FEATURE-With Wal-Mart unionised in China, now what?
Mon Mar 26, 2007
By John Ruwitch
JINJIANG, China, March 26 (Reuters) - When Wal-Mart <WMT.N> opened supercentre No. 1035 in this town near China's coast in late 2005, the stage was set for a showdown.
The local branch of China's state-backed union took pride in having penetrated more than 90 percent of the companies within its jurisdiction, including foreign ones -- way above average.
But the world's biggest retailer -- known for shunning unions -- had fended them off since entering China in 1996.
Eight months later, the All-China Federation of Trade Unions (ACFTU), the only one allowed in the country, emerged victorious, opening its first Wal-Mart branch and triggering a tide of similar openings across the country.
Now, labour experts wonder if -- and how -- the union will leverage its foothold and newfound clout nationwide.
Critics deride the ACFTU as a sham. Over 25 years of market reform, it has been accused of putting the creation of an attractive investment environment above workers' rights.
Whether it will begin acting on behalf of China's legions of labourers or whether its aggressive membership drive is simply a way for the Communist Party to extend its reach to workers outside of state-owned enterprises, is still an open question.
"The whole debate that the trade union has to resolve internally now is: does it go for protecting workers' rights, and will that mean capital flight?" said Stephen Frost, a corporate social responsibility expert at City University of Hong Kong.
"Or should it continue essentially assisting, or ensuring, that workers aren't creating trouble for foreign direct investors?"
CENTRAL INTEREST
The story of the Wal-Mart union's inception reads like a thriller, with secret party machinations and midnight rendezvous.
Since coming to power in 2002, Communist Party boss Hu Jintao has taken a populist approach toward economic development, paying lip service to protecting the swelling ranks of urban workers -- many of whom pull long shifts for tiny salaries -- who are seen as a potential source of instability.
Hu issued what would become a call to arms on March 14, 2006, writing about "instability" in foreign-invested companies and pressing for the opening of more union branches in a document the ACFTU decided to distribute for nationwide study two days later.
At the same time, the ACFTU set ambitious goals of unionising 60 percent of foreign firms in 2006 and 80 percent by end 2007.
That spurred an early April visit to Quanzhou, a city in coastal Fujian province with the one of the highest rates of unionisation, by a senior union team from Beijing.
Jinjiang is a suburb of Quanzhou. Wal-Mart was on the agenda.
A month later, the union branch in Quanzhou set up a working group to plan the assault. It enlisted heavyweight consultants from Beijing to get past managers from the Arkansas-based retail giant that had rejected its overtures.
"If such a globally influential company wouldn't allow the establishment of a union it would definitely have an effect on China's union," said Zhang Huiping, vice director of the Quanzhou federation of trade unions.
To finally crack the nut, the ACFTU had to do something it had never done before -- organise workers from the ground up.
SECRET ORGANISING
It started small.
In early July, a Quanzhou union director sought the help of a neighbourhood party leader in rousing potential members. He, in turn, convinced a neighbour to sound out Ke Yunlong, who worked in the Wal-Mart meat department.
"Before liberation, there were many people who participated in underground party branches, risking their lives," Ke recalled the neighbour as saying, capturing some of the heady nationalism behind the drive. "There's no threat to our lives these days. At worst you could lose your job or something."
Within days, he and four friends had met with union officials.
After a couple weeks of recruiting and secret meetings -- sometimes in the middle of the night to avoid detection -- Ke led 30 workers in filing a formal application, and established the first union in a Chinese Wal-Mart on July 29.
By mid-August, Wal-Mart -- which denies blocking unions in China -- had reached a deal with the ACFTU to unionise the rest of its outlets, now numbering 71, plus headquarters and a distribution centre.
Anita Chan, a China hand at Australian National University, said the union's next step was unclear.
"They, themselves, think that this time they are doing something very different," she said. "Whether they can continue like that ... is now up to the trade union and up to the workers."
In the ensuing half year, Wal-Mart union branches have done little more than organise social events and run employee clubs, fuelling criticism the ACFTU remains staunchly pro-management.
Another element critics note is that the ACFTU is funded by dues paid by companies with branches, so tapping foreign firms is the only way forward in the face of cutbacks and bankruptcy at state-owned enterprises.
"I'm not optimistic," said Liu Kaiming, of the Shenzhen Institute of Contemporary Observation, a labour-focused Chinese NGO. "There won't be much change in the near term, not because of the Wal-Mart affair."
The Jinjiang Wal-Mart union office doubles as a recreation centre where about a dozen people were chatting on computers, watching movies or playing games. Free bottled soft drinks sat in a corner.
"To tell you the truth," said one early joiner who declined to give his name, "most of the workers, even most of the union members, feel that it doesn't really matter if there's a union here or not."
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© Reuters 2007.
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