Those western firms concerned about Chinese workers' rights should establish a legal fund to help them sue factory bosses
For many years now, British companies concerned about labour rights abuses in their Chinese supplier factories have employed auditors to ensure compliance with their corporate codes of conduct. And in response, those same supplier factories have come up with an increasingly devious array of ploys to cheat the inspectors.
A sports equipment factory in southern China, for example, requires all new employees to memorise the answers to 32 questions commonly asked by the labour department during factory inspections. Those employees who give the "correct" answers receive a 200 yuan (£19) bonus at the end of the month.
The deputy head of the city's labour department admitted he could take no action in the face of such blatant deception unless the employees lodged a formal complaint. Encouragingly, however, more and more workers are doing just that. And herein possibly lies the answer for British companies and others who are serious about eliminating sweatshops from their supply chain.
According to China's Supreme People's Court, the number of labour-related lawsuits increased by 95% last year, while the number of labour dispute arbitration cases in 2008 increased by 98% to 693,000, and involved about 1.2 million workers.
The upsurge in labour dispute cases reflects the sharp increase in factory closures and wage defaults last year, together with workers' increased awareness of their rights and a greater confidence in China's institutions of public redress.
China implemented two major labour laws last year, the Labour Contract Law and the Labour Arbitration Law, which have made it much easier for workers to sue the boss. And because most labour rights abuses are so flagrant and egregious, in the vast majority of cases, the workers win. The main barrier to legal redress, however, remains the high cost of legal action. The average cost of a labour lawsuit in China is about 4,000 yuan, or three to four months' wages for a factory worker.
British companies genuinely concerned about the rights of Chinese workers could help them by establishing up a legal assistance fund administered by a law firm or non-governmental organisation in the city in which their factory is located. The fund would provide workers who cannot afford legal and court fees with expert legal representation in court and arbitration hearings. This would help protect the rights not only of workers in the supplier factory but also of those in other factories in the same city or even the whole province.
The advantages of this approach are clear. Labour rights litigation is a proven effective means of defending workers' rights. China Labour Bulletin, for example, won 95% of the 430 cases it concluded last year, obtaining more than 10m yuan for the worker plaintiffs. A legal assistance fund would promote the development of civil society and the rule of law, and improve the corporate citizenship of British businesses in China.
Moreover, the supplier company's local competitors would also be held accountable if they attempted to undercut prices by violating labour laws. Finally, if the cases taken on were properly screened, and worker plaintiffs repaid the fees once they won, the fund could be largely self-sustainable.
Copyright Speakers Corner 2016