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The Honolulu Advertiser
Posted on: Sunday, August 20, 2006

Wal-Mart union may have quiet voice

By Tim Johnson
McClatchy-Tribune News Service

NANJING, China Labor boss Chen Siming beamed as he recounted how local organizers won the right to introduce unions to Wal-Mart, the world's biggest retailer and a notorious foe of organized labor.

"We are in a state of excitement," Chen said. "It is for a simple reason. Wal-Mart is not very willing to set up trade unions in China or anywhere else in the world. Yet we've had this breakthrough. It's a very important step."

Chen, who's chairman of the Nanjing Federation of Trade Unions, said he expects "a lot of unions" to form in Wal-Mart's 60 stores across China in coming weeks.

On the face of it, the conflict between the global retailer and the world's biggest labor group, the All-China Federation of Trade Unions, might seem of epic potential.

But less is here than meets the eye. The federation's not a union alliance in the Western sense. It's controlled by the ruling Communist Party, allows no competing labor unions, rejects free elections of its leaders and often goes to bat on the side of management over workers under the guise of harmonious economic development.

It's also a federation in a fix. It struggles to gain dues-paying members in the thriving private sector and craves international legitimacy. Almost no union confederation abroad recognizes it officially.

"If it gets unions in Wal-Mart, it will improve the image of the federation in the international community and with the international labor movement," said Qiao Jian, dean of the Department of Labor Relations at the China Institute of Industrial Relations.

The first thunderclap came July 29 in Quanzhou in southeast China's Fujian province, where a handful of employees at a Wal-Mart said they had formed a union. Chinese are aware of Wal-Mart's anti-union posture, so headlines ensued.

A week later, employees at a Wal-Mart in Shenzhen, near Hong Kong, said they'd formed a union.

Then came a succession of other stores, including one in Nanjing, a metropolis near Shanghai. To date, new unions have sprouted in at least seven Wal-Mart stores.

As Nanjing's top labor chief, Chen said it wasn't hard to recruit some 30 of the local Wal-Mart store's 300 employees and persuade them to form a union.

"I presented them with a TV set, a DVD player, books and 20,000 yuan (about $2,500) in cash," Chen said. "I also treated all Wal-Mart employees to an American blockbuster movie, 'Mission Impossible III.' You know, with Tom Cruise."

A 22-year-old college graduate, Wu Yinzheng, emerged as the union leader. In a telephone interview, Wu sounded both confused and reticent, saying he took no part in organizing the union. He declined to say if he might press for better conditions.

Wal-Mart isn't the leading retailer in China, trailing Carrefour, the French chain of mega-stores. But it has huge plans to expand over the next five years, seeking to hire 150,000 people to add to the 28,000 it employs now. By the end of this year, it will open 20 more stores.

Moreover, it's a huge customer of Chinese-made goods. Last year, Wal-Mart imported $18 billion of Chinese merchandise to U.S. shores.

Under Chinese law, private companies must permit unions. They also must set aside 2 percent of total payroll costs to finance union activities. Workers themselves pay less than 1 percent of their salaries in union dues.

Wal-Mart is decidedly anti-union in its U.S. operations. The Bentonville, Ark., retailer has few unions overseas, although some exist in Germany, Argentina, Brazil, Mexico, Britain, Japan and Canada (one store), generally pre-existing in stores bought by the company.

Since entering China in 1996, Wal-Mart has dismissed the need for unions, saying it might allow them if organized by workers themselves, not the federation leadership.

But the company reversed course after the flurry of announcements, saying in an Aug. 9 statement that it was working with the All-China Federation on "a mutual goal: to establish unions in all of our stores in China."

Even so, Wal-Mart sounded unsure of what unionized workers might desire. All of Wal-Mart's Chinese workers get retirement benefits, medical insurance, workers' compensation, maternity and paternity leave, paid holidays and annual health checks, said Amy Wyatt, a spokeswoman for Wal-Mart's international affairs.

"Our benefits are not only competitive in the retail industry, but in all industries," Wyatt said.

No one is yet saying if the Wal-Mart unions will seek collective bargaining.

"It is too early to say whether these new Wal-Mart unions are real unions or fake unions," said Apo Leong, executive director of the Hong Kong-based Asia Monitor Resource Center, an advocacy group for organized labor.

It's not too early to predict, though, that the new unions will be denied a basic entitlement of unions in the West: the right to pick union leaders in democratic elections.

"Upper-level officials are afraid some leaders they don't like will be elected," Qiao said.