Friday, 28 December 2007

Labour Party Pakistan mourns Benazir's tragic death: Musharraf should resign!

Labour Party Pakistan mourns Benazir’s tragic death

It's a murder of democracy. Musharraf should resign

A tragedy wrought by combination of dictatorship, fundamentalism, imperialism

Lahore (PR): The Labour Party Pakistan (LPP) strongly condemns the tragic murder of Benazir Bhutto, former prime minister and chairperson Pakistan Peoples Party (PPP).

In a joint statement issued here on Friday, LPP spokesperson Farooq Tariq and National Secretary Nisar Shah said: ‘ It is not mere a murder of an individual but murder of democracy and political culture in Pakistan’.

They said it was the duty of the regime to provide Benazir Bhutto with a fool-proof security. ‘This is a failure on the part of the regime hence exposing country to an unprecedented danger and chaos. Therefore, we demand an immediate resignation of Pervez Musharraf and his cabinet,’ they added.

They said the tragedy that struck Pakistan yesterday was yet another expression of the instability created in the region owing to the US presence in the region. ‘Her brutal murder is a tragedy jointly wrought by religious fundamentalists, military dictatorships in Pakistan and the USA’, they commented.

They said Al-Qaida had taken upon itself the responsibility for this horrendous crime according to media reports. ‘But the Frankenstein of Al-Qaida would not have been ruling the roost in Pakistan had it not been created by the USA and pampered by military dictatorships in Pakistan’, they said.

Urging the PPP workers restraint, they said LPP workers were with them in that hour of grief. ‘We must turn this anger on the culprits who plotted this dastardly murder'’, they said. They appreciated Pakistan Muslim League (N)’s decision to boycott the elections due on January 8 and APDM decision to suspend the campaign recently launched for the boycott of elections.

(via Farooq Sulehria -

Thursday, 27 December 2007

Socialism in the Silly Season

'Twas the night before Christmas, and all through the class-conscious elements of the proletariat and the various socialist organisations, everyone was furiously chucking in their two cents as the opportunity arose to take a break from the "leg-work", and put more effort into the "head-work" in order to work out the best line of march for the coming year. As Lenin pointed out: “without revolutionary theory there can be no revolutionary movement”, and when better to theorise than when immobilized by large amounts of food and drink at Yule-tide?

The Wombats will publish more on some of the matters below when we have access to a *real* computer, but until then:
• Far across the seas, International Viewpoint treats us to Daniel Bensaid on ‘Hegemony and the United Front’, a lovely little piece on 'Elements of Revolutionary Strategy’ by François Sabado from an LCR cadre school, and a more exciting development in Denmark vis-à-vis the FARC and PFLP.

• Also in the “Northern Podeans”, England-based Peter Taafe, of the Committee for a Workers’ International, has produced an argument in defence of broad parties, yet which goes into some of the problems they face, and Vincent Kolo has produced an interesting analysis of the class nature of the Chinese state (and recognises the victory of the counter-revolution). This analysis should be compared with the position of the Democratic Socialist Perspective in 1999

• The Democratic Socialist Perspective itself is holding its decision-making congress in early January, and has published all three platforms being taken into that discussion on their website.

• The voluntary publication of these internal documents (limited though they are) has excited Louis Proyect enough to comment on it at his blog

• After the messy split in RESPECT in the UK, Socialist Alternative in Australia have given us their “wise words” on the matter.

• Some debate on this has opened up at LeftClick and, around the analysis of RESPECT, at the UK Socialist Unity Blog

• At Labor Tribune and Socialist Alliance on the other hand, the focus has been on the practical, responding to the NSW Government’s plans to forcibly privatise the State’s electricity industry, and the subsequent union and public backlash.

• Green Left Weekly leaves us to end the year with a few thought-provoking articles: on Marxism and ecology, the Bali “bluewash” on climate change, and the real “plan of action” of the new Rudd Labor Government.

• The ALP, in case you hadn’t noticed, are happily running the country for the bourgeoisie (we had to mention them, as didn’t want anyone to feel left out), and the Greens are rejoicing in “two tippy-toes forward, one giant backflip”, as Kerry Nettle prepares for her last 6 months in office, at which time she’s out and two notably less ‘left’ Greens senators will take up abode as the latest “unrepresentative swill” (as Keating would have it) in the Senate. Their increased representation gives the Greens “official party status” with five MPs and over 1 million votes.

• Finally, Socialist Alternative have also published a chapter on building revolutionary organizations from the book “From Little Things Big Things Grow”, by Socialist Alternative member Mick Armstrong, which argues against broad party formations, and reinforces Socialist Alternative’s “ideologically homogenous propaganda group” approach.

This piece will be the target of a response promised by a fellow marsupial (but certainly no wombat!) which we will reproduce here in due course, but for now we have contented ourselves with reproducing a response by Joaquin Bustelo which he posted to the Marxmail list. It can be found here.

Class, party and organization: Bustelo responds to Socialist Alternative's Armstrong

The small (around 150-200 members) Australian socialist organisation Socialist Alternative, a group in the IST tradition, yet not formally affiliated to that international, has put up on their website a chapter from the book “From Little Things Big Things Grow”, by Socialist Alternative member Mick Armstrong, which argues against broad socialist party formations, and reinforces Socialist Alternative’s “ideologically homogenous propaganda group” approach. That piece can be found here.

The Wombats' view is that Armstrong’s piece is a classic example of the fact that “a stopped watch is always right twice a day”, and in this case, the over-emphasis on propaganda work, fondness for 1910, and the distain for building movements (and larger organisations) that that organisation exhibits in real life (their preference is to recruit out of the movements, over putting in the hard yards to organise and lead them), it is a very stopped watch indeed!

Joaquin Bustelo, a regular contributor to the Marxmail list, has produced his own critique of Armstrong's piece, which we reproduce below. (Note that the Wombats do not agree with all of Bustelo's arguments. This piece is produced merely as a contribution to the larger debate). A fellow marsupial has promised another response, which should be available shortly.

Class, party and organization

Joaquin Bustelo,
Posted: 26 December, 2007

I think comrades should carefully read the Australian Socialist Alternative article Louis pointed to and think carefully about the approach it takes. For it is just about as finished an expression of the voluntaristic Zinovievist strategy of sect-building as one could hope for.

Why do I say "sect-building"? Because I think what the comrades propose is precisely the defining characteristic of a sect -- a group whose organizational boundaries are defined by adherence to a well-defined and codified doctrine.

The alternative to a sect is a group that is the organized expression of social forces in motion, social forces with which the organization has a million and one formal and informal organic links.

The essential argument that comrade Mick Armstrong presents is captured in the title of the book from which the article is drawn: "From little things big things grow." The theses is that "small groups of socialists need to start by first building a socialist propaganda group if they are to have any hope of laying secure foundations for a mass revolutionary party."

But is it true that "From little things big things grow?" Do working class parties come from the preaching of socialist saviors?

In the Manifesto of the Communist Party Marx and Engels lay out a very clear logic and progression for the development of the working class movement. They see it growing from sporadic outbursts to unions to workers in a given country achieving CLASS consciousness, i.e., an understanding or feeling, however rudimentary, that as workers they face common problems and must seek common solutions. When the workers movement advances sufficiently it becomes a class movement and FOR THAT REASON gives rise to working class political parties.

Time and again, Marx and especially Engels in his letters in his latter years stress that the transition from economic struggles to a political struggle is a qualitative one of central importance in the development of the movement. It marks the transformation from what Marx called a "class in itself" to a "class for itself."

Something I have discussed at some length in other posts is the REALITY that in the United States, there does not exist a working class movement "worthy of the name," i.e., a class-for-itself movement even in its most beginning stages. There USED to be such a movement but it disintegrated following
WWII. I'll also repeat my observation that the same tendencies seem to be at work in other imperialist countries, which has led to, among other things, the traditional "bourgeois workers parties" like the British and Australian Labour Parties becoming straight up bourgeois parties (even if they retain some of their working class base and formal affiliations or informal ties with unions).

The *class movement* is the absolute, indispensable pre-requisite for the emergence of workers parties.

For this reason, the real problem revolutionaries in imperialist countries face is not subjective. It is not that they have not hit on the right formula, the right publications format, the right rules and structures, or the right "correct program" which would allow them to build a genuine revolutionary workers party. The problem is that, at least in the U.S., and I suspect most of these other countries as well, quite simply the conditions DO NOT EXIST which would lead to the emergence of workers parties.

Moreover, there is an additional problem with the ideological sect as precursor to the mass party idea. And that is the dialectics of scale. Size does matter. Typically, these groups structure themselves as small parties -- "Toy Bolshevik Parties" (I think it was Louis who first came up with that expression.

But an acorn looks nothing like an oak tree.

In particular, all experience shows that the attempt to apply "democratic centralism" as it is commonly understood to groups that are essentially propaganda leagues INEVITABLY produces a stifling internal regime in which differences are impossible to contain.

The formula for "Democratic Centralism" is freedom of discussion, unity in action. But what if the "action" being contemplated is simply more discussion, i.e., propaganda? The formula then becomes nonsensical: freedom of opinion in discussion, homogeneity of opinion in discussion.

If you look at Lenin's railings against indiscipline in the RSDLP and the Bolsheviks, you will see that they were few and far between, and did not concern the "line" of an article in the paper. There were debates about whether to take part in or boycott various elections. Lenin insisted the party couldn't have it both ways because then, quite simply, there would be no party. But differing views on theoretical, historical or political questions? That's what the newspaper and other publications were for. If Bukharin wrote an article about imperialism that Lenin thought was off the wall, Lenin answered him.

Thus when Lenin returned to Petrograd in 1917 and presented his "April Theses," the editors of the organ of the central committee --which had been following a different, conciliatory line towards the provisional government-- did not demand that Lenin shut up and follow party discipline. Instead, they published an editorial criticizing Lenin's views.

Or take the famous 1917 incident where Central Committee members Kamenev and Zinoviev "outed" the CC's decision to head towards an insurrection. Lenin said that they should be expelled because it was like a member of a union leadership telling the bosses through the bourgeois press that a surprise strike was being prepared. But so entrenched was the tradition of freedom of discussion in public in the Russian workers movement that Lenin couldn't get any support from the rest of the Central Committee for expelling the two miscreants, and had to resume normal political leadership collaboration with them.

Comrade Mick Armstrong of the Australian Socialist Alternative argues that the fact that the Bolsheviks were at one point reduced to being a small propaganda group shows that the creation of small propaganda groups is the road to the reincarnation of the Bolsheviks Party in out time. This is utterly false. He takes as his starting point the FORM of organization, and says the Bolshevik organization was reduced to a tiny propaganda group around 1910 or so, just like we are today, and we've just got to be as good a propaganda league with rigid ideological boundaries as they were.

This is goofy. The Bolsheviks were the main expression of the revolutionary wing of the Russian workers party, even when in the main ALL the formal structures of that party within Russia had been shattered by a combination of defeats and tsarist repression and the party's expressions abroad, in exile, were a maze of warring factions and cliques. Then mass social and political base of the workers party in its class is what allowed not just the "Leninists," but ALSO the Mensheviks and the (pre-1917) "Trotskyists" (the conciliators) to rapidly rebuild their units and networks within Russia at the first improvement of the political situation. The Bolsheviks were not, not ever, a propaganda group comparable to any that exist today in the imperialist countries.

What made their group of a few dozen or a few hundred different from our groups of a few dozen or a few hundreds is that they had a mass base. They were one of the two major wings of a mass workers party. (This was the social character of Bolshevism at least until the start of the war, and probably later, because although as far as the leadership was concerned, the definitive split with Menshevism took place in 1912, ON THE GROUND the differentiation into clearly different parties was not completed until after the February, 1917, revolution.)

The mistake Mick Armstrong makes is precisely the same one that was made by proponents of the guerrilla warfare strategy in Latin America in the 1960's. Noting that after the disastrous Granma landing, Fidel's forces in early 1957 were barely a couple of dozen men, and that the revolution triumphed less than two years later, the idea developed that, under conditions of a repressive dictatorship, all one needed to do was to take a few dozen committed fighters to some mountain redoubt and stage a few guerrilla attacks to set in motion a dynamic that would inevitably lead to a political crisis of the system and revolution.

What Regis Debray and other proponents of the Guerrilla Foco theory did not understand is that "Fidelismo" was, to all intents and purposes, a mass party in Cuba. It was the foremost expression of the revolutionary wing of a Cuban national movement that stretched back nearly 100 years.

The group that organized the July 26, 1953, attack on the Moncada Barracks in one year had created a structure of around 2,000 young people to fight the Batista dictatorship. When you're talking about a country of six million people, a couple of thousand in a militant underground organization is very significant. And it became much larger in size and influence as a result of that attack and the campaign to defend those who survived, and even moreso when it was reorganized as the July 26 Movement following the freeing of Fidel and his comrades thanks to public pressure.

It was the strength of the Cuban national-revolutionary movement, and the growing influence and then hegemony of the Fidelistas within the movement, that transformed the few square miles of inaccessible mountain terrain held by the Rebel Army as "Free Territory of Cuba" into a mortal threat for the imperialist puppet regime in Havana.

(Note that I spoke here of Fidelismo as an expression of the Cuban national-revolutionary movement, rather than of the Cuban workers movement. I will have a little more to say about this general subject of national movements in relation to comrade Mick's article later on. But for the time being, the essential point is that that a small group that may appear to be functioning simply as a tiny propaganda group [and dubious as this may sound at first blush, in ESSENCE that is what Fidel's guerrilla force in early 1957 had been reduced to], that group may in fact represent powerful social forces, as is demonstrated by the reality that those forces WILL and DO group themselves around that nucleus organically at the very first opportunity.)

The mistake comrade Mick makes is to BEGIN with pre-conceived organizational FORMS (the Zinovievist "Leninist Party" writ small as a homogeneous propaganda sect) rather than POLITICAL TASKS. If one studies the ACTUAL practical, political activity of Marx, Engels and Lenin, as well as that of later revolutionaries such as Fidel and his friends, one will see that what guided their organizational activities and forms were concrete political tasks. Not a preconceived recipe. And in determining the political tasks, there is no substitute for a Marxist appraisal of the state of the workers movement, especially from the angle of its development towards or as a class-for-itself (a class-political) movement, as well as, in our days, an appraisal of the social and protest movements which can express varying class interests.

My FIRM opinion about the United States, and tentative opinion about Australia and other countries, is that the existence of multiple groups whose stated programmatic aim or goal is the seizure of power by working people to carry out a revolutionary reorganization of society along socialist lines is not justified. There is no real, material basis for the differentiation.

There is, I suspect, a strong case to be made for DOING general socialist propaganda and for socialists participating in politics. But the effect of several different groups all selling what appears to someone beginning to radicalize as exactly the SAME product, only under different brand names, is overwhelmingly counter-intuitive and counter-productive.

The argument that Mick makes --that in the framework of a propaganda nucleus it is necessary to achieve programmatic political clarity, even to the point of a split, if the issue is important enough, is an IDEALIST one, not a materialist one. The program of the revolution will be forged in the struggle, i.e., in the actual clash of social forces, and not through the internal debates of some sect or the public debates between sects.

The Bolsheviks provide good examples of this. By all lights, the Bolsheviks from their inception were totally and completely 100% wrong on the Jewish question in Russia. And we know this because despite all the polemics against the Bund about how Jews weren't a people or a nation and Stalin's 1913 pamphlet, when they took power, the Bolsheviks were forced by the material logic of the clash of social forces to recognize the national/cultural rights of the Jewish people, contrary to their paper program. They did that because they needed to convince the nationalist Jewish working people that THIS revolution was THEIR revolution, and so –in essence-- the Bund's approach to the question of Russian Jewry became the basis of Bolshevik government policy.

Another example is the agrarian program of the revolution, not an insignificant detail in Russia. The Bolsheviks had a fine agrarian program, I'm sure, but when 1917 came around, they took THEIR OWN program, flushed it down the toilet, and ADOPTED INSTEAD the program of the left wing of the SR's (Social Revolutionaries), which represented the poor peasants. As the workers party, the Bolsheviks understood they COULD NOT take and keep power WITHOUT an alliance with the peasantry, and the best way to cement THAT alliance (and undercut the social base of rural reaction) was to give the peasants what they wanted.

Comrade Mick considers only two poles for possible modes of organization -- an all-inclusive socialist party versus a homogeneous and tightly disciplined propaganda league.

To show what is wrong with the all-inclusive workers party, he then has an extensive discussion of the reformist versus revolutionary trends in the workers movement, attributing the reformism to things like that workers are oppressed and therefore usually under the ideological influence of the bourgeoisie and a number of other similar eternal verities.

Comrade Mick does not stop to consider that what he is describing are various moments in the process of the working class coming together and understanding its own interests, the process that the Manifesto itself describes. And IF this were all that was involved, there could be no stable long-term basis for reformism, as sooner or later the workers would come to the conclusion that they have no stake in this system, that they and ALL their class sisters and brothers have nothing to lose but their chains.

This brings up the elephant in the room that nobody --especially those in the broad Trotskyist-descended anti-Stalinist family of currents-- seems to want to discuss, the relationship between imperialism and the rise of what Lenin called opportunism and we call reformism in the workers movement.

For comrade Mick, the problem is the "all inclusive socialist party," a BAD organizational form + the eternal nature of the working class as an oppressed class. For Marx, Engels and Lenin, the root cause wasn't bad organizational forms, but rather, the privileged position of certain layers of workers.

In an October, 1916, article, "Imperialism and the Split in Socialism," Lenin draws together a number of the comments by Marx and Engels on this problem and applies their method of analysis to the social-patriotic debacle that destroyed the second international. That article is to be found here: .

Lenin's article begins, "Is there any connection between imperialism and the monstrous and disgusting victory opportunism (in the form of social-chauvinism) has gained over the labour movement in Europe?

"This is the fundamental question of modern socialism."

Noting that "imperialism is monopoly capitalism," Lenin says, on the basis of Marx and Engels's writings about the English workers movement from the1850's into the 1890's:

"Why does England's monopoly explain the (temporary) victory of opportunism in England? Because monopoly yields superprofits, i.e., a surplus of profits over and above the capitalist profits that are normal and customary all over the world. The capitalists can devote a part (and not a small one, at that!) of these superprofits to bribe their own workers, to create something like an alliance (recall the celebrated 'alliances' described by the Webbs of English trade unions and employers) between the workers of the given nation and their capitalists against the other countries."

Lenin's view AT THAT POINT was that, in distinction to the British case during the second half of the 1800's, inter-imperialist competition and war made long-lasting class peace unlikely:

"It was possible in those days to bribe and corrupt the working class of one country for decades. This is now improbable, if not impossible. But on the other hand, every imperialist 'Great' Power can and does bribe smaller strata (than in England in 1848-68) of the "labour aristocracy". Formerly a 'bourgeois labour party', to use Engels's remarkably profound expression, could arise only in one country, because it alone enjoyed a monopoly, but, on the other hand, it could exist for a long time. Now a 'bourgeois labour party' is inevitable and typical in all imperialist countries; but in view of the desperate struggle they are waging for the division of spoils it is improbable that such a party can prevail for long in a number of countries."

Note that Lenin identifies two different stages or modalities of the same sort of problem: one where one could say that the class as a whole is bribed, and one where privilege is restricted to a narrow layer. These correspond roughly to two different political situations. In the former, the workers have no party, they "gaily share in the feast" of their master's exploitation of other countries. In the latter, the labor aristocracy becomes the basis for a "bourgeois workers party," a workers party committed to capitalism because its social base DOERS HAVE something more to lose than its chains, it has quite substantial material (social and economic) privileges.

I think Lenin was completely on target about his time, and his comments largely describe the three decades that would follow. However, following WWII, imperialism changed increasingly to a model of semicolonial countries JOINTLY exploited by the imperialists through the mechanisms of the (manipulated) world market, instead of the exclusive control by one imperialist country of various territories, the fight over which was the underlying cause of WWII. I believe this was one of the major factors that made it possible for the imperialists to buy themselves "class peace" and establish a political hegemony over the working class approximating that enjoyed by the British ruling classes at the height of Britain's manufacturing and colonial monopolies.

The archetype of these arrangements were the West European "welfare states" associated with social democracy. But although some aspects of these have now been dismantled, the extent of the relatively privileged position of most working people in the imperialist countries remains huge, and with it, the political effects. These effects may have been frayed around the edges in some countries, and what some might call "internally colonized peoples" such as Blacks in the U.S. as well as immigrants in Western Europe and the U.S., are a different matter, but I've yet to see convincing evidence that these political effects have been or are well on their way to being decisively reversed.

I understand some of the reasons WHY there is resistance to facing up to and engaging on this line of analysis among revolutionaries (especially dominant-nationality revolutionaries) in the imperialist countries. It means facing up to the possibility and even likelihood that there will not be, at least for the time being and possibly for decades, a mass movement against capitalism based in the working class in their countries. Something totally contrary to what every Marxist revolutionary hopes for and wishes for.

Please note that I make no PREDICTION this situation will last for decades, or is likely to last, or anything else like that. I ALSO make no prediction that EVEN IF these effects perdure, political prospects for revolutionary socialists must remain extremely modest. In particular, we should note that the radicalization of the 1960's happened even as living standards were rapidly rising in the imperialist countries and the domestication and decline of the labor movement (at least in the U.S.) continued.

But recognizing that is no excuse for failing to face up to reality, or failing to use the analytical tools, insights and example of the great Marxists in understanding the reality we face.

Lenin said about the relationship between imperialism and the split in socialism, "This is the fundamental question of modern socialism." You would think that something identified by Lenin as "the fundamental question of modern socialism" would draw more attention. Yet, despite the forests massacred to print anti-reformist polemics by revolutionary socialists of all stripes, what Marx, Engels and Lenin analyzed as the MATERIAL BASIS for what we call "reformism" is simply ignored when it is not outright denied, as in the oft-heard rejoinder from groups that identify with the "socialism from below" tradition that "white workers don't profit/benefit from racism" or that "white workers don't exploit Black workers," and so on.

With this bit of sanctimonious moralizing, those comrades deny what is obvious and plain for any child to see, which is that white people stand in a superior position to Blacks in a country like the United States, and that working people in an imperialist country tend to be tremendously privileged compared to working people in semicolonial countries.

Just as the rise of imperialism at the beginning of the 1900's changed the working class movement and affected the prospects for revolution in the “advanced" countries, it is clear that it also had a HUGE impact in the colonial and semicolonial world. Just as imperialism decreased the prospects of revolution in the imperialist countries, it INCREASED them in the Third World.

In his article, comrade Mick fails to analyze and understand that political dynamics in the Third World are different from those in the imperialist countries. In particular, he betrays no sign that he may even have a suspicion that the fundamental character of the revolutions that have taken place throughout the Third World over the past half century or more has been that of national movements against imperialist domination,

Thus he lumps the "reformism" of a Lula in Brazil together with that of imperialist countries, and as always fetishizing organizational forms rather than the motion and interrelationship of real social forces:

"But it is not just in Italy that the approach of building 'broad' socialist parties has led to disaster," he says. "In Brazil the Workers Party, which carried the hopes of many socialists in the 1990s, has in government been just as committed to neo-liberal policies and an alliance with George Bush as its conservative rivals."

This isn't right.

First, "neoliberalism" in Latin America is not a set of policies inspired in Adam Smith, that's just the advertising campaign. Neoliberalism is handing the country over to imperialist interests. Lula has NOT followed a policy of craven capitulation to imperialist demands, but rather a policy with a lot of bourgeois-nationalist elements. Among other things, Lula's government opposed and helped bury Washington's plan to impose the FTAA. It has strongly upheld the interests of Brazil and other Third World countries in the Doha round of world trade negotiations, firmly -- at least thus far -- demanding and end to the ruinous subsidies that the American, Japanese and European imperialists give their own agricultural producers, tipping the paying field against farmers and farm industries in the Third World. He has won recognition of Brazil's right to master the ENTIRE nuclear fuel cycle, dealing a blow to the imperialist cartel that is trying to use the non-proliferation treaty to establish a monopoly in nuclear fuel.

The problems with Lula --and they are real-- aren't simply a function of the PT's all-inclusive character. I'm not an expert in Brazil, but I'm willing to bet that an analysis of the actual social base of the party and the relations of this base with other sectors of the toilers would help us understand more than 1001 denunciations of Lula as a neo-Liberal. And at any rate, telling anyone conversant with Latin American politics that "in government [the PT] has been just as committed to neo-liberal policies and an alliance with George Bush as its conservative rivals" will only make them laugh.

Mick Armstrong's conclusion in his article is that "The experience of history is that time and time again small groups of revolutionaries armed with a burning commitment to Marxist politics and a fierce determination to build have been able to break through and establish parties that could play a leading role in struggles for workers' rights and even lead a challenge for power."

This is a purely voluntaristic notion. Working class parties do not arise from the "the fierce determination to build" of revolutionaries but from the evolution of the workers movement into a class political movement. We need to face up to the DECADES of FAILURES of the revolutionary left in its party-building efforts in the imperialist countries. Such a record suggests that it is not a question of "mistakes" by this or that group, or lack of "fierceness," but rather that there are objective, material causes for the failures.

This gives the whole debate in Australia something of an eerie character, far removed from reality. No one is bothering to ask in a fundamental Marxist way, what is the state and stage of the workers movement in
Australia. What signs are there that it is moving towards (or away from) becoming a real class movement? What are the reasons for that state of affairs, the underlying causes, and how are those underlying circumstances evolving?

Instead, we have a discussion about how to "build the party" abstracted from any consideration of what construction materials are available.


Friday, 14 December 2007

And just what is Socialism?

From Cuba Socialista

By Armando Hart Dávalos

Speaking of today’s debate about the content of 21st century’s socialism, it becomes a theoretic as well as a practical necessity the articulation of both Caribbean’s and Latin American’s intellectual tradition, the ALBA, symbol of an alliance between Martí and Bolivar, with the socialist ideology as interpreted by Hugo Chávez and Fidel Castro.

During the 20th century there was such a distortion of Marx’, Engels’ and Lenin’s ideas on what socialism should be about, that today we are strongly urged to go directly to their original writings. Let’s see what Marx and Engels had to say, and also the ideas of Martí and Juárez on this subject.

In the paper “Feuerbach: Opposition of the Materialist and Idealist Outlooks,” Marx and Engels state: “For us, communism is not a condition that must be imposed, an ideal that needs to abide by reality. We call communism the real movement that cancels and surpasses the actual status of things (…).”

Friedrich Engels in a letter to Otto Von Boenigk on August 21, 1890, suggests: “To my mind, the so-called ‘socialist society’ is not anything immutable. Like all other social systems, it should be conceived in a state of constant flux and change. Its crucial difference from the present order consists, naturally, in production being organized on the basis of common ownership by the nation of all means of production.”

In a letter sent by Friedrich Engels to Joseph Bloch in September 1890, Engels poses: “(…) history happens in such a way that the final result derives from conflict between many different individual wills, each of which is what it is by virtue of a number of special conditions in life; they are the innumerable forces that crisscross one another, an infinite group of force parallelograms that add up to one – the historic event – that in itself may be considered the product of a single force that, as a whole, acts without conscience and without will; since what one wants stumbles with the resistance placed by another, the end result becomes something nobody wanted.”

In another letter sent by Engels to Karl Kautsky in September 1892, Engels states: “But as to the social and [political] economic phases these countries – in reference to those we call today underdeveloped countries – will then have to pass through before they likewise arrive at socialist organization, we today can only advance rather idle hypotheses, I think. One thing alone is certain: the victorious proletariat can force no blessings of any kind upon any foreign nation without undermining its own victory by so doing.”

In his letter to the editors of the Annals, Karl Marx states: “My historical understanding of the origins of capitalism in Western Europe is bent on converting it into a historic and philosophical theory of a general trajectory to which all peoples have been tragically subjected to, whatever the historical circumstances taking place, to be finally expressed in that economic formation that, (…) assures man’s development in each and every aspect. (This is allowing me too great an honor and, at the same time, too much mocking) […]

“Studying separately each of these historical processes and later comparing each to the others, we will easily find the key to explain these phenomena, results that we would never obtain by using the universal key of a general philosophic theory of history that has its major advantage in the fact of its being a supra-historic theory.”

Friedrich Engels writes to Joseph Bloch in September 1890, “…According to the materialist conception of history, the ultimately determining element in history is the production and reproduction of real life. Other than this neither Marx nor I have ever asserted anything else. Hence if somebody twists this into saying that the economic element is the only determining one, he transforms that proposition into a meaningless, abstract, senseless phrase.”

In the first point of the Theses on Feuerbach, Karl Marx states: “The chief defect of all hitherto existing materialism – that of Feuerbach included – is that the thing, reality, sensuousness, is conceived only in the form of the object or of contemplation, but not as sensuous human activity, practice, not subjectively. Hence, in contradistinction to materialism, the active side was developed abstractly by idealism – which, of course, does not know real, sensuous activity as such.”

In a letter to Werner Sombart dated March 11, 1895, Engels writes: “The entire conception of Marx is not a doctrine but a method. It does not offer made dogmas, only starting points for subsequent investigation and the method for such investigation.”

On the same grounds, I elicit from the reader that he/she studies this paragraph from José Martí: “A thing which I must celebrate a lot, it’s the love in which you treat others and your respect as a person, those Cubans that are sincerely searching for, with this or that name, a higher level of cordiality, and an indespensable balance to the administration of all worldy things. An aspiration must be judged by its nobility, and not for this or that wart brought about by human passion. The socialist ideas, like so many others, encounter two dangers: foreign writings – confusing and incomplete – and that of pride and concealed rage of ambitious people, that they use to elevate themselves in the world and which start with pretense, so that they may find shoulders to climb, from where they can show themselves to be frenetic defenders of the helpless.”

Later on Martí adds: “But with our people it isn’t so much the risk, as it is in societies more enraged, and of a lesser natural clarity; our task will be to explain, flat and deep, as you will do it – the idea is not to compromise sublime justice on the way or in the excesiveness in which we ask for it. And always with justice, you and I, because errors by which it is being carried give no authority to those of good upbringing from deserting when called for its defense.”

Also to be studied is the following paragraph from Karl Marx to be compared with one by Benito Juárez that is given afterwards. Marx says in the Critique of the Gotha Program written in late April, early May 1875: “In a higher phase of communist society, after the enslaving subordination of the individual to the division of labor, and therewith also the antithesis between mental and physical labor, has vanished; after labor has become not only a means of life but life's prime want; after the productive forces have also increased with the all-around development of the individual, and all the springs of co-operative wealth flow more abundantly – only then can the narrow horizon of bourgeois right be crossed in its entirety and society inscribe on its banners: From each according to his ability, to each according to his needs!”

Fourteen years before, on January 11, 1861, Benito Juárez wrote something which was later discovered by historians that stated:

”To each according to his ability and to each ability according to deeds and education. That way there will be neither privileged classes nor unjust preferences (…)”

“Socialism is the natural tendency to better the condition or the free development of both physical and moral competences.”

As underlined before, Engels expressed that Marxism is a method for investigation and study, and Lenin, in his own right, declared that it was a guide for action. Using both method and guide we can tackle the concrete problems of our time, while also heeding the warning that there is no general formula that can be applied to all situations and all nations. It is up to us, starting with the concrete development of our societies, and the intellectual tradition and politics of our region, to find creative ways and paths, and the optimal form to channel that true socialism of the 21st century, the one aspired by our nations.

Any analysis we carry out must start from our history and the links established during the centuries between the Latin American and Caribbean nations which make our region the one with the loftiest calling towards integration given our impressive spiritual [cultural] heritage.

In the 21st century we should find inspiration in the enlightened ideas of Marx, Engels and Lenin as expressed in the original writings, and relate them to whatever is found to have validity with those ideas of Bolivar, Martí and other past illustrious leaders and thinkers of our America.

Thursday, 13 December 2007

China’s new Labor Laws: employment contract reforms

Chris White reports on Your Rights at Work in China: November 2007

China’s new labor law system on employment contracts promises to protect their precarious workforce from the excesses of capitalism.

The 10th National People’s Congress (NPC) passed Labor Law Contracts on June 29th 2007. They are in force from 1st January 2008.

What are the industrial relations issues addressed? What are the new rights at work?

In Part One, I give an overview of the provisions to regulate employers whose exploitative practices have gone too far. Professor Liu Cheng comments on their likely impact.

In Part Two, I report on the initial compliance reactions. Major corporates prior to January 1st 2008 sought to avoid the new law by dismissing and re-employing their workforce. But now they have been publicly exposed, they have to comply. The role of the All China Federation of Trade Unions ACFTU is stronger.

In Part Three, rather than going down PM Rudd’s collective bargaining road, the debate in China is on a new arbitration system.

Readers may compare these modest Chinese labour law reforms for precarious workers with the reforms from PM Kevin Rudd and Minister for Industrial Relations Julia Gillard for Australia’s precarious workforce.

Australia’s democracy decisively rejected Howard’s WorkChoices. It provided less protection for vulnerable workers than these new Chinese employment contract reforms.

Australia, after the great strikes and lockouts of the 1890’s, turned to arbitration to prevent and settle disputes. The ghost of Judge H. B. Higgins may be shaping China’s labour reforms!

Part One The Reforms and their Impact

I reported in Evatt On-Line in February 2007
[1] on China’s unprecedented public debate in over these new Labor Laws. As well, the US corporations with their neo-liberal ideology lobbied National People’s Congress (NPC) delegates hard to water down the original provisions. They had some success on the details.[2] These labor law contests in China have relevance for workers and their unions’ worldwide.

I returned to Shanghai on October 12th 2007. I followed up a key adviser on the labor laws, Professor Liu Cheng, from Shanghai Normal University, Law and Politics.

Liu Cheng: ‘In the context of globalisation, Chinese labor law is not only something of China its own, but also of America, Europe, and other parts of the world. The trend of “race to the bottom” and deregulation should be deterred by way of global unity. Chinese labor legislation has suffered MNCs’ attack; Chinese labor rights has been endangered by not only Chinese dark-minded employers but also dark-minded employers abroad—such MNCs as Wal-Mart is exploiting Chinese workers by way of driving down acquisition price to make its suppliers non-profitable. This compels the suppliers to exploit workers by way of violating labor law in order to ensure their profit. What’s more, it also hurts fair competition--the dark-minded employers will take advantages of low cost to beat moral employers. It’s apparent that without labor law, there would be no fair competition; without labor law, there would be no social stability.’

I asked about Liu Cheng’s US and Europe visits.

Liu Cheng: ‘I found it necessary to get support from outside China, to counter the foreign corporations lobby, otherwise there may have been something worse for the Chinese workers. So I made USA visits explaining to the NGO anti-sweatshop lobby, unions and Congress the debates. I argued with four lawyers from the American Chamber of Commerce, but did not convince them.

I received good responses from European unions and NGOs who made contact with National People’s Congress delegates to support the changes. I interviewed some European government leaders, some employer organisations and spoke to about 50 foreign journalists at a press club. European employers now support the new Employment Contract laws…so although the end represents compromise, with some details in the protections for workers and the union role curtailed, it is a victory.’

The provisions apply to all employers. The main reason is to regulate the exploitative employer practices in China’s majority private sector enterprises. Here there are millions of precarious and marginalized workers. In China’s state sector, there is more job security, payment of wages, respect for labour law etc and union consultation, and these new laws still apply.

The key solutions are described. These indicate the industrial relations problems being tackled.

Back pay and no forced labour

It is unbelievable, but such is the capitalist violation of labour rights and the extent of forced labour in China that not only are migrant workers from the countryside in sweatshops factories not paid the minimum wage nor overtime when working seven days a week to finish contracts, but for months not paid at all.

Unofficial strikes over employers not paying wages are widespread. Stories in the Chinese press reveal workers treated as slaves
[4] and ‘wildcat’ strikes and workers beaten to death by company thugs for protesting about not being paid![5]

The new law says wages and overtime have to be paid. The Labor Bureau can direct an employer to pay wages owed within a specified period, failing which an order for damages at between 50 and 100% of the amount outstanding can be made.

Liu Cheng: ‘In the past many employers regarded the labor law requirements to pay wages when due as rubbish, but now employers have to take these new laws seriously, and this is a big improvement. Some 40% of overtime is not paid, so the new law is to ensure overtime and penalty rates are paid.’

Can migrant workers not being paid go to a judge in a People’s Court for an ‘order to pay’?

Liu Cheng: ‘Yes, they can go directly and it should be speedier. The cost of litigation is most important, for if the cost is very high the workers will not be actually protected and the employers can violate the law. The employers have to be punished efficiently if they do not pay the wages and have to take the new law seriously. Although more detailed dispute settlement processes are to be determined later in 2008, this Labour Contract law helps give the worker more protection.’

I read in a China Labor News Translation a report
[6] where a Shenzhen furniture factory worker fought long and hard to get back unpaid two years overtime through the court system.

From no contracts at all to deemed minimum contracts

Liu Cheng: ‘Much past practice in four in five private enterprises in China have not even signed job contracts with their workers. The lack of contracts leaves workers in a legal limbo. This meant work rights were not enforced and no access to the pension fund as there was no proof of an employment contract and the employer denied liability. So now the employment contracts must be in writing and failure to do so means the employer faces liability for double wages. The new law says there is a written contract and provides minimums.’

In 2008, Chinese Courts have to recognise that labor law deems a contract to exist. Minimum wages and conditions are based on comparable collective agreements or regional provisions.

Liu Cheng: ‘Also the Labor Bureau can order damages if the employer refuses to comply…so minimum living standards are much more protected.’

Crack down on forced labour

When hiring workers, an employer may not require them to provide any surety or collect property from the worker as collateral. The employer may not retain the workers’ resident identification cards or other papers.

So a crackdown is promised on the prevalent practice of forced or bonded labour, in their various disguises. The ACFTU has to unionise these migrant workers. We shall see.

Short-term contracts at an end

Liu Cheng: ‘In many private companies which signed contracts with workers, the duration was often less than one year. Employers concluded employment contracts with the same workers four times in one year. Casualisation is prevalent. The employers refused to sign long-term contracts to avoid legal obligations such as accident pay, health benefits etc.’

‘Now with the new law, after two short term contracts a more permanent open-term contract must be signed. That has to happen so as to prevent many short-term contracts. The third open-term contract then provides for health insurance and the employer is liable for severance pay.

A fixed term contract now has severance pay of one month’s pay for each year of service. Most fixed term contracts can’t be changed by the employer but by negotiation.’

The more permanent contract is also compulsory for those workers with service of no less than ten years, or is ten years away from retirement.

When reemploying after a state owned enterprise has restructured the permanent contract is to be used, as it is when the renewal occurs following the conclusion of a fixed-term employment contract on two consecutive occasions.

Combating casualisation

Provisions regulating part-time work are made. A ‘Part-Time Labor’ category is allowed in the final law, a ‘non-full-time engagement of labour’.
[8] This employment is remunerated by the hour and is terminable at any time without notice or severance pay. But it is restricted to its status, to an average of four hours daily and ‘the maximum remuneration settlement and payment cycle for part-time labor may not exceed 15 days. Article 72.’

This is a legitimate ‘casual’ position. If implemented, it will assist in reducing long-term casualisation, with its many problems.

Probation no longer to be abused

Workers can no longer be on long probationary periods. An employer may stipulate only one probation period with any given worker and not less than 80% of the local minimum. The new standards are: less than one year contract, less than a month probation; 1 to 3 years, 2 months; not less than three years, 6 months.

Transmission of business and contract

The employers cannot avoid liability with a change in the name of the company. Transmission of business also transfers the employment contract, ‘…under the new law, the employment contract will be maintained into the new company…’

Sacking at will to cease

Corporations opposed the termination reforms. These have moved dramatically away from dismissal at will. Employers sought to reduce the costs of terminating workers.

Greater job security is to be put in place for those workers engaged on an ‘open-ended’ regular basis. There are costs for illegal dismissal.

Dismissal is to be allowed only on specific grounds: such as by consent; being incompetent; for serious misconduct; incapacitated by non-work related injury; for mass redundancy (where there are substantive and procedural requirements); and termination by 30 days notice. An employer cannot dismiss for work related injury and e.g. pregnancy.

The Law enhances the role of the union in the termination process.

Where an employer unit plans to dissolve a labor contract unilaterally, it shall give the trade union advance notice of the reasons. If the employer unit violates the provisions of laws and administrative statutes or the labor contract, the trade union has the right to demand that the employer unit take corrective action. The employer unit shall study the trade union's opinions and notify the trade union in writing of the outcome of its handling of the matter. Article 43.

The social interests of workers in redundancies of over 20 are recognised. Article 41 gives priority for protection for those with long service, those who are the only ones in their families to be employed and whose families have a senior citizen or a minor who needs to be provided for. They have 30 days notice and the circumstances explained to the union.

Are these tougher restrictions an incentive for employers to use avoidance tactics, such as forms other than regular on-going contracts?

Liu Cheng: ‘In theory it looks like this, but in practice they cannot, because of severance pay of one months pay for each year of service for most dismissals. Even with shorter terms, still severance pay applies. And if this does not occur, then the employer has to pay the penalty of double salary to the employee, so in practice the risk is so great and the economic consequences strong. Maybe there will be some employers who use part-time and casual contracts, but most employers won’t put all their employees onto part-time or casual.’

I read reports where employers preparing for the new laws are converting short-term workers into permanent contracts. Others are trying the reverse to pre-empt the changes (see below).

I asked about contracts for project work where severance does not apply. Liu Cheng said most employers would not employ workers on separate projects.

Liu Cheng: ‘ With projects such as building bridges, the employer may conclude one project contract, but may not in practice do more as the employer wouldn’t get labour for the next projects…maybe one off, but not continuously.’

There may be grey areas, where the provisions appear ambiguous. But the employer risks severance pay if dismissing. ‘The cost of violation is very important. The cost will compel the employers to abide by the labour laws.’

Liu Cheng does not think that the more skilled workers will have greater job security over the unskilled. I thought this was the experience in other countries. Will this assist migrant woman?

‘I think in the recent past in China the migrant worker was hurt by the employer, but now their living standard can be improved when the employers abide by the new laws. So now we inform the migrant workers of their rights.’

The ACFTU aims to unionise millions of these migrant workers coming from the countryside into the cities and sweatshop factories.

It is not easy for the ACFTU to move from its servicing model to a new grass roots organising model. There is debate whether this is happening.

Staffing issues: Labour-hire regulated

Employers lobbied against the strong regulation of many labour-hire firms and their use of ‘dispatch’ workers. The new law means there will not be financial reasons for management to sack sections of their workforce to replace them with cheaper labour-hire with ‘staffing firms.’

All dispatch workers from staffing firms must be hired permanently for not less than two years. There is a formal written contract with the same rate and benefits as workers in the user firm in similar work. A minimum wage is paid even when not placed. The worker may join the user firm’s union. Restrictions are a prohibition on user firms ‘on-selling’ dispatch workers to other firms; labour-hire be implemented ‘generally for short-term, supplementary and substitute positions’; and employers may not arrange to have staffing firms to place workers with themselves or their subordinate units.

Liu Cheng: ‘The employers say that this is very tough, but it is only a slogan. In practice, the assessment of discrimination will be difficult, but the tactics of labour hire firms will not be as discriminatory. The outcome does no longer require the employer to hold money in reserve to cover workers insurance. Nor is there an automatic conversion to a permanent basis.’


The employers’ lobby watered down earlier drafts for workers who leave with a confidentiality clause, a non-compete clause on trade secrets or intellectual property.

When a professional, skilled or worker who has the obligation to maintain the confidentiality of his employer’s trade secrets, the employer may have a restrictive confidentiality clause. This stipulates the employer shall pay financial compensation to the worker on a monthly basis during the term of the competition restriction after the worker leaves.

If the worker breaches the competition restriction provisions, he shall pay liquidated damages to the employer. There is less compensation for the worker affected, one month’s salary rather than one-year. Geographic restrictions are dropped.

As the Chinese workforce move into more highly skilled technology companies, these restrictions protect existing employers, not the new technology companies. They inhibit the movement of professional and skilled labour.

Liu Cheng: ‘ I think there should have been a ceiling for the damages on the worker and for the compensation to the employer, otherwise employers will take their advantages…to more profitable workers, so, I think there should be more reforms and damages should be lower than three times the yearly wages and the compensation should be no less than 40% of their normal wage, and without such ceiling and floor, it will not be better. In 2008, there will be more detailed rules formulated for these labour laws promulgated by the State Ministry of Labour and Social Security.’

OHS tougher

The lack of compliance to OHS obligations is notorious in China. One new provision is:

‘Article 32 Workers shall not be deemed to be in violation of their labor contracts if they refuse to perform dangerous operations directed in violation of rules and regulations or peremptorily ordered by management personnel at the employer unit. Workers have the right to criticize, report to the authorities, or file complaints against their employer units over working conditions that endanger their lives or health.

Worker and union involvement improved

Major opposition came from employer lobby groups against the earlier draft to require the employer to gain the consent of the employees’ representative works congress and the union to the required changed work rules.

This is watered down to a form of ‘negotiations’. But, still, a form of workplace democracy.

‘Article 4 Employer units shall establish and improve labor rules and regulations in accordance with the law to ensure that workers enjoy labor rights and discharge their labor obligations. Employer units seeking to formulate, revise, or decide on rules and regulations or significant matters that have a direct bearing on the immediate interests of their workers, such as those concerning remuneration, work hours, rest, leave, work safety and hygiene, insurance, benefits, employee training, labor discipline, and work quota management, shall determine the matters through negotiations conducted on an equal footing with trade unions or employee representatives, after employee representatives' conferences or all the employees have held discussions and put forward proposals and comments.’

Liu Cheng still sees this as an important procedure, as does the ACFTU.

Liu Cheng: ‘This is still a restriction on the employers’ behaviour. Workers and their trade union can indicate if the work rule is inappropriate and the employer is then to make ameliorating amendments to the work rule after consultation. There is a greater role for the local trade union, and if ignored, a higher-level trade union authority is involved. Employers can still be punished if there is no consultation on new company work rules, and may be later found to be invalid and not varied. This procedure is still very important for the workers. The employer may not enforce the work rules if challenged in any arbitral proceeding. There is a greater democratic process for work rules.’

How tough will the Labour Bureau be against employers not complying? How will China’s overly legalistic judicial system respond?

Work conditions on hours, OHS, leave etc are in individual or collective contracts. Employers work rules cannot override them, as contracts are changed only by agreement.

Liu Cheng: 'The problem still is at the moment that most contracts are minimum state wages and standards with little negotiation…China still has a long way to go in many areas, such as more collective bargaining, including in state enterprises…but in some provinces, even in the private sector collective bargaining is changing. I think it needs time.’

Union to Assist and Collective bargaining

‘Trade unions shall safeguard the lawful rights and interests of workers in accordance with the law and oversee the execution of labor contracts and collective contracts by employer units. If an employer unit violates labor laws or regulations or a labor contract or collective contract, a trade union has the right to raise its opinions or demand corrective action. If a worker applies for arbitration or institutes legal proceedings, the trade union shall provide support and assistance in accordance with the law. Article 78’

The enhanced union role, for the ACFTU is important. They are pressed to improve representation over grievances and litigation rights. They are establishing new legal centres.

Liu Cheng: ‘The ACFTU is the only trade union in China, from the period of the planned economy. It’s very strong on the top, while very weak at the grass-root level. In recent years, it has begun to reform. For example, the pilot of direct election of trade union leaders at the grass-root level has been taken for some years, and unionisation such as at Wal-Mart by way of mobilization has also begun.’

The ACFTU wants new legal rights for the election of union delegates at the workplace level. This is because when workers join the union, the employer wants to control the election of the union delegates!

Collective contracts with collective bargaining higher than the minimum wages and conditions are encouraged, as is pattern
[13] or industry bargaining.

‘Article 53 Industry-specific or area-specific collective contracts may be concluded between representatives of trade unions on the one hand and of enterprises on the other hand in such industries as construction, mining, and catering services in areas below the county level.’

The ACFTU is pushing for greater rights for union collective bargaining later in 2008.

I asked that with the requirement of greater consultation with the elected Staff and Workers Representative Congresses (SWRC), would there be greater use of SWRCs to respond to poor management, as in the past in the public sector. Liu Cheng thought this might be only a formalism in the private sector. However, there is scope for a form of Works Council.

Part Two: Compliance or Avoidance?

The state apparatus for compliance is strengthened.

Employers’ legal liability is detailed. These new Chinese ‘Rights at Work’, are to ensure changed employer behaviour and a crack down on the exploitative practices of the capitalists with ‘dark minds’, as Liu Cheng calls them.

The government is educating workers and employers on these laws. In Hangzhou, I read a newspaper for University students explaining their new Rights at Work in 2008.

The Labour Administration departments are given powers to ensure supervision and inspections and are to organise tri-partite compliance rules.

Lawyers for big global companies complain that the new law imposes a heavy burden. ‘It will be more difficult to run a company here,’ says Baker & McKenzie's employment law group, which represents America's biggest corporations in China. Lawyer Mary Margret Utterback, a major corporate law firm, just days before the law’s passage (cited in Global Labor Strategies):

The law is likely to increase the cost of doing business in China. Larger companies will feel the need to have human resources capability in-country. Severance payments, non-compete payments, and the decrease in probationary period length will all increase the employer's labor costs. The undefined role of the labor union may complicate the relationship with management. The ambiguities for justifying a lay-off may also result in increased costs to the employer. Beijing may decide that this is an appropriate time to send the message internationally that the PRC takes labor conditions seriously.’

Other lawyers advised employers there would not be enforcement, as in the past.

Liu Cheng disagreed. ‘In the past, the cost of violating labour laws was very low, but now the cost is higher, so most employers will not prefer to violate the labour laws. …This is a strong national law, but also at the regional and local government level, there has to be enforcement. At the moment, there is publicity on the new laws and I think nearly all employers will see the cost will be much higher and the local authorities have to comply.’

The pressure will be on MNC’s to see their Chinese suppliers comply.

Liu Cheng: ‘I think that the multi-national corporations will be compelled to enhance their purchase price, otherwise most of their Chinese suppliers could not afford to comply and became sweat-shop producers, but this will now change.’

European HR managers say they can comply and one line of legal advice for overseas corporations is that their labour cost increases will stay within a controllable range.

Liu Cheng: ‘…in the long run, their good will towards the workers, will mean they can maintain their profit making process, otherwise they should pay the cost of turmoil or instability.‘

Corporations look at avoidance strategies. From Global Labour Strategies:

‘…it appears that some companies operating in China are already using an avoidance tactic for existing dispute resolutions cases. On June 8, 2007,
the American Chamber of Commerce in Shanghai sponsored a conference on “China’s Trends” where one influential lawyer representing numerous global firms “promoted using an offshore arbitration clause…” He argued that his firm had a high rate of success in getting foreign business-to-business arbitration awards enforced in Chinese courts. Some favorite arbitration off-shoring locations include Hong Kong and Singapore.

For years global corporations have been moving their operations to whatever country offered the weakest labor and environmental regulations. …if the government passes modestly progressive legislation they'll respond by drafting contract clauses that “ship” the dispute to business-friendly shores. This has been common practice in the US for decades.’

Compliance contest

That this compliance contest is underway is shown by the following reports.

‘ACFTU: Huawei agrees to suspend controversial employment scheme after union talks 2007-11-10 21.

BEIJING, Nov. 10 (Xinhua) -- China's Huawei Technologies Co. Ltd has agreed to suspend its controversial "voluntary resignation" scheme after talks with trade unions, the All China Federation of Trade Unions (ACFTU) said Saturday.

The ACFTU said it called on China's biggest maker of telecommunications network equipment to protect workers' interests after its plan sparked fears that the company was trying to sidestep a new labor law.

The ACFTU and union organizations called on Huawei to solicit workers' opinions and respect their rights while making regulations related to their benefits.

A company source confirmed on condition of anonymity they had reached a consensus with the trade unions.

The company agreed to suspend the plan but the exact date to implement the suspension will be decided after workers' opinions were solicited at the impending workers' conference since the plan was launched with the consent of workers.

Huawei initiated a plan, calling for its staff who have worked for eight consecutive years to hand in "voluntary resignations", according to the Nanfang Daily, a local newspaper in southern China's Guangdong Province, where Huawei is headquartered.

The staff would have to compete for their posts, and sign new labor contracts with the firm once they were re-employed, while those who lost out would receive compensation.

Officials with the Shenzhen Federation of Trade Unions met with a vice president of Huawei and the two sides reached a consensus on three issues, said an official with the ACFTU on condition of his own anonymity and that of the vice president. They agreed that:

-- The company needed to create a welfare system to guarantee the workers' benefits and rights and in return, the trade unions supported the company's reform and innovation to unite the workers for the company's future development.

The company needed to abide by the law, and to solicit workers' opinions and negotiate with trade unions while making regulations related to workers' rights and benefits.

-- The company needed to consult with the workers on an equal basis while making contracts for workers' pay, workings hours, vacations, work safety and insurance.

The Huawei vice president reportedly said the company always valued the rights and benefits of workers and respected their contributions, said the union official.

Critics said Huawei was making a last effort to avoid signing open end-of-labor contracts with its employees through "voluntary resignation" before the new labor contract law came into effect on Jan. 1, 2008.

Under the law, employees who have worked for an employer for ten consecutive years are entitled to sign a labor contract that has no fixed term, on agreement by both parties.

The new law meant these "veteran" workers would become "permanent" employees, except in circumstances of willful resignation or retirement.

The ACFTU also called for better publicity of the new labor contract law and closer supervision of companies to avoid similar cases occurring.’

Here is the Global Labor Strategies report November 2007:

‘The Battle for Labor Rights in China: New Developments’

Huawei—the Chinese owned telecommunication company with ties to many foreign firms—recently instituted a personnel program widely believed to be an effort to avoid a key provision in China new Labor Contract Law. That provision automatically grants open-ended contracts to workers with either 10 years of service or two consecutive fixed term contracts. Open ended contracts allow workers much more job security—since there is no renewal date and workers can only be removed for just cause—and they provide for more severance pay should a layoff occur. Under Huawei’s program 7,000 long-term workers were offered economic incentives to quit and be rehired on 1 to 3 year fixed term agreements. The layoff program was widely reported in the Chinese press and roundly criticized by labor rights advocates inside and outside the government.

Now, under intense pressure from the public and the All China Federation of Trade Unions (ACFTU), China’s sole legal union, Huawei has suspended the program.

There is a widespread sense that many firms are engaging in similar practices as they position themselves for life under the new law.

And it's not just Chinese owned firms. Wal-Mart has also come under scrutiny in the Chinese media for some staff reductions. Wal-Mart said that the reshuffle of its employees is not aimed at the new labor law. …but more than 100 employees had been laid off, including 40 in Shanghai and 60 in Shenzhen. A woman who works in the Shenzhen center, said she has been working there for four years and was laid off last month. She was told she would receive three months salary plus some additional compensation. She said she expected to be off for one to two months before returning to the company.”

Back at Huawei, the
Asia Sentinel reports on how pressure was applied to long time workers:

We were called into our supervisor’s office about one month ago”, an unnamed Huawei employee who has been working with the electronics company since 1999. “We were encouraged to voluntarily resign within two weeks. My stock will be kept for six months. If I can get reemployed by the company, then I can get the stock back. Otherwise, I’ll be paid cash.”

It is not clear from press reports what will happen to the employees who have already resigned. But the official news agency
Xinhua reports, officials with the Shenzhen Federation of Trade Unions met with a vice president of Huawei and the two sides reached a consensus on three issues (see above.)

In what may be a sign of the times in China, despite efforts to mask the layoff programs as legitimate corporate restructuring schemes, many people weren’t fooled. The official on-line news service reports:

A recent survey, organized by the Investigation Center of China Youth Daily, shows that 42.7 percent of the 2,212 interviewed applaud Huawei's staff reforms, while 57.3 percent do not.

According to the survey, opponents consider this a display of capital power, because "the employees working more than 10 years at Huawei are the backbone of the company, and they are the most important for the survival of the enterprise. Huawei's attitude toward its 'veteran' workers will definitely make the company less attractive to talented professionals."

The survey further found,

….87.4 percent of the respondents believe the new law does not provide excessive protection for employees, while 69.4 percent think the protection is not enough.

Nearly 70 percent feel that employees don't have the power necessary to protect their rights.

In the wake of the Huawei controversy the government and the ACFTU have issued warnings to both Chinese and non-Chinese companies on compliance.

The ACFTU reports that it has “…carried out probes….” to pre-empt evasive actions. The
China Daily reports,

Chang Kai, an official with the Legal Affairs Office of the State Council, asked the companies to study the law properly before initiating a move against it…..

"The national and local legislatures, the State Council and government agencies will soon issue judiciary interpretation and guidelines to stop employers from trying to dodge the law," Chang said.

According to the interpretation, a firm will be seen as trying to dodge the law if it prompts mass resignation, 21st Century Business Herald quoted him as having said. And "violators will have to pay a heavy price."

The controversy and highly publicized cases like Huawei may be good news for a number of reasons.

First, while some companies are worried about the law and are conducting covert campaigns to circumvent its impact, the government and the ACFTU seem serious about its implementation. This could be a step in the direction of establishing the rule of law in China.

Second, what happens at big companies like Huawei could have a ripple effect, at least in some industrial sectors, by setting the tone for what happens at smaller firms. One HR official at a smaller IT company, quoted by, says, “I have paid great attention to Huawei’s ‘voluntary resignation scheme’ since the beginning…. I want to know how relative departments will deal with…. problems so we can use [it] as a reference in the future.”

Third, the agreement reached at Huawei looks a lot like conventional collective bargaining. Of course, whether and what kind of bargaining actually takes place will depend in part on the actions of the ACFTU which, to date, has generally worked in close collaboration with management—indeed, is often staffed by managers. The ACFTU could become an agency to help impose the new law in China’s workplaces and economy, or it could continue to be just a vehicle for quieting down worker upheavals. Time will tell.

Finally, the Labor Contract Law may function like the National Labor Relations Act did when it was enacted in the US 70 years ago, defining rights that employers try to ignore, evade, or repress—thereby creating the conditions in which workers demand implementation of the rights that they have been told they possess. We may be witnessing an early skirmish in that battle.’

Other reports give a balanced assessment of adjusting to doing business in China.
[14] Important changes for making profit in China.

No Right to Strike

I was cited in the China Biz news that Chinese workers are not to have the right to strike.

‘On the lawful strike to protect workers, the right to strike, the ACFTU are not in favour. They see their task as more consultation, negotiation and prevention of disputes. Wildcat strikes and social workplace disturbances, public protests e.g. against unpaid wages are on the increase and not organised by the union, but where the union has to settle the dispute with a return to work.

…there is now quite some reluctance on guaranteeing the right to strike in the law. Chinese know the routine of striking all too well, White notes:

“There is neither a lawful right to strike or for strikes to be illegal, so there is both tolerance and repression, where strike leaders are arrested not for organising the strike but usually some trumped up criminal offence or disturbing the peace.”

So, the debate is on, but what is most likely going to happen in the short run? In China's campaign-like style of pushing forward change, we are probably going to see public tests in getting collective agreements in place, probably with some foreign enterprises as guinea pigs. It is not going to be a revolution, nor a dramatic change for most companies. It is going to be an interesting learning process, both for the Chinese trade union and the companies involved.’

I asked, as I had read
[16] that shortages of labour mean a turning point for the Chinese economy.

Liu Cheng: ’its mainly in some advanced technics markets, but not in the market as a whole where labour is a surplus driving growth. In some areas yes, such as the Pearl River delta area. But even here it is not real labour shortages, it’s owing to the wages are so low workers won’t come to work. It will still be ten or twenty years until there are labour shortages.’

Part Three: A New Dispute Settlement Law: A Mediation and Arbitration System

First, there is Chinese tripartism.

Article 5 The labor administrative departments of people's governments at or above the county level shall, together with trade union and enterprise representatives, establish a sound tripartite mechanism for coordinating labor relationships and jointly study and resolve major issues concerning labor relationships.

Next, new labor process laws will come later in 2008. There is a first draft of a new Labor Settlement Disputes law, ‘Mediation and Arbitration of Labour Dispute’ submitted to the National People’s Congress on August 26, 2007 (I have a copy).

The focus is on a reformed dispute mediation and arbitration system. Chinese workers lack the right to strike, so arbitration is one of the few institutional ways for workers to address workplace grievances.

The mediation and arbitration law is to address a number of government concerns.
According to the China Daily, PRC figures reveal that:

‘Labor dispute cases in China are continuously increasing in recent years. Statistics show that labor dispute arbitration organizations at various levels dealt with 1.72 million labor dispute cases involving 5.32 million employees from 1987 to the end of 2005, with a growth rate of 27.3 percent annually.’

‘New law will give workers free arbitration in labor disputes (China Daily October 25, 2007)
Arbitration services for employees in labor disputes will be provided free of charge if a new law is given the go-ahead. Draft of the law on mediation and arbitration of labor disputes…proposes public funds cover the cost of arbitration committees. It also says employers must present relevant evidence to the committees as required or face punishment.

…the granting of final decision-making powers to arbitration committees in three kinds of cases. These are: disputes over labor payments, workplace injuries, compensation and pensions; disputes over holidays and social security; and disputes over collective contracts.

The current regulation, adopted by the State Council in 1993, comprises a dispute-settlement process of mediation, arbitration and a trial. The new procedure aims to greatly shorten the time taken to settle labor disputes and cut costs," Yang Xingfu, a standing committee member of the congress, said.’

Liu Cheng is critical of the details of this first drafting.

‘In my opinion, the principal problems with the first draft are as follows: First, the mediation procedure is in disorder and has no binding force; second, the relationship between arbitration and litigation is the same as that of civil procedure which is employer-friendly; third, there is no proper litigation procedure.’

Global Labor Strategies explains.

‘Under the current arbitration system, workers are granted access to the court system only if arbitration fails. And many companies have gamed the system by delaying proceedings. According to a
recent article in the Beijing Review:

Against a backdrop of intensifying tension between labor and management, people have begun to question the 20-year-old arbitration solution. The major complaint is that it takes a long period to reach a verdict…The confirmation of employment relations and the appraisal of work injuries usually have to be conducted several times between arbitration and trial, which explains why in some extreme cases the whole process has taken 19 years. The biggest victims of these slow procedures are usually the employees, who often badly need compensation from their employer for medical treatment or simply to buy food and other necessities.

Many legal experts and senior lawyers have expressed worry that arbitration more often than not will give a verdict favoring the interests of management and sometimes this is a result of bribery. In other cases, the arbitration committee, which is heavily influenced by the government, will refuse requests for arbitration from employees under the government call for creating a favorable environment to attract investment. Such a response has also eliminated any judicial means for workers to safeguard their interests.

At least a few of the provisions are pro-worker. These include:
• Ensuring that workers can petition courts for cancellation of unfair arbitration judgments or parties’ failure to comply;
• Extending the deadline for initiating arbitration from 60 days to six months from the day the parties know or should have known of the harm;
• Mandating that if an arbitration court fails to deliver verdict within 45 days workers may file a lawsuit in People’s court;
• Granting workers the right to petition the court to take enforcement measures if employers refuse to comply with mediation agreements on wages, benefits or work injuries (although this right appears to be severely limited by the fact that if the employer answers the charge in writing, the enforcement order abates).

Chinese labor scholars are far from pleased with the initial draft and are pushing for major revisions.

We know for sure there is at least one major flaw in the law...and it’s a big one. The current draft is silent on the majority of Chinese labor arbitration disputes. According to Professor Chang Kai, a distinguished labor law scholar based at Renmin University and drafter of the Labor Contract Law: "The current law is drafted for solving the labor disputes of individual workers rather than those involving a group of workers. But in reality, a lot of labor disputes concern a group of workers."

Recent studies show that group labor disputes have been on the rise and now represent roughly 60% of all workers involved in disputes. Professor Chang argues that the new law needs to be grounded in China's existing realities by elevating the importance of group labor disputes: "If the law remains focused on solving individual labor disputes, in 10 years we will have many problems that cannot be solved under the current legal system."

I understand that the Labor Arbitration bureaucrats are resistant to change and want to continue their (inadequate) role. We shall see what model prevails.

Sexual harassment regulations

In regulations, Guangdong province explicitly require employers to establish investigation and complaint procedures to protect women against sexual harassment. The regulations require employers to create secure safe work environments. This is part of the Law of the Protection of the Rights and Interests of Women. I read a newspaper report where the Professor of Law, Beijing University, was promoting these requirements; another important workplace debate.

Party leadership support Labor laws

With the recent 17th National Communist Party Congress, Hu Jintao, Party Secretary and President of China, consolidated his political leadership. He stressed how important these new labour laws are for his ‘harmonisation’ in industrial relations in China’s unique ‘socialist market economy’.

This CCP leadership generation promise more focus on human as well as economic development; economic development balanced with environmental action; regional disparities between western and central regions to develop as in the coastal eastern sectors; crackdown on corruption; tackling gross inequality of wealth; social security measures dealing with inequality; and these new labor laws. These are fascinating times.

Who is to prevail, the Chinese political leadership or the corporations? Whether Hu Jintao’s ‘scientific development with Chinese characteristics’ prevails will be known soon.

After WorkChoices?

As China’s competitive production puts downward pressure on wages and working conditions, these IR outcomes are of great relevance for Australian working families.

Australian Companies have to comply with these new laws. PM Rudd should insist.

Liu Cheng said it is important with corporate globalisation that overseas unions visit China and discuss these IR issues and be a balance to the corporate world’s influence.

He said there would be soon the first US AFL-CIO delegation visiting China. Other US unions have visited regularly, including Change to Win delegations.
[19] Australian unions are increasingly being asked to visit and engage on these IR issues.

These labor laws are also important in the negotiations over an Australia-China Free Trade Agreement, now to be negotiated by a Rudd government.

One reason that Howard’s WorkChoices went down badly with workers and with voters is that Howard lied when promising protection or fairness for an increasing numbers of precarious Australian workers, casuals, out-sourced, in labour hire, and those in enterprises less than 100 who can be unfairly dismissed, restructured and made redundant.

Arguably, China’s modest labor laws afford some workplace social justice to workers and are better than in WorkChoices.

It is going to be interesting to see the modest rights for Australia’s precarious workers to get a ‘fair go’ and collective bargaining reforms from PM Kevin Rudd and Deputy PM Julia Gillard.

Australia and China’s industrial relations reforms have different social, workplace and political contexts. Nevertheless, our IR debates and contests over strategies are reasons to participate and compare the ongoing campaigns over rights at work.

November 23 2007

Chris White is a Labour Law and Industrial Relations writer living in Canberra. References

[1] I use the English translation of the Labor Contracts from the Beijing Xinhua Domestic Service -- China's official news service, New China News Agency. In February 2007, I attended a Beijing Industrial Relations conference and interviewed those involved in the new Labour Laws. My Evatt Foundation report is ‘China’s New Labour Law The challenge of regulating employment contracts. China moves beyond WorkChoices,’ My interview with the All China Federation of Trade Unions ACFTU ‘Organising China’s Wal-Mart’ Evatt Foundation
See an analysis of these new employment contract provisions in the November 2007 UNSW Law Journal. The November 2007 Journal of Industrial Relations volume 49, number 5, has the issue on China. See, e.g. on the background to China’s labour law, Sean Cooney “China’s Labour law. Compliance and Flaws in Implementing Institutions.’ Page 673. For earlier China labour law, Ying Zhu, Economic Reform and Labour Market Regulation in China, in Law and labour Market Regulation in East Asia 177 (Sean Cooney et al. eds. 2002). Sean Cooney, ‘Making Chinese Labour Law Work: The Prospects for Regulatory Innovation in the People’s Republic of China’ (2007) 30 Ford ham international law Journal 1050, 1081-1086. Also, Rolf Geffken (2006) Labour and trade unions in China (European Trade Union Institute for Research, Education and Health and Safety). Kan Wang (2007) A Changing Arena of Industrial Relations in China What is happening after 1978 Renmin (People’s) University of China, Beijing.
[2] See Global Labor Strategies on the contest between corporations and NGOs and unions ‘Behind the Great Wall of China. U.S. Corporations Opposing New Rights for Chinese Workers. Opposition may harm workers in the U.S. and other countries.’ For their 20/2/2007 reply to the corporate lobby, see Earl Brown ‘Chinese Labor Law Reform: Guaranteeing Worker Rights in the Age of Globalism’ JapanFocus 24/11/2006; ‘Multinationals Accused of Hypocrisy over China Labour Law Reform’ International Textile, Garment and Leather Workers’ Federation (ITGLWF) 26/10/2006.
Global Labor Strategies: Update October and November2007.
[3] Reports on Liu Cheng’s US visits His papers are available from the author.
[4] ‘Shanxi Scandal Gives Urgency to Draft Labor Contract Law.
Chinese lawmakers deplored the forced labor scandal uncovered in north
Shanxi Province and recommended that the top legislature urgently ratify the labor contract law and thus better ensure the legal rights of employees.
… the investigation found that 2,036 of the 3,347 brick kilns had been devoid of any legal licenses and collectively employed 53,036 illegal workers. (The story was exposed first by Chinese bloggers).
This scandal had emphasized the needs for stronger protection of employees' legal rights. Items of the draft labor contract law could be applied to illegal labor cases such as the one in Shanxi.
The forced labor scandal… sparked public outrage and grave concern among the upper echelons. The workers were treated as slaves, forced to work long hours without payment in brickyards, mines and other small works. Shanxi provincial governor Yu Youjun has formally apologized over the forced labor scandal, promising to use his full power to root out any more cases of such illegal practices. (Xinhua News Agency June 25, 2007)’
[5] Worker Beaten to Death over Pay Strike. One unpaid migrant worker was beaten to death at a building site in Guangdong Province and hundreds of his workmates who were striking to get delayed salaries were injured by thugs the building owner hired. The attackers, armed with shovels, steel pipes, axes, and knives, injured many of the strikers and killed Lei Mingzhong, a laborer from Kaixian County. Nearly 300 workers went on strike at the site after working for four months without payment, because the owner, a subsidiary of Shenzhen based Fuyuan Energy Group, had delayed paying the contractor millions of yuan. Having failed to coerce the workers to end the strike, Fuyuan then hired hundreds of thugs to fight them and force them back to work. Ye was reported to have led the thugs when they rushed the workers and beat them. The workers, most of who were reported to have been empty-handed, suffered injuries in the fierce attack, even after police arrived at the scene. Lei was killed while two of his workmates were forced to jump from a high wall into the Dongjiang River. The thugs even threw rocks into the river after them, the newspaper said. Fuyuan Hydropower Co, a subsidiary of Fuyuan Group, plans to build a hydroelectric power station on Dongjiang River. With a total investment of 316 million yuan (US$41 million) from Fuyuan Group, the power plant is expected to produce 90 million kilowatt hours a year.
Miao Shouliang, the boss of Fuyuan Group, was listed as the 19th richest real estate tycoon last year by Rupert Hoogewerf, a former Forbes China employee who established his own luxury business listing company — Hurun Report — in Shanghai. Miao denied delaying the payment of money to the contractor but hung up when reporters asked him to comment on the incident. (Shanghai Daily July 2, 2007). Earlier: China Daily 31/12/2006 ‘Migrants frustrated over unpaid wages’ about anger over ‘the death of a young rural worker who was beaten up last week while claiming unpaid wages…’
[6] CLNT translated two articles: the first is a newspaper report on the case with a brief comment from a legal expert; the second is the worker’s own description of the process, published in an NGO magazine. These are available from this author.
[7] Article 9; Chapter two Conclusion of Contracts.
[8] Chapter V. Section 3 Part-Time Labor. Articles 68, 71.
[9] Chapter IV Dissolution and Termination of Labor contracts; article 39; article 42; 44.
[10] Articles Staffing services 57 to 62. Article 66. Article 67. It will be interesting to see how these are enforced.
[11] Chapter Article 24
[12] Article 4; also chapter vii Legal Liability
[13] WorkChoices outlawed industry bargaining industrial action. This breached ILO Conventions. Kevin Rudd’s policy is also in breach. Check my guest blog at ‘What limits the right to strike?’

[14] There are many legal firms and consultants advising: e.g. Global Risk Alert from AON Global; and lawyers King and Wood; Baker and McKenzie
[16] Ross Garnaut & Ligang Song. ‘The Turning Point in China’s Economic Development’ (2006 Asia Pacific Press).
[19] The US union movement split at the top, with now the ALF-CIO and the Change to Win, already invited into China by the ACFTU.