ZAMBIA: Zambians wary of "exploitative" Chinese employers
Michael Sata made Chinese investment in Zambia an election issue
Lusaka, 23 November 2006 (IRIN) - China has pledged investments worth millions of dollars to development-hungry Zambia, but ordinary citizens are wary of the quality of jobs that would be on offer.
Earlier this month China wrote off US$211 million owed by Zambia, as part of President Hu Jintao's three-year aid package to Africa. China has pledged $3 billion in preferential loans and $2 billion in preferential credits over the next three years, and has set up a China-Africa development fund that will grow to $5 billion.
The aid package includes the cancellation of all interest-free government loans that matured at the end of 2005 for least developed countries with diplomatic relations with China. The package also provides for the establishment of five economic zones, including one in Zambia.
The spinoffs for Zambia, with a population of about 10 million and only about 400,000 formal-sector jobs, would be enormous.
In the past China's relations with Zambia were ideologically driven, symbolised by the construction of the 1,800km Tanzam Railway in the 1970s, linking the landlocked country to the port city of Dar-es-Salaam in neighbouring Tanzania. Business is now the new watchword, but analysts say locals have become less enthusiastic about China's embrace, largely because of poor labour practices.
Among the Zambians sceptical of the possible job opportunities is Richard Mwanza, a full-time salesman in a Chinese grocer's shop in the capital, Lusaka. "Chinese investment is not meant to improve our lives, we are working for nothing," he alleged. "We are not allowed to go for lunch every day, and yet we only get 180,000 Kwacha [$40] every month. We are not given any transport or housing allowance."
The minimum monthly wage for permanent as well as casual or contract workers in Zambia is $90.
The terms "contracted" and "casual" are often interchangeably used in Zambia, where anyone employed by a firm for more than six months automatically becomes a permanent employee entitled to medical benefits, housing and transport allowances, but employers often fire workers before six months of employment have been completed. Contracted workers are not entitled to any of these benefits.
Acknowledging the problem, Ministry of Labour and Social Security permanent secretary, Ngosa Chisupa, said "about 80 percent of foreign investors in Zambia do not remit anything to the pensions board for employees, they don't give employees any benefits upon termination, and the employees are made to work without any signed contracts on the conditions of service."
Chisupa said the Zambian authorities had signed an agreement with the Chinese government, covering the issue of "exploitative wages. The Chinese government has pledged to help ensure their investors are acquainted with Zambian labour laws before coming to invest here". The authorities were also currently revising labour laws to curb casualisation - short-term contract work - and increase the minimum wage bill.
According to the Mineworkers Union of Zambia (MUZ) president Rayford Mbulu, foreign companies are taking advantage of the lack of protection for casual workers. "It all starts with their employment policy. The Chinese and Indian mines are employing people on [short-term] contracts and, in some cases, Zambian workers are forced to sign forms before going underground to declare that they are working at their own risk, so that there would no compensation in case of an accident."
The death of 51 Zambian miners last year in an explosion at the biggest mine run by the Chinese, at Chambishi near the Congolese border, seemed to confirm fears over safety standards.
Chisupa cited corruption among labour law enforcement officials as another reason foreign companies were flouting existing laws. To check corruption, the department had decided to send officials from various departments to inspect a number of businesses. "So far, within this month of November, we have closed three companies that were paying their permanent employees about $25 per month."
In the run-up to the general election on 28 September this year, losing opposition leader Michael Sata made China's investment in Zambia a campaign issue and pushed for recognition of Taiwan, which China regards as a renegade province. The campaign proved effective, and resulted in a win for Sata in Lusaka and Copperbelt, the two most prosperous provinces, where the Chinese presence is very strong.
Dr Martyn Davies, director of the Centre for Chinese Studies at Stellenbosch University in South Africa, described Sata's campaign as "unfortunate" and "racist".
"The question is, 'why are Zambian [laws in] workplaces not being enforced by Zambian officials themselves'? Unfortunately, the Chinese are quite lax over health and safety issues in their own country."
Davies pointed out that, ultimately, a country's economic success was determined by its internal policies and not by outside investment.
President Levy Mwanawasa's pro-market economic policies have lured thousands of Chinese investors to set up businesses in the mining, agriculture, construction and manufacturing sectors.
But according to Sata, Chinese businesses employ relatively few Zambians. "Our Chinese don't bring in any equipment or create any sensible employment. In fact, to every Zambian in a Chinese company, there are about 15 Chinese. I have done my intelligence research and it is devastating to know that all Chinese companies are paying an average of $50 per month to Zambian employees."
The economic affairs counsellor at the Chinese Embassy, Zhang Shudong, declined to comment.
Musiyalela Sitali, a marketing and investment promotion manager at the Zambia Investment Centre, commented, "Chinese investment has been increasing over the years and, at the moment, we have a total of 145 Chinese projects running in Zambia. These registered Chinese companies have brought in over $378 million in capital investment commitments and created more than 10,000 jobs for Zambians" over the last 13 years.
An estimated 80,000 Chinese are resident in Zambia. Besides the businesses registered by the Investment Centre, there are thousands of unregistered ones, and with Hu's resolution to double his country's investment in Africa, more are expected to spring up.