Articles

Zambia: Mixed Reactions to Chinese Investments

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By Charles Mafa*
IDN-InDepth NewsReport

LUSAKA (IDN) - China’s voracious appetite for natural resources has driven a boom of investments and aid to African countries. In the Southern African country of Zambia, Chinese companies are building roads, hospitals, sports stadia as well as reviving copper mines abandoned in the country’s Copperbelt region.

The Chinese have also chosen Zambia as the place to set up its first out of five free trade zones in Africa. The Chambishi multi-facility economic zone on the Copperbelt is anchored by a 200 million US dollar copper smelter. It is also meant to manufacture "TV’s, mobile phones and other electronic items".

According to government sources, over 5,000 local jobs have been created and at completion, the zone will have up to 60 Chinese companies, employing 60,000 local people.

At the heart of this huge investment is the unsettled question of Chinese investment in Zambia, particularly the poor relations between the workers and their Chinese employers.

The recent killing of a Chinese supervisor during a protest by workers over wages at Collum coal mine reveals the growing frustration over bad working conditions in some of the Chinese run companies, observers say.

Chinese owned Collum mine, 350 kilometres south of the capital Lusaka, is not alien to controversy, with a string of complaints and even gunfire in the past.

In 2006, the then minister for Southern Province, Daniel Munkombwe shed tears on national television saying workers were "kicked and beaten as though they are not human beings" and working without safety equipment.

In 2010, a protest by workers was met with indiscriminate gunshots into the crowd from Chinese managers, injuring 11 Zambians. Charges against the culprits were subsequently dropped under the previous government.

The current president, Michael Sata, while in opposition fought his way to power over a sequence of four elections by taking a hard-line stance on labour abuses in Chinese owned companies. Analysts are faulting Sata's party, the Patriotic Front, now in government, for the existing workers' hostility towards the Chinese in the country.

"You have to reverse the bad scenario that was very much fuelled by the political preferences at the time the PF (Patriotic Front) were strategizing with the Taiwanese government," said Professor Oliver Saasa, a prominent business and policy consultant.

The professor of international economic relations added: "The Chinese are scared, the Chinese are threatened, the Chinese know they are not welcome. . . . Government now, must invest their time in making the Chinese feel that they are welcome."

But Foreign Affairs Minister, Given Lubinda told national television that: "When we were in opposition, we were calling upon Chinese companies and all other companies to provide conducive working environment for the Zambian people."

Chinese ambassador to Zambia tried to repair the damage caused by disapprovals from locals. Zhou Yuxiao said the Chinese get unfairly singled out for the problems in the country's more than a century old mining industry.

"Zambia's mining industry is as long as almost 100 years old but the Chinese mining companies have been here only for the last, let's say 10 years . . . ," the ambassador said at the first anniversary of the Levy Mwanawasa Hospital built by the Chinese, "if China is going to be blamed, we are going to be blamed for the 5% and for the last five years, no more than that".

Carlen Banda, whose real name has been withheld on request, a cashier in a Chinese firm dealing in household goods, said she has had no problems with the conditions of service offered by her company.

"You are talking to the wrong person because I'm well paid at my (Chinese) company."

Growing Complaints

Growing complaints about poor working conditions far outweigh any measure of praise. In 2011, Human Rights Watch Report titled: 'You Will Be Fired If You Refuse' found that many Zambians working in Chinese-run companies suffered from abusive employment conditions that fail to meet domestic and international standards.

"Injuries and negative health consequences are not uncommon, although many incidents are not reported to the government, contrary to Zambian and international labour law," said the report.

The report added that miners had to work 12-hour shifts often in fume-filled tunnels. Sometimes shifts were 18 hours long. Zambian law limits shifts to eight hours.

The report is based on interviews with 170 copper miners, more than half of whom worked for the Chinese companies.

The pressure group urged Michael Sata, the longstanding critic of conditions in Chinese-run enterprise to fulfil election promises and take decisive action against the owners.

The other major source of discontent has been the Chinese participation in economic activities which normally should be the preserve of Zambians.

"They go to the deepest areas where Africans reside. They go to the shanty compounds were people reside, COMESA market, Soweto market, streets where other investors don’t try," said Saasa.

In one of their construction projects, the Chinese provided assistance to the Lusaka city council in upgrading Kamwala trading centre.

After completion, Chinese traders started operating from the new premises, much to the annoyance of the local population, who protested that they had been displaced from their original shops.

Despite the growing list of complaints, Saasa said the Chinese deserve a "red carpet" treatment because of what they have done for this country but when it comes to breaking the labour laws he said: "They have to be treated fairly as we would treat a Zambian or any other investor to comply with our laws."

Other than the Tanzania-Zambia railway project, which the Chinese helped Zambia build, the other major infrastructure project was the Mulungushi Textile factory built in the late 1970s. For a while the textile factory operated fairly well. However, years of limited investment in the plant and machinery led to operational difficulties and subsequent closure of the firm.

With government estimating the total sum of Chinese investment by the end of 2011 to be 2.4 billion US dollars, it remains by far the most important economic partner for Africa's top copper producing country.

Chinese assistance has mainly been through loans and to a lesser extent, grants in the form of cash and materials. Prior to the liberalization and privatization drive of the early 1990s, several public projects were financed through Chinese loans. After privatization, Chinese economic activities increased and included the opening of a branch of the Bank of China and a Trade and Commercial Centre, besides the acquisition of mining enterprises.

The Ministry of Finance deputy minister, Miles Sampa told the BBC Africa debate programme that where the Chinese provide aid, this is done without conditionalities.

“We are able to borrow for instance 100 million dollars for 20 years with a grace period of five years at a rate of 1%. Are we able to do that from somewhere else?"

*Charles Mafa is a freelance journalist and a member of the Africa Media Network. This article is being re-published from IDN partner Pressenza International Press Agency. [IDN-InDepthNews – September 18, 2012]

2012 IDN-InDepthNews | Analysis That Matters

Photo: Tan-Zam railway | Credit: IPP Media

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