After being elected president, Michael Sata has softened his combative stance towards Chinese mine owners so now the trades unions are leading the charge

After just two months in office, President Michael Chilufya Sata has made a complete turnaround in his attitude to China. He once criticised Chinese investors but now wants to use them to develop Zambia’s economy. The full force of his government is focused on reassuring its partners in Beijing, leaving workers and human rights groups to attack the activities of Chinese mining companies. In opposition, Sata (aka King Cobra) blamed Chinese investors for abuse and corruption; as President, he blames the former government for fraud in handing out working papers.

Every ministry that has any dealings with the Chinese government or Chinese companies has started a charm offensive. At a 28 October State House luncheon given by Sata for the Chinese community in Zambia, he told Ambassador Zhou Yuxiao that he would send Zambia’s founding President Kenneth Kuanda to Beijing to thank the Chinese government for its investment and aid. Rather than blame Chinese companies for unreliable construction projects or for bringing large numbers of Chinese labourers into the country, Sata blames the former government.

After lunch, Minister of Mines and Mineral Development Wylbur Simuusa told Chinese companies the government hopes for a period of unprecedented good relations with Beijing. He echoed the new Patriotic Front government’s message that China’s investments will be protected and that its companies will be able to engage in any economic activity as long as they respect Zambia’s laws. At China’s Lusaka Embassy on 31 October, Simuusa reassured Ambassador Zhou that he would work to reduce misunderstandings between the two governments after the recent labour unrest. Simuusa then left for an official visit to China.

On 2 November, Finance Minister Alexander Chikwanda told Zhou that China is Zambia’s most reliable partner. His ministry will set up a unit to work more closely with the Embassy on the follow-up of Chinese projects.

Since defeating incumbent Rupiah Banda and the Movement for Multiparty Democracy (MMD) in the 20 September polls, Sata’s popularity has soared. After campaigning on populist slogans of ‘more jobs, less taxes and more money in your pockets’, he has made huge statements and attempted to reverse the Banda government’s more unpopular decisions. Sata, who says his PF will lead Zambia on the principles of the ten commandments, has pledged zero tolerance for corruption.

Sata's shake-up
In the first month of his presidency, Sata fired Bank of Zambia Governor Caleb Fundanga and its board, reversed the FirstRand takeover of Finance Bank, briefly halted metal exports and purged elements of the Anti-Corruption Commission, Drug Enforcement Commission, the police and Zambia Defence Force. He also directed that the minimum wage for non-unionised industrial workers be increased from 419,000 kwacha (US$85) to K1 million. Sata’s changes, so far, have focused on pro-poor programmes and combating corruption in the civil service. He promised drastic change within 90 days. His critics argue that some of his pronouncements and decisions on graft are not genuine but perceived. ‘This has come at a cost, promoting a high level of uncertainty,’ says a governance expert.

Workers saw the victory of Sata, a vocal critic of Chinese workplace practices (AAC passim), as a signal for poorly paid Zambian workers at Chinese mines to demand better working conditions. ‘The workers have expressed their views [at the ballot box] and now they feel liberated,’ Labour Minister Fackson Shamenda said on 24 October. Chinese-owned mines and industries have been hit by an unprecedented wave of industrial unrest. Chinese companies, chiefly in the mining sector, have suffered the brunt of the wild-cat strikes in the wake of Sata’s election.

The ‘Chinese have been responsible for the economic growth seen in Zambia in recent times… and therefore it goes without saying that instability at Chinese [mining] operations spells doom for the economy,’ an industry expert told Africa-Asia Confidential, adding that ‘the President needs to take responsibility for these strikes because ultimately the buck stops with him.’

Zambians working in Chinese mines are some of the lowest-paid employees in the hazardous mining sector. Sata won by a huge margin in Copperbelt Province, where he has enjoyed unwavering support since the 2006 polls. Under the MMD government, workers complained that foreign capital took precedence over workers’ welfare. Labourers continue to work under poor conditions and without proper protective equipment (see box).

Chambishi Copper Mines, owned by Non-Ferrous China Africa, was hardest-hit by the strikes that started on 18 October. On news of Sata’s elections, NFCA gave its 2,000-strong workforce a pay rise of 85%. The windfall was not meant to last for ever. The workers resisted the reversal and the mine had been rocked by stoppages, resulting in millions of dollars in losses. Sata has avoided commenting on the matter but both Labour Minister Shamenda and Mines Minister Simuusa backed the miners’ demands as ‘justified’. Sata sent a Simuusa-led delegation to resolve the matters using quiet diplomacy.

Artisans and craftsmen at NFCA are paid between K850,000 and K1.1 mn. Labourers contracted by NFCA’s main underground contractor, JCHX, are paid K450,000. ‘We want equal pay with KCM [India’s Vedanta Resources-owned Konkola Copper Mines] and Mopani,’ shouted one of the protesting miners at NFCA. ‘We did the same copper and sell it to the people; we need to be paid the same,’ said other protesting miners.

Union sympathies
Former trades unionists occupy the top jobs at the three ministries that deal most with Chinese mining companies. The Labour Minister, his Deputy and the Mines Minister all share a union background. They engaged the Chinese companies in talks about wages rather than leaving it to the unions. On 11 October, Deputy Labour Minister Rayford Mbulu directed NFCA to award workers a K2 mn. salary increase to align pay standards with other firms. Ambassador Zhou stepped in to defend the interests of the state-owned NFCA on 24 October: ‘The increase is a bit too much and not realistic.’

A source at Chambishi said that NFCA sent representatives to other major mining companies in 2010 to investigate their pay structures but did not change its practices after finding that it paid less. After the sacking and rehiring of more than 1,000 NFCA workers on 23 October – with the threat of sorting out the troublemakers – a new round of talks started. On 1 November, the mining companies and unions started a two-month negotiation period about collective bargaining agreements.

Christopher Silute, the Deputy National Secretary of the National Union of Miners and Allied Workers, told AAC that the unions want the government to let them represent workers. ‘When we go to negotiate for higher salaries, what we are usually told is “your government has told us when we signed these agreements that the minimum wage here is ABC”, so it becomes very difficult because we don’t know what they’ve agreed.’ He said that Chinese miners originally opposed unions but the current government’s intervention means that all workers can join a union.

Meanwhile, a research note at the Chinese Ministry of Commerce suggested that these moves towards better regulation would squeeze profits at a time when global copper demand is flagging, ultimately affecting Zambia’s ability to attract investment.
Source: AFRICA-ASIA CONFIDENTIAL