Manufacturing Focus: Our Weekly Feature Article on Topics Related to Manufacturing Management  

- August 5, 2010 -

Supply Chain News Another Manufacturing Advantage for China - Low Safety Standards

Average of 187 Workers Killed - Per Day!  Government Again Pledges Crackdown; Risks for Outsourcers?




While China contemplates a manufacturing environment with higher wage rates and workers more aware of their rights (see Labor Dynamics Continue to Change in China as Workers get Bold), reminders last week that China has another advantage over Western manufacturers - a low focus on worker and factory safety.

Just least week, two more major incidents occured that were stark reminders that despite official statements from the Chinese government about safety and environmental concerns, the practice - and cost - of making improvements needed to get there are far from a reality.

SCDigest Says:

You wouldn’t want to work and live in some of the better factories in China, not even for one week, according to one observer there.

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First was an explosion of a propylene-gas line at a plastics factory in a densely populated section of the Chinese city of Nanjing, which killed at least 12 and injured dozens more outside the plant, many critically. At least 300 people were treated at area hospital and clinics as a result of blast-related injuries.

In addition to highlighting overall manufacturing safety issues in China, the accident illustrated the risks of placing manufacturing sites in crowded urban areas, a routine scenario in China.

The same day heavy rains led to chemical containers drifting into the Songhua River near the northern city of Jilin, leading authorities to cut access to tap water in the area. The cutoff, in turn, spurred a run on water in supermarkets, just as a major chemical spill in almost the same place five years earlier did. All told, some 1,000 containers filled with 160,000 kilograms of Trimethylchlorosilicane, a colorless, flammable liquid with a pungent odor, fell into the Songhua.

Unbelievably, in the first six months of 2010, at least 33,800 factory and mine workers have been killed in China -an average of 187 deaths each day. That is according to official government statistics, which likely to not capture the full total. The government said the 2010 figures were actually down some 11% from the deaths in the first half of 2009.

"Beijing's decadeslong emphasis on economic growth has overshadowed efforts to ensure safe workplaces and a clean environment. The Communist Party's singular role in setting policy leaves little room for counterweights, such as corporate gadflies or an activist press, that might alter the equation," the Wall Street Journal notes. "Corruption and collusion between, for example, factory owners and local inspectors limit the likelihood that laws protecting workers and the environment will be enforced."

Two years ago, USA Today wrote that "When China's senior safety inspector shows up on prime-time TV, it usually means that more Chinese workers have died in an accident. Li Yizhong [the safety inspector] has been in front of the cameras a lot lately," - and it doesn't appear much progress has been made since then.

(Manufacturing Article - Continued Below)




Chinese officials are quick to cite local collusion and corruption as being at the root of the safety issues, rather than a lack of the appropriate regulations.

When a mine accident in 2008 killed 20 workers, Li accused the mine owners of exchanging "life and blood for coal and high profits."

Later, he smashed a safety helmet to pieces on a rock to show its bad quality, and said a faulty mine in Shanxi province was "licensed by devils from hell."

But it is not clear that top-down anger has any real effect on China's industry.

Last week, the Chinese government pledged a crackdown on "illegal" manfacturing operations, meaning those operating without the proper permits. The government said these illegal operations were responsible for some 55% of "relatively major" accidents, defined as those in which in which three or more deaths are involved, ten or more are seriously injured or an economic loss above 10 million yuan ($1.48 million ) is caused.

The Chinese government last week also blamed the plastics factory explosion on lax local and plant safety standards, and renewed calls for more focus on worker safety.

However, some critics say the existing standards, even if followed, set a very low bar for Chinese manufacturers.

Michael Mesarch, a marketing manager at Asia Inspection, a factory inspection company based in Hong Kong, recently said that Western companies outsourcing production to China need to become more in tune with what is going on in terms of factory safety there.

“My opinion is that you have to follow the standards, but you can’t do the minimum you can get away with," Mesarch said. "You wouldn’t want to work and live in some of the better factories in China, not even for one week."

Is China's lax overall stance on workplace safety a real cost advantage? What are the risks for multi-nationals contracting work to Chinese manufacturers? Let us know your thoughts at the Feedback button below.


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