UNIVERSITY OF MACAU | Bloody Coal Mine | -Ethical Analysis on Wangjialing Case | | | 5/1/2010 |

Group 4
BA605786 QIU KAN, Fred
BA600912 WENG YANG, Rick
BA605958 XU RU YIN, Reon
BA603026 CHEN JUN KAI, Kaiser

Event Review
28 Mar 2010, Wang Jialing, the state owned mine in Shanxi province, there were totally 261 miners underground before the accident. In order to catch the production schedule, dare to be the first, all miners worked hard at that moment. Even when someone reported that there was potential safety hazard in the mine, water penetration, the supervisor took little attention on it, still continued the project. When the accident happened, 108 miners had been lifting the shaft, and 153 workers were trapped in a coal mine, after about 150,000 cubic meter of water flooded into the mine. At that time, there has been no sign of life, even though thousand of rescuers have been working against time to search for them. The rescue operation lasted for two weeks. Finally, the coal flooding disaster killed 38 miners, and 115 trapped miners were rescued from death.

Relevant Facts
China coal mining industry
Coal has been the dominant energy source for China for hundreds of years. The industry of coal mining is highly related to China’s energy safety as well as GDP. This industry has been one of the most important mainstay industries to China. However, the coal mine industry is considered lacking of efficiency in production, labor intensive and has poor machinery. What has been the most debatable and criticized is the low salary for workers and unsatisfied safety condition in working environment. Even when the coal price soared and the revenue rise, that situation has not yet been changed. People can still find tragedies happened each year. The coal production is even referred as The Bloody Coal which is in scarification of hundreds of lives.

Tragedy Figures
In 2007: China: 1.485 deaths per 1 million tons of coal. U.S.: 0.04 deaths per 1 million tons of coal.
In 2009: China: 0.849 deaths per 1 million tons of coal. U.S.: 0.02 deaths per 1 million tons of coal.
The table below shows major mine accidents happened in China recent years. Date | Accident Location | Death Toll | Cause | 2009.09.08 | Pingdingshan, Henan | 54 | Illegal production | 2009.02.02 | Tunlan, Shanxi | 78 | Coal mine explosion | 2008.12.05 | Shanyin, Shanxi | At least 30 | Mine flooding, officials concealed the truth | 2008.11.08 | Chengcheng, Shaanxi | 29 | Gas explosion | 2008.09.21 | Dengfeng, Henan | 37 | Gas outburst | 2008.09.08 | Xiangfen, Shanxi | At least 276 | Dam collapse, officials concealed the truth | 2008.08.01 | Louufan, Shanxi | At least 43 | Iron-ore mine landslide | 2008.07.21 | Nadu, Guangxi | 36 | Mine flooding | 2008.07.14 | Weixian, Hebei | 35 | Explosion, officials concealed the truth | 2007.12.06 | Hongdong, Shanxi | 105 | Dust explosion, officials concealed the truth | 2007.08.17 | Xinwen, Shandong | 181 | Heavy rain caused flooding | 2006.11.12 | Lingshi, Shanxi | 34 | Illegal production of explosives | 2005.11.27 | Qitaihe, Heilongjiang | 171 | Dust explosion | 2005.08.07 | Meizhou, Daxing, Guangdong | 121 | Mine flooding, illegal production | 2005.02.14 | Sunjiawan, Liaoning | 214 | Gas explosion | 2004.12.02 | Tongchuan, Shaanxi | 166 | Gas explosion |

For some comparison, check out U.S.’s and China’s coal-mining death toll over the last ten years: Year | US (death number in person) | China (death number in person) | 2000 | 38 | 5300 | 2001 | 42 | 5670 | 2002 | 27 | 5791 | 2003 | 30 | 7200 | 2004 | 28 | 6027 | 2005 | 23 | 5986 | 2006 | 47 | 4746 | 2007 | 28 | 3786 | 2008 | 30 | 3215 | 2009 | 18 | 2631 |
Statistics on deaths per 1 million tons of coal indicate China’s miners are dying at a rate about 37 times America’s fatality rate. The death rate per million tons of coal production is the highest in China. In addition, we have got other figures about mine accidents in China. There were 188 serious coal mine accidents (with the death toll of 10 or more) in China from 2001 to 2004, an average of once every 4-7 days. The death toll of coal mine industry all over the world was 8000 in 2003 and Mainland China accounted for nearly 80% with 6434 people died. In China, the mortality rate per million tons of coal is 4%, which is 100 times of the United States, and 30 times of South Africa.

Ethical Issues
In order to deeply analyze the Wangjialing’ case and China coal mining industry, the following issues are investigated to draw a insight about the different parties involved and give a clear picture about why the tragedy seems inevitable.

1. Employment environment safety and health:
It’s widely accepted that the working environment of those coal mine workers are the most dangerous and risky situation that human-beings can withstand. The works are subject to a long list of calamities: cave-ins, floods, suffocations and poisonings from poor ventilation, and, most of all, explosions. Besides those potential geologic threats, the workers also expose largely to the hazardous gases, large pressure, humid weather, which tend to cause lung-disease etc. and thus reduce the life-expectancy.

Every country, including China, has a system of comprehensive laws and regulations that virtually specified every accepted behavior under the coal mine. In Wangjialing’s case, the deviation and loopholes of the regulations made the tragedy seems inevitable from the very beginning: For one thing, the ground water flow system was never investigated before the exploitation. Secondly, in order to catch-up with the progress, as many as 15 teams of workers, totally 150 people, are exploiting at the same time. Thirdly, most of the coalmine workers lack of training and practical experience in this highly specialized field, some new staff even work without the certificate. Finally and most severely, construction safety measures are not properly implemented—no evacuation or cease of operation even after the apparent symptom of flood was discovered.

It seems that the overlook of workers’ safety and health issues deeply rooted in China’s coalmine industry. Workplace safety hits the headlines every-time a crisis happens, and the central government takes strong measures against safety loopholes to the industry. However, the blooded lessons faded away soon and the old way of doing things becomes main-stream once again. Therefore, the government must recognize that the strong measures in a short while cannot solve the problem, and hence a sustainable or series of polices are expected to be enforced.

2. Basic human rights and workers rights
The PRC government argues that the notion of human rights should include economic standards of living and measures of health and economic prosperity. Regarding to the coal workers’ case, the ethical dilemma involves whether those poor workers should sacrifice health and take huge risk in order to trade for economic benefits. The answers, although is controversial, will depend on each single people’s value and beliefs. However, the proper treatment of those rural workers is a long-debated issue in China history, roughly 55% of China’s population was comprised by the rural society. Therefore, since most of the coal mine workers come from the rural area, how to make them share the incredible GDP growth and benefit from the urbanization progress will be the major concern of the government. As found out, the workforces hired by the mining team managers are usually temporary workers who continue to work less than three months. Those workers reserve less bargaining power for working safety and compensation. On the other hand, the regulations are less protective for them, and they even receive less compensation after the disaster.

3. Enforcement of management surveillance
Is management surveillance responsible for the disaster? Yes, of course. As research found out, the reason for this mine disaster was probably water percolation from upper old mine. Actually, this cause would be avoidable if pre-mining exploration was careful enough and if people could notice the omen of water percolation and were evacuated immediately. However, the pre-mining exploration was not conducted and monitored properly. For experienced expert equipped with advanced devices, it is easy to detect an old mine underground and notice any water accumulated. Only if this process was not enforced and taken seriously can it lead to the disaster. The management of the mine was not aware of the importance of pre-mining investigation and loosed the enforcement of necessary safety process as well as the surveillance on the project.

On the other hand, there were experienced workers who noticed mist existing in the channels and the coal slab on the sides chipped off days before and just before the disaster. Both of those implied that water could be around. The workers reported the situation immediately to the manager but got no response. The manager didn’t even take it seriously. It can show that the awareness of danger or risk management of managers was weak. Probably the manager was not trained and has little knowledge about mining, which is a result from poor management formation and surveillance. The safety early-warning should be regulated and enforced. Once managers get report for danger, they should call all the workers out of the mine and assess the situation.

4. Priority of safety and production
Priority of different values and perspectives lead to different action and results. This Wangjialing project was outsourced to mining team by the company. As stated by the company, the objectives in 2010 is to reach RMB 0.6 billion production, RMB 30 million profits. In order to compliment the objectives, the company applied progress evaluation system for all the outsourcing mining teams. It means that the team will get bonus if they can produce more, and pay penalty if they produce less. Under this system, all the mining teams forced to be productive aggressively.

Although “safety be the first” is the shared concept in mining industry, here in the case production took a higher priority than safety. Also because of this, in practice, all the process which would delay the progress of production would be ignore, for example, the detecting of water. The mining team and the company sacrificed the long-term interest which is to sustain a productive workforce team and ensure their safety to achieve short-term interest which is only to reach a production goal for the year. They considered the priority wrongly and fail to manage the relationship of long-term and short-term interest.

5. Customer Responsibility
One more ethical issue in this case is the customers should concern more and try to know more about the origin of the coal when they buy the product. Actually, it’s quite difficult to know exactly what the origin of the coal is. Usually, customer doesn’t know whether it’s from an illegal or legal mine or if many people died for our use of it. However, if the costumer takes more time to find out how the coal is collected, this will put a high pressure on the coalmine owners. Indeed, if usual costumers stop buying from the unethical coalmines, their sales will be severely hurt. Therefore, the more customers can be involved in the monitoring process the more likely the companies will execute the regulations and laws. To conclude, we can say that customers have an important role to play if we want to help increasing the security in the mine.

6. Family Interests
As an ethical employer, the responsibilities go beyond just concern the rights of the workers. The worker’s family, as a crucial part of employee’s welfare, is also deserved attention. For one thing, the long working hours, heavy energy demanding, and irregular work shift virtually make the coalmine workers no spare time to take care of the family. Therefore, the question is whether the company should take care about the worker’s family life which is virtually beyond the traditional working relationship. More specifically, after the crisis, how to compensate the family properly and how to make the family honestly and timely informed when the rescue under progress. Overall, everybody has family or beloved ones, and the he Gordon rules are: “Treat other as you want to be treated” might be a good lesson to those owners.

7. Insurance Company Involvement
We also think one of the ethical issues in this case is about the insurance companies. The death rate of China's coal mining industry is the highest in the world, with thousands of miners perishing every year in the pursuit of fuel for the country's rapidly expanding economy. Therefore, to ensure the compensation of these tragic events and take responsibility of the family’s victims, it is urgent and ethical to cooperate with the insurance company to further set up a risk reduction system. This system can not only ensure a comprehensive compensation scheme but also largely involved the insurance company into the surveillance process. Thus we can expect that as long as the coalmine owners are forced by the government to enter the insurance scheme, the workers’ rights can be protected more properly.

Values
To evaluate the Wangjialing tragedy, there is no simple judgment about which attitude is absolutely right. However, following perspectives of value should be treated as the basic principles in this highly risky and labor intensive industry.

1. Protecting the rights of the vulnerable groups
Vulnerable groups are defined as those groups which would be vulnerable under any circumstances and likely to have additional needs and experience poorer outcomes if these needs are not met. The lack of basic knowledge and working certificate, the absent of safety measures, together with the struggling economic status literally makes lives of those coalmine workers fragile when crisis happens unexpectedly. For example, almost all of the workers didn’t know how to use the life saving appliance when they trapped underground, because no one ever tough them.

Underneath the overlook of the welfare of the vulnerable groups is the disrespect of the dignity of those common people. In the coalmine industry, life is so cheap compares to the excessive revenue the coal owners made. Thus, those owners are quite used to use money to handle the death accidents. In their points of view, the death accidents are part of the coal mine operations, and as long as the dead numbers can be tolerant no sever consequences they need to bear. However, currently China has strict laws and regulations to surveillance the coal mine operations. Especially the “Coal Mine Production Safety Law” and “Criminal Law” punish the guilty owners severely. But the truth is no one really makes effort to enforce such laws and measures, thus virtually leave those workers unprotected and even easier to be exploited.

2. Honesty
In terms of information disclosure, the mining companies should be honest. For example, as required by the laws and regulation, certain safety measures and investigation process should be carried out as required. Companies should accept examination from relevant department and report all the facts. When facing mining disaster, companies should report the exact reasons that cause the disaster and find the person or department who is responsible. After the death, companies should be honest to the public for number of people died and compensate to the family of the people died as regulated.

3. Responsibility
The parties involved in those disasters of coal mining should be responsible. Mining industry is responsible for implementing a safe operation and production environment as well as obeying the laws and regulations. Managers are responsible for monitoring the production process and supervise the worker’s safety. Also, workers themselves should be responsible for their own lives and work by learning how to use tools to survive in danger and protect themselves.

4. Mutual-trustiness (reliability and responsiveness)

Furthermore, we think that the most important value in this case is obviously, the reliability and the responsiveness of the company. Indeed, it is the role of the company to ensure the security and the wellness of their employees. They are responsible of people life so it’s something nobody has to make fun on it. We think that, it’s a real exchange between workers and managers because workers have to trust their bosses and for that managers have to show their interest in workers security. Both parts have to take their responsibilities. On the one hand industry has to respect the rules and be involved in employees needs for the safety of everybody and on the other hand, workers have to demonstrate their dissatisfaction and annoyance toward the manager management. Moreover, the values reliability and trust are closely related.

Assumptions
The coal mine problem has its long existence in China and a lot of political and economic factors are involved. The solution is extremely complex and even there may not be any solutions exist today. However, in our report, we are only concentrating on the issues related to business ethics, that is, how the business can do to improve its position in ethics. Later some approaches will be discussed, and such approaches may be under challenge when applied in China. In order to make it less complex to focus only on the business ethics, please assume that we are in a world free of the complicated relationships among some “dirty” interest groups (the “evil” side).

Ethical approaches for solution
People always desire an end but fail to consider the approaches necessary to achieve it. This point of view that ethics is concerned with means rather than ends was raised by Miller (1996). He argues that for an ethical employment conditions to be met the organization must pursue a “good” strategy. Miller also concludes by arguing that there must be a fit between the organization’s strategy and its HR strategy for the business to be ethical. The rights and duties of both the employers and the employees should be harmonized to achieve the goal of an ethical business. He argued that some of the rights at work include: * the right to be treated fairly and honestly * the right to be treated as an individual, with roles recognized and adequate training provided the right to be given feedback on performance at work and the opportunity to improve skills * the right to be paid a fair and equitable rate in relation to skills, the labor market and the financial position of the firm * no restrictions on rights as a citizen * the right to have health and safety protected * the right to a personal life outside work * the right to take part in activities which are of benefit to society * the rights to work, and to free association and to strike.
On the other hand, the workers are also expected to fulfill certain duties, which might include: * the duty of loyalty * the duty to give “a fair day's work for a fair day's pay” * the duty to strike only as a measure of last resort * a duty to contribute to the best of their ability to the organization's goals * a duty to work flexibly, using their skills to the full * a duty to accept personal responsibility for developing skills to increase their effectiveness.
Duties, rights and obligations are not givens. No doubt some of the above listed may not applied to a second culture. Also, some of the above may not be applicable to our case here of the coal mine. But as a whole, we would say most of those are the general guidelines when we come up with ethical approaches for a business. Our ethical approaches for the coal mine in our case are therefore designed based on such guidelines. Below are the approaches we believe would make the coal mine business more ethical.

1. Improve the workplace safety and invest in the safety measures and facilities. The coal mine owners are expected to be responsible to inspect the coal mines they are operating to make sure that the probability of disasters such as coal mine flood and gas leakage is minimized. Besides equipped with the necessary safety tools as required by the laws and rules, the company will also keep up to date with the advancement in the safety technology. At least, it is a signal for the employees that the company does care about the workplace safety.

2. Strengthen surveillance in the workplace in the coal mine. Some of the disasters can be detected beforehand by experienced workers or inspectors. The laws have really strict and specific lines specifying the safety measures. However, the company should arrange more inspectors than the laws require so that the workers who are working in the coal mines will at least feel safer. Providing a sense of safety is, actually an important working environment that the coal mine company can create for the workers.

3. Invest more in training for the use of the life preservers. The law in China requires that the safety practice to be exercised at least once a year. Off course, to conduct ethical behaviors in business, the coal mine company can practice twice or even three times a year, or even more. Also, the company may also train the employees more during the normal operations. All of the actions will lead to more correct measures to be taken by the employees (refugees) during real disasters.

Principles, values and belief
The approach above is based on the principles, values and belief given below.

Fairness and Justice
Generally speaking, fairness or being fair can be referred to Distributive Justice or Equity. In the coal-mine crisis, Distributive Justice is all about whether the allocation of the company’s revenue is socially just. In Wangjialing, the workers’ revenue range from 1,500 to 2,000 RMB per month (just slightly above the minimum wage 0f 1,100) which is trivial comparing to the hundreds of thousands of revenue the owner makes per day.

The basic workers’ information of mining industry in different countries is listed below:

Compared to other major mine exploitation countries, we can also see that the huge annual output is primarily based on the extremely large amounts of workers whose personal productivity are well-below average. Therefore, as long as there is continuous workers supply, there is no incentive for the owners to train and enhance the worker’s skill, and thus there is no hope to earn the equal salary because the bargaining powers of workers are quite low. Overall speaking, this industry is all about the blooded money based on the exploitation of the low skilled cheap labors. So that the inequality also about the workers’ rights of a fair pay, training, proper working schedule, and safe working environment which belongs to the equity area.

Respect for life
All life should be respected; no matter one is non-education worker or power-equipped managers. We need to protect people from danger and save them from death. Healthy and safe environment should be developed in workplace.

Decision and action
In this part, we will provide some advises in order to improve and increase the safety in the mine and decrease the number of death in the work place. One of our solutions will be to unionize the coal mine workers to gain themselves larger negotiations power such as in many western country which have strong trade union units. It will permit them to bargain many factors such as salaries, working condition, retirement or paid vacations. If the union is strong enough, they could have a very strong bargaining power and going on strike and totally stop their activity which make the company having big looses. The problem of this solution is that it takes a very long time and trade unions have to be a part of the local culture. If people are not used to going on strike, for example, it’s very complicated to tell them to do it and they will not understand why they have to do it because they will not be paid during this demonstration. You have to make people understand their rights and duties. For example, in France, workers often go on strike each time government try to make changes or when you touch government official rights and benefits

Actually, we think we have to take the problem at the beginning in order to solve it. It is a problem that workers lacked of awareness and knowledge of self-protection. So in order to make them understand the real issue governments or companies have to take decision to educate employees and make them really involve on security problem and on the respect of rules. The solution is to increase training in company and of course sensitize employees on the danger of their work. During these training they should teach them how to react in case of emergency, explosion or flooding so the number of dead will obviously decrease.

Our last solution concern insurance companies which have to be more involved into the safety during their evaluation and control in the coal mine operation. Indeed, all extracted coal companies have to subscribe insurance in order to protect their business. In that case, insurance company should be more strict and severe as regards bad mine company and may be make them paid higher taxes or fees if there are not respecting the security. Bad companies should receive penalties for their non-ethical behavior and the best way to reach them is to make them losing money. Insurance company can exert pressure on their customers so we think it could be a good solution too. Lessons
After all the information collection and analysis on the case, several lessons can be learned with regards to not only the coal mining industry but also common business corporations.

1) Precaution measures are the most important.
From this coal mine accident, we must be aware that safety precaution measures are needed in high risk industry. Safe production is the primary problem. Many companies already have very good regulations for management. But in order to lower the risk, company has not only to pay more attention on precaution measures, but also to invest fund to taken in measures accordance with actual situation. 2) Respect for the basic human rights.
Everyone has the right to life and to live in freedom and safety. Miners here living at the foot of the social ladder, also have the basic human rights. There is an example in Australia, two miners were trapped in a coal mine, elicited the sympathetic response from the whole country. That why the fatality rate in Australia is almost zero in coal mine industry. In China, things go to different way. We believe that a company with high level of CSR, need to take care of their employees, give them the basic respect. Everybody lives in the world, should be equal, and should be valued. 3) Workers should have the awareness of their own safety.
These miners living at the bottom of society, has little education. They even don’t have the awareness of their own safety. That is the reason why mining company offers insufficient safety protective measures, to cut down the expenditures. This is unethical for the company, but it is profitable for the company. So it requires the miners have the awareness of their safety, and have the courage to bargain with the company.

Reference http://www.chinatimes.net/?p=36 http://frankwarner.typepad.com/free_frank_warner/2006/01/us_coal_mining_.html http://news.qq.com/a/20091121/001369.htm http://news.sina.com.cn/z/sxwjlmktssg/index.shtml

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