Chamber clarifies position on China's draft Labour Contract Law

----By Mark Godfrey

Implementation of existing labour legislation is essential before China introduces new legislation aimed at protecting workers' rights, according to the European Chamber. Commenting on a draft of China's new Labour Contract Law, then-Chamber Executive General Manager Giorgio Magistrelli told a press conference in Beijing on December 8 that the Chamber supported the principle behind the proposed law. "But challenges in the country's labour system, such as worker abuses, won't be resolved with additional legislation alone."

The Chamber was one of 200,000 organisations and individuals that submitted comments when the National People's Congress (NPC) called for comments on the first draft of the Labour Contract Law in early 2006. Drafted as part of China's blueprint for a "Harmonious Society", the new law proposes stricter labour contracts to restrict the grounds on which employees can be fired. New legislation without enforcement of existing law, however, could actually worsen the situation by "widening the gap between law and implementation," according to Magistrelli.

The current Chinese labour law, by limiting the maximum labour week to 44 hours and guaranteeing a minimum employment age, broadly matches international standards, Magistrelli said. "But the lack of implementation at provincial level raises much concern." The new Labour Contract Law, he added, would not make China less competitive, as had been suggested when the draft law was first announced. "Most European companies are in China for the local market. Better labour conditions can only result in increased purchasing power of workers and a bigger market for investors in China." While welcoming government efforts to protect workers, the European Chamber, said Magistrelli, is also encouraging improved labour conditions through its Corporate Social Responsibility (CSR) Working Group. The group is encouraging Chinese companies to share best CSR practices by improving supply chain management, corporate governance and environmental practices.

Waste not, want not

New Chinese, EU laws prohibiting lead and other dangerous substances explained to importers of electrical, medical goods at Chamber conference

----By Mark Godfrey

Chinese regulations on the restriction of the use of hazardous substances in electrical and electronic equipment (ROHS), set to take effect on March 1, will be even more restrictive than a similar EU directive which entered into force in July 2006, according to industry experts. New legislation in the EU and China restricting six environmentally harmful substances, including lead and mercury, was discussed by regulators and executives at an EU-China conference on ROHS organised by the European Chamber on December 4 and 5.

Although the aims of recent EU and Chinese regulations on hazardous substances are similar, enforcement methods differ in each territory, explained Klaus Ziegler, standards officer at the European Commission's delegation to China. "In the EU, the producer is responsible for compliance," Ziegler told the Beijing conference. "Whereas the EU does not require compulsory certification or labelling or the use of standards, China requires labelling of all products and packaging."

European industry and officials are seeking more convergence between the two ROHS codes to ease market entry for exporters in China and the EU. Chinese firms, including TCL and Haier, earlier voiced concern over the cost of adjusting the content in electrical exports to adhere to the EU's new ROHS directive. Yet whereas EU law expects companies to comply voluntarily, the new Chinese law will require every product covered by the ROHS regulations to be tested and labelled before it is allowed into China.

EU regulators are encouraging China to either remove the compulsory certification requirements or accept manufacturers' declarations based on voluntary schemes developed by accredited certification organisations in the EU. "It appears that there will not be any other method for compliance with any other standard," suggested Robert Hine, business development manager at the British Standards Institution. "The Chinese regulations will apply to manufacturers and distributors as well as importers and retailers, who are required to have imports tested to comply with Chinese standards for compulsory certification." The Chinese version of ROHS, said Xing Weibing, vice chief engineer at the China Electronics Standardisation Institute, will block foreign products that have been turned down by the EU market from being dumped in the country. "Mainland consumers will benefit as the law will restrict companies who prefer to sell quality products to the EU, while marketing inferior ones on the domestic market."

While the list of hazardous substances is identical in each law, it is unclear if the maximum allowable values will be the same in both. Whereas the EU allows exemptions and applications for further exemption, such as for spare parts for goods placed on the market before July 2006, there are no exemptions included in the Chinese regulation. All products covered by the regulations must be labelled, indicating the amount of each substance present, after March 1.

ROHS legislation is seen as necessary to ease the environmental impact of electrical and electronic equipment waste, which has been multiplying three times faster than the rate of municipal waste in EU countries. Toxic chemicals have caused environmental damage after leaking into the soil when PCs and other electronic are dumped into landfills.

Wine and food matching at high-level events

Wine matching is about recommending the best wine to match the food being served; further enhancing the combined pleasure of both the course and the wine.

After many years of actively supporting European companies in China, the European Chamber hosted a large-scale dinner in honour of MOFCOM Minister Bo Xilai. Held next door to the Ministry of Commerce on Beijing Chang'an Avenue at the Grand Hyatt on September 4, the gala dinner celebrated China's five-year WTO partnership.

In an effort to further share the European lifestyle, Bacchus Wines proudly displayed a selection of wines in accordance with the courses that were served that evening. Benefiting from long experience in the Chinese market, Bacchus Wines focuses on the premium market, introducing French wines with an attitude.

Every major European company joined the dinner. All 500 available seats sold outwithin three weeks as proof of its success. The Grand Hyatt Beijing and European Chamber teams showed great care in the execution of the event. The ballroom of the hotel was evenly mixed with executives from China and Europe. Media were also in attendance to record the minister's speech.

After the introduction by European Chamber President Serge Janssens de Varebeke, Minister Bo Xilai delivered an excellent speech. In his accustomed ease, shifting between Chinese and English, the minister displayed a skilful sense of humour and leadership.

The first French wine served was a cool Saumur red, Domaines les Salaises, served at 14 degrees Celsius. Barbequed meats and jelly fish platter were pleasantly matched with the explosive raspberry nose and light-bodied cool red. This experience appeared to be a pleasant first try for many guests.

The second wine came from the neighbouring region of St Emilion, in Bordeaux. A soft wine with mild red berries and a smooth finish, the Chateau de Mauperey 2003 introduced the hot and sour soup with lobster. It then gave room to the specialities from Minister Bo's home province of Shanxi, displaying a pleasant balance of both fragrance and body.

Steamed garoupa with premium soy sauce and spring onion was served during the last speech. This became the turning point for the last wine to be served: a sweet, though mineral and refreshing, white wine from the Loire region.

Not surprisingly, the Domaine de la Roche, Coteaux du Layon AOC 2004 pleased both the lovers of sweet whites and those who enjoy a clean and refreshing wine. The vine dry soil made of clay brings a good hint of herbaceousness and minerality, balancing the high level of sugar found in this half-sweet wine.

Following the dinner the key guest left the room relieving participants for the night, leaving expectations for an even greater night next year.

Xavier Tondusson - Bacchus Wines