Ex-Workers Face Off With China Oil Firm

Thousands of laid-off workers remain in a long-running standoff with officials at one of China’s largest oil fields, highlighting the social and economic costs of transforming lumbering Maoist-era industries into corporations fit to compete in the global economy.

Dissatisfied with the terms of their severance, the workers have surrounded the offices of the Daqing Oil Management Bureau in China’s northernmost province, Heilongjiang, since March 1, milling around by day and dispersing peacefully at night.

A public relations official in Beijing for PetroChina, the oil field’s parent company, acknowledged that there are 1,000 to 2,000 protesters but insisted that the demonstrations “have basically subsided” and have not affected oil production.

The official, who declined to give his name, rejected earlier reports of tens of thousands of protesters as exaggerated. He also denied reports that authorities had mobilized soldiers from a nearby tank division to contain the protests, or that officials had quashed attempts by the laid-off workers to unionize.

“Local officials have gone to the scene to explain policies and dispel misunderstandings with the workers,” he said.

Protests by laid-off workers are increasingly common throughout China’s northeastern industrial belt. The Hong Kong-based Information Center for Human Rights and Democracy said Monday that police had detained the organizers of 5,000 workers demonstrating against unpaid wages and alleged corruption at the bankrupt Ferroalloy Factory in the northeastern city of Liaoyang.

Workers began drilling Daqing’s oil wells in 1958, battling Manchuria’s harsh winters and using primitive equipment on permafrost. China hailed completion of Daqing’s main facilities in 1963 as a sign that the country no longer needed to import oil or the technology needed to produce it.

Beginning the following year, the Communist Party directed all government departments to learn from the “Daqing spirit” of self-reliance, as personified by “Iron Man” Wang Jinxi, the model worker who reportedly said, “I’m going to build this oil field even if it takes 20 years off my life.”

At its peak, Daqing produced about two-fifths of China’s crude oil.

In its transition to a market economy, however, China has increased its reliance on petroleum imports even as domestic producers have been hit by falling oil prices worldwide.

In 1998, in anticipation of foreign competition after its entry into the World Trade Organization, China organized its oil companies into northern- and southern-based conglomerates. The northern one, PetroChina, absorbed Daqing.

Then, as part of a restructuring ahead of its stock market listings in New York and Hong Kong in 2000, PetroChina took its best-performing assets and a staff of 425,000 for the listed vehicle, while Daqing and other unprofitable subsidiaries were left with outdated plants and a bloated staff of more than 1 million.

“Anyone left in the remaining subsidiaries would scream injustice,” Zeng Yukang, head of the Daqing Oil Management Bureau, told the official People’s Daily last month.

From 1999 to 2001, the subsidiaries laid off about 300,000 workers, roughly 28% of their staffs, cutting annual losses from $1.5 billion to about $500 million, according to the People’s Daily.

Last year, the State Labor Bureau reported that the Daqing Oil Management Bureau was the fourth-worst corporate performer nationwide in giving the government money for retirement benefits.

In recent years, as many as 80,000 bureau employees have signed severance contracts providing them with up to $500 for each year they worked at the company. Although the payment was a substantial sum for many workers, many still felt it would not cover rapid cost-of-living increases and hence wanted their jobs back, according to the Hong Kong-based China Labor Bulletin. Other workers alleged that while they were losing their jobs, bureau managers had given themselves generous bonuses.

“Some workers may have felt that the severance contract was unreasonable and therefore didn’t admit its validity,” said the PetroChina spokesman. “But they looked at the contract before signing it. You can’t just walk off the job one day and then come back tomorrow.”