The Situation

Many penal systems across the world allow the possibility of prison labour under certain conditions. However, in China prisoners are often forced to work in conditions that contravene international labour or human rights standards.

In China, the labour reform system (called the “laogaidui”) consists of three categories:

Labour reform of convicted prisoners (“laogai”), re-education through labour (“laojiao”), and forced job placement (“jiuye”). While laogai refers to prisoners who have been through the judicial system, laojiao has been controversial in that it refers to labour imposed on individuals detained without judicial conviction. Although recently, the Communist Party of China decided to abolish the latter practice, it will not be formally abolished until the top legislature amends the laws.

Meanwhile, this has become a lucrative practice in China, forming a profitable and essential part of China’s GNP and economic health. China thus has a vested interest in maintaining this system. Although these practices are promoted at trade fairs in China, buyers should still question them; these practices represent a systemic risk for companies operating in or sourcing goods from China. Failure to uphold the core international labour standards developed by the ILO – such as the forced labour and abolishment of forced labour

convention (see end of document) – can expose companies to various bad practices which are explained in this document.

BSCI Principles No bonded labour: Business partners shall not engage in any form of servitude, forced,

bonded, indentured, trafficked or non-voluntary labour.

There are three major indicators that indicate whether a prisoner’s labour is forced, thus violating human rights:

1. Lack of consent: The work is not performed voluntarily

2. Lack of fair remuneration: There is no legal minimum wage paid. 3. Lack of fair practices: Payments are not timely, in legal tender or in full. Published December 2013