Putting Labour into Free TradeRegulating Swiss Capital in the Context of Labour Relations in China

Suki ChungExecutive Director Labour Action China

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Structure of the presentation

Part I Labour Relations in China: Current Landscape & Trends

Part II The role of the ACFTU: Challenges to the Chinese trade union & Issues with Collective Bargaining

Part IIILabour rights compliance of Swiss capital in China

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Labour Relations in China: Current Landscape & Trends

Rising labour disputes in China during the transformation in industrial relations

Political and economic domination of the state-capital vis-à-vis the labour

Workers’ activism on the rise

Widespread dissatisfaction with the current labour system

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The Chinese government’s reaction

The state’s priority is to maintain political stability and socially harmonized economic growthsignificant rise in minimum wagesintroducing Labour Contract Law and Social Insurance Lawnew regulations on collective wage negotiation, narrowing rural-urban development gapNon-independent trade organizing of the only official trade union – the All China Federation of Trade Unions (ACFTU)Pilot experiment in Guangdong Province to facilitate trade unions to initiate collective bargaining under the current political system

Enterprises reactionseeking alternatives to the low-cost modelIndustrial upgrading to go up the ladder of value chains Upskilling from disposable unskilled labour to skilled labourRelocation of labour-intensive from the coastal regions to the less developed inland provinces

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The Role of ACFTU: Challenges to the Chinese trade union & issues with collective bargaining

The only legal trade union, ACFTU, has no popular mandate to represent workers

ACFTU is part of the party / state apparatus

Pushing through Democratic Management of Enterprise Regulation in Guangdong

Tripartite Collective Bargaining mechanism is a top-down bureaucratic unionising campaign led by the ACFTU

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Labour Rights Compliance of Swiss Capital in China

The China- Switzerland Free Trade Agreement, FTA, is an entrance point highlighting the importance of international labour solidarity

The FTA negotiations mark a formalization of trade relations between China and Switzerland which cannot be discounted or ignored

the active involvement of UNIA is crucial in the monitoring of Swiss investment in China

Federal councillor Johann Schneider-Ammann and chinese Trade Minister Chen Deming signing FTA declaration of intent at the World Economic Forum in Davos 2011

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Comparison ILO Convention Switzerland China

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Swiss Capital in China

About 300 Swiss firms with over 700 branches employing several tens of thousands of people. Swiss direct investments in China in 2009 US$ 300 million, In the first three quarters of 2010, Swiss companies invested

US$ 177.4 million

Major sectors Food Processing Machinery, apparatus, electronics Textiles, clothing, shoes Chemicals Watches & Jewelry

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Facts and Figures

Nestle Clariant ABB Swatch

Employees 13’000 1’300 13’500 ?

Turnover (aprox)

19 Mio CHF 420 Mio CHF 4 Mia CHF 2 Mia CHF

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Global Compact

Global Compact on Labour

Principle 3: Businesses should uphold the freedom of association and the effective recognition of the right to collective bargaining;Principle 4: the elimination of all forms of forced and compulsory labour;Principle 5: the effective abolition of child labourPrinciple 6: the elimination of discrimination in respect of employment and occupation.

Nestle and ABB are member's of the UN Global Compact

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Do Swiss Companies have Collective Agreements in China?

Nestle:

No detailed information on collective bargaining in China available

ABB:

ABB does not specifically give information about China

Clariant:

Clariant claims it “ is fully compliant with the International Labor Organization

Swatch:

The Group maintains good relations with the trades unions, in a spirit of openness.

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Expected impact of the FTA

China has undertaken an ex-ante (foreshadowing) simulation of the effects of such an FTA predicting an up to 50% increase in the bilateral trade volume and result in an increase in Switzerland’s GDP of 0.23%. As the de facto outcome of such an Agreement depends on a plethora of internal and external factors, these figures are to be regarded with caution

Felix Rosenberger,

Senior Advisor of East Asia, from the Swiss Federal Department of Economic Affairs:

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We have to Act!

Monitor Swiss companies in China of labour rights compliance!

Educate Swiss Companies about Collective Bargaining in China

UNIA to push Swiss companies to adopt Collective Bargaining framework agreements in China.

To counteract the trend of ‘bureaucratic unionising campaign’ launched by the ACFTU in foreign enterprises

To create Steering Committee comprised of ILO, Swiss & Chinese union members, government officials, and concerned civil society organisations to Evaluate progress of FTA

Trade unions can take a position in labour rights advocacy through FTA review platform

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What else…

Support Labour Action China

through Unia and Swiss Labour Assistance

So that we can maintain ourLegal Service for workers in ChinaMonitor Swiss Companies in ChinaTo Organise workers at grassroots levelTo lobby and network with Asian Labour Movement

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Thank you!