CHINA 2016 - La aplicación del Acuerdo Marco con INDITEX y la defensa del trabajo decente en sus proveedores de calzado - Un reto para el sindicalismo internacional y para las grandes marcas cuyos productos se fabrican en este país

En un reciente viaje a China (el noveno desde 2006), realizado como integrante de una delegación sindical-empresarial y en aplicación del Acuerdo Marco con la multinacional española, con visita de fábricas de calzado proveedoras de Inditex, hemos detectado importantes incumplimientos de los estándares de trabajo decente en esta industria.

El informe completo del viaje se encuentra en:

China 2016 - un reto para el sindicalismo global y para las grandes marcas

cuyo índice es:

1.       La novena visita a China

2.       Algunas notas sobre China-2016

3.       Características de las empresas visitadas

4.       Condiciones de vida y de trabajo observadas.

5.    Principales problemas observados: régimen de contratación, jornada de trabajo, la cotización a la Seguridad Social.

6.       Sobre las auditorías

7.       Sindicalismo y acción sindical en las empresas visitadas

8.       Los sindicatos oficiales chinos, la ACFTU, y su relación con el Acuerdo Marco y la defensa del trabajo decente

9.       Algunas consideraciones sobre este viaje y los proyectos de futuro

Los problemas detectados, a los que se hace referencia en el informe y están sintetizados en el nº 5 del mismo, señalan la necesidad de que en base al propio Acuerdo Marco que ha posibilitado esta nueva “aproximación sindical” se desarrollen las iniciativas adecuadas para abordarlos y avanzar en su solución. No va a ser fácil, teniendo en cuenta la ausencia de un sindicato que represente realmente a la clase trabajadora del país y la negativa detectada en los sindicatos oficiales chinos, la ACFTU, a considerar esta problemática.

Todo ello supone por tanto un serio reto para el sindicalismo internacional, concretamente para IndustriALL Global Union, firmante del Acuerdo Marco con Inditex, así como para las grandes marcas cuyos productos proceden de este país considerado como “la fábrica del mundo”.

A esta cuestión hemos dedicado una parte importante de la reunión de trabajo que los Coordinadores de IndustriALL Global Union para la aplicación del Acuerdo Marco con Inditex hemos mantenido en el día de hoy con los responsables de su Departamento de Sostenibilidad. 



Incorporamos a continuación la versión inglesa del informe:

Index

1.     Ninth visit to China

2.     Some notes on China-2016

3.     Characteristics of the factories we visited

4.     The living and working conditions we observed

5.     The main problems we observed: hiring system, workday, Social Security contributions

6.     About audits

7.     Trade unionism and trade union action in the companies we visited

8.     China’s official trade unions, ACFTU, and their relationship with the Framework Agreement and the defence of decent work

9.     Some considerations about this trip and future projects

1.- Ninth trip to China

The trade union-business delegation in this new trip to China in June was made up of: 1) in the case of the unions (IndustriALL Global Union — IGU), Isidor Boix and Víctor Garrido, as IGU’s General Coordinators for the Global Framework Agreement (GFA) with Inditex. Once again, as in previous visits, the official Chines trade unions, ACFTU, did not participate, which matter is discussed below, and 2) on the part of the company, María Morell (from Inditex’s Sustainability Department), Alejandro Pertusa (in charge of sustainability at the Tempe supply chain –subsidiary and footwear supplier of Inditex) and Andrew Feng (in charge of Inditex’s Sustainability Department in China). Jing Wang was our interpreter during the trip.

This ninth trade union trip to the People’s Republic of China was preceded by:

1)       A first trade union trip to China in 2006, visiting Inditex and Mango supplier textile factories in Shanghai and Shenzhen.

2)     In 2013, a visit to Inditex’s supplier garment and footwear factories in the Guangzhou area.

3)       In 2007, 2014 and 2015, we visited Mango supplier garment factories in the Hangzhou area.

4)      Two trips in 2008, one participating in the CCOO confederal delegation to Beijing for interviews with the management of China’s trade unions, ACFTU, and another in representation of CCOO’s Peace and Solidarity Foundation for meetings with the management of the School of Labour Relations of the People’s Republic of China University’s Employment Research Institute and with the Chinese Academy of Social Sciences’ European Studies Institute. This was an attempt, which ultimately failed, at promoting a study on working conditions and labour relations in garment factories that supply international clothing brands, as well as the possible creation of a Chinese-Spanish forum on labour relations.

5)    In 2010, a delegation of ICEM (International Trade Union Federation of Chemical, Energy and Mining Industries, now part of IndustriALL Global Union) participated in a meeting with a wide-ranging delegation of China’s official trade unions, ACFTU (representatives of different sectorial federations and departments of the confederal management).

Now, in June 2016, we visited Inditex’s supplier footwear factories in the Guangzhou area.

All the factory visits were announced to all supposedly interested parties well in advance. In all them, we tried to get a representation of China’s official trade unions, ACFTU, to accompany us but were unsuccessful in all cases (as on previous occasions). At the same time, we planned interviews with the ACFTU management, which was “officially” possible in 2006, 2007, 2008, 2014 and 2015, and “unofficially” in 2013. However, this was not possible this year (2016), the same as in 2013, due to an “impossibility” that has supposedly been overcome. Below is a section on relations with China’s official trade unions and their evident desire not to get involved in the activities of IndustriALL Global and Spain’s CCOO-Industry, aimed at promoting decent work in global clothing brands’ supply chains in the country.

The factory visits, in this latest trip, were carried out following the work model that we have been applying in this trade union activity for 10 years. During this time, we have visited more than a hundred factories that supply Spanish brands (belonging to Inditex, and some to Mango and El Corte Inglés) in 11 important countries in Inditex’s production chain. The first one was precisely China, in 2006.

As on other occasions, the work was carried out as follows:

·   Joint interview between the trade union-business delegation and the management of the Chinese company.

·        Joint visit to the facilities, during which the trade union delegation selects some workers for subsequent individual interviews with trade union representatives.

·        Individual interviews between the trade union delegation and the workers selected during the factory tour. The company provided us with each worker’s contract along with the payslips and clock in/out records of the entire workforce. Although these workers still had a reserved, fearful attitude, more than in other countries (Vietnam, for example), we saw some improvement in this regard compared to previous trips.

·         On this occasion, we only had a brief encounter with a member of the official union management in one of the factories. In all of the factories, the “trade union” leaders were also senior managers in the company, resulting almost always in one of the following two circumstances: either they were not in the factory or they were part of the company delegation (often being in charge of personnel) that received us on our arrival and with whom we had the initial interview, in which they also gave us the employers’ view of the official “trade union” activity.

·         On other occasions, and in other countries, after finishing the visits to the factories, when the local trade unions have participated in this union work (which has never happened in China to date), we have held assessment meetings with them on trade union premises. This was followed by a meeting featuring the participation of Inditex representatives as well, with the objective of establishing a regular working relationship between them and local trade unions, also establishing immediate objectives based on any matters detected in the factory visits, and on global, trade union and business approaches.

2.- Some notes on China-2016

As in previous trips, these words are not meant to analyse the particular country’s current situation. There are abundant and frequent references to China in the media, in view of the great interest in all the news that reaches us from China on a daily basis. On the other hand, we believe that most of the data and impressions from previous trips, particularly from 2015, are still valid.

However, it is worth providing some supplementary data, considerations and observations. Some feature the latest statistics and others were spotlighted in China’s official (and only) press, in this case in its English-language version, the “CHINA DAILY”:

·   China’s current population is 1.38 billion inhabitants, with India fast approaching (it now has a population of 1.34 billion). According to some forecasts, India will surpass China in 2050, or even in 2022 according to others, based on their different growth rates (around 13 million births this year up to July in India compared to less than 9 million in China) and with a similar number of deaths (around 5 million in both countries). This growth is also accompanied by a similar male-female imbalance in both countries (around 30 to 40 million more men). The changes that have been introduced in China regarding the single child policy (and legislation) do not seem to have had any noticeable impact on this tendency. All of this also directly influences the age pyramid in China, which faces the danger (unlike India) of population aging (over-60s could rise from 14% in 2010 to 33% in 2050). Another difference between both countries, which does not seem to modify the aforementioned trends, is that life expectancy in China is around 75 years compared to around 66 in India.

·         GDP growth in China in 2015 was 6.9%, 0.1 below the planned (and, it seems, desired) 7%, and lower than that of all previous years in the latest period. However, this GDP is still the world’s number one in “purchasing power parity” (i.e. in the volume of goods and services at each country’s prices) and second only to that of the USA in absolute value. The objectives set in the current Five-Year Plan are still in force, including “annual growth of not less than 6.5%,” in order to double its GDP from 2010 to 2020 and thereby lift 70 million that are considered poor “out of poverty.” Prime Minister Li Keqiang has pointed out that GDP growth in the first six months of 2016 was 6.7% and 120 billion USD has been spent on lifting 10 million people out of poverty this year. The “slowdown” in GDP in 2015 resulted in stock market crashes all over the world when it was detected. The year 2015 was also the first in which the services sector contributed more than any other to GDP, with 50.5% of the total.

·         The ongoing wage rises (with annual increases since 2004 of around 14.3% in the public sector and 18.3% in the private sector –we will discuss this matter later) have led the Finance Minister (Lou Jiwei) to point out that “wage rises in recent years have been far superior to increases in productivity.” Some employers have told us that this tendency “has finished,” although we did not observe this to be the workers’ impression, or desire, and we are unaware of the official “trade union” assessment in this regard.

·       Differences in country-city spending power hinder growth in the domestic market.

·        The amount of “internal migrants” is said to be 277.4 million, 20% of the population, which means that a minimum of 10 million new jobs have to be created every year.

·      The injection of Chinese capital into the world’s “global value chains” continues to advance, resulting in China having less technological dependence and stimulating the development of its own technology.

·         The “CHINA DAILY” of those days featured almost daily, and on the front cover, concern about what it calls a “commercial war” in relation to the West’s “antidumping” measures, and to threats from others, particularly in the case of iron and steel. The newspaper claimed that China “does not” want such a war and pointed out that both the USA and European countries “subsidised their iron and steel” companies in the crisis, further highlighting that in 2015 China “only” exported 7% of its iron and steel production.

·         This matter was also stressed, according to the same source, during the visit of the country’s president, and the Chinese Communist Party’s secretary-general, Xi Jinping, to Poland, Serbia and Uzbekistan, as part of its efforts to activate the modern “silk road.”

·         Another front, at least in the media, is the fight against corruption. On June 16, “China Daily” devoted a lot of coverage and headlines to the 27-year prison sentence that was given to Zhou Yonghang (former member of the all-powerful Permanent Committee of the Political Bureau of the Communist Party’s Central Committee), as well as the 19-year and 9-year sentences delivered to his son and wife, respectively. It also underlined that this was “a verdict that took place 6 months after” President Xi Jinping “called on an intensification of the fight against corruption” (I do not think that this implied a lack of independence on the part of the judiciary, who are constitutionally subject, on the other hand, to the Party). A Chinese TV series on the repression of corruption was also announced.

·   Another front in the official press is the permanent and ostentatious proclamation of the defence of “human rights” in the country. On June 15, the newspaper devoted 6 large pages to a “Report on the Implementation of the National Human Rights Action Plan of China 2012-2015.”

·         And without mentioning that the news had a direct relationship with the above, on June 17, the newspaper announced that “in 2018 Shenzhen will most probably be the safest city in the world” as a result of the installation of numerous cameras in the city streets and their permanent monitoring, generalising what has already been applied to the district of Longgang and its demonstrated effectiveness for “detecting and arresting any suspect in seconds.”

·         It is worth remembering, in relation to the Chinese people’s political rights, what was pointed out in previous reports, namely that economic development seems to be accompanied by a slow public transformation process. The Communist Party’s Political Conference in September 2014 spoke about “consultative democracy” as a “gradual objective,” so that the “people can participate in governing the country.” However, it placed the Party “above the judicial system” and “meritocracy” above universal suffrage, all based on the country’s specificity, its culture, its tradition, with an express rejection of separation of powers (also backed by an authoritative quotation: “as Deng Xiaoping declared back in 1987”). And accompanying the renewed leadership with a certain formal revival of “red symbols” (“the 2^nd generation of reds has come to power,” is an expression used by some China watchers). The young people of the Cultural Revolution are now leading the country, with a return to certain symbols and rites from Mao’s time, as well as references to “Marxism” and “socialism.”

3.- Characteristics of the factories we visited

The footwear of Inditex’s different brands is managed by its subsidiary TEMPE, with its supplier factories mainly located in Vietnam and China, although it also has a few in other countries that supply Inditex. We were unable (as we have indicated on other occasions and will discuss below) to carry out what we are progressively attaining in most of the countries where we visit factories: the participation of local trade unions in the union work project, which enables them to suggest factories to be visited based on their knowledge of Inditex’s production chain. We therefore suggested to Inditex that we visit 4 factories of different sizes, with recent assessments, corrective action plans underway in order to improve their conditions and, in the case of some, a subcontracting relationship with another of the visited factories.

Below is a summary of the characteristics of the factories we visited:

·         One of them was Taiwanese owned (belonging to an industrial group with more than 100 companies in different sectors, ranging from footwear to food), another from Hong Kong and the other two belonged to continental China (one of them had a subcontracting relationship with the larger one, which regularly transferred part of its production to the smaller). In the first two, the top executives and senior technical managers were also from Taiwan and Hong Kong.

·         They all essentially worked for exportation (for large global brands), without their own brand, but with a small amount of their production for China’s domestic market and also for online sales worldwide. The factories we visited work for Inditex (between 30 and 90% of their production), as well as for other client brands such as GAP, Adidas, Nike, Columbia, George, Timberland, Next, Tesco, Walmart, ... In one factory, 50% of its production is for Inditex and the other 50% for America’s GAP. These figures are of special interest in view of the initiative that we will refer to below as regards some important problems that have been detected, particularly in relation to the exorbitant number of work hours.

·         The explanations we were given seem to indicate a progressive increase in the quality of the manufactured product, with simpler footwear being displaced to other countries in the region (Vietnam, Cambodia, India, …).

·         The delivery terms for other brands were generally 50% longer than those of Inditex (generally with larger orders), although this did not seem to be problematic as regards organising their work. In fact, they admitted that in the case of urgent orders, they nearly all resorted to an increase in overtime and workdays in order to satisfy demand. Only one of the four factories (with about 500 workers) told us that during peak production periods they transferred part of their production to several regular workshops (with about 200 workers in total), which are authorised and audited by Inditex.

·         The number of workers ranged from 135 to 950, with the smallest one working for the largest; the other two had 300 and 500 workers. Women made up between 50 and 60% of the workers, more so in offices in all cases compared to the workshop. All of this indicates a noticeably different female-male ratio in the footwear industry compared to the garment industry, which has a higher proportion of women. Despite the existence of legislation to this effect, in practice pregnant women are not given the easiest jobs. Normally, we were told, women “decide to leave” for their home village when they find out that they are pregnant.

·         Staff turnover was normally around 30% per cent, although it could reach 50% some years. In several factories we observed that several workers chose to stop working for a spell (several weeks or months) and then return to the same company, which generally rehired them. On other occasions, especially in the case of young people, they left to work in the services sector, receiving less pay but working in jobs that were “not so hard.”

·         The number of workers between the ages of 16 (the minimum working age in China) and 18 was very small; they did easier jobs but worked for the same number of hours as the rest of the workforce.

·         Absenteeism was around 1 to 2%, reaching up to 3 or 4% at the beginning of the workday, taking into account those arriving late.

·    The technology was Japanese, Italian, German, Taiwanese for the best machines, and Chinese for simpler tasks, although this seems to be attaining a better technological level.

·         One of the four factories we visited was in an area where the monthly legal minimum wage was 1,210 RMB (or “yan,” about 165 euros), another with 1,530 RMB (€ 209) and other two with a minimum wage of 1,510 RMB (€ 206), all of them in the province of Guandong, whose capital is Guangzhou (formerly Canton).

·         Although wages in the country have been increasing (but, as indicated above, some factories told us that they have the impression that these important annual increases carried out by the Government “have finished), this is the not the case with the prices paid by Inditex and other brands (one factory told us that these could even decrease by around 5% per year). Even so, on this occasion the employers had practically no complaints nor did they use any arguments or pretexts to oppose the improvement of working conditions. Rather, they pointed to improvements in work productivity, although we did not see any formal projects to improve productivity. The figures provided by one of the factories show that, in only a few years, it had doubled its workforce while tripling its production. This matter, however, came to light thanks to our questions in this regard, rather than by its own, spontaneous formulation, and could be linked to the fact that the new workers (who were hired with a lower turnover rate compared to before) were, increasingly, young people born in the region, which led to a decrease in the number of recent migrants from inland China (in one factory, however, they still made up 90% of the workforce). And some of the new workers were from other footwear factories, which produced for the domestic market or were secondary workshops for other brands.

·         Half of the factories had Inditex’s Code of Conduct (generally along with that of other brands, as well as that of the BSCI) on display in English, one in Chinese, although almost all of them in places were the majority of workers did not pass by. When we asked the workers about this, they did not know what we were talking about. In the case of the “trade union leaders” (business executives) that we interviewed, Inditex’s Code of Conduct sounded “familiar” to them but none of them had heard of the “Global Framework Agreement” with international trade unions. In relation to China’s sectorial “Code of Conduct” (similar to the first of Europe’s BSCI), nothing was known about it in any of the factories (although in previous trips we saw that the management of China’s official trade unions were familiar with it).

·       The subcontracted factory belonging to the primary supplier claimed that Inditex audited them but not GAP, the other brand for which they both worked.

·         In one of the factories (located in an area with a fair amount of tourism), our visit coincided with that of two “government” (seemingly municipal) inspectors, which enabled us to include this matter in our interview with employers in direct relation to our own management. Apparently, they told us, the government was interested in everything, but they in fact came (more frequently that the brands’ auditors) to verify the environmental impact of their activity (waste treatment and other matters, since this was a tourist area) and if overtime was being paid, although they did not ask about the amount of such or whether it exceeded what is stipulated by Chinese legislation. In the other factories, there was a lot less governmental monitoring. In relation to the possible control of the “local trade union,” they were either not aware of it or mixed it up with that of the “government.”

·       All of the factories did piecework, either formally or de facto (but with payslips based on worktime).

4.- The living and working conditions we observed

Our interviews with the companies’ management and with several workers in each of them produced fairly similar results, with important differences regarding the workday, which we will discuss specifically below.

a)   Work contracts:

According to China’s labour legislation, after two temporary contracts, the third one must be permanent. However, non-compliance regarding this matter does not concern companies and its fulfilment is not demanded by the workers or trade union. In one factory, they became permanent workers after completing a first contract of 3 to 5 years, although due to staff turnover, only 20% had worked for more than 5 years. In another factory, they became permanent after 10 years, although at that time only 4% had attained this goal. In another two, they renewed the contract of the entire workforce, including technicians, every year without any limit. Few companies have trial periods for new contracts, although we have seen some cases of 6 months for an assembly job.

 b)   Wages

We have already mentioned the diversity of minimum wages established by law (165 and 209 euros per month), which gives rise to different salaries in the workshop. However, wages are almost the same in the offices and in the case of line managers and department heads. Remuneration in the workshop, in fact, was based on piecework, but in payslips it was indicated and calculated according to hours worked, including overtime. In all the factories wages were paid by bank transfer, except for the “red envelopes,” which we refer to below.

All of this results in the following situation:

·       Workshop salaries ranging from 350 to 550 euros per month for a total number of weekly hours ranging from 66 to 74, i.e. between 26 and 34 hours of overtime per week, apart from the normal legal workweek of 40 hours. It is worth highlighting, in relation to the remuneration detected in previous visits, the increase in bonuses in the final amount compared to the basic wage.

·     Line and office managers, between 400 euros (with no overtime from Monday to Friday, but working on Saturday, which is considered overtime) and € 1,000 (with overtime) per month.

·    The highest wages in companies (we were told) ranged from 1,500 to 2,700 euros per month for the top executives.

These totals are calculated according to the following salary structure:

1.     Basic wage, i.e. the local legal minimum; on this occasion, we found a greater variety of amounts in nearby localities within the same province.

2.   Overtime, which proved to be the most important part of the salary, although in practice it was a theoretical calculation that was adjusted in line with the piecework remuneration that exists in most companies and that results in a certain “flexibility” of worktime (in several factories, the workshop workers told us that they could leave “a little earlier,” in relation to the usual 2 or 3 hours of overtime, “if they attained” the required production). The estimated calculation for an hour of overtime, according to their legislation would be 150% of the normal hourly rate, 200% in the case of a Saturday/Sunday and 300% for working on a public holiday.

3.     Different types of bonuses (the usual name for extra pay), which may be subsumed, at least partially, in piecework:

a.       Attendance bonus, between 4 and 5 euros per month if they work and arrive punctually every day. Around 90% of the workforce receives this bonus.

b.       Production bonus, ranging from 7 to 40 euros per month, established by the line manager when piecework is not paid directly. Some factories have a special bonus if the workers exceed a certain number of pieces established by the company (the concept of these being amounts that could be negotiated, as regards production volume or remuneration per piece, does not even exist).

c.       Flexibility bonus, around 18 euros per month, applicable to half of the workforce.

d.       “Good behaviour” bonus, assigned at the line manager’s discretion to a few workers (around 5 to 10%) and amounting to 30 or 40 euros per month.

e.       Heat bonus. One factory told us that they had a bonus during the hottest months (June to October) of around 20 euros for working “at more than 35⁰C.”.

f.    Seniority bonus, which exists in theory but has gradually been disappearing due to pressure arising from the hiring of young people, who are generally more productive and felt that they were being discriminated as regards remuneration.

g.       “Red envelopes,” with a long tradition, at least in this region; once or twice per year (always at New Year according to the Chinese calendar), sometimes almost symbolic (from 2 to 50 euros), handed over to each worker and generally with the same amount (although sometimes they vary somewhat and are distributed randomly). Another more important one (of up to €700) is handed to managers and executives at the company management’s discretion.

h.       13^th payment, which some companies pay to executives and generally amounts to a complete monthly wage.

c)     Social Security Contributions:

There are 5 types of insurance in China, with contributions from both the company and workers (the latter pay approximately half compared to the former); the same amount is paid for all (based on the minimum wage), around € 70/month on the part of the company and € 35/month by the worker. We found a variety of practices in the different companies, always with the argument that they only pay for a few because the workers “didn’t want to pay” (one factory told us that if they discounted Social Security contributions then “the workers left”). Some workers still claimed that they “paid it in the villages,” and it seems that when they change company then they lose what they have contributed, also with reference to a municipal insurance system for a future retirement pension (a 19-year-old worker told us that he paid about 130 euros for this, but he did not know what pension he would receive).

The situations we found range from a company that pays such contributions for practically the entire workforce (except for around 15 people that worked after retirement age -60 for men, 50 for women– who did not receive a pension and did not have to contribute) to another that contributes for 5% of the workforce, including another that paid for half of its workers but claimed to have them covered by a private accident insurance policy. One factory claimed that the government requires that they pay Social Security for “60% of the workforce”; another, that the government checks its Social Security contributions, but not the hours worked.

d)     Worktime

This is, undoubtedly, the main problem we detected. Chinese legislation establishes a maximum of 36 hours of overtime per month, in addition to the “ordinary” workweek of 40 hours. The maximum of 60 hours per week indicated by the ILO would therefore amount to a maximum of 80 hours of monthly overtime (above the amount of worktime established by Chinese legislation). However, the normal situation is 11 hours of daily work from Monday to Saturday, and often 8 hours more on Sundays, which amounts to 20 to 34 hours of weekly overtime (which would mean from 85 to 145 hours of overtime per month, well above the legal maximum of 36). We observed that some workers occasionally worked more than 100 hours of overtime during some months. This is not a sporadic situation but seems to take place, with some variations, throughout the year.

The labour system that gives rise to this worktime consists of 8 hours daily, from Monday to Saturday, with a break of 1 or 1½ hours for lunch, with another break of 30 minutes to 1 hour before working 2 or 3 hours of overtime from Monday to Friday, and normally on Saturday too. Work on Sunday is generally limited to 8 hours, with one or two Sundays off per month, as the “normal” work model, particularly during peak periods.

Work is carried out on a daily basis, except for 11 official inter-annual public holidays (which always seem to be free of work) and 5 days of “holidays” for the Chinese New Year, which are sometimes extended to 10 or 15 days for the entire workforce (workers with more than 10 years of seniority in the company should legally have 10 days of holidays, but this seems to be applied in very few cases). Some factories pay the basic wage during these official holidays, while others do not pay anything. During this time, people generally travel to their home village to see their family or their children who are with the grandparents (one worker told us that he sends around 85 euros every month to the grandparents for looking after his son).

In one of the factories, every day workers signed a list regarding their availability for overtime. When we asked several workers about the hard working conditions, the older ones replied that “farm work was harder.” This confirms our impression from previous trips that the compulsory nature of working overtime is being relaxed. A fair amount of workers never even think about the possibility of not working overtime, while some (generally younger ones) indicated that “sometimes” they do not stay on (most said that “you have to justify” not working overtime –and they are always granted permission to not stay on– and others said that it was not necessary). Although it was difficult to quantify, some figures indicate that 5% did not work overtime 1 day per month. One worker told us that, when he was hired, he was told that the factory worked on Saturday and Sunday. Another explained that permission was required in order not to work overtime during the week, while this was not necessary in the case of not working on Sunday.

All of this is based on the factories’ clock in/out records and the workers’ explanations (some workers told us, however, that they did not work on Sunday, contrary to what the clock in/out list indicated). The initial information provided by the companies’ management was not very clear, although they later acknowledged the situation with some curious considerations. Some employers claimed that the government or official trade union was interested only in overtime being paid rather than in the actual number of hours of overtime (sometimes “workers even demanded overtime”).

Up to now, the visits to Chinese factories had been basically directed at the garment industry. Although the problem here was also important, it did not have the same scope and overtime rarely amounted to more than 60 hours per week (although it frequently exceeded China’s legal maximum of 36 hours). This visit shows, however, that the problem can be considered generalised in the indicated amounts in the visited area’s footwear industry. This clearly poses an important problem for applying standards of “decent work,” which we refer to below.

e)     Health and Safety

The audits carried out in the companies we visited had detected some health and safety problems (noises in the cutting department, finger protection in sewing machines, activated carbon masks, dormitory evacuation plan, air quality control, canteen evacuation signs, suitably located fire extinguishers, lack of gloves in gluing process, location of storeroom and dormitories), with different correction deadlines. The observations established in the audits with fulfilled deadlines showed that some of the CAPs (corrective action plans) had been applied, while others were still pending. On the other hand, the factories’ official trade union structures were not at all worried about or interested in this matter.

Although it was not the year’s hottest period, we noticed that some working areas were very hot. We were told that, according to Chinese legislation, work has to be stopped from 40^o upwards, which was not then the case (they said that this temperature is never reached).

f)      Food

All the factories had a canteen and provided meals, both lunch and dinner (before the customary overtime). They all have dining rooms where food is provided; its cost, whenever it has to be paid for, ranges from 10 to 13 €/month. Food was always free in two of them and free from the third year onward in another (they charged 50% in the 2^nd year).

g)     Accommodation

Although the factories were close to city centres, they all provide accommodation (dormitories with bunkbeds alongside the factory, in the same area) for part of the workforce, about 50%, although they were never full. The rooms measured about 3 x 8 or 9 metres with 8 bunkbeds, of which 5 or 6 were used, with a small closet and the unused bunkbeds for the workers’ scarce personal belongings. Two of the factories had a few dormitories for couples measuring 3 or 4 x 4 to 6 metres.

One factory had a residential block for managers outside its facilities.

In two factories bunkbeds were free for everyone, with one charging for water and electricity; in another two, workers paid around 8 euros per month for a bunkbed. In one of them managers paid 16 €/month (in another accommodation was free for managers) and € 3 for water and electricity consumption.

We asked some workers that did not sleep in the factory about their living conditions. They generally had small flats near the factory and paid from 40 to 150 euros per month for a two-room apartment. Some rented a room for about 28 euros per month.

5.- Main problems we observed: hiring system, working time and Social Security contributions

We have already referred to these problems on previous pages. Below are some additional observations, which we will then discuss in relation to audits, trade union work and the application of the Framework Agreement.

1.     Hiring:

Chinese legislation, particularly the law that came into force on January 1, 2008 (called precisely the “Law on Employment Contracts” and which serves almost as a “Work Code”), establishes that, after a second temporary contract, a worker’s contract automatically becomes a permanent one; the same is true after working for ten years without a formal contract. But nobody (neither the company nor the workers or “trade union”) sees a problem in this regard; they believe that periodical renewal is the “custom.” However, this is still a breach of Chinese law. And when there are employment problems, or the risk of discrimination on the part of employers as a reaction to effective trade union action (i.e. when this comes about, although this does seem to have been the case in the factories we visited[1]), this periodical renewal may be a serious problem for the worker, as we have seen in other countries.

2.     Working time:

There is clearly a generalised infringement of Chinese legislation that establishes 36 as the maximum number of hours of overtime per month, as well as the maximum limit of 60 hours of weekly work established by the ILO. We have already referred to the government’s and official trade union’s lack of interest in relation to workdays that clearly violate the concept of “decent work.” Despite this, we believe that the Framework Agreement is a commitment to correcting this situation.

The objective now, on the part of Inditex and IndustriALL Global Union (or vice versa), is seeing how we can correct this situation, aware of the added difficulty of this being a general situation. This requires initiatives that impact the sector as a whole, although they do not necessarily have to be simultaneous. We also have to start from the fact that the factories that should take the lead in the solution work for several global brands. Therefore, all (or at least a significant part) of the main brands should be involved, although those that have subscribed the Framework Agreement (Inditex and H&M at present, Mizuno, Next and C&A in the near future) should undoubtedly play an essential role. It is worth highlighting that the largest factory we visited works for both Inditex and America’s GAP (50% each).

3.     Social Security Contributions

This is another important field in which both Chinese legislation and the basic concepts of decent work are violated. It should be easier to solve than the workday matter, since its infringement does not seem to be so generalised. It is clear that the fact that the system still offers few benefits limits the workers’ interest, along with the lack of rigorous control and enforcement on the part of the country’s institutions. However, we also have to think about how to overcome this situation.

6.- About audits

We have already pointed out several matters that were detected by the audits and are being solved, but others are still pending despite having passed the deadlines set by the auditors. There are other important matters that have not been sufficiently detected by the audits carried out, such as worktime or Social Security contributions. Comparing what we observed in our visits with the score derived from the audit highlights another matter that we sensed in previous trips but did not see as clearly as on this occasion, namely the way that detected problems are scored, i.e. the significance of each matter analysed and each one’s score in the total mark.

Therefore, in the last six-monthly monitoring meeting of the application of the Framework Agreement, held after our trip to China, it was agreed that we coordinators would participate in some upcoming audits as observers. Thereafter, we will therefore be able to analyse the entire system, the audited matters, the scoring system and the final grading formats. That is what we are working on at present.

7.- Trade unionism and trade union action in the companies we visited

Trade unionism, trade union action, in the factories we visited did not provide anything new with regard to the Chinese “trade unionism” that we are familiar with, i.e. in relation to official trade unionism, the only one that we were able to examine in the garment and footwear garment. In fact, we could speak about “non-trade unionism.”

In a 2015 interview with the ACFTU management, they spoke about a curious pilot experience precisely in the Guangzhou area (which, along with its importance in China’s footwear industry, was one of the reasons that brought us back here), explaining that they had established a new rule that forbade the company owners or their relatives from “chairing” the company trade union. The ACFTU management then rejected our suggestion to agree on a joint trade union approach to this “new and interesting” initiative and its application.

However, we returned to Guangzhou and we found a similar situation. Now in all the “big” companies (not in the one with 150 workers, considered “small”), membership was officially 100%. However, some workers did not know if their company had a trade union and found it difficult to identify the trade union –we had to ask them if they knew who “organised the karaoke” (they had no identification problems in this case). The term “trade union” had no meaning for them.

It is true that we did not find any company owners, or their relatives, chairing the unions. In this regard, we only came across a vice-manager in one, the head of accounting in another, and an official designated by the local ACFTU organisation and hired as such by the company, in the third factory; and the head of personnel as vice-president and other top executives.

In relation to the election system, only one had recently applied (and this was an excuse to tell us that they were still learning what was expected of them and were even participating in training courses in the trade union’s local premises) the procedure contemplated in Chinese legislation. This involves a first electoral phase in which a few delegates are voted for and then these in turn choose the trade union management in the next phase. In the rest, the procedure varied little from more or less irregular systems summarised as follows: the bosses, or the company management directly, choose the President and Vice-President, and each departments chooses a delegate that is more or less agreed on or indicated from above. However, all of this takes place without most workers’ participation and even without their knowledge.

In relation to trade union action, the only matter that everyone agreed on was in the organisation of events, particularly karaoke. And some opinions related the “trade union” with some kind of welfare work. When asked about the concept of collective bargaining, agreements, nobody knew about its existence; even a company union vice-president (who was also head of personnel) was unaware of this concept. One of the workers we interviewed mistook the “bosses” of the company trade union (one that I knew existed but had heard little about) for those of the Communist Party (ChCP).

In relation to the trade union quota, the situation was the same as the one detected on previous trips. In two companies, the trade union managements knew about an individual quota of 2 RMB (less than 0.30 Euros) per month, but it did not appear in the payslip and nobody was aware that they were paying it. In two of the three with an officially organised trade union, they knew that the company paid an important amount to the trade union (they thought it was 2% of the payroll in one factory, while in another they mentioned a monthly total with a fair amount of zeros, although they had doubts about the exact amount).

8.- China’s official trade unions, ACTU, their relationship with the GFA and with global trade union action with a view to its monitoring, for the defence of decent work in supply chains

Isidor Boix’s trip in 2015[2], with a visit to factories in Hangzhou and then passing through Beijing for an official meeting with the ACFTU management, seemed to indicate a new period in the relationship between global trade unionism and China’s official trade unionism, including the latter’s approach to the Framework Agreements and their possible interest in global trade union action in defence of decent work in our world. We therefore sent them the trade union report of the aforementioned trip as well as those of previous trips. And we told them that there would be another visit in 2016 in the Guangzhou area in spring; we then asked them when it would suit them best, in order to coordinate with them and then visit Beijing with a view to what they had proposed in 2015.

However, there was no reply to our initial messages, neither as a comment to the reports we sent nor with regard to the notification of the project for 2016; neither did they reply to a second message reminding them about the matter two months later. We had therefore given up on the idea of visiting Beijing, when we received a strange proposal regarding possible joint work and a meeting to specify such. Nothing to do with the subject, but it came from the same person that led the ACFTU delegation in the 2015 meeting. We therefore modified our itinerary and told them a month in advance when we would be in Beijing, so that they could arrange an interview and, perhaps, other activities. And again silence, until the day before our flight from Guangzhou to Beijing, when they told us that, unfortunately, there would be nobody in Beijing to meet with us.

The anecdotes from 2013 and 2015, as well as this one from 2016, basically underline the fact that China does not formally have trade unions and, unlike Vietnam for example, the official trade union structure does not feature attitudes and interests coinciding with what could be regarded as the individual and collective ones of the country’s working class. The GFA with Inditex (as well as Mango’s CSR) has provided us with an interesting look at working conditions in an important sample of the country’s garment and footwear industry, as well as the reality of China’s official trade unionism.

What we have seen up to now confirms what we have detected since our first trip to China in 2006, i.e. the lack of effective channels in order to express the interests of China’s important (due to its number, but also to its history) working class. This situation undoubtedly generates elements of instability whose future development is, at least for us, unforeseeable. However, we are convinced that at some time a new trade unionism will arise, although only a few visible expressions of such have taken place to date.

9.- Some considerations regarding this trip and future projects

What we have explained up to now enables us to reproduce almost word for world the last paragraph of the 2015 report. It mentioned there that previous notes highlighted important conclusions for future trade union work in relation to the international brands’ production chains in China, aware of the fact that our function is not that of replacing each country’s trade unionism (whether effective or latent), regardless of how important the detected problems are. Rather, our objective is to support the workers therein in exercising the basic labour rights specified in ILO Conventions. This approach involves not only supranational trade union solidarity, the very essence of trade unionism, but also demanding that the multinationals manufacturing in such countries ensure that their subsidiaries, contractors and subcontractors, and their supplier companies respect the exercising of such basic rights. It is also clear that it is not up to multinational brands to govern the country or organise its trade unions.

In any case, from the trade union perspective of the Global Framework Agreement with Inditex, we have to continue with the work that has been carried out to date, in order to update the situation in the garment industry and monitor the problems that we have now detected in the footwear industry and the process of their necessary solution.

International trade unionism’s relationship with the official union organisations of some countries, such as China or Vietnam, has always been present in the problems examined by the governing instruments of our global organisations, IndustriALL Global Union in our case. There have been some advances, such as some of Vietnam’s Trade Union Federations joining the international Trade Union Federation or support for the participation of China’s ACFTU in the ILO’s administrative bodies.

Based on what we have seen in this and previous trips to the People’s Republic of China, we believe that this is an important moment, with an uncertain future, in our working relationships with the country’s official trade unionism. The market relationships that are advancing therein are generating evident class interests, which are undoubtedly new in some cases and will continue to develop in one way or another. Global Framework Agreements and their application in China may be an interesting instrument in this regard.

September 2016

International Coordination of CCOO-Industry

Coordination of IndustriALL Global Union for the Global Framework Agreement with Inditex

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[1] We should not forget, however, that in April 2014 one of the most important strikes (defined in Art. 27 of the China’s Trade Union Law as “interruptions of work”) in recent Chinese history took place, precisely in the footwear industry. In the locality of Donguang, in the same province of Guangdong that we visited, a two-week strike broke out with the participation of the great majority of the factory workers of Yue Yuen Industrial Holdings, a Taiwanese company based in Hong Kong that is considered the largest sports footwear producer in the world and works for Nike, Timberland, Puma, Crocs, etc.

[2] See http://www2.industria.ccoo.es/comunes/recursos/99927/doc245349_China_-
2015 Una nueva aproximacion sindical - VII -.pdf