Tricky FootworkThe Struggle for Labour Rights in the

Chinese Footwear Industry

CHANGE YOUR SHOESCHANGE YOUR SHOES

Anton Pieper, Felix Xu

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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

7

11

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).

41%

17%

13%

19%

8%2%

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

Source: APICCAPS 2015

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

CHINA

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: APICCAPS 2015

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.).

Source: Own Research

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.

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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.

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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.

Source: Own Research

Fig 10: Investigated Sites

Guangzhou

Lida

Lide

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.

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>> 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

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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.

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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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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