SA8000 requires positive attitude

Xia Yueming, president of Zhejiang-based Mishuai Apparel Co, is basking in an increasing number of international orders since his private company passed SA8000 certification, according to Tuesday's China Daily.

"Now we can directly supply US clients instead of resorting to other traders, thanks to the certificate," Xia said.

But not everyone is as lucky as Xia.

More and more Chinese firms are told by their European and US clients that they should meet these criteria before they can talk business, a move local firms dub as a "trade barrier."

Social Accountability 8000 is a set of voluntary labour standards initiated by the US-based Social Accountability International (SAI) in 1997, which ensures that retailers, brand companies, suppliers and other organizations maintain just and decent working conditions throughout the supply chain.

However, experts urge Chinese companies not to dodge the challenge, saying they should be integrated into the global certification system if they want to make a bigger impact on the international market.

Meanwhile, they also call for concerted efforts from governments, associations and certification agencies to ensure Chinese exporters play on a level ground.

About 50 Chinese firms had been approved as meeting the standards by the end of 2003.

Most of those certified are located on South China's Pearl River Delta, one of the country's thriving processing trade centres.

Contents of SA8000

SA8000 is the most influential labour standard in which enterprises are judged by work conditions, treatment of workers by management, discipline and compensation.

A number of multinational corporations in the United States and Europe such as Avon and Wal-mart ask their suppliers to meet the standards.

Some of the requirements include:

Child labour: No workers under the age of 15; minimum age lowered to 14 for countries operating under the International Labour Organization defined exception; remediation of any child found to be working

Forced labour: No forced labour, including prison or debt bondage labour; no lodging of deposits or identity papers by employers or outside recruiters

Health and safety: Provide a safe and healthy work environment; take steps to prevent injuries; regular health and safety worker training; system to detect threats to health and safety; access to bathrooms and potable water

Freedom of association and right to collective bargaining: Respect the right to form and join trade unions and bargain collectively; where law prohibits these freedoms, facilitate parallel means of association and bargaining

Discrimination: No discrimination based on race, caste, origin, religion, disability, gender, sexual orientation, union or political affiliation, or age; no sexual harassment

Discipline: No corporal punishment, mental or physical coercion or verbal abuse

Working hours: Comply with the applicable law but, in any event, no more than 48 hours per week with at least one day off for every seven day period; voluntary overtime paid at a premium rate and not to exceed 12 hours per week on a regular basis; overtime may be mandatory if part of a collective bargaining agreement

Compensation: Wages paid for a standard work week must meet the legal and industry standards and be sufficient to meet the basic need of workers and their families; no disciplinary deductions

Management systems: Facilities seeking to gain and maintain certification must go beyond simple compliance to integrate the standard into their management systems and practices.

Firms' worries

"A new export barrier!"

That is the immediate response when Chinese exporters are requested by foreign clients to obtain a SA8000 certificate.

The voluntary standards could become a trade barrier that consumes the profits of Chinese exporters and deny them their biggest advantage in foreign trade inexpensive labour, a key factor of production cost is likely to be reduced, they claimed.

"If we run our plant according to SA8000, our profits would be diminished a great deal," said an unnamed manager of a toy company, who said he has studied the standards word by word.

He insisted that although his plant does not reach the standards in some areas, it outperformed them in others.

South China, with its booming export-oriented economy, feels the pinch of the SA8000.

An increasing number of plants there have lost international orders due to demerits under the SA8000 requirements.

Another concern is the cost needed for passing the certification itself.

Expensive, the firms cry, as most of them are private and small-scale players seeking quick returns.

According to calculations, a 1,500-employee company will spend 230,000 yuan (US$27,811) on the first-time accreditation and following reviews for three years.

These firms also complained about the lack of available SA8000 consultants.

Chinese producers of electronic products, apparels, textiles, toys, sporting equipment and shoes are thought to be most vulnerable to the strict requirements.

Not a big threat

"Chinese firms need not to be fussy about the SA8000," said Fan Ying, a professor at China Foreign Affairs University.

"The good side of the issue will prevail over the negative impact if we handle it properly."

Beijing-based analysts soothed industrial worries that the SA8000 requirements would reduce the benefit of access to an inexpensive labour force and affect its exporting advantage.

Long Yongtu, chief negotiator of China's World Trade Organization (WTO), said cheap labour should not be equated with dire working conditions or neglect of social accountabilities.

Long is now the secretary-general of Bo'ao Forum for Asia.

Among 500 million rural labourers in China, 20 per cent will become workers in the coming two to three decades as urbanization gathers pace.

China's labour price will not be raised very rapidly during this period as the country has such a large number of "back-up" workers, and thus the country's trade advantage will remain at least 20 years, he said.

China has formulated a set of laws, regulations and standards concerning labour and work conditions.

If the employers strictly abide by these rules, said senior certification verifier Huang Xiaolan, at least 90 per cent of Chinese firms should be fearful of the seemingly harsh SA8000 requirements.

"Many SA8000 requirements are within the local laws," she added.

Firms' concerns are mostly based on their ignorance of the standards and they take it for granted that SA8000 will be very hard to reach, said Fan.

Analysts agree that SA8000 will help improve the country's work conditions and rectify the foreign image that Chinese labour standards are low.

"Those firms who do not plan to pursue certification should also improve labour standards approaching those in the SA8000," said Zhao Shuhua, a researcher at the Chinese Academy of Social Sciences.

But experts also expressed their concern that the certification would be abused by some developed nations to curb cheap Chinese products.

This concern accelerates as the global quotas for multi-fibre products are due by the end of this year.

It is widely predicted that more trade barriers will be imposed on Chinese textile exports.

Further efforts

China should take an active role in shaping the SA8000 standards, which are still being tested and improved on the way to becoming a set of international norms, said Zhao.

"Most imperative for the Chinese Government to deal with regarding the SA8000 impact is to define and specify the standards along with other countries under the negotiating mechanism of the WTO," he said.

The standards should not be abused or biased when they are implemented, Fan added.

"And SA8000 should be localized," she said, "we cannot expect China, a developing country with such a big population, to afford the same high-level labour standards with developed economies."

Analysts also call for the government to formulate a set of standards that cater both to Chinese conditions and comply with international norms.

In addition, the Certification and Accreditation Administration of China (CNCA) should rev up efforts to put SA8000 on top of its work agenda, Zhao said.

CNCA should add SA8000 to its certification list and organize relevant agencies to help firms familiar with the standards.

As for how to deal with similar certification requests in the future, Zhao believes an early-warning system is needed to trace the changes in international standards.

Source: China Daily