[South Africa] Hauwei falls foul of employment equity policy

In February, the South African Department of Employment and Labour filed court documents against Huawei Technologies South Africa for failing to comply with the country’s Employment Equity Policy. South African authorities discovered that Huawei had not followed the legislation in their 2020 audit, Bollyinside reports.

According to sources, the company employed about 90 per cent foreign nationals, in violation of South Africa’s Employment Equity Policy.

A statement said that South Africa has asked a court to impose a fine of 1.5 million rand (USD 99,151) or 2 per cent of Huawei’s annual 2020 turnover for these alleged rule breaches while advising Huawei to comply with law of the land. This is reportedly the first time the South African government has made a legal challenge against the Chinese tech giant, which is already facing US sanctions over allegations that the company’s equipment has the potential be used by the Chinese government for espionage.

In the case of South African law, the Immigration Regulations provided that Huawei should employ 60 per cent local South African labour and only 40 per cent foreign nationals for their projects in the country. In addition, an investigation by the department also revealed that, at the top management level, Huawei had five employees and all five (100 per cent) were foreign nationals.

Huawei intends to keep this number for two further years but the company also intends to increase the number of foreigners at the senior management level. At present, of a total of 71 employees at senior management positions, 27 (38 per cent) are foreign nationals.

The labour department of South Africa also took action against a smaller Chinese firm over charges of poor working conditions and human trafficking at its factory in Johannesburg. That case is still in court. Although working conditions at Chinese companies in Africa differ across sectors, some common trends persist such as tense labour relations, hostile attitudes by Chinese employers towards trade unions, violations of workers’ rights, compulsory overtime working without pay, lack of toilet facilities at worksites and poor working conditions and unfair labour practices.

This is not an isolated case, Chinese firms operating in Africa are frequently accused of violating international labour standards and not adhering to national labour laws. Because China is the fund provider in such cases it maintains control over development projects throughout the entire implementation phase, using Chinese contractors and labours. This is reportedly causing significant consternation and discontent in the African countries hosting China aided projects.

In Malawi, for example, a number of workers at Chinese manufacturing companies had to work long periods without protective gear. Similar labour breaches - including no provision for sick leave and no maternity pay - have been observed in South Africa, Nigeria, Angola and Kenya. 

A study conducted by Human Rights Watch (HRW) also revealed human rights abuses at four Chinese-run mining companies in Zambia.

Studies suggest that Chinese development projects, unlike the projects of other major development partners, discourage trade union involvement in the local area. It was also found that Chinese firms’ labour practices engender abuse via casualisation of labour, low remuneration, and a general lack of adherence to occupational safety. African countries are fast becoming disenchanted with the Chinese way of project implementation. If there are alternative sources of funding available, at present in Africa the mood seems to be in favour of pursuing those options.

In February, the South African Department of Employment and Labour filed court documents against Huawei Technologies South Africa for failing to comply with the country’s Employment Equity Policy. South African authorities discovered that Huawei had not followed the legislation in their 2020 audit, Bollyinside reports.

According to sources, the company employed about 90 per cent foreign nationals, in violation of South Africa’s Employment Equity Policy.

A statement said that South Africa has asked a court to impose a fine of 1.5 million rand (USD 99,151) or 2 per cent of Huawei’s annual 2020 turnover for these alleged rule breaches while advising Huawei to comply with law of the land. This is reportedly the first time the South African government has made a legal challenge against the Chinese tech giant, which is already facing US sanctions over allegations that the company’s equipment has the potential be used by the Chinese government for espionage.

In the case of South African law, the Immigration Regulations provided that Huawei should employ 60 per cent local South African labour and only 40 per cent foreign nationals for their projects in the country. In addition, an investigation by the department also revealed that, at the top management level, Huawei had five employees and all five (100 per cent) were foreign nationals.

Huawei intends to keep this number for two further years but the company also intends to increase the number of foreigners at the senior management level. At present, of a total of 71 employees at senior management positions, 27 (38 per cent) are foreign nationals.

The labour department of South Africa also took action against a smaller Chinese firm over charges of poor working conditions and human trafficking at its factory in Johannesburg. That case is still in court. Although working conditions at Chinese companies in Africa differ across sectors, some common trends persist such as tense labour relations, hostile attitudes by Chinese employers towards trade unions, violations of workers’ rights, compulsory overtime working without pay, lack of toilet facilities at worksites and poor working conditions and unfair labour practices.

This is not an isolated case, Chinese firms operating in Africa are frequently accused of violating international labour standards and not adhering to national labour laws. Because China is the fund provider in such cases it maintains control over development projects throughout the entire implementation phase, using Chinese contractors and labours. This is reportedly causing significant consternation and discontent in the African countries hosting China aided projects.

In Malawi, for example, a number of workers at Chinese manufacturing companies had to work long periods without protective gear. Similar labour breaches - including no provision for sick leave and no maternity pay - have been observed in South Africa, Nigeria, Angola and Kenya. 

A study conducted by Human Rights Watch (HRW) also revealed human rights abuses at four Chinese-run mining companies in Zambia.

Studies suggest that Chinese development projects, unlike the projects of other major development partners, discourage trade union involvement in the local area. It was also found that Chinese firms’ labour practices engender abuse via casualisation of labour, low remuneration, and a general lack of adherence to occupational safety. African countries are fast becoming disenchanted with the Chinese way of project implementation. If there are alternative sources of funding available, at present in Africa the mood seems to be in favour of pursuing those options.