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Cablegate: Employees Form First Union at Wal-Mart in China

VZCZCXYZ0000
RR RUEHWEB

DE RUEHGZA #5215 2140751
ZNR UUUUU ACCORDINGLY.
R 020751Z AUG 06
FM AMCONSUL GUANGZHOU
TO RUEHC/SECSTATE WASHDC 0000
INFO CHINA POSTS COLLECTIVE
RUCPDOC/USDOC WASHDC
RUEHC/DEPT OF LABOR WASHDC
RHHMUNA/HQ USPACOM HONOLULU HI

UNCLAS GUANGZHOU 025215

SIPDIS

SENSITIVE
SIPDIS

STATE FOR EAP/CM, DRL/IL


STATE PASS USTR FOR KARESH, ROSENBERG
LABOR FOR ILAB HELM, LI ZHAO, SCHOEPFLE
USDOC FOR 4420/ITA/MAC/MCQUEEN
STATE PASS USTR
USPACOM FOR FPA

E.O. 12958: N/A
TAGS: ELAB ECON CH
SUBJECT: EMPLOYEES FORM FIRST UNION AT WAL-MART IN CHINA


(U) THIS MESSAGE IS SENSITIVE BUT UNCLASSIFIED. PLEASE
HANDLE ACCORDINGLY.

1. (U) SUMMARY: WAL-MART EMPLOYEES IN THE CITY OF QUANZHOU,
FUJIAN PROVINCE, RECENTLY ESTABLISHED THE FIRST UNION FOR
THE STORE'S EMPLOYEES IN CHINA. ON SATURDAY, JULY 29, THE
WAL-MART UNION MEMBERS ELECTED A SEVEN-PERSON COMMITTEE AND
SELECTED 29-YEAR OLD KE YUNLONG AS CHAIRMAN. ACCORDING TO
THE XINHUA NEWS AGENCY, THIS FLEDGLING UNION IS COMPRISED OF
30 WORKERS AND OPERATES UNDER THE AUSPICES OF THE ALL-CHINA
FEDERATION OF TRADE UNIONS (ACFTU) -- A GOVERNMENT
CONTROLLED ORGANIZATION AND THE ONLY LEGAL UNION IN CHINA.
CRITICS FEAR THAT THE RECENT WAL-MART UNIONIZATION IS MERELY
A GOVERNMENT PUSH TO WIELD INFLUENCE OVER FOREIGN COMPANIES,
RATHER THAN PROTECT CHINESE WORKERS. END SUMMARY.

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2. (U) GATHERING IN THE CONFERENCE ROOM OF THE GENERAL TRADE
UNION OF QUANZHOU MUNICIPALITY, WAL-MART EMPLOYEES IN FUJIAN
PROVINCE RECENTLY ESTABLISHED THE FIRST UNION FOR THE
STORE'S EMPLOYEES IN CHINA -- THE JINJIANG STORE TRADE
UNION. ON SATURDAY, JULY 29, THE WAL-MART UNION MEMBERS
ELECTED A SEVEN-PERSON COMMITTEE AND SELECTED 29-YEAR OLD KE
YUNLONG AS CHAIRMAN.

3. (U) WAL-MART CHINA HAD PREVIOUSLY RELEASED A STATEMENT
THAT SHOULD ASSOCIATES REQUEST FORMATION OF A UNION, WAL-
MART CHINA WOULD RESPECT THEIR WISHES AND HONOR ITS
OBLIGATION UNDER CHINAS TRADE UNION LAW. NEVERTHELESS, WAL-
MART ASSERTED THAT IT WOULD RATHER DEAL WITH THEIR EMPLOYEES
DIRECTLY. PRESS REPORTS ON JULY 31 QUOTED A WAL-MART
SPOKESWOMAN AS SAYING THAT THE COMPANY WAS NOT AWARE OF THE
UNION'S FORMAL ESTABLISHMENT. POST CONTACTED A WAL-MART
CORPORATE AFFAIRS OFFICIAL IN FUJIAN WHO DECLINED TO
COMMENT. THE QUANZHOU GENERAL TRADE UNION MERELY REFERRED
THE CONSULATE TO A JULY 30 QUANZHOU NEWSPAPER ARTICLE FOR
DETAILS AND COMMENTS.

4. (SBU) ON AUGUST 2, ECONOFF SPOKE WITH MR. LI CHENGJIE,
DEPUTY DIRECTOR OF THE CORPORATE RELATIONS DEPARTMENT FOR
WAL-MART IN SHENZHEN, WHO SAID THAT THIS IS A SENSITIVE
ISSUE. LI ADMITTED THAT THEY LEARNED OVER THE WEEKEND THAT
29 WAL-MART ASSOCIATES HAD FORMED THE UNION. WAL-MART IS
CURRENTLY ARRANGING A MEETING IN BEIJING WITH THE ACFTU TO
"CLARIFY ISSUES." LI NOTED THAT THE WAY IN WHICH THE UNION
WAS FORMED WAS "RATHER UNUSUAL." HE SAID THE EMPLOYEES WERE
BUSSED OUT IN THE MIDDLE OF THE NIGHT WITHOUT INFORMING THE
COMPANY TO HOLD THE MEETING FORMING THE UNION. LI STATED
THAT WAL-MART HAS HAD A GOOD DIALOGUE WITH ITS ASSOCIATES
AND WANTS AN OPEN DISCUSSION WITH THEIR EMPLOYEES. EFFORTS
TO FORM UNIONS AT OTHER STORES HAVE BEEN ONGOING, BUT LI
REMARKED THAT REQUESTS TO FORM UNIONS AT THEIR STORES IN
OTHER CITIES HAVE GREATLY INCREASED SINCE THE QUANZHOU UNION
STORY BROKE IN THE PRESS. LI SPECULATED THAT THE ACFTU'S
METHODS ARE AN EFFORT TO BOOST DECLINING MEMBERSHIP ROLLS.

5. (U) THE UNIONIZATION APPEARS TO BE RIDING ON THE HEELS OF
A RECENT ACFTU PUSH TO EXERT MORE CONTROL OVER FOREIGN
COMPANIES. VICE PRESIDENT OF THE ACFTU, XU DEMING, SAID
THAT ONE OF THEIR MAJOR TASKS IN 2006 WAS TO PUSH FOREIGN-
FUNDED OR TRANSNATIONAL COMPANIES TO UNIONIZE. IN EARLY
JULY, ACFTU PRESIDENT WANG ZHAOGUO SINGLED OUT WAL-MART. "WE
STARTED TO PUSH WAL-MART TO SET UP UNION BRANCHES TWO YEARS
AGO," HE STATED. WANG WANTS THE GOVERNMENT TO MAKE IT
MANDATORY FOR ALL FOREIGN FIRMS TO SET UP UNIONS FOR THEIR
EMPLOYEES. WAL-MART CURRENTLY HAS 60 STORES AND 23,000
EMPLOYEES IN CHINA, WHERE IT HAS BEEN OPERATING SINCE 1996.
THE ACFTU IS THE ONLY LEGAL UNION IN CHINA WITH A MEMBERSHIP
OF 150 MILLION AND 1.174 MILLION BRANCHES.

6. (U) SKEPTICS DOUBT THAT UNIONS WILL REALLY BENEFIT WAL-
MART'S APPROXIMATELY 23,000 CHINESE EMPLOYEES. THE ACFTU
HAS BEEN ACCUSED OF FAVORING BUSINESS INTERESTS OVER
WORKERS' RIGHTS. THEIR MEMBERS HAVE LITTLE AUTONOMY AND ARE
NOT ALLOWED TO ORGANIZE INDEPENDENT TRADE UNIONS OR ARRANGE
COLLECTIVE BARGAINING ACTIVITIES. WORKERS WHO STRIKE OVER
WAGES AND WORKING CONDITIONS ARE DISMISSED, AND ORGANIZERS
OF LABOR PROTESTS FACE IMPRISONMENT. DEPUTY CHAIRMAN OF THE
ACFTU, XU MING DE, SAID THAT THE TRADE UNION "PLAYS AN
IMPORTANT ROLE IN PROTECTING EMPLOYEES LEGAL RIGHTS AS WELL
AS PROMOTING THE HARMONIOUS RELATIONSHIP" BETWEEN THE
EMPLOYEES AND THE COMPANY. THE WALL STREET JOURNAL REPORTS
THAT THE ACFTU MAY USE ITS CONNECTIONS WITH THE GOVERNMENT
TO BRING ABOUT FINES AND ADDITIONAL WORKPLACE INSPECTIONS
AGAINST WAL-MART.

7. (U) COMMENT: THE CREATION OF THE WAL-MART UNION COMES IN
THE CONTEXT OF DEBATE OVER A PROPOSED LABOR CONTRACT LAW. A
SECOND DRAFT OF THIS LAW WAS RELEASED IN MARCH AND WOULD
GIVE THE ACFTU THE RIGHT TO NEGOTIATE ON BEHALF OF WORKERS
THROUGH COLLECTIVE BARGAINING; UNIONS WOULD HAVE TO BE
CONSULTED ABOUT MASS LAYOFFS AND APPROVE COMPANY RULES FOR
EMPLOYEES. CRITICS FEAR THAT THE RECENT WAL-MART
UNIONIZATION IS MERELY A GOVERNMENT PUSH TO WIELD INFLUENCE
OVER FOREIGN COMPANIES, RATHER THAN PROTECT CHINESE WORKERS.
UNIONIZATION MAY PROVIDE AN OPPORTUNITY FOR THE CHINESE
GOVERNMENT TO BRING WORKERS IN THE PRIVATE SECTOR UNDER
STATE CONTROL. THE QUANZHOU UNION SETS A PRECEDENT FOR THE
OTHER 59 WAL-MART STORES IN CHINA. IT COULD ALSO ENCOURAGE
OTHER FOREIGN AND DOMESTIC COMPANIES' EMPLOYEES TO FORM
UNIONS.

MARTIN

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