Price of growth

Awe-inspiring achievements on the economic front have diverted attention from China's poor record in the safety of coal miners.

BY PALLAVI AIYAR in Beijing

IN China the buzz of economic growth is unmistakable; it is virtually everywhere. But the relentless pace of construction and the steady clatter of factories come at a price: the lives of tens of thousands of coal miners.

Coal feeds some 70 per cent of China's ravenous appetite for energy. The country is, in fact, both the largest producer and consumer of coal in the world. But while mainland China produces 35 per cent of the coal produced globally, it also accounts for 80 per cent of the world's coal mining accidents. In 2004, China produced 1.96 billion tonnes of coal, but according to the State Administration of Workers Safety (SAWS) it registered 6,027 mining-related deaths: a fatality rate of around three persons per million tonnes. About 5,500 miners died in the first 11 months of 2005, SAWS figures say. In contrast, the United States (U.S.), the world's second largest coal producer and consumer, produced one billion tonnes in 2004, but registered a death toll of 28, making for a fatality rate of 0.03 per million tonnes.

Some estimates of China's mining fatalities, such as those given by the Hong Kong-based China Labour Bulletin, put the annual death rate much higher at between 10,000 and 20,000. But even going by official statistics, China's mining-related fatality rate is almost 100 times that of the U.S. and 7.5 times that of the average industrial country. In India, the death rate is less than one per million tonnes.

China's 28,000 coal mines experience almost daily fires, floods, cave-ins or explosions. One of last year's worst accidents was on November 27 when a blast at the Dongfeng Coal Mine in Heilongjiang province left 169 miners dead. In the aftermath of the disaster, the authorities announced that 12,000 small coal mines would be shut down over the next three years and 4,000 by the end of 2005 itself. China currently has 24,000 small mines with annual outputs ranging from 10,000 to 30,000 tonnes. They account for around one-third of the total coal production in the mainland.

Before China started economic reforms, all coal mining was done by large state-owned enterprises (SOEs). But once the country's economy took off in the mid-1980s, Beijing allowed partial privatisation of mining and encouraged town and village enterprises to get involved in mining operations. At one point, over 100,000 small mines were operating across China.

These mines rarely had the necessary resources to ensure the safety of workers and many of them operated without licences and permits. At its worst period in the mid-1990s, China's mining fatality rate was 9.6 per million tonnes, a phase of neglect so bad that, as the Xinhua news agency put it, "even donkeys would baulk at entering mines".

About 70 per cent of China's mining accidents take place in smaller, private mines. For example, of the 6,343 deaths officially recorded in 2003, only 1,773 occurred in SOEs. Thus Beijing's campaigns to improve mining safety have tended to focus on the closure of small mines and their replacement by large coal production bases. The reasons usually cited for the abysmal safety record of the small mines are the absence of mechanisation, lack of economies of scale and the mines' inability to invest in expensive safety equipment and the training of personnel.

But the problem does not lie solely with small-scale private operations, as is demonstrated by the fact that of the five coal mine disasters between October 2004 and December 2005 that killed more than 100 miners, four occurred in state-owned mines. China's large state-owned mines are often saddled with excess workers and faced with dwindling coal reserves. Threatened with bankruptcy, these have shed more than a million workers over the past few years.

In recent years, Beijing has spent $4 billion in improving safety standards in key coal mines of SOEs, but the Central government admits that an additional investment of some $6 billion is still needed by the large ones to bring standards up to scratch.

In total, China has passed nearly 200 laws and administrative decrees concerning production safety. The problem of China's deadly mines thus clearly does not lie with the laws themselves but in their implementation. In August 2005, 123 coal miners lost their lives, trapped by flooding in the Daxing coal mine of southern China's Guangdong province. Investigations revealed the mine to be operating without the necessary safety and production licences. It had, in fact, continued to function even after the provincial government ordered suspension of production at all local mines following a mining tragedy in July that killed 14.

In the immediate aftermath of the incident, all the 65 owners of the Daxing mine fled. It was later revealed that nearly half of them were representatives of the local People's Congress or officials from various government entities. The mine's owner was a deputy to two local legislative bodies and is believed to have paid $185 million worth of stocks as bribes to local officials over the past several years.

Herein lies one of the primary reasons for the ineffectiveness of Beijing's safety regulations for coal mines: the collusion of mine owners and managers with local government officials.

For many village- and county-level governments, mining is the only significant source of revenue, and this causes them to turn a blind eye to the lack of safety precautions. Economic reforms have weakened China's top-down political system and led to fiscal decentralisation so that localities are largely left to their own devices to generate funds. As a result, the Centre finds it hard to force obedience from local officials hooked on mining profits and bribes. For the mine operators, ignoring Beijing's directives makes simple economic sense. Investing in expensive safety equipment and training is usually costlier than paying off officials. According to the China Labour Bulletin, the "going rate" for compensating a miner's family is as little as $1,000 in some provinces. The absolute maximum compensation given is around $25,000 but this is the exception rather than the rule and is reserved for high-profile cases that attract public attention.

The bald fact is that coal production has to match the near 10 per cent annual economic growth of China. The relentless energy needs of its galloping economy have thus resulted in Beijing sending out conflicting signals on its position regarding mining.

On the one hand, it has stressed its concern over the abominable safety record and focussed on the closing down of thousands of small-scale, private mines. On the other, faced with growing power shortages that hurt the cement, steel and other critical industries, the government is in desperate need of the coal produced by these mines.

Massive power cuts across China in the summers of 2003 and 2004 led the authorities to order coal mines to increase their output and guarantee supply for coal-fired power plants, which account for more than 70 per cent of China's total installed generating capacity. Between 1997 and 2001, the Central government had some 50,000 small mines shut down, but with the onset of the power famine many of these were allowed to reopen.

In the autumn of 2004, mine owners were reportedly promised an RMB 40,000 ($5,000) bonus if they were able to raise the output by 400,000 tonnes in the last months of the year. As a result, owners and managers ordered overtime work with flagrant disregard for safety norms.

The situation is made more complex by the fact that in the mainland the All China Federation of Trade Unions (ACFTU), a government-controlled umbrella organisation, has a legal monopoly on organised labour. The majority of its full-time representatives, however, do not come from the workers themselves but rise through government ranks and are then assigned to the ACFTU. The organisation is aimed at workforce control.

As a result, when faced with managerial callousness and violations of China's labour and safety laws, miners have nowhere to turn to. The average miner works six to seven days a week in cramped tunnels, thick with coal dust, and in temperatures as high as 35 Celsius. In contrast to the pre-reform era when all miners were employees of the now defunct Ministry of Coal and were guaranteed a steady wage, pension and medical benefits, today they earn what they produce and have no medical insurance.

In the thousands of small mines across the country where local officials are paid off in return for their non-interference, cheap, novice colliers, largely comprising farmers from the surrounding countryside, are the employees of choice. These largely uneducated peasant-workers have little knowledge of their rights or even of the existence of the labour and safety laws meant to protect them. Thus, the China Labour Bulletin argues, unless workers themselves are allowed to monitor safety on the ground, no number of "urgent directives" from the Centre will improve China's gruesome mine safety record.

Beijing disagrees. Instead of allowing independent unions, the Centre has issued a fresh stream of policy measures it says will stem coal mine deaths. The State Council announced in late 2005 plans to send specialist "overhaul panels" to eight major coal-producing provinces by the end of 2006. This year a revision of China's nine-year-old coal mining law is expected to outlaw operators who do not invest sufficient capital in ensuring work safety.

A campaign to sever the links between government officials and mine owners is under way and plans to set up 13 large coal production bases have been given approval. Punishment of corrupt officials and mine owners is also being pursued more vigorously and transparently.

According to the coal-mining law, anyone held responsible for negligence leading to fatalities in mines will be fined, stripped of office and assets and handed over to the "judicial organ of the state for investigation into their criminal responsibility".

In the past, this clause was rarely applied vigorously. However, according to SAWS, 222 government officials have been punished for varying degrees of responsibility for six major coal mine accidents since November 2004. Forty of them were stripped of their administrative posts and 96 are being investigated for criminal liability.

Coal miners are a sensitive topic for the Chinese Communist Party (CCP), which built its reputation in part by championing their cause. Even today schoolchildren in China read about how Mao Zedong and other founding fathers of the CCP launched the communist movement in the country by leading strikes in Jiangxi province's Anyuan coal mine in 1922.

The continuing string of coal-mining disasters is thus a public embarrassment to the country's leaders. According to police statistics, mass protests increased to 87,000 in 2005, up from 10,000 in 1994. Prime Minister Wen Jiabao has in the past directly dealt with mine accidents as the head of the State Industrial Safety Bureau. He has declared it a goal to have China's mining fatality rate down to 1.6 per million tonnes of coal by 2010. Last year, Wen even went down mining shafts himself, in a high-profile symbolic gesture of solidarity with miners. But in the absence of sufficient energy alternatives to coal, such gestures will not go far.