African kids feed Chinese company profits

July 27, 2008

By Simon Clark, Michael Smith and Franz Wild

He is one of 67 000 people in Katanga who earn a living collecting rocks infused with two metals that are in high demand around the world: copper and cobalt.

Copper is used to make the electrical wires needed to light cities. Cobalt is used to make jet engines, ink and cellphone batteries.

Katanga is home to 5.5 million people and contains 4 percent of the world's copper and a third of its cobalt reserves, according to the US Geological Survey.

The minerals Adon wrests from the earth go to smoky smelters on the edge of impoverished towns near the mines. Most of these rusting, hand-fed furnaces are owned by companies based in a faraway country founded on an ideology that exalts the rights of workers: China.

Adon toils in the Kamatanda mine near the town of Likasi. On paper, the mine is owned by the DRC's state mining company, Gecamines.

In reality, Adon and his peers practise a chaotic form of capitalism, with little supervision from company or state. The hand diggers are not staff, but freelancers who sell what they dig and clean to brokers.

The middleman pays Adon to wash the copper ore, which he sells to a smelter in the provincial capital of Lubumbashi, run by a unit of China's Zhejiang Huayou Cobalt.

With wads of Congolese francs on hand, Zhejiang Huayou's representatives buy copper and cobalt ore straight from the brokers.



Child labour

"This is one of the worst forms of child labour," says Joost Kooijmans, a legal officer at the International Labour Organisation (ILO), a UN agency. "If they buy ore processed by children, they're involved in violating the rights of the children."

Patricia Feeney, who campaigns for the rights of the DRC's miners, says Chinese smelters buy cobalt and copper from mines across Katanga that use child labour.

"The Chinese smelters have no regard for the health and safety of their workers or the children who dig the ore," says Feeney, the executive director of UK-based Rights and Accountability in Development.

In Tongxiang, Zhejiang Huayou's home base near Shanghai, marketing manager Zhai Yang says his company sells processed cobalt via intermediaries, who he declines to name, to companies such as Sony, Nokia and Samsung Electronics.

Nokia spokesperson Susan Allsopp says the Finnish cellphone giant is researching whether Zhejiang Huayou is an indirect supplier.

"We have no evidence to suggest they are supplying any of our suppliers," she says. "We take any accusations of this nature seriously and do not accept the use of child labour or abuses of human rights. We will continue to monitor this, and if we find any breaches of our standards, we will take swift action."

Samsung spokesperson Hae Won Choi says the South Korean firm is investigating and so far, 70 percent of its suppliers say they don't buy cobalt from Zhejiang Huayou.

George Boyd of Tokyo-based Sony declined to comment.

Zhai says he doesn't know if Zhejiang Huayou buys minerals that originated with child labour.

"I've never been to the DRC, so I don't know the mines," he says. Zhai says his firm has a policy against child labour and will investigate. It will stop purchasing ore if it was dug by children, he says.

The Chinese government says the DRC's law must be respected.

"Chinese companies need to observe local labour laws and regulations and fulfil their social commitments," says Chen Rongkai, a spokesperson for the ministry of commerce in Beijing.

The DRC, like China, has ratified an ILO convention against hazardous child labour.

Katanga governor Moise Katumbi says since 2005 the Chinese have become the primary owners of furnaces that rely on ore from hand diggers. He says more than 60 of Katanga's 75 processing plants are owned by Chinese companies and adds that 90 percent of the region's minerals go to China.


Juggernaut China

From the deserts of Sudan to the savannahs of Zimbabwe and South Africa, a juggernaut of Chinese companies is moving across Africa.

The goal is to secure natural resources to supply factories, build cities and fuel an economy that has expanded more than 9 percent a year on average since the late 1970s, when Chinese Communist Party vice-chairman Deng Xiaoping pushed his country towards free enterprise. Deng is associated with the phrase "to get rich is glorious" - although he denied saying it.

Because China is not self-sufficient in natural resources, the government has made the hunt for minerals and food around the world a foreign policy priority.

In its global quest for commodities, China relies on labourers - from hand diggers in Katanga to iron ore miners in Peru - who work in unsafe, unsanitary and sometimes lethal conditions.

In mines, smelters and ports, hundreds of workers have been injured or killed since 2005 working for Chinese companies in Africa, Asia and Latin America, according to government administrators, workers, doctors and official documents.

In Laos, Chinese rubber plantation owners took rice paddies from villagers against their consent and unknowingly removed soil from a burial ground to build a road, according to study for German aid agency GTZ in February.

In Peru, regulators fined a unit of Shougang, which is owned by Beijing's municipal government. Peruvian officials found that the firm violated regulations by allowing 110 workers with lung disease to work in an iron ore mine. Two have died since 2006. The company disputes those findings.

Africa's weak law enforcement makes it vulnerable to Chinese companies with lax practices. In the past five years, the continent has become China's new frontier for oil, copper, cobalt and iron ore.

Chinese diplomats are paving the way for its companies, courting governments in places such as the DRC with promises to build roads, railways and ports - and to provide jobs. In exchange, China has received access to mines and oil fields and the rights to buy minerals for years to come.

The Chinese don't tie African aid and investment to requirements that governments respect human rights and labour standards, says Ana Maria Gomes, a European Parliament member from Portugal.

Yang Jiechi, China's foreign minister, said at London's Royal Institute of International Affairs in December that countries should be allowed to set their own standards for development and choose their own social systems.

"This is an African problem," says Liu Zhenmin, a Chinese deputy ambassador to the UN.

Wu Zexian, China's ambassador to the DRC, says: "We will work economically in countries without interfering at all in their internal affairs."

Wangari Maathai, a Kenyan environmentalist who won the Nobel peace prize in 2004 for opposing political repression, says China has an obligation to ensure it and its companies act in a civil and humane manner.

"In countries where human rights aren't respected and where people can't hold their governments accountable, it's vital for foreign governments and investors to impose conditions," she says.

Jonathon Bond, a managing partner at London-based Actis Capital, says the no-strings deals that China makes in Africa benefit consumers in the US, Europe and Japan.

The commodities Chinese firms acquire in Africa and Latin America supply factories in China that export more than $1 trillion of goods a year. Actis Capital has invested $3 billion (R22 billion) in Africa and other developing regions.

"The West has subcontracted its manufacturing industries to China," Bond says. "China imports African raw materials and then re-exports them as components of finished goods to the West."

That supply chain starts in places like the Kamatanda mine, where 200 men, women and children toil in the scorching sun, digging and trading on ground covered by faeces in an area with no sewage system and no tap water.

Adult diggers who explore deep underground for minerals are paid more when they're producing. Those workers pay a tax to Saesscam, the agency that oversees hand diggers.

Brokers sell the ore for a mark-up of almost 100 percent to Congo Dong Fang International Mining, which is owned by Zhejiang Huayou.



Commodity boom

Cobalt prices have doubled since the start of 2005, and copper values have almost tripled, even though the three-year rally in commodities lost steam earlier this year.

Aside from the Chinese, Gecamines and companies run by Indian, Lebanese and local entrepreneurs also purchase the ore unearthed by the hand diggers, says Denis Kampashi, who runs Saesscam's office in Lubumbashi.

Betty Bambi, who runs a charity orphanage where Adon sometimes sleeps, says everyone in Katanga, including the managers of Chinese smelters, knows children work in the mines. She says neither the government nor the companies do anything to help the child miners.

The situation at Kamoto, an underground mine 130km from Kamatanda, is different.

There, the miners are all employees, not freelancers. They work for the mine's owner, Bermuda-based Katanga Mining.

The company supplies every miner with $250 worth of safety gear, including a lamp fixed to a hard hat, steel-toed leather boots, overalls, a belt, a jacket and pants.

"We want to bring safety standards up to North American or European safety standards," says Katanga Mining manager Andre Boudreault.

Governor Katumbi says DRC regulators have safety and environmental standards for the mines at which hand diggers collect ore for Chinese companies, but government enforcement is weak.

The DRC's rules follow ILO standards banning child labour.

Chinese-owned smelters in Katanga are particularly prone to accidents that maim or kill workers, Katumbi says.

"It's not even the Chinese standards which they are building here," he says. "There are no standards."

Most North American and European companies adhere to international safety and labour guidelines set by groups such as the International Organisation for Standardisation and the ILO. The rules forbid using children under the age of 18 in hazardous conditions.

Since March last year, Katumbi says he has expelled about 600 Chinese nationals from Katanga for violating labour and environmental laws, about 12 percent of the number working there at the time.

In January, China expanded its ties with the DRC by promising to finance $9 billion of roads, railways and mines in exchange for 10 million tons of copper and 600 000 tons of cobalt from six Gecamines-run mines over a decade at a fixed price.

The DRC's southern plains are scattered with derelict mines and furnaces - relics of the predecessor of Gecamines, which Belgium built to extract minerals from its colony.

"The mines are like a disaster area," says Gecamines chief executive Paul Fortin. China's offer was the best one on the table, he says.,

Ambassador Wu says Chinese banks will guarantee the loans for the deal so they won't increase the DRC's $11.5 billion of debt.

But China's promises are meaningless to Mbayo Muyambo, who says he has witnessed a torrent of injuries as safety director at Chinese-controlled Feza Mining in Likasi.

Muyambo says workers are routinely burned at Feza's smelter by molten cobalt because the company doesn't supply fireproof suits.

Wang Xiao, Feza's deputy director, says China's Wanbao controls Feza. Feza's shareholders include Congolaise des Mines et de Developpement, owned by Gecamines, and DGI International of Israel.



Backlash imminent

As more and more Chinese arrive in Katanga, pressure is rising to prove to locals that they will benefit from the new investors, according to Fortin. "There will be a backlash," he says.

On March 6 there was one.

Diggers from the Kamatanda mine clashed with riot police in Likasi. They were protesting because Gecamines wanted to oust them from the land and reclaim the mine after it traded six of its other mines to China.

China's leap from Marxism to capitalism has come at a cost of deadly labour conditions, says Han Dongfang, who founded the China Labour Bulletin, which monitors Chinese worker abuses.

"The government has totally ignored health, environmental and social responsibility," Han says. "The Chinese, from the top leaders to the desperate ordinary people, believe that making money is more important than human life."

In the past 30 years - following Mao Zedong's death and Deng's embrace of market principles - 300 million out of a population of 1.3 billion Chinese have lifted themselves out of poverty, according to the UN. More than 415 000 have become millionaires, according to a Merrill Lynch and Capgemini study.

Maathai says Chinese companies should respect human rights and internationally accepted labour standards around the world.

"We in Africa expect China to help and not to take advantage of Africa's vulnerability," she says.

For Adon Kalenga, the concept of fair treatment is a world away.

It's the end of a nine-hour workday in March, and he is slumped in a chair, nursing his back. Tomorrow, as he has almost every day for more than three years, Adon intends to return to the mine and the stream.

"I want a normal life, like the people I see walking in the street," says Adon, who can barely read and write. "But I can't even afford to go to school. Things will never change."



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Jean-Louis Kayitenkore
Procurement Consultant
Gsm: +250-08470205
Home: +250-55104140
P.O. Box 3867
Kigali-Rwanda
East Africa
Blog: http://www.cepgl.blogspot.com
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