GEF Termite Control Project - World Bank



E1285, v. 3

Demonstration Project of Alternatives to Chlordane

And Mirex for Termite Control in China

Social Assessment for the Closure of the Liyang Guanghua Chemical Company, Ltd.

SOCIAL DEVELOPMENT INSTITUTION, HOHAI UNIVERSITY

MAY 2005

This document is a safeguards document prepared for the GEF project China: Demonstration of Alternatives to Chlordane and Mirex in Termite Control. The project is a $28 million demonstration of approaches to implement the Stockholm Convention on persistent organic pollutants (POPs) in termite control. There are three safeguards documents prepared for this project.

1. Pest Management Plan (PMP) prepared for the entire project. The PMP was developed according to the requirements of the World Bank’s Operational Policy OP 4.09 on Pest Management which mandates the use of integrated pest management (IPM). The project itself is essentially a large-scale implementation of IPM in termite control, since it promotes replacement of the current chemical-based termite control methods with environmentally more sustainable IPM-based method. Majority of project funding – more than $20 million – is allocated directly to IPM activities. The PMP and the project document, therefore, are very closely related, and the principal recommendations and consideration of the PMP are an integral part of the project design.

2. Environmental Impact Assessment (EIA) and Environmental Management Plan (EMP) specific to the component 4 of the project. The component – with the budget of about $2.64 million – demonstrates a closure of a chlordane and mirex manufacturer – Liyang Guanghua Chemical Company Ltd. – in Jiangsu Province. The EIA and EMP were prepared according to Chinese environmental impact assessment regulations and the World Bank’s Operational Policy OP 4.01 on Environmental Assessment.

3. Social Assessment (SA) which complements the EIA. The SA was prepared to address the social and economic impacts of the closure of the Liyang Guanghua Chemical Company, Ltd. on the plant work force. The SA was prepared as a matter of best practice, and serves as a basis for the worker compensation and retrenchment program which will be implemented under the project.

Table of Contents

1. Introduction 3

1.1. Background 3

1.2. Social-economical status of Liyang 4

1.3. Objectives and contents of the SA 5

2. Methodology 6

2.1. Data Collecting 6

2.2. Filed visit 7

3. Basic Information of Guanghua factory 8

3.1. History 8

3.2. Business situation 8

3.3. Current employee statues 9

3.4. Salary Statues 12

3.5. Productive safeguard 12

3.6. Development strategies 13

4. Project social impact analysis 14

4.1. Product social impact analysis 14

4.2. Social impact on production line closure 15

5. Mitigation measures 17

5.1. Reemployment objects 17

5.2. Cash compensation 18

5.3. Re-employment Training 26

6. Conclusions and Recommendations 27

Introduction

1 Background

Termites are worldwide-affecting pests. It produces a heavy affect on trees, gardens, buildings, dams, bridges, historic architecture, natural sight and environment. There are over 2000 species termites in the whole world and about 482 are found in all but six Northern provinces (Heilongjiang, Jilin, Inner Mongolia, Ningxia, Qinghai, and Xinjiang) in China, which are rich and with large population. These areas concentrate mostly in southeast which contribute 70% GDP of China. Affecting more than 40% of the total land area in China, termite has caused damages to between 30 and 90% of buildings south of the Yangtze River. It is estimated that the direct economic loss caused by termites in China is about 2 to 2.5 billion RMB Yuan annually. Termites have produced a heavy affect on the economic development and living security of people.

Both chlordane and mirex are produced and consumed in China as termiticides and because of heavy affect on human health and environment, they have not been allowed to produce and use in many other countries. There are twelve persistent organic pollutants (POPS) including termiticides chlordane and mirex identified for elimination by Stockholm Convention to accumulate in the food chain, and their ability to travel long distances through the global ecosystems and persist in the environment.

As a country strongly committed to the Stockholm Convention, China participated in all preparatory meetings and was one of the original signatories of the Stockholm Convention (signed on May 23, 2001). On August 13, 2004, China ratified the Stockholm Convention and became a Party to the Convention. China has made substantial progress in meeting the Convention requirement that Parties to the Convention submit a National Implementation Plan (NIP) to the Conference of Parties within two years after the Convention enters into force that country. In fact, China started preparing its NIP in mid-2004 and it expected to complete it timely by November 11, 2006.

This project’s demonstration corporation is Liyang Guanghua Chemical Company Ltd. On one hand, the closure of Chlordane and Mirex Production Facilities will reduce the harm to human health and global environment. On the other hand, the methods and experience can be a demonstration and reference to other projects according to the NIP.

2 Social-economical status of Liyang

Liyang, one county level city of Changzhou, is in the south of Jiangsu province plain. It is a land flowing with milk and honey, and is famous for its tea, silk, architecture etc. It is 59.06 km length from north to south while 45.16 km width from east to west. The topography of south, west and north are high while the middle and east are low and flat.

Liyang’s area is 1,535 km2 with 787,000 population (among which 612,600 or 78% agricultural population) in 2003, and population density was 1293 per km2. It includes 425000 mu surface of rivers and lakes, the average cultivate land per capita is 1.1 mu and forestland is 0.43 mu. Tianmu Lake scenic spot of Liyang is countrywide famous for vacation and tourism.

Liyang has a developed economy in Jiangsu Province. In 2003 the average GDP per capita was 15,415 Yuan. The industrial structure proportions of the primary, secondary, and tertiary are 11.6%, 55.3% and 33.1%. Financial income per capita of 2003 was 1561 Yuan. The annual salary per capita of urban workers was 13377 Yuan, net income per capita of rural was 5126 Yuan and retail sales of social commodities per person were 6286 Yuan[1] .

Guanghua Chemical Company, Ltd. is an experimental enterprise of GEF termite control project. It lies in the provincial economic development zone, which lies in the Northeast Liyang. The planning area of the development zone is 40 sq. km, and the explored areas were 10 sq. km. Up to now, there are 242 enterprises in the development zone and the total investment are 4.6 billion Yuan. Among them there are 180 industrial enterprises and 54 foreign-invested enterprises. The gross income of three industries in this district was 4.888 billion Yuan in 2003, industrial sales income 4.24 billion, gross domestic product 1.18 billion and the taxes 0.236 billion. The foreign capitals utilized by contracts were 44.21 million US dollars; the real utilized foreign capitals 19.18 US million dollars. Exports income was 20.13 million US dollars. Forty-two enterprises have invested in this district recently. The investment of technology improvement was 8650 million; basic facilities 50 million with new developed area were 3288 mu.

3 Objectives and contents of the SA

Termination of the productive operation would have impacts on the employment of the current staff employed in the productive operation. To mitigate this impact and develop necessary measures, a social assessment(SA) is proposed to be conducted. The SA report has 7 chapters. Chapter 1 and 2 introduce the background and task, references and research approach of SA. Chapter 3 introduces the basic situation of Guanghua Company, which contains eight respects about history, ownership, production and management, marketing, workforce, salary system, work security measures and development prospect. Chapter 4 describes the contribution of the company to local social economic development, and also point out the harmful effects to worker health and the community development by chlorine and mirex, on this basis analyzing the social influence brought by closing the company. In chapter 5 according to the participation and consultation with current employee and company owner , a mitigation measures are put forward on the basis of policies and data as “Liyang State-owned enterprises buy-out service” and “Liyang social security” etc. In chapter 6, the conclusion and suggestion have been proposed according to the demonstration and analysis above.

Methodology

1 Data Collecting

In order to predict social impact brings with the closure of company product line, at first the consultant must get detailed materials to analyze the interests loss of all employees. Because this project does not have corresponding policies, the compensation standard draws lessons from relevant projects and policies. At the same time, in order to check the accuracy of the information obtained from the company, the investigation has also consulted local revenue department, enterprise management department and workers’ salary inventories.

SA took following as references: Liyang social security policies and regulations, Liyang reemploy and training policy of laid off / unemployed workers, Liyang state-owned enterprise reform and buy-out policy, Liyang minimum living guarantee policies of urban and rural residents, financial data of Guanghua Chemical Company, Ltd from Liyang tax department, the social security fee payment data from Liyang labor department, All the policies documents are mainly got from Labor Bureau, Social Security Bureau, Civil Administration Bureau, Taxes Bureau, Environmental Protection Bureau of Liyang. The basic situation and information of the company is got from both manager and employee workers.

Main reference documents and materials are as follows:

1) Liyang statistical yearbook 2003,

2) File No.49 of 2000 of Liyang municipal government “suggestion on property relations reform of enterprises under municipality

3) File No.58 of 2001 of Liyang municipal government “suggestion on the labor relations reform of enterprises under municipality

4) Liyang no base calculation measures social security repayment;

5) Liyang social security policies of enterprise workers;

6) Balance sheet of 2003, Guanghua Chemical Company Co., Ltd.

7) The profit and its distribution forms of Guanghua Chemical Company Co., Ltd. ,2003

8) Workers’ basic information of Guanghua Chemical Company Co., Ltd.

9) Workers’ payroll of Chemical Industry Co., Ltd.

10) The financial statements of Guanghua Chemical Company Co., Ltd

11) Security policies for Guanghua Chemical Company workers

12) The 16th order of the State Economic and Trade Commission

13) Chemical law of the People's Republic of China

2 Filed visit

In order to get further information and cross-reference and double check the accuracy of the information from different sources, from April 8th to 22nd of 2005, a depth interview investigation of key information provider and a group discussion were carried out to verify alternately the authenticity of the materials. There were 15 people attending the group discussion, including 6 women, 4 managers and 11 line employees.

Basic Information of Guanghua factory

1 History

Liyang Guanghua Chemical Company Ltd. is a shareholding system enterprise, which was set up by Guan Linsen and Zhang Shunxiang couple in 1988. Originally the company’s predecessor is Liyang Guanghua Chemical Plant, a school-run workshop of Liyang Guanghua Middle School. The plant reformed in July 2002, renamed as Liyang Guanghua Chemical Company Ltd., it is an enterprise under city of Liyang, the ownership form is private (individual proprietorship), the company juridical person is Guan Huaqing (general manager). The company producing address lies in the Niucheduo, Liyang economic development zone of Jiangsu Province, the office address lies in the No. 216 Liyang Kunlun South road of Jiangsu Province. [2] The scale was correspondingly small when the company was founded, but now it is expended through the development in recent years. Principal products of business are chlorine, mirex, endosulfan and other chemical material. The company has 68 employees (appendix 1), including 16 administrative managers, 31 workers in chlorine production line and 21 in endosulfan production line. In October 2004, Guanghua Chemical Company Ltd. signed “CPC agreement” with National Environmental Protection Bureau, according to the agreement, in March 2005, the company removed the endosulfan production line and compensated 21 production line workers.

2 Business situation

The current existing fixed assets of Guannghua Chemical Company Ltd. are 3 million Yuan with good business status; the output value increased year by year from 1999 to 2002, but dropped down in 2003 and 2004. The company had the first production line to produce chlorine and mirex in 1998 and production capacity was 180 tons per year. From1999 to 2003 it added another line and the whole production capacity was 360 tons per year. But because of the demonstration of POPs agreement, it has reduced as one production line from August, 2003; the production capacity is 180 tons per year now. The chlorine stock is 160 tons at present and mirex stock is 2 tons.

In terms of the information of termite project brief[3], the general production cost of chlorine is 14,000 to 30,000 Yuan per ton, selling price is 26,000 to 48,000 Yuan per ton. The general production cost of mirex is 50,000 to 72,000 Yuan per ton, selling price is 200,000 to 320,000 Yuan per ton. It is obvious that chlorine and mirex are high profit products. The aftertax price of chlorine of Guanghua Chemical Company Ltd. is 30,769 Yuan per ton and the after tax price of mirex is 170,940 Yuan per ton. Chlorine and mirex products of Guanghua Chemical Company Ltd. are sold export indirectly and at home mainly. At the normal production level, the annual average net profit is 743,500 Yuan and annual average tax is 1,182,000 Yuan.

Table 3.1 Economy indexes of Liyang Guanghua Chemical Company, Ltd Social

Unit：Ten thousand yuan

|Year |1999 |2000 |2001 |2002 |2003 |2004 |

|Profit |49.39 |70.9 |83.78 |93.33 |76.06 |74.24 |

|Revenue |87.8 |114.2 |131.05 |139.9 |120.4 |114.6 |

3 Current employee statues

Principal products of business are chlorine, mirex, endosulfan and other chemical material. The company has 68 employees, including 16 administrative managers, 31 workers in chlorine/ mirex production line and 21 in endosulfan production line (appendix 1).

31 workers in chlorine and mirex production line are all agricultural residents with 14 women workers , among them 14 people have been working there more than 10 years, many of the rest have been working there nearly 9 years. Their education degrees are mostly at junior middle school level. All of them are Han nationalities and local residents of Liyang. The company has not signed the labor contracts with workers and buy social insurances either. The workers arrangement in chlorine and mirex production line are as follows: 18 online workers, 3 production managers, 4 technical workers, 3 maintenance workers and 3 other workers, 31 people altogether. The information of workers is as following:

|Employee name |Sex(m=male, f=female) |Education |Nationality |

|Manager |16 |8 of them will re-employed in the new company; |Lots of labor |

| | |Cash compensation for the other 8 managers |demand in Liyang |

| | | |economic zone |

|Chlordane and mirex |31 |Cash compensation | |

|Endosulfan |21 |Have been resettled | |

|Total |68 |8 re-employed | |

| | |39 cash compensation | |

4 Cash compensation

There is no corresponding compensation policies for those affected person. In order to ensure employees’ interests, it is suggests that the following relevant policies would be referenced .

Scheme one: Social insurances retroactively

（1）According to the local policy offered by Liyang social security bureau, because enterprise and workers have not signed labor contracts with Guanghua Company, all the social insurances only can be handed in retroactively until January 1996. And procreation insurances and hospitalization insurances only have no effectiveness if they are handed in later, so it its suggested that only endowment insurances and unemployment insurances will be calculated for the employees.

Endowment insurances: From January of 1996 to April of 2005, according to the monthly basic wages of the Liyang worker, the enterprise and individuals must pay the endowment insurances in certain proportion. Monthly basic wages and the payment proportions are showed in Table 5-2.

Unemployment insurances: The unemployment insurance value for one person accounts for 1% of one’s monthly basic wage and must be totally undertaken by the enterprise before 2000. From 2000, one’s unemployment insurance includes two parts, the enterprise undertakes 2% of one’s monthly basic wage and individual undertakes 1%.

Table5-2 Worker's monthly basic wage and insurance sharing proportions of enterprises and individuals

|Year |Amount of months |wage |Endowment insurance |Unemployment insurance |

| | | |enterprise% |individual% |enterprise% |individual% |

|From Jan. to Dec. 1997 |12 |570 |16 |4 |1 |0 |

|From Jan. to June 1998 |6 |630 |17 |5 |1 |0 |

|From July to Dec. 1998 |6 |630 |17 |5 |1 |0 |

|From Jan. to May 1999 |5 |663 |17 |5 |1 |0 |

|From June to Dec. 1999 |6 |663 |17 |5 |1 |0 |

|From Jan. to Dec. 2000 |12 |715 |18 |6 |2 |1 |

|From Jan. to Dec. 2001 |12 |758 |19 |7 |2 |1 |

|From Jan. to June 2002 |6 |855 |19 |7 |2 |1 |

|From July to Dec. 2002 |6 |855 |19 |7 |2 |1 |

|From Jan. to Dec. 2003 |12 |1242 |19 |7 |2 |1 |

|From Jan. to Dec.2004 |12 |1242 |20 |8 |2 |1 |

Note: monthly salary is the salary of no base repayment divide 60%. The monthly salary standard of social security bureau can be 60%、80%、100%、150%、200%、250%、300% of monthly salary. (monthly salary hand in is related to retired salary so according to the salary sheet of Guanghua Company, management staff should pay 300% of monthly salary and common work pay 150% of their monthly salary)

（2）The amount of compensation: By the end of December 2004 there were 31 workers in chlorine and mirex production lines need total social security compensation 930,000 Yuan including endowment insurance 840,000 Yuan and unemployment insurance 85,000 Yuan. Among them, the company should pay 620,000 Yuan of the endowment insurances and 59,000 Yuan of the unemployment insurances. There will be 8 managers of the two production lines not be employed after the closure. The total social security compensation money for them is 420,000 Yuan, including endowment insurance money 380,000 Yuan and unemployment insurance money 40,000 Yuan. And the company should pay 280,000Yuan of the endowment insurances and 28,000 Yuan of the unemployment insurances. The total compensation money of the social security is 1,350,000 Yuan including 1,220,000 Yuan of endowment insurances and 120,000 Yuan of unemployment insurances. The company should pay 910,000 Yuan for the endowment insurances and 87,000 Yuan for the unemployment insurances. The average compensation fee for the 39 employees is 25,000Yuan。

Calculating as endowment insurances standard now ( excluding workers pay security fee themselves after closure) they will get 494.4 Yuan monthly on average when he or she reaches the endowment age (man is 60 years old , woman is 55 years old ). According to the relevant social security policies of Liyang, a worker can get one month unemployment insurance[5] when his working time reaches one year. The longest time for the workers to get the unemployment insurances are 12 months. Because the workers of Guanghua Chemical Company Ltd. are all farmers, the unemployment insurances for each one are 147 Yuan per month.

Scheme two: reference of the compensation standard of the state-owned enterprise transformation of Liyang.

（1）According to the announcement of No. 49 of Liyang, 2000 , Article 4 in the suggestions on strengthening the Property Right System Reform of Liyang Industrial Enterprises

File No. 49 of Liyang in 2000: as for worker compensation, it is allowed for the reformed enterprises divide workers’ allocation fee from the company net assets. The contracted workers can get compensation money for every one-month when their working time reach every one year. Liyang city have not built up new the employment service centres since 2005; the workers who stop or unchain the labor contracts will enter the labor market directly. The economic compensation calculated as: the worker unchained the labor contract can get every one-month compensation wage when his working time reaches every one-year. The compensation wage is the average of the past twelve months salary before the contract unchaining. The worker whose contract is over before the buying out can get every one-month compensation when his working time reaches every one-year. But the longest time for him to get the compensation is 12 months and monthly salary standard is same with above.

According to regulations of the social security bureau, the company must make up the workers’ social security fee before unchaining the labor contracts. The company will have no responsibility to the workers’ social security fee from the next month after the workers get compensation. The social security money will be paid voluntarily by individuals from then on.

（2）Compensation fees. According to the standard above, workers should also be paid the one-off resettlement fee after the company pay off the entire social security fee for them. The amount of social security fee must be made up by the company is 1,350,000 Yuan. The workers should get 577,000 Yuan as resettlement compensation. So the total compensation fee is 1,927,000 Yuan including the social security and resettlement compensation fee. The total compensation fee is 1,570,000 Yuan(excluding the social security part paid by individuals )

The company should pay one-off resettlement compensation on the basis of handing in the social security. The resettlement compensation for 31 workers is 399,000 Yuan and the other part for 8 managers is 178,000 Yuan and total is 577,000 Yuan.

All the 39 staff can get endowment insurances and unemployment insurances at the proper age and time on the basis of getting the resettlement compensation.

According to the standards above, the total social security fee is 1,350,000 Yuan, the resettlement compensation is 577,000 Yuan. So the total compensation fee is 1,927,000 Yuan. Compensation sum is 157,000(excluding the social security part paid by individuals ) and each person of 39 workers can get 40,000 Yuan.

The minimum living guarantee of urban residents in Liyang is 240 Yuan per month for each person. The minimum living guarantee of rural peasants is 120 Yuan per month for each person. According to the schemes above, compensation workers obtained are higher than the minimum living guarantees for urban and rural residents of Liyang city.

Table 5-3 Social insurance and economical compensation for the 39 employees

No. |Name |Work year |Endowment insurance (total) |Endowment insurance (company) |Endowment insurance (individual) |Unemployment insurance

(total) |Unemployment insurance

(company) |Unemployment insurance

(individual) |Salary (Nov,2003) |Economical

compensation |Enter time | |1 |Ruan guofu |8 |58662 |43456 |15205 |5867 |4135 |1732 |3000 |24000 |1997 | |2 |Tan Guofeng |10 |61970 |46103 |15867 |6046 |4314 |1732 |3200 |32000 |1995 | |3 |Chen Tianfu |3 |32434 |23495 |8939 |3605 |2404 |1202 |2800 |8400 |2002 | |4 |Liu Hongbing |2 |24585 |17760 |6825 |2682 |1788 |894 |3000 |6000 |2003 | |5 |Li Aiguo |17 |61970 |46103 |15867 |6046 |4314 |1732 |3200 |54400 |1988 | |6 |He Yulin |4 |38986 |28283 |10703 |4424 |2950 |1475 |3000 |12000 |2001 | |7 |Zhang Xigao |7 |54866 |40420 |14446 |5662 |3930 |1732 |3200 |22400 |1998 | |8 |Xi Zhenghong |6 |50160 |36783 |13377 |5435 |3703 |1732 |3200 |19200 |1999 | | |Subtotal | |383631 |282403 |101228 |39769 |27538 |12232 |24600 |178400 | | |9 |Wang Zhilei |7 |27433 |20210 |7223 |2831 |1965 |866 |1460 |10220 |1998 | |10 |Zhou Anqing |6 |25080 |18392 |6688 |2718 |1852 |866 |1500 |9000 |1999 | |11 |Guan Linkun |15 |30985 |23051 |7933 |3023 |2157 |866 |1550 |23250 |1990 | |12 |Wang Yigang |2 |12293 |8880 |3413 |1341 |894 |447 |1450 |2900 |2003 | |13 |Tan Bingrong |4 |19493 |14142 |5351 |2212 |1475 |737 |1550 |6200 |2001 | |14 |Guan Xiangfeng |12 |30985 |23051 |7933 |3023 |2157 |866 |1460 |17520 |1993 | |15 |Zhoubin |2 |12293 |8880 |3413 |1341 |894 |447 |1460 |2920 |2003 | |16 |Yang Guorong |2 |12293 |8880 |3413 |1341 |894 |447 |1450 |2900 |2003 | |17 |Guan Huaping |15 |30985 |23051 |7933 |3023 |2157 |866 |1700 |25500 |1990 | |18 |Tang Shundi |16 |30985 |23051 |7933 |3023 |2157 |866 |1600 |25600 |1989 | |19 |Guan wangqin |12 |30985 |23051 |7933 |3023 |2157 |866 |1500 |18000 |1993 | |20 |Guan Huaxin |8 |29331 |21728 |7603 |2934 |2068 |866 |1460 |11680 |1997 | |21 |Guan Weifeng |9 |30985 |23051 |7933 |3023 |2157 |866 |1600 |14400 |1996 | |22 |Wang Jianjun |10 |30985 |23051 |7933 |3023 |2157 |866 |1340 |13400 |1995 | |23 |Teng Xizhen |4 |19621 |14235 |5386 |2212 |1475 |737 |1340 |5360 |2001 | |24 |Wang Wenying |7 |27433 |20210 |7223 |2831 |1965 |866 |1500 |10500 |1998 | |25 |Yang Abao |10 |30985 |23051 |7933 |3023 |2157 |866 |1500 |15000 |1995 | |26 |Tong Hemei |4 |19493 |14142 |5351 |2212 |1475 |737 |1400 |5600 |2001 | |27 |Liu Yingdi |15 |31671 |23581 |8090 |3023 |2157 |866 |1700 |25500 |1995 | |28 |Jiang Qindi |6 |25080 |18392 |6688 |2718 |1852 |866 |1550 |9300 |1999 | |29 |Guan Xifeng |12 |30985 |23051 |7933 |3023 |2157 |866 |1550 |18600 |1993 | |30 |Xia Keshuang |12 |30985 |23051 |7933 |3023 |2157 |866 |1700 |20400 |1993 | |31 |Fei Zhongliang |14 |30985 |23051 |7933 |3023 |2157 |866 |1200 |16800 |1991 | |32 |Zhang Liuqing |12 |30985 |23051 |7933 |3023 |2157 |866 |1200 |14400 |1993 | |33 |Yang Renqin |7 |27433 |20210 |7223 |2831 |1965 |866 |1140 |7980 |1998 | |34 |Guan Linbao |10 |30985 |23051 |7933 |3023 |2157 |866 |1200 |12000 |1995 | |35 |Yang Bulin |12 |30985 |23051 |7933 |3023 |2157 |866 |1200 |14400 |1993 | |36 |Wu Ankun |9 |30985 |23051 |7933 |3023 |2157 |866 |1200 |10800 |1996 | |37 |Zheng Caiqin |7 |27433 |20210 |7223 |2831 |1965 |866 |1200 |8400 |1998 | |38 |Yang Xiuqin |8 |29331 |21728 |7603 |2934 |2068 |866 |1200 |9600 |1997 | |39 |Chen Rongmei |9 |30985 |23051 |7933 |3023 |2157 |866 |1200 |10800 |1996 | |Subtotal |841465 |622639 |218826 |84678 |59476 |25202 |44060 |398930 |　 | |Total |1225096 |905042 |320054 |124447 |87014 |37434 |　 |577330 | | |

5 Re-employment Training

In order to reduce unemployment risks and reemployment pressure, various reemployment channels should be adopted besides compensation. Firstly, because of their skilled work in chlorine and mirex and knowing working environment well Guanghua Chemical Company Ltd. should employ these workers in the other two branch factories and the new company in Yancheng City. Secondly, it is encouraged the affected workers to work in local relevant factories. In the economic zone of Liyang, 15 km2 ecology garden and 3 km2 chemical industry garden are being established and need a lot of labor. Thirdly, when the workers are trained for reemployment they should be encouraged to select other jobs. Detailed training schemes as following:

1) Enterprises organize technologists to train the unemployed workers.

2) Workers can participate in the trainings organized by Liyang labor and social security department.

3) Training fees and source: according to the training fee standard offered by Liyang labor and social security department, senior type of work is 300 Yuan once one person, common type is 200 Yuan. Training fee is 500 Yuan once one person; the total is 15500 Yuan once and 58500 Yuan for three times.

Conclusions and Recommendations

First, on the basis of the full understanding to the harm to social development, human health and environment protection caused by chlorine and mirex, the company fictitious person, employees and the local community are all agree to the closure of chlorine and mirex production lines. But they demand reasonable compensation.

Second, the company has 68 employees, including 16 administrative managers, 31 workers in chlorine production line and 21 in endosulfan production line. According to the agreement signed with National Environmental Protection Bureau, the company has dismantled the endosulfan production line since March 2005. The 21workers in endosulfan production line have already been compensated. Eight managers of the two production lines remained to work in the company after the closure and another eight managers will not be remained. On the one hand their low education level do not adapt to the new management and development model of Yancheng Guanghua Chemical Company Ltd. On the other hand, they are unwilling to leave Liyang for Yancheng to work. 31 workers of the two production lines are all Liyang natives; they are unwilling to leave for Yancheng to work after the closure too. So after the closure, 31workers and 8 managers, 39 people altogether, will be compensated.

Third, through a depth interview investigation of key individuals and a collective discussion with the company corporation, managers, workers and local government, we have decided the following resettlement scheme: 31 workers of chlordane and mirex production lines hope to get cash compensation; eight of the sixteen managers can still be employed in Yancheng Guanghua Chemical Company Ltd. after the closure of chlordane and mirex production lines and the other eight persons hope to get cash compensation.

Fourth, there is no corresponding compensation policy to the closure. In order to ensure the staff’s interests, this social assessment suggests using the following relevant policies.

Scheme one: The amount of compensation: By the end of December 2004 there were 31 workers in chlorine and mirex production lines need total social security compensation 930,000 Yuan including endowment insurance 840,000 Yuan and unemployment insurance 85,000 Yuan. Among them, the company should pay 620,000 Yuan of the endowment insurances and 59,000 Yuan of the unemployment insurances. There will be 8 managers of the two production lines not be employed after the closure. The total social security compensation money for them is 420,000 Yuan, including endowment insurance money 380,000 Yuan and unemployment insurance money 40,000 Yuan. And the company should pay 280,000Yuan of the endowment insurances and 28,000 Yuan of the unemployment insurances. The total compensation money of the social security is 1,350,000 Yuan including 1,220,000 Yuan of endowment insurances and 120,000 Yuan of unemployment insurances. The company should pay 910,000 Yuan for the endowment insurances and 87,000 Yuan for the unemployment insurances. So the average compensation for each one is 25,000 yuan.

Calculating as endowment insurances standard now ( excluding security fee workers pay themselves after closure) they will get 494.4 Yuan monthly on average when he or she reaches the endowment age (man is 60 years old , woman is 55 years old ). According to the relevant social security policies of Liyang, a worker can get one month unemployment insurance when his working time reaches one year. The longest time for the workers to get the unemployment insurances are 12 months. Because the workers of Guanghua Chemical Company Ltd. are all farmers, the unemployment insurances[6] for each one are 147 Yuan per month.

Scheme two: According to the standard above, workers should also be paid the one-off resettlement fee after the company pay off the entire social security fee for them. The amount of social security fee must be made up by the company is 1,350,000 Yuan. The workers should get 577,000 Yuan as resettlement compensation. So the total compensation fee is 1,927,000 Yuan including the social security and resettlement compensation fee. The total compensation fee is 1,570,000 Yuan if the social security part paid by individuals is excluded.

The company should pay one-off resettlement compensation on the basis of handing in the social security. The resettlement compensation for 31 workers is 399,000 Yuan and the other part for 8 managers is 178,000 Yuan and total is 577,000 Yuan.

All the 39 staff can get endowment insurances and unemployment insurances at the proper age and time on the basis of getting the resettlement compensation.

According to the standards above, the total social security fee is 1,350,000 Yuan, the resettlement compensation is 577,000 Yuan. So the total compensation fee is 1,927,000 Yuan. Compensation sum is 157,000 if the social security part paid by individuals is excluded and each person of 39 workers can get 40,000 Yuan.

Fifth, Reemployment training should be given to workers besides compensation. Enterprises can organize technologist to train unemployed workers. Workers can participate in the trainings organized by Liyang labor and social security department. Training fees and source: according to the training fee standard offered by Liyang labor and social security department, senior type of work is 300 Yuan once one person, common type is 200 Yuan. We suggest tat training fee can be 500 Yuan once one person and 58500 Yuan for three times.

Appendix 1 ：Employee Situation of Guanghua Chemical Co., Ltd.

No. |Name |Sex |Education |Nationality |Compensation year |Salary (Nov.2003) |Labor Source (local/non-local) |Buy social security |Sign labor contract |Working in other factory at the same time |Permanent /temporary |Manager |Chlorine/mirex worker |Endosulfan worker | |1 |Wang Zhilei |m |primary school |Han |7 |1460 |local |N |N |N |1998 |　 |Y |　 | |2 |Zhou Anqing |m |middle school |Han |6 |1500 |local |N |N |N |1999 |　 |Y |　 | |3 |Guan Linkun |m |primary school |Han |15 |1550 |local |N |N |N |1990 |　 |Y |　 | |4 |Wang Yigang |m |middle school |Han |2 |1450 |local |N |N |N |2003 |　 |Y |　 | |5 |Tan Bingrong |m |middle school |Han |4 |1550 |local |N |N |N |2001 |　 |Y |　 | |6 |Guan Xiangfeng |f |middle school |Han |12 |1460 |local |N |N |N |1993 |　 |Y |　 | |7 |Zhoubin |m |high school |Han |2 |1460 |local |N |N |N |2003 |　 |Y |　 | |8 |Yang Guorong |m |middle school |Han |2 |1450 |local |N |N |N |2003 |　 |Y |　 | |9 |Guan Huaping |m |middle school |Han |15 |1700 |local |N |N |N |1990 |　 |Y |　 | |10 |Tang Shundi |f |middle school |Han |16 |1600 |local |N |N |N |1989 |　 |Y |　 | |11 |Guan wangqin |f |middle school |Han |12 |1500 |local |N |N |N |1993 |　 |Y |　 | |12 |Guan Huaxin |m |high school |Han |8 |1460 |local |N |N |N |1997 |　 |Y |　 | |13 |Guan Weifeng |f |middle school |Han |9 |1600 |local |N |N |N |1996 |　 |Y |　 | |14 |Wang Jianjun |m |primary school |Han |10 |1340 |local |N |N |N |1995 |　 |Y |　 | |15 |Teng Xizhen |f |primary school |Han |4 |1340 |local |N |N |N |2001 |　 |Y |　 | |16 |Wang Wenying |f |primary school |Han |7 |1500 |local |N |N |N |1998 |　 |Y |　 | |17 |Yang Abao |m |middle school |Han |10 |1500 |local |N |N |N |1995 |　 |Y |　 | |18 |Tong Hemei |f |middle school |Han |4 |1400 |local |N |N |N |2001 |　 |Y |　 | |19 |Liu Yingdi |f |middle school |Han |15 |1700 |local |N |N |N |1995 |　 |Y |　 | |20 |Jiang Qindi |f |middle school |Han |6 |1550 |local |N |N |N |1999 |　 |Y |　 | |21 |Guan Xifeng |f |middle school |Han |12 |1550 |local |N |N |N |1993 |　 |Y |　 | |22 |Xia Keshuang |m |high school |Han |12 |1700 |local |N |N |N |1993 |　 |Y |　 | |23 |Fei Zhongliang |m |middle school |Han |14 |1200 |local |N |N |N |1991 |　 |Y |　 | |24 |Zhang Liuqing |m |middle school |Han |12 |1200 |local |N |N |N |1993 |　 |Y |　 | |25 |Yang Renqin |m |middle school |Han |7 |1140 |local |N |N |N |1998 |　 |Y |　 | |26 |Guan Linbao |m |junior school |Han |10 |1200 |local |N |N |N |1995 |　 |Y |　 | |27 |Yang Bulin |m |junior school |Han |12 |1200 |local |N |N |N |1993 |　 |Y |　 | |28 |Wu Ankun |f |middle school |Han |9 |1200 |local |N |N |N |1996 |　 |Y |　 | |29 |Zheng Caiqin |f |middle school |Han |7 |1200 |local |N |N |N |1998 |　 |Y |　 | |30 |Yang Xiuqin |f |middle school |Han |8 |1200 |local |N |N |N |1997 |　 |Y |　 | |31 |Chen Rongmei |f |middle school |Han |9 |1200 |local |N |N |N |1996 |　 |Y |　 | |32 |Guan Lisen |m |undergraduate |Han |17 |6000 |local |N |N |N |1988 |Y |　 |　 | |33 |Guan Huaqing |m |junior college |Han |6 |6000 |local |N |N |N |1999 |Y |　 |　 | |34 |Zhang Shunxiang |f |undergraduate |Han |17 |6000 |local |N |N |N |1988 |Y |　 |　 | |35 |Guan Huaqiang |m |undergraduate |Han |8 |6000 |local |N |N |N |1997 |Y |　 |　 | |36 |Ruan guofu |m |high school |Han |8 |3000 |local |N |N |N |1997 |Y |　 |　 | |37 |Tan Guofeng |m |high school |Han |10 |3200 |local |N |N |N |1995 |Y |　 |　 | |38 |Chenjin |f |secondary school |Han |10 |3500 |local |N |N |N |1995 |Y |　 |　 | |39 |Lu Zhicheng |m |high school |Han |7 |3100 |local |N |N |N |1998 |Y |　 |　 | |40 |Chen Tianfu |m |Technology school |Han |3 |2800 |local |N |N |N |2002 |Y |　 |　 | |41 |Liu Hongbing |m |college |Han |2 |3000 |local |N |N |N |2003 |Y |　 |　 | |42 |Zhang Xigao |m |high school |Han |7 |3200 |local |N |N |N |1998 |Y |　 |　 | |43 |Xia Zhenghong |m |high school |Han |6 |3200 |local |N |N |N |1999 |Y |　 |　 | |44 |Jiang Meijuan |f |college |Han |6 |3000 |local |N |N |N |1999 |Y |　 |　 | |45 |Yang Meihua |f |secondary school |Han |2 |3100 |local |N |N |N |2003 |Y |　 |　 | |46 |Li Aiguo |m |high school |Han |17 |3200 |local |N |N |N |1988 |Y |　 |　 | |47 |He Yulin |m |college |Han |4 |3000 |local |N |N |N |2001 |Y |　 |　 | |48 |Fu Hongjian |m |middle school |Han |4 |1500 |nonlocal |N |N |N |2001 |　 |　 |Y | |49 |Qiong tinggui |m |middle school |Yi |4 |1600 |nonlocal |N |N |N |2001 |　 |　 |Y | |50 |Jiangxian |f |middle school |Yi |4 |1200 |nonlocal |N |N |N |2001 |　 |　 |Y | |51 |Meng Xianyou |m |middle school |Yi |10 |1460 |nonlocal |N |N |N |1995 |　 |　 |Y | |52 |Wang Kaihua |m |middle school |Miao |2 |1500 |nonlocal |N |N |N |2003 |　 |　 |Y | |53 |Chen Hailong |m |middle school |Han |2 |1400 |nonlocal |N |N |N |2003 |　 |　 |Y | |54 |Xiong Zhengyou |m |middle school |Miao |3 |1500 |nonlocal |N |N |N |2002 |　 |　 |Y | |55 |Wang

Chaokuan |m |middle school |Miao |4 |1500 |nonlocal |N |N |N |2001 |　 |　 |Y | |56 |Jiang Jiaan |f |junior school |Han |8 |1500 |nonlocal |N |N |N |1997 |　 |　 |Y | |57 |Chu Wangsheng |m |junior school |Han |9 |1500 |nonlocal |N |N |N |1996 |　 |　 |Y | |58 |Zhang Baorong |m |junior school |Han |8 |1500 |nonlocal |N |N |N |1997 |　 |　 |Y | |59 |Xiong Tingxiang |m |high school |Yi |2 |1600 |nonlocal |N |N |N |2003 |　 |　 |Y | |60 |Yang Guangxiang |m |middle school |Miao |2 |1600 |nonlocal |N |N |N |2003 |　 |　 |Y | |61 |Xiong Chaoming |m |junior school |Miao |2 |1550 |nonlocal |N |N |N |2003 |　 |　 |Y | |62 |Yang Shuwei |m |middle school |Han |4 |1550 |nonlocal |N |N |N |2001 |　 |　 |Y | |63 |Wang Fuchun |m |high school |Miao |2 |1550 |nonlocal |N |N |N |2003 |　 |　 |Y | |64 |Lu Dawei |m |middle school |Han |9 |1550 |nonlocal |N |N |N |1996 |　 |　 |Y | |65 |Wu Hongjun |f |middle school |Han |2 |1550 |nonlocal |N |N |N |2003 |　 |　 |Y | |66 |Sun Lianghe |m |primary school |Han |7 |1550 |nonlocal |N |N |N |1998 |　 |　 |Y | |67 |Zhou Jiukang |m |middle school |Han |2 |1500 |nonlocal |N |N |N |2003 |　 |　 |Y | |68 |Wang Guoqiang |m |primary school |Han |2 |1460 |nonlocal |N |N |N |2003 |　 |　 |Y | |

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[1] Liyang Statistical Yearbook 2003,

[2] telephone：0519—7301574；fax：0519—7302175；post code：213300

[3] Termite Project Brief, World bank, March, 2005

[4] Pay slip of Nov, 2003, Guanghua Chemical Company Ltd.

[5]According to the Liyang Statistical Yearbook 2003, the unemployment insurance is 1163 yuan every one per month.

[6] According to the Liyang Statistical Yearbook 2003, the unemployment insurance is 1163 yuan every one per month.

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