Chinese battery producer fails to be a decent employerPhoto: 8-10 December 2009 strike at Power Pack in Huizhou.

Chinese battery producer Gold Peak Industrial Holding Ltd is under fire by Chinese and international labour groups for failing to be a decent employer. Year-long struggles of (ex-) workers with cadmium related health problems have not yet resulted in an acceptable solution. Gold Peak unilateral decision to close down and relocate its Shenzhen-based Jet Power plant, completely disregarding workers interests, has caused distress. Recently, a strike erupted at Power Pack, another Gold Peak subsidiary in Huizhou, over wages and benefits. The management's response so far has been totally inadequate. Chinese labour groups have addressed Gold Peak via two open letters, dated 10 and 30 December 2009 respectively. Gold Peak batteries are used in all types of toys and electronics products. JOIN GoodElectronics in its urgent appeal to Gold Peak!

Chinese battery producer fails to be a decent employerPhoto: 8-10 December 2009 strike at Power Pack in Huizhou.

JOIN GoodElectronics in its urgent appeal to Gold Peak


What preceded

On 28 April 2009, on the occasion of the International Commemoration Day for Dead and Injured Workers, GoodElectronics reported about the ongoing struggle of Chinese cadmium poisoned workers, addressing their (former) employer Gold Peak Industrial Holding Ltd for compensation and redress. GoodElectronics called upon Gold Peak and its subsidiaries to listen to the concerns and demands of the affected workers and take appropriate steps to resolve the lingering conflicts. Moreover, GoodElectronics called upon electronic brand name companies sourcing from Gold Peak to look into the issues raised by Gold Peak workers and Chinese labour groups and to put their policies regarding supply chain responsibility in practice.

 

Current situation

At the moment, there are still several unresolved issues at hand, the industry is yet to take meaningful steps. Non-governmental Chinese labour groups, including Globalization Monitor Ltd., Asia Monitor Resource Centre and the Justice and Peace Commission of the Hong Kong Catholic Diocese, are continuously monitoring developments at Gold Peak production sites. Recently, on 10 December 2009 and on 31 December 2009, they have addressed Gold Peak via two open letters.

 

Power Pack

The most recent controversy addressed by Globalization Monitor Ltd. and others concerns bad labour practices at Power Pack, a Gold Peak subsidiary in Huizhou, China. For years, workers have had to put up with low wages and the curbing of benefits. Workers are dissatisfied with the company’s long-standing practice of differential treatment of workers. The daily base pay of older workers is a mere 33 Yuan (about 3 Eur), while workers in other plants in the zone receive 40 Yuan. While wages remained low, food prices have been soaring. In previous years, food and lodging were provided and workers received end-of-the-year, travel, and other benefits. All this has been cut, without any consultation or explanation. Discrimination of payment also exists among cadmium-affected workers who stay in the Occupational Health and Safety hospital.


Strike

In December 2009, the growing dissatisfaction amounted to a two-day strike in which reportedly some 1,000 workers participated.

The strike started on the morning of 8 December with older workers putting work down, joined by combination and assembly workers. The strike soon turned sour when three workers were locked up and treated badly by the company’s security guards. In the course of the strike, workers blocked the gates as well as the main road to the compound. The Power Pack

managing director stepped in to negotiate with the strikers but no agreement was reached. 

 

On 22 December 2009, four employees of Power Pack were summoned to the local police station, to assist in an investigation into the road blockade by striking workers of Power Pack on 9 December. Among the four was Ms Wang Fengping, a 45-year old engineer employed with Gold Peak since 1995. Ms Wang suffers from severe kidney failure, caused by cadmium exposure while working for Gold Peak. Ms Wang was released after being questionned for more than 10 hours on account of her medical condition; the three other workers were kept in detention until 2 January 2010. Following the detention at the police station, Gold Peak has fired Ms Wang. 

 

Demands

In their open letters to Gold Peak, the labour groups demand that the Power Pack management looks into the violence used against workers by the company’s security guards, and to pay the full hospitalisation costs of the workers injured by this violence.

Besides this, Globalization Monitor Ltd. and the other groups call upon Gold Peak to ensure that the Power Pack management engages upon proper negotiations with its workers and their representatives on the basis of equality and transparency, in order to resolve disputes over wages and benefits.

Globalization Monitor Ltd. and others stress that the right to assembly is a basic right according to the Chinese constitution. Dismissing an employee as a punishment for her being detained by the local police is unacceptable.

Globalization Monitor Ltd. supports Ms Wang in her call for compensation, and calls for the rehabilitation of the three other wrongfully detained workers.

Reportedly, the management agreed to increase the daily wage by 1 Yuan, but the prevailing opinion is that this offer is far too low. Workers feel their year-long loyalty to the company is not properly recognised and rewarded.

 

Cadmium

These recent problems at Power Pack are set against the background of the unresolved issue of the compensation of Gold Peak workers who have been exposed to cadmium.

Over the past years, hundreds of workers involved in the manufacturing of cadmium batteries have been diagnosed with cadmium poisoning or excessive cadmium levels in their urine. Till this date, the Gold Peak management and the workers have not been able to reach an agreement over diagnosis methodology and compensation packages.

Since October 2008, 19 Gold Peak workers with cadmium-related health problems have filed law suits against their former employer. So far, eight workers won their cases and received more than 90,000 Yuan (about € 9,200) as compensation.  In settlements reached outside of court, some workers got around 150,000 Yuan as compensation and reimbursement. Gold Peak now insists, however, that complainants have to follow court procedures to claim compensation, and is not willing to settle out of court. Court procedures, however, take awfully long and are especially burdensome for workers plagued with health problems.

Mid-August 2009, Globalization Monitor Ltd. supported workers with excessive levels of cadmium, to file a petition at the Ministry of Health, arguing that the official standard for diagnosing cadmium poisoning is too strict and the period allowed for tracking its impact is too short. These workers have all undergone medical tests that confirm excessively high levels of cadmium in their urine; however, they were not formally diagnosed with cadmium poisoning. As a consequence they are not entitled to compensation. So far, the Ministry has not yet responded to the petition.

 

Jet Power

A related issue is the closure of Jet Power, a Gold Peak subsidiary in Shenzhen and the relocation of production to Huizhou. The decision was announced in April 2009 and was to take effect in December 2009. Jet Power workers responded with great concern, afraid to lose their jobs, and with GP no longer responsible for their medical treatment. Globalization Monitor Ltd. pointed the finger at Gold Peak for trying to make use of a loophole in the Chinese labour law that stipulates that a company is not obliged to pay compensation for workers under medical observation. Despite the announcement to close the plant by December, Gold Peak effectuated the closure of Jet Power by 20 October 2009. At that time, 14 workers among the Jet Power work force had cadmium-related health problems - their contracts were terminated. With the advanced closure, they feared to loose out on two months of wages and social security. Under pressure, Gold Peak agreed to a fairly reasonable compensation package for this limited group of workers. For every month of service, the workers are to receive 1.3 times the average monthly wage. Luckily for the workers, the March 2009 wage was taken as a benchmark, a month in which more hours were worked than in any other month that year. On top of this, workers received an extra compensation of 10,000 Yuan, as well as a 5,000 Yuan subsidy from the trade union, and monthly nutrition fee of 300 Yuan until cadmium levels are back to normal. The other Jet Power workers were offered jobs in Gold Peak plants in Huizhou, or to accept dismissal.

 

JOIN GoodElectronics in its urgent appeal to Gold Peak

It is high time for Gold Peak to structurally improve its labour record. Gold Peak should ensure that the management of its respective subsidiaries engages upon meaningful negotiations with its workers and their representatives on the basis of equality and transparency, in order to resolve disputes over wages, benefits and compensation packages.

GoodElectronics will again address buyers of Gold Peak products.

 

Further information

For some background on the disputes between Gold Peak and its cadmium-affected employees, see the article 'Toxic Factories Take Toll On China's Labor Force', in the Asian Wall Street Journal by Jane Spencer and Juliet Ye, of 15 January 15, 2008.

 

Globalization Monitor Ltd.

Globalization Monitor Ltd. is continuing to put efforts in making contact with Gold Peak battery workers and ex-workers with excessive levels of cadmium who are still fighting for their rights. Globalization Monitor Ltd. is strongly focused on making workers aware of their rights. A first core of informed workers has set up a mutual aid network to serve as a focal point for their fellow workers.

 

Further to monitoring the Gold Peak case, Globalization Monitor is taking an industry-view, monitoring trend of the overall battery industry. Nowadays, new types of batteries are taken into production, including Lithium-Ion, Lead-Acid and Nickel- Hydride batteries which are for high-tech products such as environmental-friendly and energy-saving vehicles and computer products. Some of these types of batteries may not contain cadmium; but it does not mean that all health risk can be excluded. Globalization Monitor Ltd. is particularly concerned about the occupational health and safety risks of workers producing such batteries and will continue to closely monitor the working conditions in these new areas.