New guide on social responsibility for Chinese contractors abroad

December 14, 2012

The China International Contractors Association released its Guide on Social Responsibility in September. The text, which is bilingual and clearly adapted to the lingo of international CSR, mostly sticks to generalities and exhorts companies to obey laws — for example, by paying taxes (article 4.7.3).

Nonetheless, some parts go beyond the language we have been used to. For example, article 4.2.1 recommends treating job applicants of “different ethnicites, genders, races, nationalities, age, religions, disabilities, marital status and sexual orientation equally.” Such language is unusual in China, and although hiring disabled candidates in the construction industry may not be very realistic, it is nonetheless a nice idea. The same article also advises against the use of child labour, but since this is illegal in China, it is already covered by the Chinese government’s requirement that Chinese companies abroad comply with Chinese as well as local laws. Article 4.4.3 recommends localised procurement, and article 4.4.2 advises incorporating CSR standards into subcontracting arrangements.

According to International Rivers’ (IR) useful guide to the state of China’s international dam building industry, The New Great Walls, an updated version of which has just been released, Sinohydro’s 2011 policy, developed in consultation with IR, goes far beyond these guidelines: it adopts the World Bank’s principles on infrastructural projects, mandates “community” consultation and access to social and environmental impact assessments, commits  to a dialogue with NGOs, and requires at least equal income and livelihood levels for those displaced by projects. It also required informed consent by “Indigenous Peoples” where applicable, an interesting fact as China is not a signatory to the UN convention on indigenous peoples and the term is not used in China.

According to The New Great Walls, there were “at least 308 dam projects … in 70 different countries” being built with the help of Chinese contractors or financiers as of August 2012.

http://www.internationalrivers.org/resources/the-new-great-walls-a-guide-to-china%E2%80%99s-overseas-dam-industry-3962


The Malaysian dam case

April 12, 2012

On Chinadialogue, Kirk Herbertson of International Rivers describes the 12 ongoing dam projects by Chinese companies in the Malaysian state of Sarawak as a “time bomb of local opposition and a public relations disaster waiting to happen.”

Since the shutdown of the Myitsone dam project in Burma, Chinese media have been abuzz with talk about better political risk assessment for megaprojects abroad. Herbertson cleverly ties in with this by blaming not the Chinese companies for ignoring local livelihoods etcetera, but the Sarawak state government for misinforming them on the risks — both business risks, as power generation in Sarawak may not be as lucrative as expected, and what political risks — he does not call them that, but the Chinese press would — of indigenous litigation. “According to Mark Bujang, head of the Borneo Resources Institute of Malaysia, there are 327 ongoing court cases related to native customary land issues.”

Malaysia is a complex sem-authoritarian semi-democracy, with competing political establishments and with an increasing recognition of  “native title.” So in case “indigenous groups” indeed sue a Chinese company, it will be somewhere in between places like Burma or Cambodia, where local groups can only pursue their interests via global coalitions with foreign partners, and Canada or Australia, where “First Nations”  and land councils are demanding to negotiate with  “the Chinese”  directly. In Ecuador (see News, 16 March) or Peru, where Indian groups are demanding that Chinese gold miners negotiate access rights with the “community,” the situation is similar to Canada or Australia but enforcement is less strict.


Burma stops Myitsone dam, or the extraordinary Peter Bosshard

October 2, 2011

In a second, but much larger setback — or sign of a policy change? — following the announcement of Southern Grid’s withdrawal from Cambodia, the Burmese president has announced the stopping of the construction of Myitsone Dam, the largest planned dam in Southeast Asia and the largest Chinese hydropower project abroad, which has been the source of armed conflict in northeastern Burma. Environmental organisations and ethnic ceasefire armies, as well as the Burmese democratic opposition, have opposed the project.

Although other Chinese dam plans in northern Burma are going ahead, there are signs that the Chinese government (or some of its agencies) is once again demonstrating sensitivity to criticism and political risk. I have written about how existing Chinese criticisms of the wastefulness and lack of foresight in Chinese investments abroad, probably already embraced by the Development and Reform Council, were amplified after the loss of projects due to the ouster of Gadhafi in Libya. Since then, several high-level government officials called for better risk assessment before projects go ahead.

Days before the Burmese announcement, a Chinese trade publication called 中国能源报 (Chinese Energy) published a remarkable interview with Peter Bosshard, director of International Rivers and one of the main campaigners against the Myitsone dam. The interview, which was then posted on the People’s Daily website, was occasioned by the IPO of Sinohydro on several stock exchanges. The IPO was more limited than originally planned due to delays in a number of contracts. Even so, it is extraordinary that a publication subordinate to the Ministry of Energy would publish a critical article featuring a foreign activist instead of celebrating the success of the IPO. (In the article, very unusually, only Bosshard’s Chinese name is used, so that readers may be unaware that he is a foreigner. Citing foreign critics in such contexts is routinely associated with hostility to China.) Such an act almost certainly signals a policy shift on the part of the ministry, which must already have known, and probably been consulted on, the Burmese decision.

The article mentions that International Rivers has consulted Sinohydro repeatedly, and cites Bosshard as saying that the company has now agreed to refuse projects that are seriously damaging to the environment or local society, including any project in a World Heritage area or national park; that it will enter into dialogue with local “communities” before carrying out a project; that it will set up a complaint mechanism; and that it will implement World Bank social and environmental impact assessment guidelines as a minimum standard.

But these measures are explained in terms of managing risk, rather than as ends in themselves. Bosshard is quoted as saying that they are necessary if Chinese companies are to solve “problems of reputation and control.” There is no doubt that International Rivers’ willingness to adopt such language instead of that of radical environmentalism that has given it unprecedented access to Chinese hydropower companies and state media.