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Diane Francis

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Made in China? More like Destroyed by China

Posted: 05/02/2012 11:29 am

All Chinese companies must be banned from construction work in Canada because of their questionable track record here and around the world.

It was shocking that Enbridge Inc.'s Pat Daniel said his company was willing to allow a Chinese company to buy a piece of, and to bid for the construction, of the proposed Northern Gateway oil sands line.

Not only should China be banned from construction or bidding, but Investment Canada should ban Chinese companies from buying resource companies, or related assets.

China's strategy around the world is to buy resources, then low-ball to get construction contracts by using Chinese labourers and materials. This is not only damaging to the domestic economy, and unnecessary, but in some cases laws and obligations have been flouted, and people and host governments damaged.

In 2007, Sinopec Shanghai Engineering Company brought in 132 Chinese workers to an oil sands site to assemble their storage tanks, and do other work. Two workers were killed and several others injured. The remaining Chinese workforce was moved immediately out of Alberta, and work stopped.

The Alberta government charged Sinopec, its subsidiary, and their oil sands client with 53 safety charges. Sinopec and its branch plant have refused to appear in court. They say they have not been served papers because they are in China where they cannot be served papers to appear in court. Instead of acceding to Canadian law, they have not appeared.

In November, an Alberta Court of Appeal ruled the company must stand trial on these serious charges. In February, Sinopec said it wants the Supreme Court of Canada to overturn this ruling because it should be exempt.

It gets worse. Sinopec also did not pay these workers. The 132 Chinese workers were not paid an estimated $3.17 million by their Chinese employer even though they worked four months before the accident. They were transported out immediately after the deaths. Alberta employment standards spokesman Barrie Harrison said that the prime contractor, the Canadian oil sands project client, put the $3.17 million in wages, and benefits in trust even though it had no obligation to do so.

In an interview last year, Harrison said: "We are still trying to determine the best, most secure method of returning these funds to the workers, who are now either back in China, or working at other sites around the world. We've had nothing new to report on this file for quite sometime."

The Canadian embassy in Beijing has been involved in trying to right this wrong, at taxpayer expense.

This outrageous behavior by China and its companies should be reason enough to ban Chinese construction bidding, or workforces in Canada. After all, a major corporation has no respect for the rule of law here. It has damaged Chinese workers, and its Canadian client. It has cost the taxpayers of Alberta a great deal of money to try and clean up the mess, and prosecute those involved in the wrongdoing; it has cost the taxpayers of Canada, Canada's immigration department, and Canada's justice system as well.

By the way, this deplorable behaviour is nothing new or unique to Canada.

Shoddy work, and broken promises have occurred elsewhere. In Angola, in July 2010, more than 150 patients had to be evacuated from a new Chinese-built hospital in Luanda, after its walls began cracking, and bricks began disintegrating. China Overseas Engineering Group Co. (COVEC) built the hospital for $8 million. Reports began to come out in the local media that many roads, schools, hospitals, and other infrastructures completed by the Chinese were sub-standard or unsafe, and promises to employ Angolans were not kept.

Another example, in a developed nation, occurred in 2010. The Chinese were finally able to penetrate the European Union when COVEC won a bid to build a major highway in Poland by bidding less than half the price of domestic contractors. This caused consternation across the EU because of Chinese tactics around the world. The pattern is well worn: Chinese firms low ball to beat out local competition unfairly then bring in substandard materials, and workers from China.

The Poles, committed to tender bidding for contracts, were stuck with accepting COVEC's basement bid but were wise to their tactics. They stipulated that the company could not import Chinese materials, supplies or labor.

But COVEC flouted this requirement and started to bring in Chinese workers anyway, claiming that Polish workers were not cooperative and would not take pay cuts.

Then they began sourcing supplies from China, claiming that Polish suppliers refused to match Chinese prices.

In June 2011, COVEC stopped work. Poland sued COVEC for $271 million in damages for breach of contract. And the country has had to spend huge amounts to complete the highway in time for the 2012 European Football Champions in Poland this summer. COVEC told China Daily that it was asking for compensation.

For these reasons and more, Canada must ban any bidding or work permits to Chinese workforces. They simply are not acceptable. They are also not the only buyers for oil sands production either. A pipeline can deliver oil to the west coast to Asian and South American markets.

 

Follow Diane Francis on Twitter: www.twitter.com/@dianefrancis1

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All Chinese companies must be banned from construction work in Canada because of their questionable track record here and around the world. It was shocking that Enbridge Inc.'s Pat Daniel said his co...
All Chinese companies must be banned from construction work in Canada because of their questionable track record here and around the world. It was shocking that Enbridge Inc.'s Pat Daniel said his co...
 
 
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09:04 PM on 05/04/2012
"All Chinese companies must be banned from construction work in Canada because of their questionable track record here and around the world."

Indeed, if by "questionable" you meant finishing enormous projects on time and within budget, then yes, the Chinese are indeed astonishingly "questionable" when it comes to construction. By the way, why shouldn't the Chinese be invited to build at least a part of the pipeline, since they are going to be the number one buyer of the oil being carried by it?

Ms. Francis, tisk tisk, your arguments don't have anything to stand on, at all.
09:27 AM on 05/05/2012
Indeed they should, however the question of adhering to Canadian law is not a question at all. Workers in Canada are protected by health and safety laws no matter their country of origin. Also to build any infrastructure in Canada there are standards of quality that cannot be compromised. No project built in Canada should be done without a high degree of quality control, oversight, and with the best available materials and workmanship. This is not negotiable!
09:31 AM on 05/04/2012
Large construction projects should require a Bond or Letter of Credit from the contractor awarded the work. Then there is some ability to draw funds if the project has issues or fails. Why did these jobs not require financial security? I only waive it on projects when the winning bidder is a trusted contractor. It only adds 1-3% onto the price of the project, but adds a safety net for the project owners, and in these cases, the workers.
jimbo57
ni dieu ni maitre
05:08 AM on 05/03/2012
Of course, as a long time cheerleader for globalization, Ms Francis feels no personal responsibility for any of this.
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Mr e MaN
Political Atheist
10:46 AM on 05/03/2012
Just a bit hyocricatal when this trend comes home to roost.
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08:14 PM on 05/02/2012
As you say, their track record speaks for itself. Both the moral and economic costs of doing business with China are far too great.
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Mr e MaN
Political Atheist
07:10 PM on 05/02/2012
Well said they flout the laws, made fake products don't respect trademark, patent laws. A scourge on business everywhere.
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cameron d
Good Guys Win
06:37 PM on 05/02/2012
The headline should have had "wakka wakka" at the end.
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FearlessFreep
A radical leftist with a JS Woodsworth avatar.
06:10 PM on 05/02/2012
I remember when Investment Canada was the Foreign Investment Review Agency and its job was to scrutinize and not just promote.
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albertarick
These are questions for wise men with skinny arms
06:10 PM on 05/02/2012
Great article. Those of us who care about our country need to speak up as loud as possible about these concerns.
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The Canadian
Stop Harper
03:50 PM on 05/02/2012
Thank you, Ms. Francis, for writing this. I have been telling people for a long time what you have said about China, but some people think I exaggerate. Until China starts to respect the rule of law, they should have no involvement in Canadian affairs.