Chinese Oil Country Simmers as
Workers Protest Cost-CuttingChinese
Oil Country Simmers as Workers
Protest Cost-Cutting
Thousands Laid Off, Benefits Reduced
By John Pomfret
Sunday,
DAQING,
building in the heart of
the restructuring of one of
The demonstrations at the Daqing Oil Management Bureau in this northern city
have ranged in size from several
thousand people late Friday to 20,000 earlier
this week, witnesses said.
Protesters have spilled into Iron Man park, an
adjacent square built to
commemorate a working-class hero of the oil fields.
The peaceful protests in the
center of Daqing illustrate the tensions that exist
throughout the country as
millions of workers are laid off by inefficient
state-owned enterprises trying
to adjust to global competition following
entry into the World Trade
Organization. On top of this already complex problem
are persistent allegations that
the restructuring process has been fraught with
corruption. Furthermore it
highlights the problems
social safety net for laid-off
workers. Despite claims by Premier Zhu Rongji on
Friday that the net is almost
complete, millions of
without benefits.
Thousands of similar protests
have erupted across
years. The one in Daqing is unusual because it has been so sustained and
because
news of it leaked out before it
was over.
The situation is complicated by
the fact that PetroChina Co., which owns most of
Daqing's
oil assets, is listed on the
its actions, when dealing with
the workers, could be subject to the scrutiny of
its foreign shareholders.
Workers complained today that
the city government and PetroChina, one of
biggest listed oil companies
with operating income of $30 billion last year,
gave thousands of workers
severance packages of less than $500 for every year
worked. They said the protest
started this month when the government announced
it would stop paying heating
bills and insurance premiums for people who had
received severance packages. The
protesters' ranks swelled last week when
workers who still have jobs
joined the demonstration to protest a tripling of
their pension-plan
contributions.
"The managers are getting
huge packages and we are getting nothing," said one
worker who identified himself
only as Engineer Zhang. PetroChina officials
denied his allegation.
Zhang, a father of two, said he
could not support his family with the $6,000
severance package he received.
"What happens when the money runs out? What
happens if someone gets sick?
What happens if my boys get into college?"
Zhang and others pointed to a
scandal that roiled Daqing two years ago as
evidence that the restructuring
was tainted by corruption. Thirty-nine
government officials were
punished for rigging the listing of Daqing Lianyi
Petrochemical Co. on the
relatives and friends.
"Do you think anything has
changed?" asked another worker who identified himself
only as Chen. "They changed
the mayor but they didn't change anything else,
really."
Participants and witnesses said
plainclothes security forces had detained
several leaders of the ad hoc
workers' movement in Daqing.
independent labor unions, and
the Communist Party-approved All-China Federation
of Trade Unions generally
represents the interests of the security forces rather
than
"Now no one dares to speak
in public because of the arrests," said a witness who
used to work for the oil bureau.
She said she believed some of the workers had
been roughed up while in police
custody. "When those workers were released from
the police station, some of them
were in a daze."
Daqing,
in far northern
industry. When oil was
discovered here in the 1960s, it was a state secret,
because China's leaders feared
an attack by the Soviet Union, just 220 miles to
the north.
The town spawned a series of
Communist legends about the superiority of China's
workers, most notably "Iron
Man" Wang, who is said to have jumped into a pit of
cement to stir it with his body
because of a lack of mechanical equipment.
During China's ultra-leftist
Cultural Revolution, Daqing's reliance on heavy
industry, despite its costs, was
held up as a model for all of China. But the
full-speed-ahead production
techniques that once made Daqing the pride of
China's oil industry have now
made it one of China's laggards.
Mayor Wang Zhibin
recently told the official New China News Agency that the
outlook for his city was grim.
He said that Daqing's aging wells would produce
1.5 million tons less crude oil
this year than last. And, he said, Daqing's oil
still costs too much to produce;
the cost of oil development in China averages
$1.50 a barrel, compared with
$1.20 in most other parts of the world.
China began a large-scale
restructuring of its oil industry in the 1980s,
merging companies to create a
few large, integrated oil concerns. In November
1999, China National Petroleum
Corp. formed a subsidiary called PetroChina and
gave it 480,000 of the parent
company's 1.5 million workers and most of its best
assets. PetroChina
took over much of Daqing's industry. Crude output
from Daqing
reached 56.6 million tons.
By January 2001, 38,000
employees had been laid off. Many of them were from
Daqing,
workers said today.
In November 2000, the oil bureau
arranged for 50,000 workers to receive
severance packages of $375 to
$500 for each year of service. All benefits
supplied by the company -- such
as medical care and pensions -- were stopped.
Workers said the government had
neither the funds nor the interest to step in
and replace the cradle-to-grave
security once offered by Daqing's state-owned
firms.
The workers said their protest
would continue until the government agreed to
reconsider the severance
packages. But that could be difficult. While still
owned mostly by the state, PetroChina also has responsibilities to its
shareholders.
"This is a tricky
situation," said a PetroChina executive.
"If the government
orders us to back down, our
shareholders will be angry. But if we don't modify
the plan, there could be more
unrest."
© 2002 The Washington Post Company