China Labour Bulletin is quoted in the following article. Copyright remains with the original publisher
3 June 2013
CHIP STARNES, an American businessman, used to run a medical-equipment factory just outside Beijing. For six days last month however he gained renown as an impromptu prisoner. His own employees had become his jailers, until they released him on June 27th. Mr Starnes’s case shocked audiences in America, where it received widespread publicity, but such incidents are not uncommon in China. China’s work force, newly conscious of its rights, has developed a reputation for taking a firm (some might say: extremely firm) hand with managers whom they fear might abscond their owed wages. Kidnapping or confining managers has also become one of the favoured methods of forcing better working conditions.
Labour experts and business advisers say the practice is a direct reaction to the reputation that some factory bosses—both Chinese and foreign—have earned for closing factories and skipping town without paying severances or even back wages. Often, however, workers are asking for far more than what is owed. Both sides have become used to bargaining. Law enforcement, it appears, prefers to encourage them to strike settlements out of court.
“This particular case had its own uniqueness to it,” says Geoffrey Crothall, communications director at China Labour Bulletin in Hong Kong. He cites its high-profile media coverage. It is not difficult to find other examples of workers being pushed into a corner, he says, and to see them reacting by making sure the boss stays put until the situation is resolved.
In January, workers at an electronics plant in Shanghai held captive ten of their Japanese managers, to protest working conditions. In 2011 textile workers in Guangzhou held another boss under “house arrest” for three months to protest lousy conditions in their factory. He injured himself jumping from a window attempting to escape. In April 2011, workers at a jewellery factory, also in Guangzhou, also held their management captive, after months of (unconfined) negotiation broke down.
One reason Mr Starnes’s tale attracted so much attention overseas had to do with where it happened: most foreign correspondents are based in Beijing. Photographs of a bleary-eyed Mr Starnes at a window of the factory were easy to shoot and publish (see above; et voilà), and interviews done by telephone were run alongside them.
Dan Harris, a Seattle-based lawyer who advises American companies in the process of entering emerging markets, says firms should be prepared for the possibility of such events when they set up shop in China. Why should it be so prevalent? “Because it works,” says Mr Harris. Moreover Chinese factory workers generally have little faith in other means of resolution, and in this “they are generally right”.
Mr Harris recalls two occasions in which he was called in by American-owned factories in China where the bosses were being held captive. In each case the soon-to-be hostage had been demanding to know why products hadn’t been delivered. Wage disputes are not the only issue, according to Mr Harris. All kinds of quarrels, over production, injuries and faulty goods, have led to businessmen being held against their will.
Mr Crothall believes the solution is simple: free and fair trade unions, which would allow companies and workers to negotiate settlements with their employers when market conditions change and factories relocate or downsize. Given that China’s formal trade unions are in effect arms of the government, and usually headed by the factory bosses themselves, Mr Crothall’s proposed solution is a tall order.
Mr Starnes himself is now back in Florida, having eventually negotiated a settlement with his workers on plans to move production from China to India. In an interview with CNBC, he warned American investors to steer clear of China. Mr Harris is sceptical such warnings will do much to scare away investors. The Chinese labour market is simply too important.