Tuesday, March 17, 2015

Chinese Companies in Africa: Is Addressing Labor Conflicts Mission Impossible?

By Hou Yixiao

“We have been working together for almost half a year, and they can understand me although I can’t speak English and can only use gestures,” explained a Chinese manager proudly when asked about his relationship with his local staff on a construction site in Nairobi, Kenya. He is in his fifties and is originally from the countryside. Walking inside the construction site of the new Two Rivers shopping mall, there was no shouting, no raised voices when orders were given, and minimal disagreement between local workers and Chinese managers. I could see local workers actively greeting managers and embracing visitors with friendly smiles.

Chinese vice president Li Yuanchao emphasized in the second China Tanzania Investment Forum that China has cooperated with Africa for decades based on “mutual benefit”. China provides Africa badly-needed finance and trade, while Africa provides the PRC with a steady supply of natural resources. According to the Economist, China has been Africa’s top trading partner since 2013.

The contractor for Two Rivers' construction is the Chinese company AVIC International. The mall is planned to be the largest shopping center in East Africa, ideally situated near Nairobi’s diplomatic community and its wealthier residents. Some 200 Chinese employees and 1,000 local workers are working together to build the new mall. The Chinese managers are responsible for training, supervision, and ensuring overall safety; each leads around 20 local workers to accomplish their daily assignments. “We are required to finish the project before Christmas. Although we are in a hurry, we are still confident that we’ll be able to meet the deadline,” explained the project’s director, Xiong, whose name has beene changed for this story in order to protect his identity.



Efficiency is one area where Chinese and African perceptions differ substantially. Nonetheless, Director Xiong says he is able to avoid problems before they materialize through effective management and communication across his various teams.

According to Duan (alias), also a young English-speaking graduate who is a manager in charge of electrical engineering, the Chinese offer salaries that are above industry average, which, he says, leads to higher employee morale and retention. S.K. Kuloba, a senior official in the Ministry of Labor, Social Security, and Services offers another explanation: it is caused by “perception.” Before Chinese companies came to Kenya, they thought that the labor prices would be high, but it turned out the opposite so they are willing to pay more. He believes that salary is not a general problem among Chinese companies. Mr. Lu, a seasonede researcher in the field of labor conflict, also suggested that as a State-Owned Enterprise (SOE), AVIC has the ability to offer higher salaries.

Duan also claimed that AVIC provides extra benefits to encourage their local staff to work overtime while being understanding if some workers may be reluctant to do so. As the construction deadline approaches, everyone at the AVIC site now works seven days a week. For local employees, unaccustomed to the intense pace, fatigue is a major issue along with complaints about the “crazy” hours that are now commonplace on this project site and at many Chinese companies in Kenya as well as across the continent. The labor deputy Kuloba concluded “the Chinese push projects, while local people feel odd when asked to work overtime.” It highlights a difference between Chinese and local expectations and different work ethics. Companies, he said, must strike a balance between “labor protection” and “labor productivity.” “People are not machines, they want to feel human,” the deputy said. For the Two Rivers project, Xiong suggested that at first, the workers were enthusiastic to work overtime for the extra money. However, after several months of long hours, with few, if any days off, fatigue began to set in, prompting more and more workers to take sick leave. “The local workers alternate work with rest, that’s why they’re always healthy.” He found the Chinese working style to be too stressful: “Africans live in the present and think in the present, while Chinese think about the future, that’s why we grow old so fast.” that empathy allows Xiong to respect cultural differences as he tries to avoid problems with his local employees.

The benefits of working overtime is not limited to wages, but also generous sick leave and more. Workers reflect that if they work past 11:00 pm, they can get two glasses of milk, two pieces of bread, and 200 shillings as a transportation fee. There are doubts regarding whether working seven days a week is a violation of the labor law, and Christine A. Muga, a local lawyer who has worked for a Chinese real estate company, clarified that “all employees are entitled to at least one rest day for every period of seven days. However if the employer and employee agree otherwise, the employee must be compensated appropriately otherwise the employee can claim overtime for every extra hour worked, as stated in Section 27 of the Employment Act of 2007.”

Xiong points out that AVIC attempted to overcome language barriers both through helping those who don not know English and by strategically working with human resources to make sure all departments have what they need. This is important, as language is a major barrier in most Chinese companies in Africa. A worker who claims to have been unfairly dismissed from a Chinese construction project said, “It is ridiculous, they send people from China to manage us but we can’t talk. And they beat us for not doing our job correctly.”

For Two Rivers, Duan said that they language differences proved a major barrier when the project first started. Most of the Chinese managers do not have the education to speak English. The company was sued in court because a Chinese manager allegedly fought with a local employee atop a tractor who was injured when the Chinese manager pushed him off the vehicle. The Chinese company then failed to provide proper medical treatment or compensation, and was fined 50,000 shillings. After this incident, the company started to become more conscious about the risks of miscommunication and opened Sunday classes to teach their local staff Chinese. They also employed local translators to send to the scene in the event of an emergency.

A middle-aged Chinese manager from the countryside in charge of leveling cement suggested that he uses his phones for translation when it comes to special terms, and uses body gestures to give orders. “We understand each other as we have been working together for more than half-a-year.” Orderly workers going about their task indicate that he is right. He also reports an interesting observation from the scaffolder section where a new language combining Swahili, English, and Chinese has been invented to help communication between Chinese and Africans coworkers.

However, another section of AVIC is having difficulties with labor issues. On February 14, I witnessed a case in the regional labor department where the AVIC section building villas in Karen had problems with the termination of a group of local employees. 10 workers reported that they were dismissed because they asked for protective gear when removing sewage and were given neither notice nor extra salary as they claimed to be entitled to according to Kenya’s labor law. “They threatened us that if we are dismissed we will be blacklisted, and we’ll never be able to work in the same company again. They are treating us like dogs.” One local worker, who has worked for three Chinese construction companies and has been constructing Karen villas for two years, was extremely upset at the Chinese policies after being fired unexpectedly.

Mrs. Mukanga, a Kenyan official, showed disappointment in the Chinese companies, stating that “they are not cooperative enough” as they never respond to letters or come to meetings. I acted as a mediator and talked to the Chinese project director Mr. Gao, a young graduate from Civil Aviation University of China, who claimed he has never received the letter from the labor office. Though he has stayed in Kenya for 21 months, he is still not familiar with the labor law and he eagerly wants to learn the precise measures. He claimed that they are cutting employees as the project has come to an end and the workers are all casual workers. “I don’t know exactly how much we should pay as termination fee, and I don’t know who to trust.” Christine A. Muga also confirms “the local departments could be taking advantage of their ignorance.”

This is among the most prevalent issues that Chinese companies encounter as they are not familiar with local labor laws. Muga suggests that the only way to solve this is to be familiar with the local law at all times, as there are different ways of compensating different types of workers in different types of employment. “The best source for understanding the legal requirements would be a law firm which can explain the legal requirements and assist the businesses to come up with a framework within which to ensure that they comply with the law.” She advises Chinese companies to address these sorts of labor issues.

Some local companies attempt to eliminate such conflicts by employing local labor agencies to handle their staffing . Beth Wanjira from Corporate Staffing Service, a local agency, said, “we can be your eyes, and ears on the ground to monitor and handle labor issues.” However, she recognizes that there are Chinese companies among her clients. Xiong claimed, “There are too many procedures to go through if I work with labor agencies, and I am not sure whether the workers would be suitable.”

The founder of the China House, Huang Hongxiang, concludes that for the Chinese it all comes down to the bottom line, “they see the extra cost, but cannot not foresee the benefits”.

Notes: Yixiao Hou is currently a student at Fudan International School in Shanghai and she is also a China Africa Seed Research Fellow at the Nairobi-based China House Kenya, the first Chinese social enterprise in Africa.

A version of this post first appeared on the China Africa Projecta multimedia resource dedicated to exploring every aspect of China’s growing engagement with Africa.

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