Linus AtarahWhen China's President
Hu Jintao made a high profile tour of eight African countries earlier this year, he avoided a visit to Zambia's copper belt, fearing protests over low pay and poor working conditions at Chinese-run mines. An explosion at Chinese-run Chambishi mine killed 51 Zambian miners in 2005.
In BGRIMM, also a factory in the copper belt which manufactured explosives, 40 workers were reported killed when the factory blew up with workers locked inside. Questions have been asked as to why all the Chinese workers escaped. Compensation claims are still proceeding.
Last year 350 workers engaged by a subsidiary of China State Hualong Construction Company in Ghana threatened to go on strike over poor wages and working conditions.
According to the workers, the company has disallowed them forming a trade union to fight for better working conditions. They also charged that the company was deducting the costs of protection gear from their wages which they said was not fair.
When the project manager of the firm who gave his name simply as Zan was contacted, he bluntly said the company was operating according to the agreement reached with the Ghana Ministry for Works, Housing and Water Resources. The existing conditions, he said, were the best for the workers and those who could not work were free to quit.
Economic ties are strengthening
While the growing economic ties between China and Africa has been viewed largely as a potential for generating economic prosperity in Africa there has been surprisingly little discussion on the flipside of a deeper economic co-operation, i.e., the corporate social responsibility of Chinese companies in Africa.
Almost every African country today bears examples of China's emerging presence. China operates oil fields in the west, owns farms in the south, and mines in the center of the continent. According to a recent Reuters report, Chinese-run farms in Zambia supply the vegetables sold in Lusaka's street markets, and Chinese companies have a virtual monopoly on the construction business in Botswana.
Increasing economic ties between China and Africa is a refreshing departure from over relying on unpredictable western markets for African countries' commodities. Chinese aid also provides a timely lifeline to African countries in the face of ever shrinking western official aid budgets.
China has cancelled the debts of 31 African nations to the tune of about 1.3 billion dollars, according to the Chinese Ambassador to Finland Ms. Ma Kequing, speaking recently in a seminar on the co-operation between Africa and China.
Ms Kequing described deeper economic ties between China and Africa as a win-win co-operation. While China provides African countries with concessional loans it in turn gains access to much-needed raw materials to lubricate its booming economy.
Trade between China and African nations jumped 39% to $32.17bn in the first 10 months of last year, according to figures from official Chinese customs. Between 2002 and 2003, the two-way trade between China Africa was US$18.5 billion.
Also while western foreign direct investment has bypassed Africa and heading more towards emerging economies in other developing regions, China has bucked that trend. Chinese foreign direct investment (FDI) in Africa is now set to surpass other OEDC countries, jumping from a mere 10 per cent in 1996 to 40 per cent in 2001, according figures from the OEDC.
OECD standards don't apply
However, there is a flipside to the increasing economic presence of China in Africa that is little talked about but is now emerging as an issue of concern. The above illustrations from Zambia and Ghana - probably just the tip of the iceberg - indicate that Chinese firms in Africa appear to give back seat to corporate social responsibility, especially in relation to workers rights.
African policy makers, according to Andreas Goldstein, a senior economist at the Organisation of Economic Co-operation and Development (OECD), are beginning to raise concerns over the governance standards of Chinese investment in Africa.
Over the years companies in the OEDC countries have been obliged to apply the same environmental and labour standards in their home economies as in other developing countries where they operate. China, however, is not a member of the OECD and Chinese companies do not follow these standards.
- It doesn't mean that Chinese firms are worse but the fact that they do not apply these principles gives cause for concern, said Goldstein.
Similarly Chinese companies are not eager to urge partner countries to enter into the Extractive Industries Transparency Initiative or Publish What You Pay initiative. The Publish What You Pay Campaign was launched in 2002 by NGOs to help citizens of resource-rich developing countries hold their governments accountable for the management of revenues from the oil, gas and mining industries. It now involves over 350 NGOs around the world campaigning on the issue.
The Extractive Industries Transparency Initiative was announced by then UK Prime Minister Tony Blair at the World Summit on Sustainable Development in Johannesburg, September 2002 with transparency over payments by western companies in the extractive sector its primary objective.
The overall focus of these initiatives calls for worldwide mandatory disclosure of the payments made by oil, gas and mining companies to all governments for the extraction of natural resources.
Extractive industries are important in over 50 developing countries, home to some 3.5 billion people. However, instead of benefiting people, there is a close correlation between the countries rich in natural resources and the countries with high levels of poverty.
Increasing transparency and knowledge of revenues will empower citizens and institutions to hold governments to account. Mismanagement or diversion of funds away from sustainable development purposes will become more difficult.
No strings attached?
But while the economic ties are deepening, especially an increasing flow of FDI into Africa is most welcome. - Is it Santa Clause who does not only come during Christmas but also during the whole year?, asked Goldstein.
African countries are beginning to complain of the fact that a very large share of Chinese co-operation remains tied. In Angola for instance 70 per cent Chinese-funded public work is required by law to be given to Chinese contractors, according to Goldstein.
As part of the Paris Declaration of Aid Effectiveness in 2005, OEDC countries have agreed to untie their aid to developing countries but China is not a party to this declaration and therefore is not obliged by it.
China has always steadfastly maintained that its relationship with African countries is all benign without strings attached.
- China has never imposed its will or unequal practices on other countries and will never do so in the future. China will certainly not do anything harmful to the interests of Africa, said President Hu Jintao in February this year in South Africa.
It is also a cardinal principle in China's foreign policy not to interfere in the internal affairs of countries that it has bilateral co-operation with just in the same as way China resents interference in its own internal affairs, said Kequing.
-It is not right to bring outside pressure against what the choice of the people is. China will in the meantime tell the country its opinion and allow them make their own decision, she said.
The future of workers' rights remains to be seen
In the light of emerging concerns of Chinas' activities in Africa, how could these statements be interpreted?
Cognizance should be taken of the fact that trade unions in most African countries are weak and do not yet pose a significant counterforce to arbitrary rule, still less to force foreign companies to adopt corporate social responsibility measures.
Secondly many African countries have expressed a willingness to bend over backwards to please foreign investors by flaunting basic rights of workers as well as turning a blind eye to harmful practices of foreign companies.
China's lack of domestic political criticism, meanwhile, frees Chinese government and companies from reputational risks, so to say, and pressures that can leave western-based companies exposed. Unlike their counterparts in western countries who might shy away from investing in repressive regimes due to domestic pressure, Chinese companies may have little of such constraints.
Therefore China's attitude could mean an unwillingness to disturb the status quo irrespective of what that means to workers' rights. This can already be observed in Sudan where China has apparently turned a blind eye to international concerns over the current situation of human rights abuse for fear it might hurt China's oil interests.
