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Profits and Lives

(Originally published in CLB issue#49, Jul-Aug 1999)

The burnt out shell of the four-storey Taiwanese-owned Zhimao Electronics Factory - the company’s official English-language name is Vast Profit Limited - is situated in the Baoan district south China’s Shenzhen City. Yet another fire, which took the lives of up to 28 young workers, has yet again revealed the chaotic employment practices and criminally deficient health and safety measures that are common-place in the Shenzhen Special Economic Zone (SEZ).

The SEZ’s were designed as China’s “windows to the world”. From the outset, the theory behind them was very simple: foreign currency and technology pour in, encouraged by an “investor-friendly environment”; profits and export goods stream out from the new factories, facilitated by low wages, tax breaks and a lack of freedom of association. The whole picture neatly justified by the introduction of fresh labour regulations (culminating in a national Labour Law in1994), lots of glossy publicity and an international political climate stressing the magic of globalisation and the market.

The Chinese government and its stooges in the All-China Federation of Trade Unions (ACFTU) soon proved themselves skilled newcomers to “zone scam”. It was all so good that even Brother Ken Douglas, president of New Zealand’s Council of Trade Unions, who went to China in September 1997 as part of a delegation from the International Confederation of Free Trade Unions-Asia Pacific Regional Organisation (ICFTU-APRO) was moved to comment positively on the miracle. “The delegation was particularly impressed with the protections for workers and trade union rights in the Special Economic Zones” Ken gushed on his return.

The tragic fire at Zhimao Electronics is the latest of a series of similar fires in China’s SEZs that all have had one feature in common: an apparently unspoken agreement between local officials and foreign investors that actively conspires to ignore safety regulations, especially fire safety.

Zhimao Electronics was not a small out-of-sight back street sweatshop. Along with its nearby sister factory, the company employed up to 500 migrant workers, chiefly producing electric fans. After the fire, a delegation from the Hong Kong-based Christian Industrial Committee (CIC) found:


  • The number of victims had been initially under-reported. Official press reports put the figure at 16 deaths. The real figure is still not known, but interviews conducted with injured workers suggest at least 24 deaths and 40 injuries;

  • One child worker (aged 15) who died alongside her 17-year old sister was among the victims;

  • Lax implementation of regulations concerning employee registration. Some workers had obtained work at the factory using other people’s identity cards;

  • Wire mesh over the windows foiling attempts to escape from the blaze;

  • Only two fire exits, one of which was locked and blocked by goods forcing workers to flee to the roof. Many victims were suffocated in the thick smoke or died jumping of the roof;

  • Low knowledge of fire safety procedures among the employees;

  • Murky and slow compensation procedures despite promises from factory owners and the local government.


Below is a translation of a telephone discussion between CLB’s chief coordinator Han Dongfang and an official from the Occupational Safety and Health Department of the Shenzhen branch of the ACFTU. The discussion reveals that, no matter what the intentions of its safety officials, the ACFTU is incapable of realistically tackling the problem of health and safety at work while it functions as an intricate part of government machinery.



Transcript of CLB’s radio programme on the Zhimao fire (Broadcast on June 17, 1999)

In the early hours of June 12, 1999, fire swept through a Taiwanese-owned factory in the special economic zone of Shenzhen, killing at least 16 workers [this figure was later discovered to be wrong. There is still no final death toll - Ed.] and leaving more than 40 badly injured. Of course, in an industrial area like Shenzhen, it is impossible to avoid all industrial accidents. However, this type of tragedy, leading to so many pointless deaths, is completely avoidable. The fire that destroyed the lives of the young women workers on June 12 is a copycat of at least six similar fires in south China. Management had covered the windows to the factory with wire netting; fire escape doors were either locked or blocked, reducing the factory to a prison-like inferno. Once the fire broke out, workers were trapped in the building and most victims died either in the crush around the two fire exits or jumping off the roof.

Hong Kong labour groups protested outside Taiwan’s Chung Hwa Travel Services in Hong Kong and also contacted trade unions in Taiwan to help with compensation. China Labour Bulletin telephoned the Shenzhen branch of the All-China Federation of Trade Unions (ACFTU) to ask them for their reaction to the tragedy. Our discussion with the head of the Department of Occupational Safety and Health (OSH) leaves little doubt as to why foreign capital is ruining the lives of so many workers in China. The following is a transcript of the conversation with the ACFTU’s OSH department in Shenzhen.


ACFTU: …You would be better off going direct to the labour bureau to get more details
about the fire.

CLB: We’ve already telephoned them. We’d like to here the ACFTU’s views. Do you think the Taiwanese government itself should be taking more responsibility in managing the behaviour of Taiwanese investors on the mainland?

ACFTU: This is very difficult to say. After all, we are not talking about the actions of a government as such. It is the behaviour of individual investors that lies at the root of the problems. These people should stick to the local rules of the area in which they are investing. If you think about it, they’d never get away with this kind recklessness in Taiwan.

CLB: Taiwanese government officials have said on a number of occasions that they have no jurisdiction in these matters and there is little they can do. The responsibility lies with local governments on the mainland. So in effect they are blaming the Chinese government. Do you think that this approach of putting all the responsibility on local governments is fair?

ACFTU: It’s definitely not the right attitude. How can they put the whole problem on our shoulders? These guys come over here and open factories so it is simply not possible that they are unaware of government policies regarding investment. The point is they are not prepared to do anything that will harm their own interests. If you lock all the doors, put wire netting or iron bars over the windows and then block all the factory passageways with goods, how can people escape? They should know this. While busy protecting their own interests, they don’t care about the lives of their employees.

CLB: As a trade union official, do you have any feelings about the government’s safety monitoring practices?

ACFTU: This is not straightforward situation and certainly not a recent problem that has sprung up over the last one or two years. There are many small factories here in Shenzhen that have been locking fire doors and sealing windows for a long time. But local bodies turn a blind eye to the practice.

CLB: Which local bodies turn a blind eye?

ACFTU: What I mean is, say you take a factory that starts up production. At the very least they will have to register with the local authorities. The latter will definitely have a record of the factory and it will fall under the management of a local government or administrative department. This includes management of safety regulations. So it’s a problem of responsibility. As I said, this locked-door problem is not new and the local government officials definitely know about it. Take our union department: we didn’t know about the situation in the factory in question. If we did, then there is no doubt that we would have gone down there and tried to convince the management to stay in line with safety rules or we would have sent someone to find a way of dealing with it. But nobody mentioned it.

CLB: This kind of dreadful accident has been going on for a long time in Shenzhen and we’ve seen again and again workers dying in fires simply because of the locked, sealed or blocked exits. So why can’t the ACFTU do anything concrete to try and at least alleviate the problem? Is it that the organisation doesn’t have the power to deal with the factors that are making things difficult?

ACFTU: Every year our safety department visits factories and enterprises with trade unions. We hold safety meetings, seminars and classes, and conduct investigations into safety conditions. The problem these days is with the enterprises that don’t have union branches, especially foreign-invested or privately owned factories. Our work in these types of enterprises is much more difficult.

CLB: Why don’t they have trade unions?

ACFTU: One reason is because they are very small units. When they register, they will only have a few dozen employees or less and then at the end of the year they might up sticks and leave. This type of thing is fairly common. We have put forward the suggestion that when foreign investors register a factory they set up a trade union branch at the same time. But the local Bureau for Trade and Commerce insists that they are very concerned to make sure an investor-friendly environment is maintained. They worry that if we stress the trade union angle too much, this will influence the investors’ decision on whether to set up shop in China. If we go around checking up on them all the time, this might drive them away. As yet, there doesn’t appear to be any new approach we can find to overcome this problem and try to expand the union.

Each year, our department also sends people into the factories to try to promote trade union work. When we meet the bosses though, they get anxious about what we are trying to do. They say “Oh no! You trade union people are just stirring up trouble and encouraging the workers to go on strike.” They think that the ACFTU is the same as the trade unions in their own countries. We explain that in China, trade unions exist to protect the interests of the company as well as the workers. Some of them will agree to us setting up a branch, but it must be said that there is still a problem with these smaller factories like the Zhimao Electronics Factory.

CLB: So you are saying that there is often a misunderstanding among overseas investors about the role of union organising China. What are they worried about?

ACFTU: Like I said, they think that the ACFTU is the same as overseas trade unions. For example if the wages are too low then we’ll start organising strikes or generally see the boss as the enemy and take a confrontational approach to our work. This kind of misunderstanding is quite common.

CLB: So what do you say to the bosses?

ACFTU: We show them the ACFTU’s Constitution and the Trade Union Law and go through each clause of these documents to reassure them. We also give a few examples of our methods. For example, a foreign investor comes to China and doesn’t bother to get a union set up in his factory. Then a labour dispute breaks out, so we go down there and sort out the problem for them. Recently we had a foreign-invested company that hired 100 or so migrant workers, all form the same hometown. They were not happy with the wages the company was paying so they decided to go on strike. We went down there and sorted the situation out. The boss was very pleased. We got the workers back to work and asked that the company followed China’s law and regulations as far as possible. So our intervention can stop strikes and help the bosses avoid large losses.

CLB: In the above example you mention, were the demands of the workers met?

ACFTU: Their basic demands were met. The boss was very grateful. When we use this kind of example some of the investors allow a union to be set up in the factory.

CLB: Did the Zhimao factory have a union branch?

ACFTU: Not as far as I know.

CLB: We have just been talking to the Shenzhen labour department and suggested that it would be more appropriate for the workers themselves to be directly involved in monitoring health and safety at work. The official from the labour department told us that that they didn’t have enough staff to cover all the factories in the area. So it seems that if there was more shop floor involvement, it would help to avoid this kind of accident.

ACFTU: There are not many health and safety inspectors at the department of labour these days. We’ve got people from our office who can handle this sort of thing and who know about the latest toxic and harmful substances being used in production etc. We are already doing this kind of work in some of the bigger state-owned enterprises. But it’s going to be a lot more difficult in the foreign-invested and private factories where we don’t have union branches.

CLB: If a situation developed where there was no ACFTU branch and the boss had put up wire netting over the windows and blocked or locked fire exits etc., and the workers refused to work because of the danger, would the ACFTU support them if the boss refused to remove the dangers?

ACFTU: Probably. If there was a union office, then we would persuade the boss to keep to the rules.

CLB: If the boss still refused to listen to either you or the labour department, would the ACFTU organise a strike?

ACFTU: Strike? There’s no way we’d do anything like that. This is exactly what the foreign investors don’t want. If serious problems crop up that the local union branch can’t handle, then they must send a report to the next level up and then we can get involved.

CLB: We know that according to the national labour and trade union laws, if the ACFTU discovers a working environment that directly affects the health and safety of the employees and the management refuses to do anything about it, then the ACFTU has the right to call on workers to refuse to work under such conditions. This isn’t called a “strike” but “refusing to work”. Under such conditions would the ACFTU use this method?

ACFTU: Absolutely no way! Our job is to keep away from confrontation and find a way of avoiding labour disputes and conflicts by negotiation. Adopting a confrontational approach is not going to help anyone.

CLB: Is this how you would summarise the difference between a Chinese trade union say unions in other countries?

ACFTU: Exactly. They resort to strikes whereas we are trying to use education, persuasion and mediation.


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Online:1999-08-31