Where is the Belt and Road Initiative taking international labour rights? An examination of worker abuse by Chinese firms in Saipan

Abstract

This chapter explores the impact of China’s Belt and Road Initiative (BRI) on global labour standards primarily through a case study of a large construction project in Saipan, part of the US Commonwealth of the Northern Mariana Islands. Numerous Chinese firms were hired to build the Imperial Pacific casino, and each considered the project as a contribution to the “One Belt, One Road†initiative. The firms engaged in widespread violations of US immigration and labour laws, resulting in civil and criminal enforcement actions by federal authorities. The chapter argues that although numerous Chinese policies and regulations require companies to protect overseas Chinese workers and comply with labour laws of the host country, these rules often go ignored—resulting in the exploitation of Chinese workers and an undermining of local labour standards. The chapter reviews the first decade of China’s “going out†strategy, including government regulations on safeguarding labour rights and the existing literature on the actual labour practices of Chinese companies abroad. It then discusses the Saipan case in greater detail, including the nearly exclusive reliance on Chinese workers, the varied ownership structure of the Chinese firms, the labour abuses that occurred, and how they were eventually remedied. Next it uses the Saipan case as a starting point to examine more broadly several key labour rights questions concerning Chinese overseas infrastructure and construction projects since the launch of the BRI. The analysis reveals that even if Chinese firms are increasingly hiring local workers, there is still a significant number of projects that rely predominately, or almost exclusively, on Chinese labourers. In terms of labour conditions, Saipan is one of many cases in which Chinese companies—including both state-owned and private firms—export the same abusive labour practices that are found inside China, despite continued government instructions to safeguard labour rights and respect local laws. While the Saipan case shows that such abuses may sometimes be remedied, this resulted from a combination of active government enforcement, worker demonstrations, and free media coverage that is not possible in many other BRI jurisdictions. In conclusion, the chapter argues that safeguarding labour rights on BRI projects is not only good for workers, but also necessary for China to achieve its own financial objectives and foreign policy goals. Several possible measures to increase compliance by Chinese firms are proposed, including: translating China’s vague policies into detailed, binding domestic laws; making compliance with labour standards a condition to receive Chinese bank loans; and establishing effective complaint mechanisms for workers. China’s success on this front will determine whether the BRI helps lift or depress global labour standards.