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 Full Release of the Investigation Report into MCID

2009 April 29

by Globalization Monitor

Reinstate Unlawfully Dismissed Workers

In early March A.P.Moller-Maersk commissioned Impactt and CRECEA to conduct auditing on MCID (Maersk Container Industry Dongguan Ltd). MCID was criticized by Globalization Monitor in December 2008 for violating basic human and labor rights as stipulated by ILO Convention and Chinese laws. When the report was ready, however, A.P.Moller-Maersk refused to make it public. On the other hand, it claimed that Impactt’s survey shows that ‘86% of shop floor employees were content or outright satisfied with the factory environment’. We believe that this allegation is based on the manipulation of the finding. MCID deliberately leaves out the other eleven topics of the same question (question no.1) of the survey, which ask workers their opinion of the dormitory, food, canteen, fairness of promotion, work safety, the management etc. The fact that MCID chooses only the result of one topic (factory environment) to report on, is because the survey results of all the other eleven topics are too poor and too embarrassing for MCID to make them public. It has also failed to make public the result of all the other thirteen questions as well, especially no. 5 which asks if promotion is based on merit or bribes. It has led us to believe that MCID is hiding important information which may prove its profound failure in respecting basic human and labor rights.

The investigation in fact lasted for only two days. MCID only allowed such a short time for the investigation to be conducted, is suspected of trying to limit the scope of the investigation. The fact that even with such a brief investigation MCID finds it necessary to hide its full finding from the public is particularly troubling for us. That A.P.Moller-Maersk practically agrees to keep the report confidential and has not differentiated itself from MCID’s misleading claim (that ‘86% of shop floor employees were content or outright satisfied with the factory environment’) is also discouraging. We call for the immediate and full release of the Impactt’s and CRECEA’s reports.

MCID Continues to Deny the Right to Strike

On April 4, 2009, Annette Stube of A.P.Moller-Maersk and Irving Hultengren presented us with two documents: MCID Action Plan and Maersk’s Response to Globalization Monitor. We appreciate that they have taken some positive steps to address part of the problems in MCID. There are serious shortcomings in the two documents which suggest more doubts, however. In addition, recent developments have led us to believe that the present top management of MCID is not sincerely committed to addressing the problems they have created, nor are they committed to a fair dialogue with those workers who were unlawfully dismissed.

Maersk’s response to Globalization Monitor claims that “We are reviewing all dismissals at MCID in 2008-2009. Dismissals will be reviewed in line with the recently amended handbook and compensation, if any, will be handled accordingly. Furthermore, should a case review leave any doubt about the fairness of the dismissal, we will give the dismissed person the benefit of the doubt and compensate accordingly.”

What is lacking in the above statement is an appeal mechanism for those unlawfully dismissed if they are not content with the review. What is more important, however, is that the guiding principle on which all dismissal reviews are supposed to base is not at all clear. A.P.Moller-Maersk and MCID had mistakenly believed that strikes were illegal in China, and MCID dismissed at least 54 workers for their alleged ‘illegal’ strikes’. Until today, both A.P.Moller-Maersk and MCID have never admitted they were wrong in dismissing workers based on their mistaken belief. On the contrary, in the meeting with ten unlawfully dismissed workers on April 17, Mr. Hultengren, managing director of MCID, evaded the question of whether he still thought that strikes are illegal in China, and explicitly said that he believed the dismissal to be lawful because it was endorsed by the local labor bureau. He hence refused the workers demands for reinstatement and compensation. We take this as evidence that both A.P.Moller-Maersk and MCID continue to deny workers the right to strike against an inhuman factory regime, hence we believe that the dismissal review is just window dressing which targets the Danish public . We furthermore think that Mr. Hultengren’s reliance on the advice of the local labor bureau on the issue of ‘whether Chinese laws ban strikes’ and not on the laws themselves, set a dangerous precedent in foreign owned investment in China.

We call on both A.P.Moller-Maersk and MCID make the principles below the guiding principles for reviewing all of dismissal cases:

1. No Chinese law prohibits strikes as such. Hence dismissing any MCID employee for ‘illegal strike’ was unlawful from the very beginning and therefore he or she must be reinstated.

2. Any review of a dismissal case must be based on the principle that MCID (and all subsidiaries of A.P.Moller-Maersk) in China respect their employees’ right to strike, tracking back to the time when MCID was founded.

3. Recognizing the right to strike in MCID (and all subsidiaries of A.P.Moller-Maersk) in China is not equivalent to saying that all Chinese workers enjoy the right to strike, therefore it does not require the consent of the local or national government of China.

4. Recognizing the right to strike in MCID (and all subsidiaries of A.P.Moller-Maersk) in China exceeds labor rights that are stipulated under present Chinese laws, but in no way violates any existing Chinese laws. In the same way paying employees above the minimum wages does not violate the law on minimum wages.

5. To invite GM and a Mainland independent labor NGO as observer in the review of all dismissal cases, and they as observers have the right to provide evidences in their possession.

MCID’s Senior Management Knowingly Violates Chinese Laws or Evades Their Legal Responsibility

Until the end of 2008 MCID imposed long working hours which are in violation of the law: 11 hours a day, six days a week. For a month with 26 working days, this meant a total of 286 working hours, including around 100 hours overtime. This far exceeded the 212 monthly working hours (44 hours per week plus a maximum of 36 hours of overtime a month) permitted by the Labor Law. It is a gross violation of the law.

The company had not abided by its legal obligations – as clearly stated in the Safe Production Law – and informed workers of all the occupational hazards they were in contact with. No effective health and safety training or awareness raising was provided to workers either. MCID also violated the Law on the Prevention and Treatment of Occupational Diseases as it failed to provide sufficient safety measures for workers.

Before the strike in January 2008 workers were allocated one pair of ear plugs, model 3M1100, per month. After the strike, in April 2008 this was increased to two pairs a month, and then after the May strike it further increased to four pairs a month. According to the staff of 3M company, Hong Kong, model 3M1100 may not be effective enough as a protective device in a noise environment reaching 105-6 dB. Additionally this model will only be effective when changed at least daily, and if workers get proper training in using them. Making workers use the same plug for a whole week, let alone a whole month, will subject workers to exceedingly high noises.

This has resulted in more than one hundred workers suffering from hearing damage. Mr. Hultengren, in response to our questions, replied that

“MCID has at this time no employees diagnosed with a confirmed hearing related occupational disease. Some employees have minor hearing impairments and in most of such cases the certified doctors recommend that they do not work in an area with high noise levels. We obviously follow the doctors’ recommendations for these cases.”

He evaded our other questions, however. Before one is confirmed as having an occupational disease, one needs to take time consuming medical investigation, and this requires the company to provide the necessary paper proofs to the hospital for various reasons. Evidence has led us to believe that the company has blocked more than one hundred workers’ access to medical investigation and treatment by:
— Ignoring workers’ complaints;
— Not sending workers with suspected occupational diseases to hospital;
— Withholding medical investigation results, and not releasing them to workers identified as suspected of being victims of occupational disease.
— Repeatedly delaying the sending of relevant documents to the occupational diseases hospital for diagnosis.

If making things difficult for workers with suspected occupational diseases is not enough to make them quiet, the management will simply turn to dismissal. The first batch of workers who were officially placed under medical observation were fired – although according to the law they cannot be dismissed. Among them there were Wang Dapeng and Yuan Daiyong. The management want to get rid of them so as to keep the numbers of workers affected, in different degrees, by occupational diseases low.

A hundred or more workers who complained about hearing damage were either intimidated and had to withdraw their complaints or were dismissed out right. They were left without a medical check and treatment. After the intimidation and dismissal the company can of course claim that “MCID has at this time no employees diagnosed with a confirmed hearing related occupational disease”.

The reason MCID’s management wanted to evade the responsibility of taking care of victims of occupational diseases, suspected or certified, and went so far as to dismiss them, was not to evade medical costs, as these are covered by insurance, but chiefly because they wanted to hide from the public the fact that their safeguards against occupational hazards were terribly poor. They feared that if this was made public it would not only create scandal, but it would cost a lot of money to clean up and, more importantly, would mean the stoppage of production, something which Mr. Hultengren did not want. Mr. Hultengren has always been very keen to push up productivity without regard for workers. Since Mr. Hultengren joined MCID, the management has increased the production target from 150 containers to 180 per day – on top of the fact that production targets have already been constantly raised from just 80 to 150 between 2006 and May 2008. This was also one of the reasons why there have been so many cases of work injuries. In fact Mr. Hultengren was responsible for strengthening the barrack like factory regime by increasing the penalty clauses in the employee handbook from 52 to 73. We suspect that it was his obsession with squeezing more labor from the workers in order to raise productivity that prompted him or his management to impose such an inhuman regime on the workers, to violate the laws, and to dismiss workers who were placed under medical observation for damaged hearing.

We demand A.P.Moller-Maersk step in to make sure that:

1. All dismissed workers with suspected occupational diseases and those placed under observation be reinstated and taken care of;

2. All present employees be sent to hospital to have medical checks directly targeting the occupational hazards that they are exposed to.

Rampant Corruption in MCID not seriously dealt with

MCID has not denied the accusation of corruption, but it was content in reiterating that ‘allegations of corruption were heard but no firm evidence put in front of management’, and that a review of procedure is enough to address the problem.

Surely the management of MCID does not have firm evidence of corruption, because it refuses to conduct a serious and in-depth investigation over the issue. We have told them the information we have but they simply did nothing to dig out the truth. In fact, we are quite sure that Mr. Hultengren is aware of the scope of corruption but is not interested in doing anything.

Corruption and bribes in the middle and lower management are detrimental to workers and even affect their safety. Workers complained that in 2006 when the factory was founded the gloves were of good quality, but they deteriorated quickly and often broke after use on the first or second day. They said that the managers concerned had bought cheap gloves for three RMB a pair but claimed more than ten RMB a pair from the company. Company procurement often becomes a chance for graft, from light bulbs to construction contracts. Therefore corruption is not only limited to middle management but goes even higher up. Another channel of corruption is stealing. Again, this is not confined to middle management, because stolen company property ranges from small things like ear plugs and light bulbs to expensive cables worth hundreds of thousands of RMB.

The third channel of corruption is paying bribes for promotion, which has already been reported.

The fourth channel of corruption is members of the management hiring and paying their own wives or other relatives to work in MCID, not based on their merits but on their guanxi, or personal relationship. The workers have given names which can be easily identified for further investigation.

Up to now not a single person of the management was fired for corruption, however, while hundreds of workers have been dismissed for doing nothing or just for claiming back their legitimate rights. Full benefit of doubt is given to managers and team leaders, while more than a hundred workers were denied basic procedural justice.

This or that particular accusation by workers may or may not be true, but the accusations speak for the need to undergo an impartial and independent investigation. We believe, after months of conducting extensive interviews with workers, that corruption is so rampant that at least part of the management had hijacked the company to serve their hidden agenda of corruption.

We are afraid that an independent investigation from MCID is not going to happen, however. Even if the top Danish management is not involved in corruption, it has turned a blind eye to it – and to all the violations of labor rights – because it only cares about production targets and profit. For the present, it cares more about defending their alleged correctness than paying attention to what workers have said.

MCID’s senior management is part of the problem

In its reply to us, MCID said that the head office of Maersk should not intervene in the negotiation with workers – which should be understood as a statement that the head office will leave MCID alone to deal with all the latter’s problems. It looks like A.P.Moller-Maersk is taking the same position.

We believe A.P.Moller-Maersk is wrong in this matter, however. The management of MCID is so plagued by corruption, arrogance and denial, and the corrupted elements have been so defensive and hostile to any investigation aimed at revealing their carefully guarded secrets, that it has convinced us that the present management of MCID is more of a problem than a solution. We have entered into dialogue with MCID since early March, but subsequent events have repeatedly shown its management to display no sincerity or commitment to having a meaningful dialogue with us or the workers, let alone a commitment to bringing justice to all the victims.

A.P.Moller-Maersk should send a special commissioner to MCID and be given real authority. He or she will be directly in charge of the review on all dismissal cases and the enforcement of the improvement plans in MCID. This special commissioner also oversees an independent investigation into charges of corruption and violation of labor rights of MCID. A monitoring panel be established to monitor the work of this special commissioner, with the participation of Globalization Monitor, the Danish trade unions and NGOs.

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 A.P. Moller - Maersk response to Globalization Monitor 6 Apr 2009

2009 April 6

Note: In a meeting with Globalization Monitor (GM) held in Hong Kong on 6 April 2009, Maersk made the following response to GM’s demands. (Browse for details http://www.globalmon.org.hk/en/01news/04report-on-maersk/a-response-to-maersks-january-statement/ )

As for the last 3 demands, regarding the 15 minutes before work meeting, fines and apology for 16 May 08 dismissals, which were raised during the meeting, Maersk gave no response.

A.P. Moller - Maersk response to Globalization Monitor

1. Reinstate all unlawfully dismissed workers, including but not confined to thefollowing categories [...]

We are reviewing all dismissals at MCID in 2008-2009. Dismissals will be reviewed in line with the recently amended handbook and compensation, if any, will be handled accordingly. Furthermore, should a case review leave any doubt about the fairness of the dismissal, we will give the dismissed person the benefit of the doubt and compensate accordingly.

2. Make public the [working] environmental investigation report and occupational hazards report

We will make the report public and ensure availability to employees. We will also provide more training to employees on H&S to prevent accidents.

3. All medical investigation reports of employees must be released to the latter immediately when the company gets them from the occupational diseases hospital

We will implement a leaner process for employees who have a suspected occupational disease as well as those under medical supervision. Each such employee will be assigned a personal case officer in HSE, who will help them throught the process and expedite matters at the hospital and in MCID administration. Case officers will regularly, and with relatively short intervals, communicate with the individuals to keep them informed of the current status.

4. Workers who have been on paid leave now should be paid in accordance to their average wages rather than the present arrangement of basic wages ples a 13.5 yuan daily subsidy, with which workers are not able to live on

Employees on paid home leave receive 100% contract salary (legal minimum is 80% of the minimum wage of the area, or RMB 616). However, since employees’ social insurance deductions principally are based on last year’s salary levels with more overtime the calculation basis will be changed to the current salary level commencing April/May. Irrespective of the deductions MCID will ensure that no employee on paid home leave will receive a payout less than RMB 616 commencing May salary payout.

5. Workers who have been on paid leave now should have their severance pay calculated in accordance to their average wages rather than the present basic wages, if the company decides not to renew their contracts when they expire.

Severance pay, if applicable, follows Chinese law and is basically calculated based upon the last 12 month average salary. It is the company’s choice to terminate employees’ contracts or send them home on paid leave. We have chosen the latter, not least because we expect to call some of them back on duty.

6. Workers who have medical investigation in hospitals other than the occupational diseases hospital should have their results recognized by the company

MCID will take a more proactive approach to help employees with suspected or identified occupational diseases (see point 3). We must have a system to ensure that the right tests are conducted by qualified doctors at accredited Chinese hospitals. Also, we cannot just pay for any test taken by employees. However, the new system should ensure that employees are being treated the best possible way and are well informed during the process.

7. Workers who are still on duty should have their wages raised because with a 9 hour working day, the wages they get now are too low to survive on

MCID recognizes that these are hard times for employees in the factory; for this reason factory employees’ salaries have been raised effective April 1, 2009 with at least 10%. In addition, on April 10, 2009 a “hard time” one-off bonus of RMB 500 will be given to all employees, including those on paid leave.

8. Maersk must deal with corruption and graft impartially

Corruption is naturally not accepted and MCID deals firmly and impartially with corruption, theft, illegalities etc. when identified. New processes have already been put in place and more will follow to minimize the risk for corruption.

9. Abolish all penalty clauses which are unlawful and unreasonable

The Employee Handbook has been through a thorogh review based on Chinese law and ILO conventions. The handbook has been adjusted accordingly.

10. One month notice should be given to workers if the management decides not to renew their contracts when they exprire.

This is a fair notice and will be implemented as soon as it has been approved by the Labour Union representatives.

11. The management of Dongguan Maersk must maintain open and fair dialogue with workers and Chinese must be used as the medium language.

Management is very open to this. Various options are being considered to expand the dialogue opportunities. We will try out what works. It is both in the interest of management and employees to have a good and trusting dialogue.

12. The headquarters of Maersk must open negotiation with workers

The factory is run by a local management and HQ should not intervene in this process. HQ’s role is to ensure that local management runs the factory in a way consistent with Maersk’s global CSR commitments.

Maersk Container Industry Dongguan Ltd.
Dasheng Village, Machong Town, 523 146, Dongguan, China
Tel: +86 (0) 769-8882 6668 Fax: +86 (0) 769-8882 4251
www.maerskbox.com

For MCID Action plan: browse: http://www.globalmon.org.hk/en/01news/04report-on-maersk/mcid-action-plan-april-2009/

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MCID Action plan April 2009

2009 April 6

Note: Maersk presented the following paper to in its meeting with Globalization Monitor on 6 Apr 2009, together with “A Response to Globalization Monitor” (Browse to read: http://www.globalmon.org.hk/en/01news/04report-on-maersk/ap-moller-maersk-response-to-globalization-monitor-6-apr-2009/ ).

This is not an exhaustive action list, but covering the key points.

Where no other dates are noted, implementation will start now and be in place within the next few months. In the case of middle management review and training, implementation is expected to take longer, but will be initiated immediately.

Health & Safety

The international advisor and auditor on working environment, CRECEA, focused on the technical aspects of Health & Safety.

Improved extraction of welding fumes

CRECEA suggested improvements on extraction of welding fumes and acknowledged that an improved system under implementation since mid-2008 and to be completed by mid-2009 would adequately address the issue.

Improved protection against noise

Measurements confirmed an official report that noise levels were found to be high in some areas due to the nature of the work. New, improved hearing protection equipment has already been put into use. Going forward, management is working with shop floor employees and 3M to develop new protection equipment. Renewed efforts ensuring that employees use the protection equipment correctly will be made in cooperation with the MCID Labour Union

H&S administration and communication

The assessment uncovered a clear need for improved communication and for a more efficient process to assist employees under medical supervision. A better process in general for employees who have a suspected occupational disease as well as those under medical supervision will be implemented. Each such employee will be assigned a personal case officer in HSE, who will help them through the process and expedite matters at the hospital and in MCID administration. Case officers will regularly, and with relatively short intervals, communicate with the individuals to keep them informed of the current status.

The overall conclusion of the audit conducted by CRECEA found that MCID was above average Chinese level regarding Health and Safety. The audit team observed many positive achievements, but also highlighted areas that could be improved as noted above.

Labour Rights / Human Rights

China team from UK based consultancy, Impatt Ltd, specialised in labour standards and factory assessments, focused on the shop floor employees and their views of working at MCID. Impatt also conducted a thorough review of the Employee Handbook against Chinese Labour Law and ILO Conventions.

Better shop floor employee representation in Labour Union

The low number of shop floor employees in the Labour Union committee left shop floor employees with a feeling of not being properly represented. Although the election was conducted in a transparent and democratic way, the Labour Union itself as well as management sees this as unfortunate and the Labour Union has following the audit drawn up plans to encourage representatives to elect more shop floor employees in upcoming by-elections and by taking an initiative to create a sub committee solely manned with shop floor employees.

Reviewed Employee handbook

The employee handbook has been reviewed based on Chinese law and ILO conventions and an updated handbook is ready for implementation as soon as it has been approved by the Labour Union representatives, expected latest May.

Simplified salary structure

A new and simplified salary structure has been under implementation in stages since June 2008. The implementation will be completed in connection with the annual April salary review in line with the overall A.P. Moller-Maersk organization.

Culture and daily life

The assessment indicated mistrust by shop floor workers towards middle management causing a feeling of a poor middle management attitude and of unsatisfactory promotional opportunities.

Improved management skills

The assessment only having focused on the shop floor employees a subsequent assessment will focus on middle management to complete the picture. Meanwhile, steps are being taken to improve management skills and to implement personal evaluations of each middle manager.

New processes to prevent corruption

Allegations of corruption were heard but no firm or actionable evidence put in front of management. Nevertheless, corruption is naturally not accepted and MCID deals firmly and impartially with corruption, theft, illegalities etc. when identified. New processes have already been put in place and more will follow to reduce the risk for corruption. Examples of those implemented are elimination of management layers and a revised approval procedure aimed at ensuring a fair promotion process.

Improving communication between employees and management

In general, management is looking into ways of expanding vertical communication channels. Various models will be tested to see what works the best. This is a long term effort.

Review of dismissals

Review of all dismissals at MCID in 2008-2009. Dismissals will be reviewed in line with the recently amended handbook and compensation, if any, will be handled accordingly. Furthermore, should a case review leave any doubt about the fairness of the dismissal, we will give the dismissed person the benefit of the doubt and compensate accordingly.

The overall survey concluded that 86% of shop floor employees were content or outright satisfied with the factory environment. The improvements made over the last year, were appreciated by employees. This will however not prevent management from implemented the actions stated above to further improve the working environment and daily life at the factory.

Follow up

A re-audit will be undertaken before end 2009 to monitor progress of implementation.

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 Demand for meeting with unlawfully dismissed workers

2009 April 3

To: Mr. Nills Smedegaard Anderson,
CEO, A.P. Moller - Maersk Group

Dear Mr. Anderson,

Demand for meeting with unlawfully dismissed workers

We were workers at the Maersk Container Industry Dongguan Ltd. We were unlawfully dismissed by the management on 12 and 16 May 2008 respectively for supposedly ‘illegal’ strikes. The company’s action has neither legal ground nor any justifiable reasons. We asked for negotiation with the management but were rejected. We are now writing to you to demand that you meet with us.

Dismissing workers for striking is unlawful
China has no law whatsoever that prohibits strikes. Therefore dismissing workers on the grounds of ‘illegal’ strikes is wrong. In addition to this Maersk, as a transnational company, should follow International Labour standards, i.e. recognizing workers’ rights to strike.

Workers’ strikes are legitimate
The 11 May 2008 strike broke out because workers discovered that their salaries were actually lower than what the management had promised. Another grievance was that the wage structure was far too complicated for workers to comprehend. Therefore workers struck on 11 and 12 May. These dates were a Saturday and a Sunday (scheduled as overtime workdays). On 13 May, the management posted a notice announcing that 29 workers were fired on 12 May. The move was to punish workers for their strikes. Yet the 29 workers who were dismissed all worked in the same section; the reason they were chosen for dismissal only because their section was the least important work station.

As for the 16 May 2008 strike, it happened four days after the 12 May Sichuan earthquake. Maersk did nothing for the earthquake in that period, hence some workers wanted to initiate fund-raising for the victims. One worker went to the management to make suggestion to the latter on fund-raising for the victims. The manager did not respond to the worker’s suggestion, instead he fired the workers’ team-leader. This triggered off the anger of 87 workers who went on strike. On the same day, the management posted a notice asking the striking workers to meet with the management. The meeting, however, had nothing to do with fund-raising, and was instead to ask workers to sign an agreement to go back to work. Many workers were forced to sign while 15 other workers rejected. The management immediately dismissed these 15 workers.

The underlying reason behind the two strikes in May 2008 was the management’s reluctance to communicate with the workers, and its arrogance and disrespect in the way it treated workers. This eventually aroused workers’ anger so much that it culminated with strike action.

Corporate responsibility – recognizing workers’ rights to strike
Maersk, as a transnational corporation, should follow International Labour Standards and recognize workers’ rights to strike. Maersk should also recognize workers’ rights to collective bargaining, and for that purpose it must provide an effective channel for negotiation with workers.

We demand:

1. Representatives from Maersk’s head office meet with us;

2. Since the dismissal of workers is unlawful and unreasonable, Maersk should withdraw its wrongful decision, and reinstate the dismissed workers. Reinstated workers should be paid the same average wages as before.

3. Maersk must compensate dismissed workers for their loss of income from the date of dismissal till the date of their reinstatement. Maersk must pay them according to their normal average wages.

4. If any worker concerned does not prefer reinstatement, Maersk must, in accordance to Labour Contract Law article 47, compensate them. The compensation should be linked to length of service: for every year of service workers must be paid one month’s wages; those who worked for more than six months but less than one year should be regarded as having worked one full year and should be paid one month’s salary; those who worked less than six months should be regarded as having worked six full months and be paid half a month’s salary. In addition to this, a sum of money equivalent to one month’s salary should be compensated to workers for in lieu of notice.

5. Maersk should immediately arrange medical inspections for workers in accordance with the laws. Maersk must be responsible for all the expenses of medical inspections as well as related medical treatment when workers are found to have occupational diseases. If workers are diagnosed as being under medical observation or are suspected of having occupational diseases, Maersk must re-instate these workers as required by law. In addition to this, Maersk must compensate these workers in accordance to the principle laid down in the aforementioned point 3.

6. Maersk must pay back the unjustifiable fines to workers (along with interest). The 15 minute meeting before work should be paid as overtime payment.

7. Maersk must apologize to the workers openly for wrongfully dismissing workers for the 16 May 2008 strike.

(Signatures by 12 workers)

30 Mar 2008

Attachments:

1. Notice by Maersk Dongguan, issued on 13 May 2008, “Notice to process the termination of contract”, regarding the dismissal of 29 workers on 12 May 2008. (see below)

2. Notice by Maersk Dongguan, issued on 16 May 2008, “Notice for the 87 workers who went on strike to have a meeting with the management” (see below)
3. Notice by Maersk Dongguan issued on 16 May 2008, dismissing 17 workers (the actual number of dismissed workers was 15, the management mistakenly put 2 other workers on the list). (see below)

4. A statement by a worker describing what happened regarding the 16 May 2008 incident. (To read, browse: http://www.globalmon.org.hk/en/01news/04report-on-maersk/we-are-fired-because-of-fund-raising/)

CC:
- Mr Irving Hultengren, Head of factory in Dongguan
- Ms. Annette Stube, Director of Corporate Social Responsibility, Group Relations
- Mr Jens Eskelund, Head of Public Affairs, Beijing
- Mr Joe Nazareth, Head of Group HSSE
- Mr Soren Stig Nielsen, Head of Maersk Line Sustainability
- Denmark Mass Media

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Notice by Maersk on 13 May 2008 to dismiss 29 workers who went on strike

Translation:

NOTICE to go through the Procedure of Termination of Contract
The following workers have seriously violated the labour discipline and the company’s rule. According to related rules and labour law, these workers are dismissed on 12 May 2008. These workers have not gone through the procedure of termination of contract.

(names of 29 workers. names on the Chinese copy are blurred for privacy reason)

We hereby notice the above workers again. Please come to our training room at the time as listed above to get the “Form for termination of contract”. Workers need to go through the procedure as instructed in the form and get this month’s salary.

Maersk Container Industry Dongguan Ltd

13 May 2008

*****

Notice by Maersk to order 87 workers who are on strike to meet with the management immediately on 16 May 2008

Translation:

NOTICE

The day-shift workers of the Side-cover station (側板線) and the Top-cover Station (頂板線) (see the names listed below) who participate the strike today must come at once to the 2^nd floor canteen to meet with the management. Workers come later than 16:30 will be dismissed immediately.

As for other workers, please stay on your duty.

(names of 87 workers. names on the Chinese copy are blurred for privacy reason)

Remarks: The above list does not include workers who are approved for leave on 16 May 2008.

Maersk Container Industry Dongguan Ltd
16 May 2008

****

Notice by Maersk to dismiss 15 workers on 16 May 2008

Translation:

NOTICE

As in our last notice mentioned, the day-shift workers of the Side-cover station (側板線) and the Top-cover Station (頂板線) must come at once to the 2^nd floor canteen to meet with the management. Workers come later than 16:30 will be dismissed immediately. However, there are some workers who have rejected to communicate with the management and did not report duty as usual.

According to related rules and national laws and rules, we have decided to terminate the following workers immediately. The following workers are prohibited to enter the factory effective from the issue of this notice. These workers should come to go through the procedure of termination of contract.

(names of 17 workers, names on the Chinese copy are blurred for privacy reason)*

Maersk Container Industry Dongguan Ltd
16 May 2008

(Remarks: the management had mistakenly put 2 workers who were on leave and not involved in the incident. So the actual number of dismissals is 15.)

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 We are Fired because of Fund-raising

The following is a letter by a worker. The worker was among the 15 workers who were fired on 16 May 2008. The names had been deleted for security reason.

We are Fired because of Fund-raising

The Sichuan earthquake has tugged the heartstrings of people all over China. We should all help in this critical disaster. We should offer a caring heart to the victims of the earthquake. In these mourning days, we should not file complaints. However, we are forced to do so. We hope someone can embrace justice and clear our names.

The incident:
On 15 May 2008, our team-leader, H (team-leader’s name) discussed with us to initiate a fund-raising for the earthquake victims. I, F (the worker’s name) and some other workers were responsible for making the box for fund-raising. As we know that we should not initiate the fund-raising ourselves, it might be better to have Maersk to initiate that. On 16 May 2008 at 8 am, I took a fund-raising box with me. I wanted to meet with the management to make suggestion on the fund-raising. I waited for long hours before I could meet the management according to their arrangement. I told the manager I met about our suggestion and I donated 200 Yuan but he said I did not need to make donation. The management needed to get the department’s approval to do that. However the department-in-charge had not yet made any decision on this matter. He then asked which was my work-station and who was my team-leader. I replied, “I worked at the side-cover station (側板線) and my team-leader is H (team-leader’s name).”

Then I went back to work after the meeting. Then during lunch, we heard that H (team-leader’s name) was fired because of the fund-raising. We were so angry that we made a banner to protest against the dismissal. Shortly after the protest had started, Maersk posted a notice, stating that all workers on the side-cover station had to come and meet with the management at 16:30 at the 2/F canteen. Any workers absent would be immediately dismissed.

We all went to the meeting. However, the management did not want to have any solid discussion with us regarding the fund-raising. They only asked us to sign a statement and go back to work. They stressed that we could get back the day’s salary if we signed the agreement. For those who do not sign would be fired.

As a result, many of us signed the agreement but 15 refused to sign as it was sheer intimidation.

The management held the meeting at 16:30 which was an overtime period. After 16:30, the production line continued as usual. We continued to protest but did not obstruct any workers to carry on their duty. Yet no one from the management came to communicate with us.

The night shift production had once been suspended but we were still protesting. We did not know anything about the work-station.

Since 2006, we had been posting our demands and suggestions. No matter how reasonable they were, all were rejected. Productivity rate and workload have been increasing. Our income was low but working hour was long. The salary structure was too complicated for us to comprehend. Our life was difficult. We expressed our concerns and demands to the management but got no response. The high turnover rate put more pressure on the experienced workers.

The problems have triggered three strikes and every time workers were dismissed immediately after the strike. The largest dismissal involved more than 40 workers. On 10 May 2008, 32 workers were dismissed. Workers were given no reasons for the dismissals nor could they get any compensation. Working in such a terrorized environment, how can we feel safe? The management does not care about workers, it suppress workers’ views and refuse to take responsibility…

We are powerless and nobody offers us help. If we follow the legal procedures to fight for our rights, it takes a long time to get the result. Then who takes care of our family? In addition, the local government often protects the interest of the corporation, hence we have no way out. We hope someone could offer help and uphold justice and clear our names.

Signed by the worker

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 A Response to Maersk’s January Statement

A Response to Maersk’s January Statement (REVISED on 30 Mar 2009)

Globalization Monitor

March 19, 2009

In response to Globalization Monitor’s January report and the related Danish news report on the deplorable working conditions at the Dongguan Maersk plant, Maersk released a statement on 12^th January, refuting nearly all of the charges. See Maersk’s statement here.

This statement aims at clarifying the truth. It will be followed by a full report in due course.

Barrack like factory regime: more and more unjust penalty clauses

Maersk’s statement begins by reiterating its supposed “high standards” regarding the working conditions and environment at the Dongguan plant. Unfortunately the opposite is true. In certain sense Dongguan Maersk’s working conditions are worse than others. It has an employee handbook that contains 73 penalty clauses, many of them seriously violating basic human and labour rights as stipulated by both ILO conventions and Chinese laws. Our investigation suggests that CIMC (China International Marine Containers (Group) Co. Ltd) plant in Xinhui (hereafter Xinhui CIMC), which is also container manufacturer and business partner of Dongguan Maersk, has an employee handbook (2006 version) containing only19 penalty clauses and none of them explicitly violate basic human and labour rights. We are not sure if the Xinhui CIMC has any internal and confidential penalty clauses, unknown to us, that are as bad as Dongguan Maersk’s. We welcome any correction here. We are, however, very much sure that in Dongguan Maersk, the barrack like factory regime goes from bad to worse. Just compare the 2006 version of Dongguan Maersk’s employee handbook with the 2008 version. One will immediately find out that whereas the former “only” contains 52 penalty clauses, the management found it necessary, after two strikes which reveal the depth of workers’ discontent, to further increase the number to 73! The parts the new managing director has added include the clause on penalizing workers for not queuing up properly in the canteen or failing to put back used utensils.

Bad-mouthing workers

The Maersk statement comes to the management of Dongguan Maersk’s defense by saying that, “many employees are former rural workers who are not used to working in a factory where many people eat together in a canteen. One of the episodes that resulted in a strike was in fact caused by a lack of proper queue behavior.” Apart from insulting the workers for the nth time, Maersk has apparently sought advice from the wrong people as far as the behavior of Chinese rural migrant workers is concerned. Chinese peasants are accustomed to “many people eating together”, as a matter of fact. In Hong Kong, although many of the rural areas have long since become sub-urban land and the overwhelming majority of the indigenous rural population has abandoned farming altogether, the residents of whole villages eating together at big feasts is still common during festivals. It does not take much effort at all to find out the truth. As for the supposed lack of “behaviour queuing up,” the Maersk statement simply leaves out its own responsibility: before May 2008, the workers had only a 30 minute lunch break. Walking from the respective work stations to the canteen, going through the long queue which is always “S” shaped because there are so many people etc, often takes workers 8-10 minutes if not more, hence the rush to queue up and eat. The gangster like behavior of security guards, who always want to fine and bully workers, only make things more difficult for workers. To blame the workers’ alleged lack of “behavior of queuing up” for their strike is simply blaming the victims.

Increasing work injuries, long working hours, low pay

The Maersk statement denies that Dongguan Maersk had daily work injuries and claims that in 2008 there were only 34 injuries. This is not true. We have at hand part of a list of work injuries indicating that in August 2008 alone there were at least 30 injuries, in July there were at least 21 injuries. The sum of these two months alone, therefore, already far exceed the Maersk yearly figure.

Why the high work injuries rate? It is because since Mr. Hultengren joined Dongguan Maersk, the management had increased production target from 150 containers to 180 per day. Most injuries happened when workers rushed to attain the required output. This was without any regard to workers’ health. In addition to this, there was long working hours until the end of 2008: 11 hours a day, six days a week. For a month with 26 working days, it meant a total of 286 working hours, including around 100 hours overtime. This far exceeded the 196 monthly working hours (40 hours per week plus a maximum of 36 hours of overtime a month) permitted by the Labour Law. It is a gross violation of law.

Workers do not complain about long working hours too much, though. This is not because they are supermen but because their basic wages are miserably low and if they eventually earn higher wages it is because they work overtime. After the Lunar New Year holiday working hours were cut in Dongguan Maersk, not because of any consideration to abiding the laws, but because of declining orders as a result of the economic crisis. Now only half of the workforce is still on duty and “only” work 9 hours a day. The other half is on “paid” leave but is paid only with its basic wages, which range from 600-1,059 yuan per month. This is little more than Dongguan’s statutory minimum wage of 770 yuan. After deductions are made for paying social security insurance and into pension funds, wages might actually be as low as 400 yuan.

Workers suffer from hearing loss

Dongguan Maersk does not perform any better in the prevention and treatment of occupational diseases.

The Maersk statement denies that there has been any “permanent hearing damage”. This is misleading, if not totally wrong. According to our investigation, there are dozens of cases where the hearing of workers has been damaged to different degrees. The initial diagnosis of Wang Dapeng shows that the victim’s hearing loss reaches 68 dB; for Yuan Dayong it is 40 dB, which far exceeds the normal level of 25dB. The most serious case of hearing loss that we have found is 77dB. Whether any of these cases will be eventually diagnosed as “permanent damage” depends on follow up treatment and diagnosis. This in turn depends on whether the management has acted in accordance to laws governing occupational diseases treatment and compensation to provide necessary information. Numerous evidence points to the fact that Dongguan Maersk has failed to do so:

— Medical investigation results were withheld, and not released to workers identified as suspected of being victims of occupational disease.
— Repeated delay in sending relevant documents to the occupational diseases hospital for diagnosis.
— Using excuses to dismiss occupational disease victims who were identified by the hospital as “placed under observation,” in order to evade treatment and compensation responsibility, despite the fact that according to the law this category of victim workers cannot be dismissed (for instance, Yuan, Wang and others). The dismissed victims were hence being robbed of the right to further treatment and diagnosis, along with their right to compensation.

The Maersk statement denies that there is a lack of ear plugs, and claims that “our employees can at any time and without limitation replace worn or damaged safety equipment.” The workers said otherwise, however. They said that before the strike in January 2008 they were allocated one pair of ear plugs, model 3M1100, per month. After the strike, in April 2008 this was increased to two pairs a month, and then after the May strike it further increased to four pairs a month. According to the staff of 3M company, Hong Kong, model 3M1100 may not effective enough as a protective device in a noise environment reaching 105-6 dB. Additionally this model will only effective when changed at least daily, and workers get proper training in using it. Making workers use the same plug for a whole week, let alone a whole month, will subject workers to exceedingly high noises.

Corruption

The Maersk statement denies any corruption and monetary gifts to middle management, or managers buying their positions. “We have procedures to prevent this”, it reassures us. A more qualified consultant might have advised Maersk that in China usually what counts are not laws nor rules, but the laws of jungle plus guanxi, or personalized networks of influence and social relationships. It is not unusual to see that company managers, mostly Chinese but also include other nationalities, tend to bring in their own guanxi in the pursuit of personal benefit. In companies where corruption are rampant, relatives and cronies of these managers get hired not because of their own merit but because of their guanxi, or after they paid their bribes. In the worst cases it consolidates into a mafia like sect who practically hijack at least a part of the company in the pursuit of their own interest, and grafts and corruption becomes widespread. If top management turn a blind eye to lower level management’s irregularities as long as the latter can squeeze enough sweat from workers, then the worst scenario will be inevitable. If Maersk is serious about its own promise of “zero tolerance to bribery and corruption,” what Maersk or its “independent auditor” should look into first is not only “procedures” but ask the correct questions: are the same things happening in Dongguan Maersk? Last but not least, is Maersk prepared to put in enough time and money and the suitable persons to make such a back breaking investigation? Does Maersk think that a one week investigation is enough to find out all the carefully guarded secrets, if any? In the final analysis, even if Maersk comes up with more knowledge about Dongguan Maersk, how can it ascertain that it is already the whole truth and not just a small part of the truth? How does Maersk know if there are still things that it does not know?

Prohibiting employees to give information about their own salaries

The Maersk statement claims that their employee handbook “only prohibited (employees) from giving information about their own salaries, and the current edition of the employee handbook does not state this.” This is not the case. Clause 53 of the penalties explicitly states that anyone “Leaking or ferreting out employee salary information, or publicly spreading the salary details of others or oneself” will be dismissed for the first offence. In Romanized Chinese it is “Xielu huo tanqu gongsi yuangong xinchou ziliao huo chuanbo tar en he ziji gongzi qingkuang de”, and “ziji” means “oneself or myself”. There should be no misunderstanding about it.

The Maersk statement reassured us that they will work with the workplace union to make things right. It does not really make us feel more comfortable because it is just a yellow union. It does not enjoy any credibility. If Maersk is serious about respecting labour rights, it should directly open dialogue with all workers or former workers who have been unjustly treated by Dongguan Maersk.

A Terrorized Working Environment

Maersk had mistaken that strikes are illegal in China. The statement promises to look into the matter more closely without directly acknowledged the truth. We must point out that not only Maersk must acknowledge that strikes are not illegal openly, it should reinstate all workers who have being fired — the number of them may be close to hundred — because of involvement in allegedly “illegal” strikes.

Dongguan Maersk is virtually in a spirit of terror. Not only are workers who dare to stand up for their rights being victimized by the management, and often dismissed, but also the local government is seriously biased towards the company and in many ways helps the company to repress the workers. In fact, local police have recently threatened one of the workers who wanted to make their voice heard. No one should be treated like a suspect criminal simply for voicing their grievances. We appeal to the international labour movement to closely monitor the situation and to protest against any repression of workers.

Our Proposal

The headquarters of Maersk should send representatives with full power, bypassing Dongguan Maersk, to Guangzhou to open direct negotiation with all workers who have been treated unjustly. Once appointed, these representatives must make public where and when they are prepared to meet up with all workers and former workers who have grievances. The message for open and honest dialogue must be sent to all workers and former workers, and all efforts for ensuring the safe passage of workers to the venue of negotiation be made by the representatives. All former workers who come to the venue should have their travel expenses, food and accommodation allowances paid by the company. We request that Maersk gives us a reply in two weeks.

We also request that Maersk replies to us concerning workers’ demands, in two weeks, that are stipulated in the appendix. The above request and the workers’ demands was presented to Ms. Annette Stube, Director of Corporate Social Responsibility of Maersk, and Mr. Irving A.Hultengren, Managing Director of Dongguan Maersk, in the morning of 19 March 2009.

****

Appendix

Demands of Dongguan Maersk Workers and Former Workers:

1. Reinstate all unlawfully dismissed workers, including but not confined to the following categories:
a. 29 workers dismissed for alleged invovlment in the 10 May 2008 “illegal” strike.
b. 17 workers dismissed for alleged involvement in 16 May 2008 “illegal strike”.
c. Wang Dapeng, Yuan Dayong and many others who were either put under observation by the occupational diseases hospital for suspected occupational diseases or having symptoms of which and were dismissed under various pretext.
d. Zhao Hongwei, who was beaten up by security guards in January 2008 triggering a protest and then a strike by his fellow workers. He was not treated fairly after he was injured, and was forced to leave the company after his superiors repeatedly made things difficult for him.
e. Workers who were dismissed for complaining to the company.

2. Make public the environmental investigation report and occupational hazards report.

3. All medical investigation reports of employees must be released to the latter immediately when the company gets them from the occupational diseases hospital.

4. Workers who have been on paid leave now should be paid in accordance to their average wages rather than the present arrangement of basic wages plus a 13.5 yuan daily subsidy, with which workers are not able to live on.

5. Workers who have been on paid leave now should have their severance pay calculated in accordance to their average wages rather than the present basic wages, if the company decides not to renew their contracts when they expire.

6. Workers who have medical investigation in hospitals other than the occupational diseases hospital should have their results recognized by the company.

7. Workers who are still on duty should have their wages raised because with a 9 hour working day the wages they get now are too low to survive on.

8. Maersk must deal with corruption and graft impartially.

9. Abolish all penalty clauses which are unlawful and unreasonable.

10. One month notice should be given to workers if the management decides not to renew their contracts when they expire.

11. The management of Dongguan Maersk must maintain open and fair dialogue with workers and Chinese must be used as the medium language.

12. The headquarters of Maersk must open negotiation with workers.

13. Maersk Dongguan had been charging workers with fines which were unreasonable and unjustifiable. The fines that had been charged should be returned to workers together with the interest.

14. The 15- minutes’ meeting before work should be paid as overtime payment.

15. Regarding the dismissal of workers on 16 Apr 2008 (as in the above mentioned point 1b, Maersk should openly apologize for the dismissal of workers.

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 Maersk battling with Chinese factory accusations

Report by ITF-Maersk Network: http://www.itfglobal.org/campaigns/maersk.cfm/newsdetail/3031/region/1/order/1

Brings in outside investigators

A two month shut-down is expected to serve as a cooling off period for Maersk Container Industry in Dongguan, China, as workers at the Danish giant’s container construction facility are sent home on a temporary layoff as the owner battles accusations of unsafe working conditions, shop floor brutality and corruption.

The factory will remain closed until March 9, including an extended holiday for the Chinese New Year. The closure has officially been blamed on the global economic downturn.

Maersk parent AP Moller-Maersk, while strongly denying the allegations brought against it, has invited Impactt Ltd, a London company, to serve as independent third party and umpire when the facility does reopen.

The plan is for a team of social responsibility and human resources experts to spend time at the factory and observe conditions for themselves.

Annette Stube, who was appointed Maersk’s first-ever corporate social responsibility director just weeks before the allegations in Dongguan surfaced, will let Impactt go into the factory and then talk directly with the group behind the accusations to see what might need to be done.

The trouble surfaced when a group called Globalization Monitor sent a report directly to Danish media and accused Maersk of unacceptable working conditions and corruption.

The Dongguan facilities are thought to employ about 1,900 people and have an output of up to 180,000 container boxes annually.

Lloyd’s List newspaper quoted Globalization Monitor spokesman Au Loong-Yu as saying that conditions at the factory had improved after two strikes by workers last year, but much more needed to be done. He said the work environment was “barrack like” and unsafe, and that workers lived in fear of retaliation from “brutal middle management”.

Specific allegations reported by Politiken and the Danish Broadcasting Corporation include:

* smoke surrounding welders not being extracted, thus exposing them to potential lung diseases

* pollution in the factory, and lack of ventilation

* a company employees’ handbook bans strikes and go-slow working, and employees must not conceal having a sexually transmitted disease

* hearing and lung damage from unsafe working conditions

* victimisation and dismissal for wanting to discuss wages

* security guards using violence against workers who do not follow company rules. All are afraid of the guards

* corruption, where employees can buy promotion.

A riot took place a year ago at the plant in protest against the beatings, after which the security company was changed. But another strike followed as workers remained dissatisfied.

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 Global Unions’ Message to Maersk

January 12, 2009 Politiken, Denmark
Peter Rasmussen, freelance journalist
Dongguan Maersk worker doing the welding

Dongguan Maersk worker doing the welding

Rules and conditions at the Maersk Container factory in Dongguan are violating ILO-conventions and Chinese labour law.

This is the message from the global union movements office in Hong Kong, Dominique Muller.

She has studied parts of the “employee handbook”, written by Maersk Container Industry Dongguan. The handbook contains 73 rules. According to some rules strikes and go slow are banned.

“The rules contravene not only the letter of the ILO conventions but also their fundamental principles. The right to strike for example is enshrined as a basic right in ILO core conventions,” Dominique Muller of IHLO, the Hong Kong Liaison Office of the international trade union movement. According to workers from the factory, the rules are used by middle management to harass and punish workers, who complain about their
conditions.

The factory suffered from two strikes in 2008. Dominique Muller strongly urges Maersk to change the conditions:

“Maersk must start to get its act together in China. It cannot continue using a stick to keep its workers in place. The string of recent protests and dismissals show how bad the situation is and it can only get worse in this economic climate. It must scrap these illegal and oppressive factory rules before more protests occur,” said Dominique Muller.

She addresses the fact that the owner of the factory, A.P. Moller-Maersk, is right now considering joining the UN Global Compact:

“If Maersk is in any way serious about joining the Global Compact it must change the situation on the ground in China. Otherwise their admission to the Compact will undermine the Compact’s reputation,” Dominique Muller said.

The Danish trade union congress, LO, also criticizes the regulations at the Maersk plant:

“It is totally unacceptable that Maersk set up rules like these for its workers in China. I am appalled by the conditions. There is no doubt that they are violating ILO conventions on labour rights.”

It would suit a big Danish multinational company to comply with these rules, Anette Berentzen, head of the International department of LO said.

The Hong Kong-based human rights NGO, Globalization Monitor, published a report about conditions at the factory on January 12. The NGO concludes that the workers rights are violated at the plant. Managing Director Irving Hultengren disagree. He said to news agency Ritzau, that Maersk was not confronted with the report before it was published and he questions the credibility of the report.

Dominique Muller from the IHLO in Hong Kong is more confident. She said: “GM is a well known NGO here in HK. Although it is small it is respected.”

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 A summary of articles on Maersk in Danish newspaper, Politiken

2009 February 1

by Globalization Monitor

Maersk accused of repression of workers in China
Danish transport giant under fire for tough company rules and poor conditions at container factory in China

Peter Rasmussen, Denmark
Workers Strike at Dongguan Maersk, 14 Jan 2008

Workers Strike at Dongguan Maersk, 14 Jan 2008

Strike is forbidden.

“Go slow” is forbidden.

It is forbidden to hide from management, if one suffers from a sexual transmitted disease.

These are three of the rules for workers at the Danish-owned Maersk Container factory near Dongguan in Southern China.

The factory is being accused of harsh regulations, dangerous working conditions and corruption, reports Danish newspaper, Politiken and Danish national television.

(This is a summary of two articles : Maersk accused of repression of workers in China and Danish transport giant under fire for tough company rules and poorconditions at container factory in China. Published in 10 January 2009.)

The rules mentioned above are three out of 73 regulations in the company’s “employee handbook”. Breaking the rules is sanctioned with “dismissal first time,” according to the handbook. Other rules are more detailed: Workers who fail to clean their plates or stand properly in line in the canteen are punished with demerit points or dismissal, the manual states.

The factory experienced by two major strikes in 2008. In January workers committed a riot at the plant, crashing offices and cars, after security guards had been beating up a migrant worker who broke canteen regulations.
In May 2008 29 workers were fired for participating in another strike.

An atmosphere of fear

The Hong Kong-based ngo, Globalization Monitor, has been following the conditions at the factory over time. In a report published January 12, Globalization Monitor criticises the general conditions for the workers.

The organisation reports that several workers complaint about corrupt supervisors, who punish critical workers with sanctions or dismissal. Workers also complain about hearing damage and lung problems caused by dangerous working conditions, Globalisation Monitor reprots.

“The conditions for the workers are very extreme, and the company’s harsh rules are creating an atmosphere of fear among the employees. The rules, set up by Maersk, are in many occassions tougher than at similar Chinese factories. They are violating Chinese law and international conventions under the UN and the ILO. The purpose is obvious: to terrorize the employees after they twice rebelled against the brutality of the management,” researcher Au Loong-Yu said.

Workers, interviewed by the newspaper Politiken, especially critizise the Chinese supervisors role:

“Many workers, who have spoken out against the conditions, have been fired or harrassed. The Chinese supervisors at the factory actively uses the company rules against us. If I criticise the conditions in front of my manager, there is a great risk that he will take revenge and punish me,” one worker said. He wishes to remain anonymous, due to fear of retaliation.

Another worker, 33-year old Wang Dapeng says that he suffers from hearing damage because of working in the welding section at the factory. Due to the injury, his work time was reduced from 60 to 40 hours. His wages were at the same time reduced to 800 RMB (117 USD) monthly.

“I told the supervisor that I wanted to discuss my wages with a manager. The day after they told me, that I was fired,” Wang Dapeng said.

Conditions can cause cancer and lung problems

A number of workers say that they suffer from occupational illnesses caused by polluted air, loud noise and lack of protection. Danish doctor in occupational medicine, Erik Jørs, has studied photos and video from the factory, recorded by the workers on cell phones. He agrees that the conditions are dangerous to the workers:

“Workers operate in areas with fumes from welding without proper extraction of air. A certain percentage of the workers is going to develop chronic bronchitis and suffer from reduced lung capacity. In the end it can cause lung cancer, Erik Jørs said.

Maersk Container Industry is fully owned by A.P. Moller-Maersk, one of the world leading transport companies. The Donguan factory opened in 2006 and employs about 1,800 migrant workers.

Irving Hultengren, Managing director of the factory in Dongguan denies the allegations of corruption, poor working conditions or harrashment of critical workers.

“The employees’ conditions by far extend what workers on countless other factories in the area are being offered. Any employee can freely critizise conditions or come up with suggestions through their union,” Hultengren said.

He sees no problem in the company’s ban on strikes and go-slows: ” Maersk Container Industry’s employee handbook emphsizes to the workers, that according to Chinese law practice, strike is illegal.”

However, this is not correct, according to Anita Chan, researcher in Chinese labour at the Department of Asian Studies on the Australian National University. She said about the company rules:

“This is not in accordance to any Chinese laws related to labor. In the Chinese legal system “strikes” are neither legal nor illegal. If so, for a workplace to say there should be no strikes does not have legal backing, ” Anita Chan said.

Because of this, strikes and work stoppages in some occasions are tolerated and considered legal, by Chinese authorities.

A.P. Moller-Maersk has asked the British company, Impactt Limited, to investigate the conditions at the plant through an audit, when workers return from Chinese New Year in March 2009. Maersk has announced that the workers are receiving two months of paid vacation, as the factory is closing down for this period due to the economic crisis.

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 Maersk’s Response to Danish News

In response to Globalization Monitor’s January report and the related Danish news report on the deplorable working conditions at the Dongguan Maersk plant, Maersk released a statement on 12^th January, refuting nearly all of the charges. Maersk’s statement is as follows:

Editor’s note:

The original press release is in Danish. The closest document in English was the one posted on Maersk’s intraweb for their employees. Most of the same information from the press release is in the box.

MCI factory in Dongguan in the Danish news
12 January 2009
Sunday 11 January, 2009, the working conditions and employee rights on Maersk Container Industri’s (MCI) factory in Dongguan was criticised in the Danish national newspaper, Politiken, and on the weekly news programme in Danish national TV. The criticism was based on interviews with anonymous employees and included statements from the organisation, Globalization Monitor.

We do not believe that the items showed the conditions at the factory correctly nor the initiatives taken by management to ensure a well-functioning workplace with good working conditions for the employees.

We are proud of our container factories in China, including the factory in Dongguan which we put into operation at the end of 2006.

We acknowledge the power of leading by example, and today our factory in Dongguan sets a high standard in China. Employment conditions exceed by far the conditions in similar factories and in several areas the requirements of Chinese legislation.

Our employees must always be able to communicate freely with management on working conditions without fear of reprisals, threats or harassment. They can freely express dissatisfaction or make suggestions through the union or management. If they wish to complain anonymously, they can use one of the many suggestion boxes situated around the factory area.

In all that we do, we aim to demonstrate responsible corporate practice. It is our clear target that the factory in Dongguan must continue to be a work place which sets high standards, not least within the area of working conditions and environment. It is therefore only natural that we continue to work jointly with the employees of the company, including the union, to constantly ensure that problems are solved quickly and efficiently.

Therefore, we are frustrated that the news items yesterday misrepresent the actual conditions at the factory. This is regrettable, not least in light of the large effort that all our employees – at Dongguan and elsewhere – make to continue to ensure and develop good and safe work places that we can be proud of and happy to work in.

Strengthening our CSR effort
A year ago, we initiated a process of creating a more structured approach to CSR work, most recently by creating a CSR department. The objective of the department is to set specific targets for our CSR efforts which will be followed up every year. Our efforts on CSR will be documented and data collated annually in a sustainability report. Increased openness will also mean that the Group to a higher extent will enter into dialogue with e.g. human rights organisations.
With this process of creating more structure in the area of CRS work, we are working towards joining a particular set of principles for CSR work. Global Compact is being considered, but other frameworks are also possible.

For further information, please contact:
Group Relations, Communication

*********

Maersk Container Industri has rejected the criticism on most points. Further to this, A.P. Moller - Maersk will make sure to look into the matters in depth through an independent investigation to establish whether there is basis for changing specific conditions. If such an investigation identifies flaws and deficiencies in relation to Chinese legislation or UN worker’s conventions, these will of course be rectified immediately.

Furthermore, we will enter into dialogue with Globalization Monitor and listen to their concerns regarding the factory. Again, should the accusations be truthful, we will rectify the problems immediately.

The following working conditions are being criticised and will be covered by the investigation:

Corruption:
The employees complain about demands for money gifts to middle management, and that managers buy their positions resulting in many not being qualified.
MCI’s reply:
We have zero tolerance to bribery and corruption. To the knowledge of Maersk Container Industri’s management, this is not taking place and procedures are in place to prevent it. This means that individual middle managers cannot independently carry out promotions or dismissals, these always take place in cooperation with the HR department of the company.

Rules:
This concerns rules which offend employees. The rules were put in place last summer following a number of strikes. Violation of the rules leads to dismissal. There is a question of an arbitrary penalty system which has now been discontinued.
MCI’s reply:
We have an employee handbook which is updated and distributed on an ongoing basis. All changes are subject to union approval.

In the spring of 2008, we removed the penalty system which is standard in Chinese production companies. Violation of the majority of rules as mentioned in the employee handbook will at most result in a reprimand. Only in cases of repeated and severe violations will dismissal be an option. If such a case arises, the union must be involved and the labour authority office of the local city council must be consulted.

We have zero tolerance to physical violence, bribery, corruption and other illegal acts, and violation is grounds for dismissal.

The rules are more severe than in similar Chinese companies, they contravene Chinese legislation and UN conventions.
The company’s ban on strikes is not in accordance with Chinese legislation.
MCI’s reply:
At A.P. Moller - Maersk all employees have – as a starting point – the right to strike. However, we generally encourage management to ensure proper dialogue with the employees and to make sure that negotiated solutions can be found to the problems that may arise. Management at the Dongguan factory is currently working with the A.P. Moller - Maersk Group’s CSR (Corporate Social Responsibility) office in Copenhagen to clarify our policy. This is being done, not least to create clarity on the rights and duties of the employees in relation to Chinese legislation, but also regarding our values.

In China, workers have the right to stop working and/or ‘go slow’ to protest against workplace issues, preferably with the support of the Trade Union (under Trade Union legislation). The law encourages workers to negotiate through the union beforehand. It is however a violation of Chinese legislation if it is a question of a mass meeting or a meeting which causes social unrest that has not been approved by the local Chinese authorities.

It is prohibited to conceal sexually transmitted diseases
MCI’s reply
If the criticism is justified, the passage will be removed. The deciding factor is contagious diseases such as tuberculosis and hepatitis. Chinese legislation requires people to make it known whether they suffer from a contagious disease. When staff is employed and when they leave an independent health check takes place at an external, local hospital. In connection with the terms of employment, we offer our employees an annual health check at our medical clinic and free, around-the-clock treatment for minor injuries and vaccinations etc.

It is prohibited to make a mess in the canteen
MCI’s reply:
Many employees are former rural workers not used to working in a factory where many people eat together in a canteen. One of the episodes that resulted in a strike was in fact caused by a lack of proper queue behaviour.

It is prohibited to give information about your own salary
MCI’s reply:
It is only prohibited to give information about the salary of others. We have no problem with the employees giving information about their own salaries, and the current edition of the employee handbook does not state this. We have zero tolerance to physical violence, bribery, corruption and other illegal acts, and violation is grounds for dismissal.

Management:
The bosses take revenge and give punishment or dismisses if the employees criticise the conditions
MCI’s reply:
We have zero tolerance to physical violence, harassment and threats.
Our employees must always be able to communicate freely with management on working conditions without fear of reprisals, threats or harassment. They can freely express dissatisfaction or make suggestions through the union or management. If they wish to complain anonymously, they can use one of the many suggestion boxes situated around the factory area, and they can contact they local city council’s labour office.

The union of the factory was formed in July 2008. In accordance with Chinese legislation, the management had no influence on the process, the proposed candidates or the election of representatives. Each week the management of the union and the managing director meet. At these meetings the general situation of the business is discussed along with employee working conditions and satisfaction. The dialogue is very open and of great benefit to the employees and the management.

Working environment:
Claims of hazardous working environment, that employees are sent home injured on a daily basis, every day in December has seen 4-5 injuries.
MCI’s reply:
We monitor and treat all work related injuries, and the rate of injuries is – compared with Danish conditions – very low. Last year, the whole factory had only 34 injuries which subsequently led to one or more day’s sick leave, equivalent to a rate of injuries of 5.41.

The employees get hearing damage and lung problems caused by high noise levels and large amounts of dust, lack of ear plugs and other safety equipment
MCI’s reply:
To date, no cases of permanent hearing damage, occurring at the factory, have been verified. All new employees go through a two day course which covers environment, safety at work, fire fighting, employee handbook, use of the canteen, organisation, workflow processes and our values and more.

Our safety equipment includes shoes, helmet, ear defenders, masks, safety goggles, gloves, welding screens and work clothes. Our employees can at any time and with no limits replace worn or damaged safety equipment.

Both management and unions organise ongoing courses in using safety equipment. Among others, we train our employees in the correct use of ear defenders.

There is not enough extraction/ventilation
MCI’s reply:
We have undertaken extensive investments in ventilation/extraction systems, an internal water treatment system and circulation, and cleaning of chemicals. According to legislation, the factory is subject to official opinion polls. These show that the factory complies with environmental standards which to a large extent are compatible with equivalent European ones. Where e.g. air ventilation and extraction is not technically possible, our employees are protected in different ways, e.g. by using masks. Our safety standards in this respect are on a par with Danish standards.

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 The Background to Two Strikes in Maersk Dongguan China

by Globalization Monitor

15 December 2008

A riot broke out amongst workers at Maersk Container Industry Dongguan Ltd in January 2008. The fierce action caused great damage to the Maersk factory buildings, and was reported by the Southern Metropolitan Daily, Guangzhou Daily and Yangchen Evening News of Guangzhou. The local government then sent a team to “properly settle” the incident. In May, however, the workers initiated another strike to protest against management continually increasing the intensity of work. 29 workers were fired by the management in order to suppress the strike. The media after the fact reported that the Maersk incident had already been “properly settled”. There was even positive news about the company facilitating the establishment of a trade union early this August. Nevertheless, the long-term hostility between workers and management inside Maersk has, apparently, been escalating dramatically. The situation is not as “peaceful” as the media has made out. Therefore, the first section of this report aims to try to sort out the whole story based on news from various media sources and comments on Net-ease forums and Baidu Blogs, in addition to our own investigation. In contrast, the second section reports on the brutality of the management of Maersk Dongguan.

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