China CSR Watch

By China CSR Watch (www.csrcsr.com)

In June 2007, Greenpeace announced that its research has found GE food produced by Japanese food producer Glico and German retail chain Metro. The environmental group criticized the two companies for having a double-standard policy, and demanded them to adopt a non-GE policy in China. Both companies adopt a non-GE policy in their own countries. Glico publicly announced its global non-GE policy the next day.

This was not the first time for Greenpeace to target multinational companies in China on GE double standard charges.

In 2003, Greenpeace accused Nestle of GE violation and consumer sued Nestle subsequently. In 2005, Greenpeace’s publicity campaign on Kraft Food’s GE products in China has pushed Kraft to adopt a non-GE policy in mainland China starting from January 2007.

However, most processed food products are not required to label their GE ingredients under the current Chinese regulation.

Sources:
Green Peace: http://www.greenpeace.org/china/en/press/release/gp-found-gefood
National Business Today: http://finance.sina.com.cn/xiaofei/puguangtai/20050316/01531432293.shtml
Sina.com: http://finance.sina.com.cn/focus/wqzjy/index.shtml
Biosino.org: http://www.biosino.org/law/law59.htm

By China CSR Watch (www.csrcsr.com)

Alibaba.com, a leading business-to-business e-commerce website in China that is 40% owned by Yahoo!, was criticized for allowing online trading of shark fins.

“Alibaba, which has more than 180 companies engaged in buying or selling shark fins, is “the New York Stock Exchange of shark fins,” quoted in the Business Week report on July 20th.

“Yahoo’s response to the news report was, ‘We know the sale of shark products is both legal in Asia and a centuries-old tradition. This issue is largely a cultural-practices one’”, according to ViceZilla’s Views.

Many shark fin traders can still be found at Alibaba.com as of July 23rd.

Sources (in Chinese and English):
Sina News: http://tech.sina.com.cn/i/2007-07-21/11351628915.shtml
Business Week: http://www.businessweek.com/globalbiz/content/jul2007/gb20070720_756191.htm
Alibaba: http://www.alibaba.com/buyeroffers/Shark.html
ViceZilla’s Views: http://vicezilla.com/views/index.php/2007/06/28/yahoo_has_1_billion_dollar_stake_in_succ
Stop Shark Finning: http://www.stopsharkfinning.net/

By China CSR Watch (www.csrcsr.com)

Exactly half a year after a blog entry advocating the removal of Starbucks from the Forbidden City by Rui Chenggang, a famouse TV news anchorman, the global coffee giant finally closed its Forbidden City branch on July 13th.

This single blog entry was read more than 560,000 times and attracted more than 2800 comments. The story also made a front cover story on Fortune magazine and roused worldwide debate on culture and globalization.

Starbucks first opened it Forbidden City store seven years ago.

“Starbucks is the vehicle and symbol of American cuisine. It may be ok for Starbucks to open a branch near Forbidden City, but not inside the Forbidden City to be part of our collective memory on this sacred place. This is not globalization. This is culture invasion,” states Mr. Rui in his January 12th blog.

Sources (in Chinese and English):
Rui Chenggang’s blog:
http://blog.sina.com.cn/u/4adabe27010008yg
http://blog.sina.com.cn/u/4adabe2701000am6
Fortune: http://money.cnn.com/magazines/fortune/fortune_archive/2007/05/28/100034253/index.htm
Beijing Morning Post: http://news.sina.com.cn/c/2007-07-14/031012201426s.shtml

By China CSR Watch (www.csrcsr.com)

Three Chinese companies, China Mobile, Haier, and Lenovo, made into Business Week’s 14 Asia’s most admired companies. Other winners are Canon, Nintendo, and Toyota from Japan; NHN, Posco, and Samsung Electronics from Korea; Singapore Airlines and Singapore Telecom from Singapore; and HDFC, Infosys, and Wipro from India.

“There’s no shortage of Asian companies that have prospered thanks to a laser-like focus on their home markets. But what wins enough fans to land on BusinessWeek’s list of most admired companies in Asia is success overseas,” writes Bruce Einhorn, correspondent from Business Week.

Sources (in English and Chinese)
Business Week: http://www.businessweek.com/globalbiz/content/jul2007/gb2007076_238945.htm
Sina.com: http://tech.sina.com.cn/it/2007-07-10/14551607944.shtml

By China CSR Watch (www.csrcsr.com)

According to the new Income Tax Law of The People’s Republic of China for Enterprises to be effective on January 1st 2008, China will four-fold its tax deduction for CSR donations from 3% to 12% of the annual profit. In other words, up to 12% of the profit is tax free as long as it is donated to CSR.

“In the first draft of the law, the tax deduction for CSR donation has been set to 10%. This revised final version listens to our feedback and added another 2%. It will surely help the CSR work in China, especially our education industry,” said Mr. WANG Xiaocun, a Chinese lawmaker and head of Zhejiang Industrial University.

The previous rate of 3% was set in the early version of the law issued in 1993.

The new tax law coming next year will also unify the income tax rate between domestic companies and foreign-invested companies to 25%. To attract foreign capitals, China used to grant foreign-invested companies huge tax incentives at around 15% while many domestic companies shield the tax burden at 33%.

Sources (in Chinese):
China Youth Daily: http://business.sohu.com/20070704/n250899398.shtml
China philanthropy Times: http://news.sohu.com/20070320/n248850993.shtml
China Education Daily: http://news.e21.cn/html/2007/jygj/163/20070317090031_11740932311585814045.htm

By China CSR Watch (www.csrcsr.com)

Although nearly all MNCs publish CSR report, Ford may well be the first to publish CSR reports specially for China. And not only once, but twice.

October 18th 2006, Ford China published its second CSR report detailing its CSR efforts from 2003 to 2005. Ford China published its first CSR report in China in 2002 about its CSR achievement from 1992-2002.

The billingual Ford CSR report can be downloaded here: Ford China CSR Report on ford.com.cn

Sources (in Chinese):
Xinhua: http://www.xinhuanet.com/classad/zxft/20061018/index.htm
Sina Foreign Management: http://leadership.jrj.com.cn/news/2007-06-29/000002373777.html
Sina.com: http://finance.sina.com.cn/roll/20061017/0752979755.shtml

By China CSR Watch (www.csrcsr.com)

According to a research published by Chinese Foundation for Hepatitis Prevention and Control on June 27th 2007, 77% MNCs in China refuse to recruite hepatitis B virus (HBV) carriers, and 96% require compulsory blood test.

The research surveyed 115 branches or JVs of 98 MNCs in China, covering 11 cities. The companies named in the report for refusing to recruite HBV carriers include Motorola, Siemens, Phillips, Foxconn, Sony, Samsung.

“Although most MNCs have global policies that require them not to discriminate based health conditions, their Chinese branches lack the application and supervision of their global policies,” the research explains.

HBV is a social problem in China. It is estimated that 120 million people, around 10% of the total population in China, are HBV carriers. Although HBV can only be transmitted through blood, mother-infant, or sex, most Chinese still have the perception that HBV is highly contagious and refuse to live or work with HBV carriers. Until recently, even many government branches refuse to hire HBV carriers.

On May 30th, Ministry of Health and Ministry of Labour and Social Security jointly issued a memo stating that employers can not refuse recruiting or lay off employees due to HBV, except in some special positions regulated by relevant laws and regulations.

Chinese HBV carriers are increasingly agreesive in protecting their rights in recent months. In May, a job applicant sued Nokia for discrimination. In July, 4 college graduates sued Foxconn for discrimination during recruiting.

Sources (in Chinese and English):
Chinese Foundation for Hepatitis Prevention and Control: http://www.cfhpc.net/static/html/200762791826.html
Xinghua: http://news.xinhuanet.com/politics/2007-05/30/content_6174757.htm
Nanfang City News: http://tech.tom.com/2007-06-27/06MP/31160236.html
Financial Times: http://www.ftchinese.com/sc/story_english.jsp?id=001010048&loc=story
China Youth Daily: http://news.sohu.com/20070515/n250019069.shtml

By China CSR Watch (www.csrcsr.com)

PetroChina published its first Corporate Social Responsibility report on February 28th 2007, in an effort to be more open and transparent to public to improve its image amid oil price gauging accusations and after some major accidents.

According to the report, “in 2006, PetroChina donated a total of RMB 80.11 million in disaster relief, 16.45 million in education, 80,000 PetroChina volunteers served more then 200,000 people.”

PetroChina, the second largest Chinese oil company ranked at 39th in the Fortune Global 500 list, has been plagued with major accidents in recent years. It was ranked 63rd, of all 64 companies evaluated, in the 2006 Fortune Accountability list with an accountability score of 3 out of 100.

In 2003, a blowout of its natural gas well in Chongqing province killed 243 villagers. In 2005, a blast in its oil chemical plant in Jilin province polluted the water system and halted the tap water supply of Harbin, a major city of 3.5 million residents, for 4 days, and directly resulted the resignation of head of the environmental protection bureau of China.

PetroChina has been trying hard to improve its record on safety.

“Compared with 2005, accidents with fatality were lowered by 25%, and fatality was reduced by 12%. However we are regret to see 3 major accidents happened and 21 lives lost,” stated in the CSR report.

PetroChina has been ranked number one in the Top 50 Corporate Social Responsibility Chart compiled by Hurun Report published April 2007.

According to Hurun Report, PetroChina has more than 1 million employees, 177.1 billion Chinese yuan tax payment, and 720 million donation from 2003-2006. PetroChina is a clear leader in corporate social responsibility in China. (According to PetroChina’s CSR report, it has 446,000 employees excluding external employees.)

Sources (in English and Chinese):
PetroChina English CSR Report: http://www.petrochina.com.cn/chinese/zrgg/Corporate%20Social%20Responsibility%20Report%202006.rar
163.com http://money.163.com/07/0411/13/3BQ74E1V00251RJ2.html
Huran Report: http://www.hurun.net/listcn62.aspx
Xinghuanet: http://news.xinhuanet.com/fortune/2007-03/22/content_5880218.htm
WTO Guide: http://chinawto.mofcom.gov.cn/aarticle/by/cb/200704/20070404614048.html
Chinanews: http://news.163.com/06/1114/02/2VRSKH01000120GU.html
Fortune: http://money.cnn.com/magazines/fortune/global500/2006/accountability/full_list.html

By China CSR Watch (www.csrcsr.com)

With the latest update of World of Warcraft, a popular online game published by Blizzard, Chinese gamers are astonished to find out that the game characters have been modified to avoid showing any bones, literally. Only the version sold in Chinese market has the “no skeletons” modification.

World of Warcraft is the most popular online game worldwide with more than 8 million global players, of which more than 3.5 million are in China.

“The modification of the game characters are due to the situation in China and the requirement of policy. It’s a minor modification to promote healthy and harmonious online gaming environment. It will not affect any gaming experience for players,” explained public relations department of the9.com, War of Warcraft’s Chinese operator.

The9.com wouldn’t comment on the government regulation issues.

The Content Examination Committee of Imported Games affiliated with Ministry of Culture is the regulatory authority to Internet games. All imported games must be examined before put into Chinese market.

Sources (in Chinese and English):
Nanfang City News: http://www.nanfangdaily.com.cn/southnews/pdf/ds/20070628/A32.pdf
Oriental Entrepreneur http://business.sohu.com/20060705/n244104437.shtml
Blizzard.com http://www.blizzard.com/press/070111.shtml
Newspaper Digest: http://www.gmw.cn/01wzb/2004-05/30/content_35928.htm

By China CSR Watch (www.csrcsr.com)

Shanghai General Motors, GM’s JV branch in China, has announced its plan to set up a paint-spray plant in Shenyang of northeast China, which will have the capacity to paint 150,000 Chevrolet-branded cars per year. The plant is located in highly populated areas and faces strong opposition from local residents for environmental concerns.

According to the public environmental impact announcement jointly issued on May 29th 2007 by Shanghai GM and Liaoning Environment Science Research Institute, the plant will generate pollutants such as P-Xylene.

“I chose to settle down in this area mostly because of the nice environment and the orchard that has decades of history. However, if now we have a pollutant-generating plant very close to my home, my life will surely be greatly effected,” said LI Nong, a local resident, a lawyer, and a representative elected by unhappy local residents.

On June 1st, more than 200 residents protested the potential pollution brought by this new plant in their community plaza and again on June 6th, more than 100 residents gathered in front of the Shenyang government to demonstrate their opposition. It is estimated that around 500,000 people reside within several kilometers of the plant, and the closest residential building is only 50 meters away.

Sources (in Chinese):
China Philanthropy Times: http://www.gongyishibao.com/jrxw.asp?newsid=53&act=jrxw
Soufan.com: http://bbs.sy.soufun.com/1617144623~-1~509/951937_951937.htm
Shenyang Department of Publicity: http://www.syxcb.gov.cn/index/gzdt-13.htm