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At an All-China Federation of Trade Unions (ACFTU) working conference in Beijing yesterday, federation president Wang Zhaoguo proposed an amendment to the Trade Union Law that would make it compulsory for foreign-funded companies to unionize.

 

The move is aimed at countering obstinate refusals by foreign companies, including the world's leading retailer Wal-Mart, to recognize trade union membership for employees in China.

 

Wang, also vice chairman of the Standing Committee of the National People's Congress (NPC), said he would "initiate amendments to the Trade Union Law stipulating that companies are obliged to safeguard the establishment of trade unions."

 

The existing law says that employees can apply to set up labor unions but fails to specify the duty of companies to assist such an establishment.

 

Many foreign companies, including Wal-Mart, have been taking advantage of this stipulation to obstruct the setting up of a union, according to ACFTU.

 

Wang admitted that it has been tough to unionize foreign companies, which are mainly located in economic boomtowns in China's eastern coastal regions.

 

"We started pushing Wal-Mart to set up union branches two years ago, but not one has been built so far," Wang said. "We will continue to work on this."

 

As early as 2003, ACFTU made repeated efforts to talk with the retail giant about setting up trade unions, but in vain. Wal-Mart responded that according to Chinese law, a trade union could only be installed at the request of employees. Since they have not received any such requests, there is no necessity to establish a union.

 

The retailer also said it has constituted a series of regulations under Chinese laws, especially those relating to trade unions, offering effective channels to resolve complaints from employees.

 

ACFTU insists that many employees of foreign-funded companies wish to join a trade union. However, they cannot afford to raise the issue for fear of losing jobs or benefits.

 

According to Chinese law, a trade union is required to be installed in every company of a certain size. The situation is unlike in the US, which allows workers to establish their own trade unions, without organizational affiliations to their employers.

 

To date, there are more than 100,000 overseas companies, including those from Taiwan, Hong Kong and Macao, operating on the Chinese mainland, but no more than three-tenths of them have labor unions.

 

"Without a trade union's protection, many foreign companies pay only the minimum salaries allowed to save costs," Wang said.

 

"In a long run, these companies will also hurt domestic producers by forcing down cost prices to accommodate their low selling prices. This would lead to vicious undercutting."

 

ACFTU now has 1.17 million branches across the country with 150 million members. About 7.7 million trade unions have been set up in companies.

 

Meanwhile, Wal-Mart is accelerating its store openings in China. It plans to open at least 18 this year, according to a Los Angeles Times report. It bought goods worth US$18 billion from Chinese manufacturers last year.  

 

(Xinhua News Agency July 6, 2006)