The Process of Institutionalization

The moral imperative being a facade is further substantiated by a process of insitutionalization and formalization of labor standards and regulations in the factories. The TNCs’ social compliance officers were keen to show us their newly constructed files and records demonstrating the institutionalization of advanced management and labor standards as claimed. Thus there were files on Code of Conduct Training Procedures, Code of Conduct Test Records, New Workers’ Assessment Form, Workers’ Complaint and Handling Records, Guidelines on Admission and Dismissal, The Management of Dormitory Guidelines, and the like. A social compliance officer told us:

The most important thing in code implementation is documentation and filing. How can you prove to your buyers and their monitors, but to provide figures and data. The more details in your files, the better it will look.

They understood code implementation as nothing more than documentation and filing systems. The necessity of building up official documentation systems was applauded by the auditors who played an indispensable role in advising on the code’s implementation in the two enterprises. The role of the auditors was also particularly important in the process of institutionalization in the way that almost all recommendations they made centred on the setting-up of registers and filing systems. For instance, on the issue of no child and juvenile workers in compliance with the code, the auditors meticulously suggested the companies build up three registers: the first one for recording the ID copies of juvenile workers (16-18); the second for establishing a register of physical examination provided to workers of age 16-18; the third for recording the training program of juvenile workers as required by the code, and a register of evaluation for the program. Surely, no record of under aged workers would appear in the files.

This example was only the tip of an elaborate documentation system. Much more energy was devoted to designing recording systems on corporate code training, wages, working hours, contracts, and non-discrimination employment policies. Training sessions provided by the social compliance officer on the code provisions were organized for new workers who had to pass a test covering basic information on the company, their contract provisions and mainly the code provisions. Apart from the new workers, training sessions were only provided to the upper and middle managerial staff such as supervisors and line leaders who in turn disseminated information on the code to their work units or production lines. Sample test papers, testing workers’ knowledge of the code were shown to us and all had a full mark. However, interviews with workers continued to indicate that the workers did not actually understand the reasons for having such a code and the benefits they could provide, although some workers could mention expressions such as “human rights”, “labor rights”, no discrimination and no compulsory work, items that are listed in the code.

In spite of these obvious problems in code implementation, the directors of the two enterprises were, very satisfied with their improvements in institutionalizing the code practice, especially with reports of the social compliance officers and auditors. The director of China Miracle remarked:

We now have a clear direction of what to do. Paperwork is time consuming, but it’s a must to show our commitment. It is good that we now have a lot of records for your inspection.

Thus, the contradictory practices between the code practices and production seemed to be resolved in this rapid process of institutionalization. Documentation, registers and filing were seen as a must in order to implement the code, and at least having records to demonstrate their compliance with it and the Chinese Labor Law.

Three mechanisms of labor complaint were also set up: a labor dispute committee, a complaints hotline hosted by grievance handling supervisors, and workers’ face-to-face meetings with the social compliance officer. A detailed three- page- long complaint handling procedure states that its mission is to “guarantee unimpeded internal company information flows, uncover problems, resolve them and effectively forestall potential troubles”. The procedure stipulated three ways to file complaints: Written reports could be placed in suggestion boxes which were placed on each floor; oral complaints through either the hotlines, to the social compliance officer, or to the labor dispute committee (constituted by the trade union, the social compliance officer, the personnel secretary and the production manager).

But only one of the workers interviewed claimed that she had used the suggestion box to suggest improvement of the food in the canteen. Workers fully understood that no matter how transparent and effective, these grievances mechanisms were set up without their representation. They were used by the management for the management. One worker pointed out, “There are a number of names posted on the wall for hotline complaints, but we never use them.” “Why not?” “We see these grievance-handling supervisors everyday on the shop floor. They are our supervisors. What’s the point of going out of the company and phoning in if we have grievances?”²² Those phone numbers painted on the wall were simply for decoration purposes. While none of the workers interviewed reported that they had ever made complaints, records for complaints and grievances were shown to us by the social compliance officer at China Miracle, who failed to recount the details surrounding those cases.

Both China Miracle and China Galaxy had a trade union to demonstrate to their international buyers that they have one. China Galaxy set up its trade union in 2000, but it barely functioned when we interviewed the union chair in May 2002. China Miracle had one newly established in June 2002. The corporation code states that “Workers are free to join associations of their own choosing”.²³ The management of China Miracle thus helped workers to make their own choice by setting up a trade union under the guidance of the city-level Garment Industry Federation Trade Union which sent a representative to be the union chair. The union committee consisted of five representatives from the management staff including the social compliance officer. The two introduced to us as “worker representatives” were actually a shop floor supervisor and a line leader. In short, there was no one on the committee representing the workers.

There were three main reasons to set up the trade union at China Miracle: to show extra commitment in meeting the code; to meet the requirement of SA 8000 which was believed to be important in gaining production orders from big American retailers; and to enable the company to sign a collective contract by the union for all workers which was granted the right by the China Labor Law. By the time of our interviewing, a collective contract was discussed by the trade union as one of its major duties to be accomplished in the coming year. Manipulating the collective contract was particularly important in that once the pro-management trade union took over the right “representing the workers”, the company did not even have to offer individual contracts to workers. The union chair, who was aged in his mid-forties and a Party member, said:

Why do we need to set up a trade union? It’s not because of a state request or regulation. Ours is a joint-venture company, and we still have the option to do or not to do it. It’s solely a market consideration. Nowadays we believe in market forces and only market forces can effectively ask the company to set up a trade union. … A trade union can help communication between the company and workers, and it’s good for the company’s development.

The economic benefits for the company of having a trade union in the workplace were not only highlighted by the union chair but also the company director who said that the trade union was established not out of political concern but for purely economic and business considerations. He said,

We see many good sides to having a trade union. We won’t worry about letting workers be organized. If the workers have their own organization, they could organize leisure and welfare activities according to their liking. It’s good for boosting productivity if the workers are happy working in my company. They can work faster, you know.

The trade union was thus turned into wing of management working to meet international code requirements. In spite of the hopes held by management, the workers were notably lukewarm toward the trade union and it had difficulty recruiting members. The union began with sixty-seven members in June 2002 and had increased to ninety-five members in late December of the same year. Most of the union members were managerial, technical and supervisory staff, and less than ten were production workers, who could not easily be persuaded to join. Most of these workers were local citizens of the region and had been working there for more than two to three years and were often considered as “old workers”, (lao yuan gong), of the company. These workers had a deeper sense of loyalty to the company than ordinary workers who were typically migrant, transient and hence had been only in the factory for a shorter period. One of the ten who was a production worker explained to us why she joined the union:

Oh, yes, I know a lot of workers did not join the trade union. Why did I join? There is no particular reason. Our supervisor mobilized me to join and said it’s good for organizing activities for the workers. She said I was a veteran employee, so should be supportive for the trade union.

For the ordinary production workers, because this union was mobilized and established in a top-down way, most of them obviously lacked for enthusiasm for it. The union chair and committee members were elected by the sixty-seven members before it expanded to the production workers, and the “election” was only a formality. Most of the workers interviewed could not name the union chair, who he was, or why he was elected as the chair. Few would say they would go to the union for help if they had problems or grievances against management. The workers’ most concerned issues-work hours and wages- were not never included in the meeting agenda of the union. The membership fee was RMB 40 each year²⁴ and for many workers the fee was too expensive. In the previous six months, the activities organised by the trade union were the Moon Festival, for both members and non-members, a cinema show, and a Christmas party on Christmas Eve 2002.