandtransparencyintheproduc-tionoftheirshoes.

Thisstudyhasbeenproducedwiththefinancialassis-tanceoftheEuropeanUnion and the Federal Ministry for Economic Cooperation and Development.ThecontentsofthisstudyisthesoleresponsibilityofSÜDWINDandcanundernocircumstancesberegardedasreflectingthepositionoftheEuropeanUnion.

CHANGE YOUR SHOESCHANGE YOUR SHOES

Publication DetailsPlaceandDateofPublication: Bonn,May2016

Authors:AntonPieper,FelixXu

Lecturers:LenaBullerdiek,Dr.SabineFerenschild,SandraGrigentin-Krämer

V.i.S.d.P.:MartinaSchaub

Layout:www.pinger-eden.de

Editor:SÜDWINDe.V.–InstitutfürÖkonomieundÖkumeneKaiserstraße20153113BonnTel.:+49(0)228-763698-0info@suedwind-institut.dewww.suedwind-institut.de

INKOTA-netzwerkChrysanthemenstr.1-310407BerlinTel.:+49(0)30-4208202-0hinzmann@inkota.dewww.inkota.de

GlobalizationMonitorHongkongTel.:+85261873401info@globalmon.org.hk

Translators:Jill DentonLaura Radosh

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