Wal-Mart Wins Round Three Against Chinese Union Federation

by Paul Garver

On 29 September from 7:00 to 8:30 PM the International Labor Rights Forum and the National Labor College co-hosted a discussion about Wal-Mart workers unions in China at the National Labor College in Silver Spring, Md. Announcement and Details . Both speakers Anita Chan and Jeff Fiedler know a great deal about Wal-Mart in China, and their different perspectives led to a vigorous debate and informative discussion, though not to agreement on how outside unions can best support Chinese workers.

The event was especially well-timed, since the most active grassroots union leader at Wal-Mart China had just resigned his post to protest the company’s circumvention of the collective bargaining process for his store at Nanchang Bayi. The company first refused to bargain over basic issues such as employee health and safety and wage determination, and then had the boilerplate agreement signed by the union chairman at another store. By openly flaunting the elementary standards of collective bargaining, Wal-Mart in effect is making a mockery of the claim that all of its stores in China are “organized” by the Chinese union federation ACFTU.

An article in the New York Times of September 12 reports on the pressure being exerted by the Chinese government on Fortune 500 global corporations to permit unionization of their operations in China. The All China Federation of Trade Unions (ACFTU) is following the directive of the state apparatus and Communist Party by trying to organize unions in at least 80% of these enterprises by the end of September. “It all depends on how they are set up,” asserts Anita Chan, “After you set up a union, these groups have to know how to become representatives of the workers, and really collectively bargain.”

Analyzing the most recent experience of union organization at Wal-Mart in China helps determine whether this kind of “union organizing” is likely to have positive or negative results for Chinese workers. As the largest company in the Fortune 500, with a vast network of suppliers producing goods for the entire world and now over a hundred Wal-Mart retail stores in China, the Wal-Mart challenge will set the tone for the future of trade unionism in China.

Round One went to the union. In 2006, having targetted Wal-Mart as a leading foreign firm in China, and frustrated by the company’s initial opposition to the legal requirement that it establish unions at its stores, the ACFTU took the unprecedented step of trying to organize workers rather than bosses. After grassroots union committees were formed and officers elected at some dozen stores, Wal-Mart management agreed that all of its stores could be organized by the ACFTU. When the world’s premier union-busting corporation agreed to unionization at all its Chinese stores, it seemed too good to be true, and it was!

Although the ACFTU and some foreign unions vaunted the accomplishment, Round Two actually went to Wal-Mart on points. All the new Wal-Mart union branches were formed in the customary way under management control, and most of the earlier grassroots committees that had been elected underground by workers slid back over time into management hands. No “collective bargaining” took place before 2008. As part of a five-point agreement signed at the national level between the ACFTU and Wal-Mart, mid-level managers were expected to form and participate in union committees.

The exceptional case was the Nanchang Bayi store, where the young elected union chairman, Gao Haitao, who had educated himself in labor law, defended two workers who had been fired on flimsy grounds and fought management over a number of issues related to union benefits. Wal-Mart employees at the store were astounded at the audacity of its union chairman, and union membership leaped from eight to five hundred at the store. The Nanchang city union federation in conjunction with Wal-Mart tried to subordinate the Nanchang Bayi branch to a city-wide unit chaired by a Wal-Mart manager — in this case national ACFTU intervened to overrule the compliant city union federation.

Wal-Mart workers throughout China used the internet and blog sites to cheer on and offer support to Gao. There were even proposals to organize national meetings of Wal-Mart union committee chairmen, or at least form a chat group to exchange information.

When “collective bargaining” over wages began in 2008 (”Round Three”), Wal-Mart agreed to a minimal 8% general wage increases in one city, and then insisted that this agreement be a template for all agreements with Wal-Mart branch unions throughout China. Although national ACFTU asserted that its agreement with Wal-Mart provided only a general bargaining framework, the details of which had to be agreed at the branch level, Wal-Mart refused to bargain over specific issues (health and safety, overtime, wage determination) raised by Gao. At Nanchang Bayi Wal-Mart convened a so-called “staff and workers congress” to bypass the union and “agree” to its proposal. When Gao refused to sign the unrevised agreement, on September 8 Wal-Mart simply had a branch union chairman under its control at another Nanchang store sign “on behalf of” the recalcitrant branch at the Bayi store. Gao resigned in protest.

Gao’s resignation removes the best known and most effective grassroots union leader at Wal-Mart. Perhaps expecting a wave of interest protest messages from other Wal-Mart employees throughout China, the authorities have to date blocked the web-site used for earlier support messages. This suggests that the Chinese government itself may be siding with Wal-Mart against Gao Haitao. At this point, it is not clear whether there will be an effort at any level of the ACFTU to challenge Wal-Mart’s manipulations. As it has in the past, the Nanchang city federation will probably side with Wal-Mart management. It is significant however that the whole story has been told in great depth and detail in the 17 September issue of the Nanchang newspaper Southern Weekend (Nanfang Zhoumo). A full translation into English is available from the invaluable China Labor News Translations.

The collective bargaining department at the national level of ACFTU still might intervene in support of the grassroots union, as it has in the past. The existence of even one combatative local union chairman at one Wal-Mart store had been widely cited as a sign that the ACFTU was serious about promoting genuine collective bargaining with Fortune 500 companies. Left unchallenged, Wal-Mart’s Round Three victory over the ACFTU in its first real collective bargaining challenge will render hollow any merely quantitative increase in ACFTU’s nominal union membership in Fortune 500 companies operating in China. The ACFTU may still lack both the will and sufficient experience and training to effectively represent its members in collective bargaining with global corporations like Wal-Mart. But we are only in Round Three, with hopefully many more rounds to go before the bout is over.

2 Responses

  1. […] Nanchang Bayi store). I used CLNT translation of article in Nanchang newspaper Southern Weekend at https://talkingunion.wordpress.com/2008/09/27/is-union-reform-possible-in-china/ chriswhite October 1st, 2008 […]

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