China in Africa, no worse than others

PUBLISHED : Wednesday, 25 April, 2012, 12:00am
UPDATED : Wednesday, 25 April, 2012, 12:00am

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Do Chinese companies violate labour rights on the African continent? Damage the environment? Bribe local officials? Perhaps, says Global Witness, a British-based watchdog - but if so, they do no more than companies from elsewhere.

'The risk of corruption and bad practice exists for both Chinese and non-Chinese companies operating in the natural resource sectors,' said Global Witness campaigner Lizzie Parsons.

Global Witness has expressed 'serious concerns', for example, over the lack of transparency of China Sonangol, a venture between Angola's state oil company and China-linked companies based in Hong Kong. But it also discovered that British giant BP won exploration rights in Angola after agreeing to make multimillion-dollar payments to obscure social projects controlled by Sonangol.

Yan Hairong, an assistant professor at Polytechnic University who has researched China's involvement in Africa, said context was often missing. 'What is wrong with the China-in-Africa discourse in Western media is that it focuses on Chinese investment as the bad apple,' Yan said.

Hugo Williamson, managing director of the Risk Resolution Group, a British risk consultancy, said: 'While Western interests frequently accuse Chinese companies of mistreating African workers, these criticisms are often voiced while standing on thin ice.'

It was true that in Zambia, workers in road-building projects managed by Chinese construction firms had complained of poor treatment and being fed very basic food, Williamson said. And in Angola, 'there have been examples of Chinese managers assaulted by African staff because of frustrations caused by mistreatment'.

Yet African unions often complained about Western oil and mining companies as well, he said.

'Chinese companies are no worse than other companies,' says Barry Sautman, a professor at Hong Kong University of Science and Technology.

'We have no problem with people criticising what Chinese owners are doing in Zambia, but they should also criticise what other miners do in Zambia and other places in Africa.'

Sautman said that virtually all major foreign-owned copper mines in Zambia, Africa's biggest copper producer, exploited workers and the environment. Those mine operators include Glencore of Switzerland, which is listed in London and Hong Kong, First Quantum Minerals of Canada, and Eurasian Natural Resources, a Kazakh-British firm.

Yet a recent report by Human Rights Watch on labour abuses in Zambia singles out Chinese-owned miners - including the state-owned China Nonferrous Metals Mining Corporation (CNMC), one of the biggest copper producers in the world - of forcing workers to labour for long hours under dangerous conditions for meagre pay.

The report said the Chinese-run copper mines fell short of common industry practices and paid Zambian workers much lower salaries than other international copper mining companies. CNMC has invested US$2 billion in Zambia and employs 6,000 workers.

Sautman denounces the report as a China-bashing discourse that 'echoes racist stereotypes about Chinese cruelty and disregard for human life'.

Sautman and Yan concede that Chinese-owned mines paid Zambian workers 20 to 30 per cent less than other foreign-owned mines.

But workers at Chinese-owned mines were less skilled than those employed elsewhere, which partly explained the lower pay, Sautman said.

Yan said although full-time workers at Western companies were paid more than full-time workers at Chinese firms, Western companies hired many more temporary workers at salaries lower than those paid to full-time workers at Chinese concerns.

Taking into account the temporary workers at Western companies, the pay difference between Western and Chinese companies was not as large as that claimed by Human Rights Watch, Sautman and Yan said.

CNMC's fatality rate at its mines in Zambia was no worse than at other companies, Sautman said. It accounted for 8.2 per cent of the 217 fatalities in Zambia's mining industry between 2001 and August 2011, broadly equivalent to the 7.2 per cent of the sector's workforce that it employed. Moreover, both of CNMC's mines were underground, and the fatality rate of an underground mine was three times higher than an open-pit mine, Sautman added.

Yan pointed out that strikes had occurred at other foreign-owned copper mines in Zambia, besides those of CNMC.

Sautman questioned the objectivity of Human Rights Watch, as it is headquartered in United States.

In reply to Sautman and Yan's criticisms, Matt Wells, Africa researcher for Human Rights Watch, told the South China Morning Post: 'We detail abuses by other multinationals. We do not imply these other companies have a perfect labour record. Our interviews showed CNMC, on average, had more severe problems in safety, anti-union activities and hours at work.'

Human Rights Watch accused Sautman and Yan of making errors in calculating fatality rates at Chinese-owned copper mines in Zambia. Sautman, in turn, accused Human Rights Watch of over-generalising in its claim that many Zambians worked excessively long hours in Chinese-owned mines.

The answer to the question whether Chinese investors treat Africans worse than Western multinationals varied from industry to industry, said Martyn Davies, chief executive officer of Frontier Advisory, a South African consultancy.

'There are instances where Chinese investors are not attuned to the local work/labour environment, and there are others where Chinese are no different to Western investors in the region,' Davies said.

Analysts said the hiring of Chinese instead of Africans had sparked local resentment. But in construction projects, Chinese companies often employed Chinese workers because of a shortage of local skilled workers, Davies said. On the other hand, Chinese sovereign wealth funds were adopting better practices by investing in African mining firms run by local management, such as Metorex of South Africa, he added.

Anthony Desir, a Hong Kong partner of Strategic African Mineral Investment Fund, an African resource consultancy, said it was misleading to 'compare the operations of a Chinese company to a Western one in Africa ... What gives better insight is to compare how the Chinese companies operate in Africa versus how they operate at home.

'They try to run their African operations the same way as in China. That is where things break down on both sides, because the cultural difference is so great,' Desir said.

'The problem will get worse in the next few years,' he warned. 'Because Africa is China's largest trade destination and many smaller Chinese companies are heading there. At some point this has to blow up.'

Chinese employers had trouble dealing with African unions, Desir said. 'Chinese companies are threatened by the independence of African unions. Unions in China are directed by the state.'

Unions are strong in many African nations because they were formed to oppose Western colonial masters - but they'd now switched their focus to Chinese firms, Williamson said.

Desir said some firms asked African governments to deal with their workers - a move that brought new friction when governments and unions were at odds on development goals. Chinese companies tended to build grand infrastructure projects in capitals that pleased officials, but neglected the countryside.

'China's strategy wins praise in African capitals,' he said. 'At the same it is losing hearts and minds in African rural areas, where the workers are. China is not neo-colonialist, but firms have moved into Africa too quickly to understand the complexities of tribal and regional politics.

'We are trying to convince our China clients that a flashy partnership between China and a government in Africa has little meaning to people who have to work in the mines or whose livelihoods are disrupted to satisfy China's growing resource needs.'

16%

The amount by which China Nonferrous Metals Mining Corp's Luanshya copper mines in Zambia raised workers' salaries in February