Full Release of the Investigation Report into MCID

Reinstate Unlawfully Dismissed Workers

In early March A.P.Moller-Maersk commissioned Impactt and CRECEA to conduct auditing on MCID (Maersk Container Industry Dongguan Ltd). MCID was criticized by Globalization Monitor in December 2008 for violating basic human and labor rights as stipulated by ILO Convention and Chinese laws. When the report was ready, however, A.P.Moller-Maersk refused to make it public.

On the other hand, it claimed that Impactt’s survey shows that ‘86% of shop floor employees were content or outright satisfied with the factory environment’. We believe that this allegation is based on the manipulation of the finding. MCID deliberately leaves out the other eleven topics of the same question (question no.1) of the survey, which ask workers their opinion of the dormitory, food, canteen, fairness of promotion, work safety, the management etc. The fact that MCID chooses only the result of one topic (factory environment) to report on, is because the survey results of all the other eleven topics are too poor and too embarrassing for MCID to make them public. It has also failed to make public the result of all the other thirteen questions as well, especially no. 5 which asks if promotion is based on merit or bribes. It has led us to believe that MCID is hiding important information which may prove its profound failure in respecting basic human and labor rights.

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

MCID Continues to Deny the Right to Strike

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

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

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

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

1. No Chinese law prohibits strikes as such. Hence dismissing any MCID employee for ‘illegal strike’ was unlawful from the very beginning and therefore he or she must be reinstated.
2. Any review of a dismissal case must be based on the principle that MCID (and all subsidiaries of A.P.Moller-Maersk) in China respect their employees’ right to strike, tracking back to the time when MCID was founded.
3. Recognizing the right to strike in MCID (and all subsidiaries of A.P.Moller-Maersk) in China is not equivalent to saying that all Chinese workers enjoy the right to strike, therefore it does not require the consent of the local or national government of China.
4. Recognizing the right to strike in MCID (and all subsidiaries of A.P.Moller-Maersk) in China exceeds labor rights that are stipulated under present Chinese laws, but in no way violates any existing Chinese laws. In the same way paying employees above the minimum wages does not violate the law on minimum wages.
5. To invite GM and a Mainland independent labor NGO as observer in the review of all dismissal cases, and they as observers have the right to provide evidences in their possession.

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

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

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

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

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

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

He evaded our other questions, however. Before one is confirmed as having an occupational disease, one needs to take time consuming medical investigation, and this requires the company to provide the necessary paper proofs to the hospital for various reasons. Evidence has led us to believe that the company has blocked more than one hundred workers’ access to medical investigation and treatment by:
— Ignoring workers’ complaints;
— Not sending workers with suspected occupational diseases to hospital;
— Withholding medical investigation results, and not releasing them to workers identified as suspected of being victims of occupational disease.
— Repeatedly delaying the sending of relevant documents to the occupational diseases hospital for diagnosis.
If making things difficult for workers with suspected occupational diseases is not enough to make them quiet, the management will simply turn to dismissal. The first batch of workers who were officially placed under medical observation were fired – although according to the law they cannot be dismissed. Among them there were Wang Dapeng and Yuan Daiyong. The management want to get rid of them so as to keep the numbers of workers affected, in different degrees, by occupational diseases low.

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

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

We demand A.P.Moller-Maersk step in to make sure that:
1. All dismissed workers with suspected occupational diseases and those placed under observation be reinstated and taken care of;
2. All present employees be sent to hospital to have medical checks directly targeting the occupational hazards that they are exposed to.

Rampant Corruption in MCID not seriously dealt with

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

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

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

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

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

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

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

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

MCID’s senior management is part of the problem

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

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

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