Chinese companies in Africa: Is addressing labor conflicts mission impossible?

Hou Yixiao

“We have been working together for almost half a year, and they can understand me although I can’t speak English and can only use gestures,” said a Chinese manager proudly claimed when asked about his relationship with his local staff on a construction site in Nairobi, Kenya. He is in his 50s and came from the countryside in China. Walking inside the construction site of the new Two Rivers shopping mall, there was no shouting, little disagreement between local workers and Chinese managers, and even no raised voices when orders were given. I could see local workers actively greeting managers and embracing visitors with friendly smiles.

Chinese vice president Li Yuanchao emphasized in the second China Tanzania investment forum that China has cooperated with Africa for decades based on “mutual benefit”[1]. China provides Africa badly-needed finance and trade while providing the PRC with a steady supply of natural resources. In 1981, China transformed from assistance to investment as former paramount leader Deng Xiaoping promoted his new economic policy, known as “China going global,” that encouraged private Chinese companies to cooperate and open in Africa and beyond. The Economist reported that China has been Africa’s top partner since 2013[2], and CIRN announced that China’s investment in Africa had a 16% annual increase and exceeded 246billion dollars in 2014.[3]

The Two Rivers is now under construction by the Chinese company AVIC International. The mall is planned to be the largest shopping center in East Africa, ideally situated near Nairobi’s diplomatic community and upscale residents. Some 200 Chinese employees and 1000 local workers are working together to build the new mall. The Chinese managers are responsible for training, supervision, and ensuring overall safety; each leads around 20 local workers to accomplish their daily assignments. “We are required to finish the project before Christmas. Although we are in a hurry, we are still confident that we’ll be able to meet the deadline,” explained the project’s director, Xiong, whose name we’ve changed for this story in order to protect his identity. At just 26 years old, he is very young to have this much responsibility overseeing such a large project.

Efficiency is one area where Chinese and African perceptions often differ quite a bit. Nonetheless, director Xiong says he is able to avert problems through effective management and communication across his various teams. By averting problems before they materialize, director Xiong explains that he is able to avoid conflict and have his multicultural teams work together more effectively.

Firstly, according to manager Duan (alias), also a young English-speaking graduate in charge of pro-phase preparations like electricity conduction, the Chinese offer salaries that are above industry average, which he says, leads to higher employee morale and retention. The senior officer S.K. Kuloba in the Ministry of Labor, Social Security and services offers another explanation for this situation, suggesting it is caused by “perception.” Before Chinese companies came to Kenya, they thought that the labor prices would be high, but it turned out the opposite so they’re willing to pay more. He believes that salary is not a general problem among Chinese companies. Mr. Lu, an elite researcher in the field of labor conflict, also suggested that as a state enterprise, AVIC has the ability to offer higher salaries.

Secondly, Duan claimed that they provide extra benefits to encourage their local staff to work overtime while showing understanding even if some workers may be reluctant to do so. As the construction deadline approaches, everyone at the AVIC site now works 7 days a week. For local employees, unaccustomed to the intense pace, fatigue is a major issue along with complaints about the “crazy” hours that are now commonplace on this project site and at many Chinese companies in Kenya as well as across the continent. The labor deputy Kuloba concluded “the Chinese push projects, while local people feel odd when asked to work overtime.” It highlights a difference between Chinese and local expectations and different work ethics. Companies, he said, must strike a balance between “labor protection” and “labor productivity.” “People are not machines, they want to feel human,” the deputy said. For the Two Rivers project, Xiong suggested that at first, the workers were enthusiastic to work overtime for the extra money. However, after several months of long hours, with few, if any days off, fatigue began to set in, prompting more and more workers to take sick leave. “The local workers alternate work with rest, that’s why they’re always enlightened.” He even mocked the Chinese working style: “Africans live in the present and think in the present, while Chinese think about the future, that’s why we grow old so fast.” As a young, english-speaking Chinese graduate, Xiong demonstrates understanding and respect for cultural differences as he tries to avoid problems with his local employees.

The encouragement of working overtime is not limited on wages, but is also shown through welfares and extra benefits. Workers reflect that if they work past 11 p.m., they can get two glasses of milk, two pieces of bread, and 200 shillings as transportation fee. There’s doubt whether working 7 days a week is a violation of the labor law, but lawyer Christine A. Muga who has worked for a Chinese real estate company clarified that “all employees are entitled to at least one rest day for every period of seven days. However if the employer and employee agree otherwise, the employee must be compensated appropriately otherwise the employee can claim overtime for every extra hour worked, as stated in Section 27 of the Employment Act of 2007.”

Thirdly, Xiong claimed that they attempt to overcome language barriers both through helping those who don’t know English to communicate, and by allocating different human resource to departments with varied requirements. In fact, language is a major barrier in most Chinese companies in Africa. A worker who claims to have been unfairly dismissed from a Chinese construction project said, “It is ridiculous, they send people from China to manage us but we can’t talk. And they beat us for not doing our job correctly.”

For Two Rivers, Duan said that they were also troubled by language difference when the project first started. Most of the Chinese managers don’t have the education to speak English. The company was sued in court because a Chinese manager allegedly fought with a local employee atop a tractor who was injured when the Chinese manager pushed him off the vehicle. The Chinese company then failed to provide proper medical treatment or compensation, and was fined 50,000 shillings. After this incident, the The company started to become more conscious about the risks of miscommunication and opened Sunday classes to teach their local staff Chinese. They also employed local translators to send to the scene in the event of an emergency.

A middle age Chinese manager from the countryside in charge of leveling cement suggested that he uses his phones for translation when it comes to special terms, and uses body gestures to give orders. “We understand each other as we have been working together for more than half-a-year.” The scene of workers working in an orderly way proves that he is right. He also reports an interesting observation from the scaffolder section where a new language combining Swahili, English, and Chinese has been invented to help communication between Chinese and Africans co-workers. It seems that the result is promising after the process of getting to know each other.

However, another section of AVIC is having some difficulties with labor issues. On Feb. 14^th, I witnessed a case in the regional labor department where the section of AVIC that’s building villas in Karen had problems with the termination of a group of local employees. 10 workers reported that they were dismissed because they asked for protective gear when removing sewage and were given neither notice nor extra salary as they claimed to deserve according to Kenya’s labor law. “They threatened us that if we are dismissed we will be blacklisted, and we’ll never be able to work in the same company again. They are treating us like dogs.” One local worker, who has worked for three Chinese construction companies and has been constructing Karen Villas for two years, was extremely upset at the Chinese policies after being fired unexpectedly.

The officer Mrs. Mukanga showed disappointment in the Chinese companies and said “they are not cooperative enough” as they never respond to letters or come to meetings. I acted as a mediator and talked to the Chinese project director Mr. Gao, a young graduate from Civil Aviation University of China, who claimed he has never received the letter from the labor office. Though he has stayed in Kenya for 21 months, he is still not familiar with the labor law and he eagerly wants to learn the precise measures. He claimed that they are cutting employees as the project has come to an end and the workers are all casual workers. “I don’t know exactly how much we should pay as termination fee, and I don’t know who to trust.” The local lawyer Christine also confirms “the local departments could be taking advantage of their ignorance.”

This is among the most prevalent issues that Chinese companies encounter as they are not familiar with local labor laws. Lawyer Christine A Muga suggests that the only way to solve this is to familiarize with the local law at all times, as there are different ways of compensating different types of workers in different types of employment. “The best source for understanding the legal requirements would be a law firm which can explain the legal requirements and assist the businesses to come up with a framework within which to ensure that they comply with the law.” She advices the Chinese companies in order to efficiently eliminate labor issues.

Some local companies attempt to eliminate such conflicts by employing local labor agencies to handle their staffing . Beth Wanjira from Corporate Staffing Service, a local agency, said, “we can be your eyes, and ears on the ground to monitor and handle labor issues.” However, she recognizes that there’s no Chinese company among her clients. The Chinese manager Xiong claimed, “There are too many procedures to go through if I work with labor agencies, and I am not sure whether the workers would be suitable.”

The founder of the China House, Huang Hongxiang, concludes that for the Chinese it all comes down to the bottom line, “they see the extra cost, but cannot not foresee the benefits”.

References:

[1] http://news.xinhuanet.com/2014-06/24/c_1111276991.htm

[2] http://www.economist.com/news/middle-east-and-africa/21574012-chinese-trade-africa-keeps-growing-fears-neocolonialism-are-overdone-more

[3] http://www.chinairn.com/news/20140902/084744697.shtml

Hou Yixiao is a Shanghai native that graduated as an IB student from Fudan International School. Her interest in international business and human rights brought her to Kenya, a place where business opportunities are booming, but risks of labor-right infringements and misunderstandings are also growing. In addition to working as a China House Fellow, Hou was also a consultant at the Nairobi Labor Department to promote company-labor understanding. She is currently taking a year off to travel, learn, and explore before beginning her studies at Amherst College in the U.S.