Chinese road subcontractor allegedly underpays workers

ZHONGMEI Engineering Group, subcontracted by the Roads Contractor Company (RCC) for the Henties Bay-Uis-Khorixas-Kamanjab road, seems to be underpaying its Namibian employees, if one compares their current pay rates to the rates in the latest gazetted labour agreement.

The Namibian is in possession of documents in which about 40 employees of Zhongmei have signed a rates agreement with their employer. These rates, however, do not reflect the rates as gazetted. Their names, job categories and hourly rates are shown on some of the documents.

Some examples show that construction drivers (code B or BE) are paid N$17,50 per hour, while the gazetted rate is N$20,71; carpenters get N$16 (gazetted rate is N$21,49 for semi-skilled workers and N$30,78 for artisans); general workers get N$13,26 (gazetted at N$14,59); and mechanics get N$14,59 (gazetted at N$27,06).

On the other hand, the Chinese employers of Zhongmei are enjoying ‘tax-free’ packages.

According to documentation seen by The Namibian, most of the workers earn around N$4 000 per month. According to the Namibian tax law, one is only taxable when one earns N$4 001 and above.

It is alleged that the Chinese employers avoid paying tax by only processing N$4 000 as salaries for most of the positions, while the other half or more of the salary is paid in cash at the site, and is thus not taxable.

The new minimum wage for construction workers in Namibia was gazetted on 31 December.

Published in Government Gazette No. 5917 of 31 December 2015 by the labour ministry, the new minimum wage is N$14,59 per hour, which is 10% more than the first minimum wage of N$13,26 introduced in 2013.

It is furthermore alleged that Zhongmei is holding back in giving a cut of the road construction contract to Erongo-based SMEs.

It is understood that there were 10 400 SME applicants to an expression of interest advertisement for the supply and delivery of several goods and services for this specific contract. Of the applicants, a shortlist of 800 SMEs was allegedly drafted.

Their participation is, however, limited.

Correspondence seen by The Namibian between the companies showed that SMEs will only be notified “around the middle term or near the end of the project”.

Work already started on the first phase of the 403-kilometre Henties Bay, Uis, Khorixas and Kamanjab connection. This phase alone will cost about N$560 million, and should be completed by 2018.

The Namibian reported last month that the Roads Contractor Company (RCC) is the main contractor for this first phase, while Zhongmei Engineering Group will be subcontracted. A minimum of 15% (N$110 million) of the entire project should be allocated to small and medium enterprises (SMEs), according to Roads Authority (RA) CEO Conrad Lutombi.

Erongo governor Cleophas Mutjavikua said the RA and RCC must give SMEs a bigger cut. He was not happy with 15%.

“How are these SMEs supposed to grow and eventually become subcontractors in larger projects? For them just to be involved in concrete work is not enough. There’s more they can do and learn to eventually become competitive, even with the bigger companies. This is what we want, and this is a good opportunity for this to happen,” Mutjavikua stressed.

Lutombi responded that 15% was just a minimum figure, and that more cuts usually go to SMEs with many of the RA’s projects. He added that SMEs will be evaluated during the first phase, and if they perform well, more doors will open for them when it comes to the next phases.

The Namibian understands, though, from reliable sources that SMEs are not even getting the 15% because Zhongmei has imported its own equipment, instead of renting it from the SMEs.

A local source very close to the project who does not want to be named, but plays a major role in the construction contract, agreed that Chinese employers “have a different way of doing things, which does not sit well with local workers”.

Claims by local workers and even project managers are that Chinese employers coming to Namibia to work on national projects somehow feel they have the liberty, without fear of prosecution, to breach local labour laws, and do things the ‘Chinese way’ that ultimately disadvantages local workers.

What is also claimed is that the Chinese’s apparent ‘liberties’ are approved by high-ranking government officials – which is considered a stab in the back to the local workers.

The Namibian tried to contact Zhongmei Engineering Group’s project manager Shu Rong for comment on the claims, but he did not answer his phone. A voice mail, and an SMS was sent to him regarding the matter, but he did not respond to any of the messages.

Source: The Namibian

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