Social Compliance Audit Report

Project Number: 54077-002 August 2020

PRC: Jointown Pharmaceutical Distribution Project

The Social Compliance Audit Report is a document of the borrower. The views expressed herein do not necessarily represent those of ADB’s Board of Directors, Management, or staff, and may be preliminary in nature.

In preparing any country program or strategy, financing any project, or by making any designation of or reference to a particular territory or geographic area in this document, the Asian Development Bank does not intend to make any judgments as to the legal or other status of any territory or area.

1 Contents

1. INTRODUCTION ...... 6

1.1 Background ...... 6

1.2 Objectives ...... 6

1.3 Methodology ...... 6

2. COMPLIANCE FRAMEWORK ...... 7

2.1 ADB Safeguard Requirements ...... 7

2.2 PRC Land and Social Regulations...... 7

3. DESCRIPTION OF THE SUBPROJECT ...... 7

4. SOCIAL COMPLIANCE AUDIT FINDINGS ...... 8

4.1 Involuntary resettlement ...... 8

4.1.1 Hainan Sub-project ...... 9

4.1.2 Nanjing Sub-project ...... 16

4.1.3 Tangshan Sub-project ...... 19

4.2 Indigenous people...... 23

4.3 Information disclosure, consultation and Participation ...... 23

4.3.1 Hainan Sub-project ...... 24

4.3.2 Nanjing Sub-project ...... 25

4.3.3 Tangshan Sub-project ...... 28

4.4 Grievance Redress Mechanism ...... 30

4.4.1 Hainan Sub-project ...... 31

4.4.2 Nanjing Sub-project ...... 31

4.4.3 Tangshan Sub-project ...... 32

4.5 Labor and social protection ...... 34

4.5.1 Hainan Sub-project ...... 34

4.5.2 Nanjing Sub-project ...... 36

2 4.5.3 Tangshan Sub-project ...... 38

4.6 Gender issues ...... 39

4.6.2 Nanjing Sub-project ...... 39

4.6.3 Tangshan Sub-project ...... 40

4.6.1 Hainan Sub-project ...... 41

4.7 Conclusions and Recommendations/Corrective Action Plans ...... 42

Appendix 1 JT Organization Chart ...... 47

Appendix 2 Attendance Sheets ...... 48

Appendix 3 Documents reviewed ...... 53

Appendix 4 Relevant national land law and regulations ...... 58

3 Table of Contents

Table 1 Basic information of three subprojects ...... 7

Table 2 Timeline of key actions related to Hainan JT's land ...... 16

Table 3 Timeline of key actions related to Tangshan JT’s land ...... 19

Table 4 Timeline of key actions related to Hainan JT’s land ...... 23

Table 5 Staff composition by sex of Hainan JT ...... 40

Table 6 Staff composition by sex of Tangshan JT ...... 42

Table 7 Corrective Action Plan/ and recommendations ...... 45

Fig 1 Location of three subprojects in China ...... 8

Fig 2 Land deal confirmation (Hainan JT) ...... 10

Fig 3 Real Estate certificate (Hainan JT)...... 10

Fig 4 Location of Hainan JT in Meian Phase 1 ...... 11

Fig 5 Notice of Land Acquisition for Meian Phase 1 ...... 11

Fig 6 Preliminary land acquisition agreement with Meiling Village for Meian Phase1... 12

Fig 7 Land plots contracted by 39 households in Meiling Village ...... 12

Fig 8 and Fig 9 Compensation rate for young crops and attachments (2014 document)13

Fig 10 Land leasing contract (Nanjing JT) ...... 17

Fig 11 Land use certificate (Nanjing JT) ...... 17

Fig 12 Land leasing contract (Tangshan JT) ...... 20

Fig 13 Real Estate certificate (Tangshan JT) ...... 20

Fig 14 Location of Tangshan JT inside the Fengnan Development Zone ...... 21

Fig 15 Handbook of staff ...... 25

Fig 16 Bulletin boards in front of the canteen ...... 25

Fig 17 Poster on the wall about first training for logistics management staff in 2020 ... 26

Fig 18 Board on the wall about SOP of goods collection ...... 26

Fig 19 Board on the wall about safe driving...... 26

Fig 20 Banner of ‘All quality concept, full quality management’ ...... 27 4 Fig 21 Bulletin board about the 2019 excellent staff ...... 27

Fig 22 Bulletin board (left: personal tax rate policy; right: quality knowledge) ...... 27

Fig 23 Safe construction knowledge on the way to the construction site ...... 28

Fig 24 Bulletin boards (left: green civilized construction requirement; right: name list of managerial staff and monitoring telephone number) ...... 28

Fig 25 Bulletin boards (left: representative of various entities; right: name list and contact ways of various representatives who are responsible to monitor dust pollution on the construction site) ...... 29

Fig 26 Bulletin board (Notice for migrant workers in construction industry to protect their rights) ...... 29

Fig 27 A response log of client’s complaint about goods loss ...... 30

Fig 28 Mailbox of General Manager ...... 32

Fig 29 Posters (right: name list and mobile number of managerial staff, and monitoring telephone number) ...... 32

Fig 30 Notice board of workers’ rights protection ...... 33

Fig 31 Notice board of mobile numbers for complaints about dust and muck ...... 33

Fig 32 Female staff’s dormitory Fig 33 Male staff’s dormitory ...... 35

Fig 34 Female staff’s dormitory Fig 35 Male staff’s dormitory ...... 36

Fig 36 Middle level manager’s dormitory Fig 37 Couple staff’s dormitory ...... 37

Fig 38 Contract signed between Jiangsu JT general manager and chief administration director ...... 37

Fig 39 Contract signed between chief administration director and the manager who is responsible for safety ...... 37

Fig 40 Delegation agreement about deposit account of migrant workers’ wage ...... 39

Fig 41 Construction bank’s payment list ...... 39

Fig 42 Female and male workers’ toilet and bathroom ...... 41

5 1. INTRODUCTION

1.1 Background

ADB will provide up to EUR30,000,000 (or its equivalent in Chinese yuan) senior loan financing to Jointown Pharmaceutical Group Company, Ltd. (Jointown), together with DEG, to support the construction of two new pharmaceutical distribution facilities in Tangshan, Hebei Province and Haikou City, Hainan Province and the expansion of an existing pharmaceutical distribution facility in Nanjing City, Jiangsu Province. Jointown, established in 1999, is the biggest private pharmaceutical company in the People’s Republic of China (PRC) with distribution of medicines and medical equipment manufactured by other companies as its core business. The company’s current pharmaceutical distribution facilities consist of warehouses and logistics network in 31 provinces in the PRC with approximately 5,000 employees and 1,700-vehicle logistics fleet (delivery trucks) serving hospitals, clinics and retail pharmacies.

During the COVID-19 outbreak, ADB temporarily shifted to processing the COVID-19 Emergency Response Project providing $18.6 million emergency assistance to Jointown as short-term funding (approved on 20 February 2020).

1.2 Objectives

Jointown requires an audit of its Corporate ESMS as well as existing facility audits of the three sub-project facilities that are proposed to receive ADB financing, in accordance with ADB SPS.

This report details the findings of the social compliance audit which is supplemented by the ESMS Corporate Audit Report and the Environmental Compliance Audit Reports for the three subprojects, where the latter was conducted in parallel to this social compliance audit.

The report is intended to provide information to Jointown on the findings of the social compliance audit and report on each of subproject’s compliance with PRC national legislation and ADB’s SPS 2009. Where there are gaps in legal compliance or the requirements of ADB these are identified and summarised in a Corrective Action Plan. The corrective actions will be discussed and agreed between the client and ADB as part of the loan agreement.

1.3 Methodology

In the course of conducting the social audit for the subproject, the following methodology was undertaken: (i) a desk review of JT’s existing environmental and social management system, (ii) a review of relevant national laws, regulations and guidelines related to social impact assessment, land acquisition, ethnic minorities and consultation and participation, (iii) interviews with JT’s corporate and subsidiary staff at various levels, local land acquisition relevant officials, local people affected by land acquisition (see appendix 1), and (iv) site visit of the three subprojects from June 1 to 6, 2020. The documentary review and interviews were carried out during the course of the site visit with an aim to assess the labor and working conditions, land acquisition and involuntary resettlement, indigenous peoples, and gender and

6 development. The desk review also included a review of project documents and literature including certificates of land use, land lease contract, detailed measurement survey record and consultation documents (see appendix 2).

2. COMPLIANCE FRAMEWORK

2.1 ADB Safeguard Requirements

⚫ ADB. 2009. Safeguard Policy Statement. ⚫ ADB. 2011. Social Protection. ⚫ ADB. Prohibited Investment and Activities List. ⚫ ADB. 2003. Policy on Gender and Development.

2.2 PRC Land and Social Regulations

Involuntary Resettlement

⚫ Law of Land Administration of the People’s Republic of China (effective from January 1, 1999; Revised in 2004); ⚫ Implementing Regulation on the National Law of Land Administration (Decree No.256 of the State Council, effective from January 1, 1999); ⚫ Notice on Further Improving the land acquisition and management (Decree No. 96) ⚫ Methods of Land Acquisition Notice (Decree No. 10) Indigenous Peoples

⚫ Ethnic Minority Autonomous Religion Law of PRC (effective from October 1, 1984, amended on February 28, 2001) ⚫ Notice of State Council on the Establishment of Ethnic Minority Villages (1983) ⚫ Regulation on the Work of Administrative Urban Ethnic Minority (effective from September 15, 1993) Labor and gender

⚫ Labor Law of the People’s Republic of China (effective from January 1,1995) ⚫ Law of the People’s Republic of China on the Protection of Rights and Interests of Women (effective from October 1,1992)

3. DESCRIPTION OF THE SUBPROJECT

The situation of three proposed subprojects is listed in the following table (Table 1) and the location is shown in the following figure (Figure 1).

Table 1 Basic information of three subprojects

Name Activity Status

7 Sorting center, testing center, auxiliary Construction almost Hainan Jointown room and guard room basically completed Development Project completed, three-dimensional warehouse, headquarters economy Sorting workshop underground garage, Construction almost Nanjing Jointown 8 floors above ground and sorting completed Project Phase IV workshop inspection building Sorting center, three-dimensional Construction on-going Tangshan Jointown warehouse, R & D center, boiler room Development Project and supporting room

Fig 1 Location of three subprojects in China

4. SOCIAL COMPLIANCE AUDIT FINDINGS

4.1 Involuntary resettlement

Jointown (JT) corporate has an Investment Management Department (see Appendix 1), which is responsible for obtaining access to land for sub-projects. Matching JT’s development plan with local governments’ investment attraction plan, the staff in this Investment Management Department travel around, negotiate with local governments, make preliminary investment agreement including land issue, usually receive a 50 years land lease from local government through official procedures, and then sign formal investment agreement.

JT rarely purchases land from other companies or launches the land acquisition or lease directly. JT prefers to choose the sites in local Development Zones or Industrial Parks or Logistics Parks. One reason is that these zones/parks provide preferential policies to attract the investment. The other reason is that JT needs not to be involved in complex land acquisition and avoid potential conflict or risk directly with affected villagers. Usually local government undertook a large area of land acquisition first to develop the Development Zones

8 or Industrial Parks or Logistics Parks. Then land was flattened and infrastructure including roads, electricity, water, communication and drainage were constructed to attract the investors. JT, as an investor, arrived after the land acquisition and received the land legally leased by local government. Thus, JT usually knew little about the previous land acquisition process and the information of affected villagers.

JT’s Investment Management Department developed an Instruction for Land Acquisition Survey (the Instruction) in 20191. The Instruction requests the project managers to investigate the proposed sites. They need to interview with the affected people or key informants, review official documents, search for pertinent online information, and make necessary documentation like recording the interview or taking photos or photocopying or scanning the official documents. They also need to fulfill a ‘Land Survey Table’, which requests various detailed information about land acquisition , including the area and location of the land, the registration number of land use certificate, land lease period, how much to pay, where to obtain the land, number of people affected by land acquisition and house demolition, whether indigenous people, their land area, land uses, annual average income and land price before and after land acquisition, their land and income loss rate, whether the affected people have been compensated, in what kind of ways, compensation rates and policies, description of the information disclosure, consultation, grievance redress mechanism and channels, measures taken to help the affected people to restore their livelihood, what the grievances are and how to redress them, and any conflict or eviction.

A copy of a Land Survey Table with information regarding the three sub-projects was reviewed before the site visit, but supporting documents as the Instruction required have not been submitted for review.

4.1.1 Hainan Sub-project

(1) Land lease

The land area of Hainan JT is 60078.76m2 (90.11mu). The land was leased by Hainan Municipal Natural Resource and Planning Bureau to Hainan JT on May 28, 2019 (see Fig 2). Hainan JT received the real estate certificate on September 10, 2019, which specifies that Hainan JT has the land use rights for 50 years from July 10, 2019 to July 10, 2069 (see Fig 3).

1 IFC did an ESDD on Join earlier in 2019 in a separate transaction. IFC guided JT’s Investment Management Department to develop this Instruction.

9

Fig 2 Land deal confirmation (Hainan JT)

Fig 3 Real Estate certificate (Hainan JT).

(2) Review of land acquisition

A. Impact

The site currently used by Hainan JT (90.11mu) is part of a larger development coordinated by Xiuying District Government (2.3%) (see Fig 4). A large tract of land was occupied in 2014 for Meian New Science & Technology City Phase 1 (Meian Phase 1) with the land area of 259.82ha (3897.3mu, including 3889.489mu of collective-owned land and 7.81mu of state- owned land) (see Fig 5). Xiuying District Government of Haikou Municipality signed the land acquisition agreements with over 20 affected villages. Meiling Village which owned the land now occupied by Hainan JT was one of them. In total, the land area of 88.38ha (1325.761mu) from Meiling Village was occupied for Meian Phase 1 (see Fig 6).

10

Fig 4 Location of Hainan JT in Meian Phase 1

Fig 5 Notice of Land Acquisition for Meian Phase 1

11

Fig 6 Preliminary land acquisition agreement with Meiling Village for Meian Phase1

The government’s land acquisition of Hainan JT plot (about 90.11mu) affected about 39 households (see Fig 7). Many are villagers of Diandu Village Group of Meiling Village. According to the present village group leader Mr. Zhong, there were no houses on Hainan JT’s plot before the land acquisition. The plots were paddy land or planted with banana trees.

Fig 7 Land plots contracted by 39 households in Meiling Village

B. Policy framework and entitlement

Compensation for land

Land acquisition for Meian Phase 1 in 2014 complied with PRC’s Land Management Law, Hainan Special Economic Zone’s Land Management Regulation, and Notice of Land Acquisition for Meian Phase 1.

As per the agreement (see Fig 8), the rate of land compensation was 66,408 Yuan/mu irrespective of land type. The land compensation was paid by Xiuying District Government to the affected villages directly since villages were the land owners. As the land owners, these

12 villages deducted certain amount of land compensation for public affairs or welfare, and then distributed the rest to the affected villagers. For Diandu Village Group, 3% of the total land compensation was deducted. The rest was distributed to the affected villagers’ bank accounts as per the area of their farm land.

Compensation for green crops and attachments

Meian Phase 1 complied with the revised Hainan Province’s Compensation rate for Green crops and Attachments issued on May 13, 2014. Young crops on the paddy land were compensated at 1,663 Yuan/mu while banana trees for 10~75 Yuan each (see Fig 8 and 9).

Xiuying District Government allocated Shishan Town Government the compensation for green crops and attachments. Then Shishan Town Government paid the compensation directly to affected households since they were the owners of the green crops and attachments.

According to Mr. Zhong, all the compensation had been paid to the affected villagers.

Fig 8 and Fig 9 Compensation rate for young crops and attachments (2014 document)

For vulnerable groups

13 All the affected villagers were treated the same. No special support policy has been provided to the affected vulnerable groups during the land acquisition. According to Mr. Zhong, no vulnerable people became more vulnerable because of land acquisition. If the vulnerable people had the problem, they could go to the village committee or local government for help.

Endowment insurance policy

Meian Phase 1 complied with Hainan Province Social Endowment Insurance Measures for Land-occupied Farmers issued in 2013. Xiuying District Government signed the land acquisition agreement with affected villages first and then paid the premium to Haikou Municipal Social Safeguard Bureau. The premium was calculated on the basis of the area of occupied land. When the male land-occupied farmers become 60 years old and the female 55 years old, they could enjoy the pension monthly. However, the endowment insurance application of land-occupied farmers was actually launched by local governments in 2018, later than expected.

Haikou City land resource bureau issued the notice on September 11, 2018, asking the district government to organize the land-occupied farmers information collection. The farmers were required to report their personal and occupied land information, which were later publicized in the village. When there was no disagreement, these information were transferred to the City Rural Social Endowment Insurance Bureau to deal with the latter issues.

C. Livelihood restoration

Before the land acquisition, the agriculture production from paddy land was not the key income source in Diandu Village Group. In total, there were less than forty households in Diandu Village Group. More than 15 HHs were involved in transportation or construction business. More than 5 HHs were running small restaurants. Other HHs had members with part-time off- farm jobs.

According to Mr. Zhong, over 85% of the farmland in their group has been occupied by Meian Phase 1. The affected villagers got the compensation for land, young crops and attachments. Elderly villagers could get the land-occupied farmer’s pension after the men reached 60 years old and the women 55 years old. Young villagers could get the off-farm jobs in the incoming factories or companies in Meian Phase 1.

Local government didn’t provide the skills training for the villagers affected by land acquisition. But in the investment agreement signed with Hainan JT, Haikou National High-Tech Development Zone did request the enterprises to actively hire the villagers affected by land acquisition.

According to the Land Acquisition Survey Table submitted by JT, the affected villagers’ average annual net income per capita was 15,000 Yuan before land acquisition while 24,000 Yuan at present.

14 D. Public Participation, Consultation and Information Disclosure

According to the town official, complying with national Announcement Measures for Land Acquisition, Notice of Land Acquisition for Meian Phase 1 was posted in the villages to let the affected farmers know the project and land compensation issues.

Village cadres also organized the meetings to inform the villagers about the land acquisition issues. They discussed and decided the percentage that the village would take from the land compensation for public affairs or welfare.

The Detailed Measurement Survey (DMS) which was conducted in Meiling Village between 2014 and 2015. It required the participation of affected households and the survey outcome needed the recognition of affected villagers with signatures (see Fig 10 and 11). The survey outcome was also posted in the village for announcement in case there was any disagreement among villagers.

Fig 10 Affected villagers’ participation during DMS

Fig 11 DMS sheet with signature

E. Grievance Redress Procedure

15 According to the town official, if the affected farmers were unsatisfactory, they could complain to the village cadres or they could go directly to the town official, even to the district officials who were responsible for the land acquisition of Meian Phase 1. Also they could appeal to various levels of Land Management departments or Letter & Visit departments.

According to Mr. Zhong, affected farmers would not complain about the compensation rates because they were regulated by local governments and they could not argue for more. The common complaint was among affected villagers arguing about the land boundary. But it would not affect the progress of land acquisition. Only if the villagers made the agreement, the compensation would be allocated without delay. There are no outstanding or unresolved land complaints.

F. Monitoring & Evaluation

No monitoring & Evaluation was taken by local government since China’s domestic policies do not require for the monitoring and evaluation of involuntary resettlement except for hydraulic or hydro power projects.

Record keeping: Original records of land acquisition and compensation about Hainan JT’s land plot are maintained in the Shishan Town Government.

Key actions during the land acquisition are summarized in the following table.

Table 2 Timeline of key actions related to Hainan JT’s land Actions Time Responsible agency Participation Issued the Land April 2014 Haikou City Government Acquisition Compensation Scheme and tomb relocation Signed the land 2014 Xiuying District Meiling Village acquisition agreement Government Information disclosure 2014-2015 Xiuying District Shishan Town, land and consultation Government resource department, Meiling Village, villagers Conducted detailed 2014-2015 Xiuying District Shishan Town, land measurement survey Government resource department, Meiling Village, villagers Compensation for land 2014-2015 Xiuying District Shishan Town, land acquisition Government resource department, Meiling Village, villagers Implemented the land- 2018 Xiuying District Shishan Town, land acquired farmers Government resource department, endowment insurance Meiling Village, villagers Signed the land lease May 28, Haikou City Natural Hainan JT contract 2019 Resource and Planning Bureau Received real estate September Haikou City Natural Hainan JT certificate 10, 2019 Resource and Planning Bureau

4.1.2 Nanjing Sub-project

(1) Land lease 16 The land area of Nanjing JT is 45264.8m2 (67.9mu). The land was leased by Jiangning District Branch of Nanjing Municipal Land Resource Bureau on April 7, 2005 (see Fig 12). Nanjing JT received the land use certificate on December 10, 2005, which specifies that Nanjing JT has the land use rights for 50 years from April 7, 2005 to April 6, 2055 (see Fig 13). The expansion happened within the present land plot and no need to trigger new land acquisition.

Fig 12 Land leasing contract (Nanjing JT)

Fig 13 Land use certificate (Nanjing JT)

(2) Review of land acquisition

A. Impact

17 Nanjing JT is located in Jiangning Economic and Technological Development Zone (Jiangning Development Zone) which was established in 1992. Jiangning Development Zone started its land acquisition in the same year. In 2010, Jiangning Development Zone became the national level development zone and the area was approved by the State Council as 38.47Km2.

Nanjing JT’s land plot is small part of Jiangning Development Zone (accounting for 0.12% in 2010). It was located in original Yinxiang Town of Baijiahu Sub-district. Land acquisition of Yinxiang area was started in 2001 by Baijiahu Sub-district Government.

According to Mr. Li, the director of enterprise service department in the Jiangning Development Zone Management Committee, the original official documents about land acquisition of Yinxiang area were difficult to find, which were about twenty years ago. Since the records were unavailable for us to review with regard to land acquisition and compensation, we could not know the accurate data about how many households were affected by the land plot of Nanjing JT, the exact timeline of the land acquisition process, and either the exact compensation rates. But Mr. Li reminded that the land acquisition around JT’s land was undertaken around 2001 and 2002.

B. Compensation

The Jiangning Development Zone Management Committee paid the compensation 2 to Baijiahu Sub-district Government. The latter was responsible for land acquisition and house demolition. The affected farmers were compensated in cash for their lost land, young crops and attachments. Yinxiang New Apartment was a residential area built by local government especially to settle local people affected by house demolition for the Development Zone. It kept expanding and now it has 297 buildings and about 40,000 residents.

C. Livelihood restoration

According to a media report3 published after compensation, affected farmers changed their identity from rural residents to urban citizens4 after land acquisition. They had the rights to enjoy urban residents’ medical insurance, endowment insurance, and minimum living subsistence allowance, much more than those for rural residents. After the allocation of new apartments and land compensation, local government took measures to encourage the affected villagers to create their own business. Self-employed subsidies were distributed to affected villagers. Tax redemption and social insurance subsidy policies were provided to those affected villagers who created small scale service businesses. Labor and social safeguard network and employment agencies have been established at three levels of

2 The actual compensation rate was unavailable. 3 Implementation of Scientific Development Concept - Recording of Jiangning District Innovation for Development, Nanjing Daily Newspaper, May 28, 2004, http://news.sina.com.cn/c/2004-05-28/07432653596s.shtml 4 This was a formal process. Previously China had a Hukou system separated urban and rural residents clearly. Urban and rural residents enjoyed different welfare policies. 18 Jiangning District, sub-districts and communities to help the affected villagers to find off-farm jobs.

Some other media reports in 20035 revealed the illegal actions by township governments during the land acquisition and house demolition for developing Jiangning Development Zone. For example, in some other towns villagers’ houses were demolished without the official approval and notice.

However, no direct complaints or negative reports about Nanjing JT’s land have been found online.

D. Outstanding issues

Mr. Li believed that there should be no outstanding legacy since twenty years has passed by and the affected villagers must have downer-established their livelihoods and places of residence.

Key actions during the land acquisition are summarized in the following table.

Table 3 Timeline of key actions related to Tangshan JT’s land

Actions Time Responsible agency Participation Land Acquisition (whole 2001-2002 Fengnan District Yinxiang Township, process) Government land resource department, villages, villagers Signed the land lease April 7, 2005 Jiangning District Branch Nanjing JT contract of Nanjing Municipal Land Resource Bureau Received real estate December Nanjing City Land Nanjing JT certificate 10, 2005 Resource Management Bureau

4.1.3 Tangshan Sub-project

(1) Land lease

The land area of Tangshan JT is 31976.7m2 (48.0mu). Tangshan JT signed the land leasing contract with Fengnan District Branch of Tangshan Municipal Land Resource Bureau on November 21, 2017 (see Fig 14). Tangshan JT received the real estate certificate on January 24, 2018, which specifies that Tangshan JT has the land use rights for 50 years from January 5, 2018 to January 4, 2068 (see Fig 15).

5 What Could Farmers Do When 800 Km2 of Land To Be Acquired? The Legal Daily. June 25, 2003. http://news.sina.com.cn/c/2003-06-25/1459267407s.shtml 19

Fig 14 Land leasing contract (Tangshan JT)

Fig 15 Real Estate certificate (Tangshan JT)

(2) Review of land acquisition

A. Impact

Tangshan JT is located in Fengnan Economic and Technological Development Zone (short as Fengnan Development Zone) which was established in 2000 (see Fig 16). Fengnan Development Zone has three parks with the total planned area of 45.11Km2 by the end of 2018. Tangshan JT is located in the High-tech Park whose total area is 106.7ha (1,600mu), occupying about 3.0%.

The Fengnan Development Zone land plot which Tangshan JT now leases was originally owned by Yujiaboqian Village (also called Yuqian Village). Land acquisition was launched in 2013 by Fengnan Development Zone Committee and undertook by Fengnan District Government, town governments and its land resource departments. According to the

20 interviewed villagers, about 2,000mu of agricultural land in their village has been occupied without residential land, about 40% of their total agricultural land. However, the impact on individual HH was mixed. Some have lost the majority of their contracted land while some still kept their original land because of the different location. During the site visit, the HHs affected by JT’s land plot could not be identified by the interviewed villagers for not knowing the exact land plot boundary.

Fig 16 Location of Tangshan JT inside the Fengnan Development Zone

B. Compensation

Pertinent land acquisition documents were not made available by government to review as part of this audit; in consequence the applied compensation policies and the exact number of affected farmers is not known. However, it was confirmed by Mr. Dong, the vice director of Fengnan Development Zone Management Committee, and Yuqian villagers, that there was no house demolition in the area that Tangshan JT has leased and mostly was agricultural land planted with corn or wheat.

According to Mr. Dong, compensation was paid by Fengnan District Government to Fengnan District Branch of Tangshan Municipal Land Resource Bureau and to the Xugezhuang Town Government. Fengnan District Branch of Tangshan Municipal Land Resource Bureau signed the land acquisition agreements with the affected villages for land. Xugezhuang Town Government was responsible to do the DMS and pay the affected villagers for houses, young crops and attachments. Interviewed Yuqian village cadres and villagers confirmed that their village charged 20% of land compensation for village development and villagers’ welfare use and the rest was distributed to the affected HHs.

No special support policy has been provided to the affected vulnerable groups during land acquisition. But if the vulnerable people had the problem, they could go to the village

21 committee or local government for help. Mr. Dong said he didn’t know any reported case regarding assistance from government for vulnerable people.

C. Livelihood restoration

Before land acquisition, Yuqian Village had about 2,100 persons and about 5,000 mu of farmland. Farmers planted corn and wheat traditionally. The Village had limited area of forestry land and vegetable greenhouses. Since it was located in the suburb area, many villagers had off-farm jobs. Many male villagers worked at local steel-pertinent factories. In Yuqian village, there were ten construction teams who were involved in local construction business. Also some villagers were taxi drivers and truck drivers. Young female villagers preferred to work at the local shopping mall or supermarkets. Women over 45 years old often stayed at home to look after the families.

During land acquisition, the affected villagers got the deposit receipt of land compensation and other compensation for young crops and attachments. The vulnerable groups got the same compensation rates without special treatment. However, if they needed help, they could go to the village committee or local civil affair department for aids. Local government didn’t specially provide the affected villagers with skills training. But the villagers said local Labour and Social Safeguard Bureau routinely supplied skill training for farmers to apply.

According to JT’s Land Survey Table, the affected villagers’ average annual net income per capita was 26,280 Yuan before land acquisition while 29,859 Yuan at present.

D. Public Participation, Consultation and Information Disclosure

Villager representative meetings were organized by village committee to inform the land acquisition and pertinent information like schedule and compensation rates, and to ask for the villagers’ support. Officials from township government and Land Resource Management departments also attended. These meetings had to be recorded as a necessary appendix attached to the official land acquisition documents for permission. Then the villager representatives would visit the affected households and let them know the information of land acquisition and ask for their cooperation. These villager representatives were also involved in the DMS and compensation payment. It was said that 2/3 of these villager representatives were women since many men were engaged in off-farm work.

DMS needed the participation of affected households and the survey outcome needed the recognition of affected villagers with signatures. The survey outcome was also posted in the village for announcement.

E. Grievance Redress Procedure

When the affected farmers were unsatisfactory, they could complain to the village cadres or they could go directly to the town officials, even to the district officials who were responsible for the land acquisition. They could appeal to various levels of Land Management departments

22 or Letter & Visit departments. They also could report to the media for further attention. According to Mr. Dong, there were no outstanding or unresolved land complaints by the site visit.

No grievances have been found online about Tangshan JT’s land. However, we did find a media report6 in 2011 about illegal land use just in Yujiaboqian Village of Xugezhuang Town. In this case, two enterprises occupied the land before they got the formal approval but with the connivance of the Fengnan Development Zone Committee.

Key actions during the land acquisition are summarized in the following table.

Table 4 Timeline of key actions related to Hainan JT’s land

Actions Time Responsible agency Participation Land Acquisition (whole 2013 Fengnan District Xugezhuang Town, process) Government land resource department, Yujiaboqian Village, villagers Signed the land lease Nov 21, 2017 Tangshan Municipal Land Tangshan JT contract Resource Bureau Received real estate January 24, Tangshan Municipal Land Tangshan JT certificate 2018 Resource Bureau

4.2 Indigenous people

In JT’s Land Survey Table, there is one column to check whether indigenous people have been affected by land acquisition.

According to Mr. Tan, the director of Investment Management Department at the JT corporate, JT subsidiaries sites are often chosen in the urbanized or suburb area where few native indigenous people would be affected.

Key informants during the site visit confirmed that no ethnic minority groups have been impacted by three JT subprojects. For example, there are only about 20 persons of Man Ethnic Minority in Yujiaboqian Village with the total population of about 2,100, and they have not been affected negatively by the Tangshan JT subproject.

4.3 Information disclosure, consultation and Participation

Information disclosure for employees

JT corporate and subsidiaries pay attention to the information disclosure, consultation and participation of various aspects during the construction and operation.

6 Two projects in Fengnan District suspected of illegally occupying land. China Industry and Economy News. November 25, 2011. https://tieba.baidu.com/p/1300831312?red_tag=1487517500

23 All new employees will receive a 3-days induction including culture, basic operation flow, rules/restrictions. They will get a Staff Handbook covering JT introduction, behaviour norms, human resources regulations, confidential system, in-corruption norms, award/penalty system, and dormitory management rules (see Fig 17). The staff handbook was made in 2015. Although it hasn’t been officially revised, the HR staff will let the new employees know the actual changes during the induction.

Through JT intranet, I9 system, and Active Messenger (called Jishitong), JT corporate and subsidiaries disclose key information online to let the employees know the development of the group, the news, the policies, the training and workshops, the welfare, the awards, various activities and etc. Each department has a special management post to inform the colleagues about the latest key information. Wechat is also an important informal tool to spread the information. Besides, traditional poster or signing board are used to disclose the information.

Community information disclosure and consultation

JT has limited contact with the nearby villages since it has not been involved in land acquisition. It recruits the employees mainly through labor market or on-campus job fairs rather than directly going to the villages announcing the job vacancies.

4.3.1 Hainan Sub-project

In front of the canteen, there are the bulletin boards (see Fig 18). The left is to publicize JT’s business concept and the employees and managers’ behaviour norms. The middle is to publicize the Covid-19 information and how to prevent it. The right is to publicize the new Pharmacy Management Law.

However, Hainan JT has limited contact with the nearby villages. There are only two employees from nearby land-acquired villages. The HR staff said they did ask these two employees to recommend their neighbours or relatives for the job vacancies, but they didn’t post the job announcement in the nearby villages.

24

Fig 17 Handbook of staff

Fig 18 Bulletin boards in front of the canteen

4.3.2 Nanjing Sub-project

Nanjing JT does the information disclosure well through various means and covering various aspects like training information (Fig 19), operation procedures (Fig 20), safe driving (Fig 21), quality requirement(Fig 22), the awarded staff (Fig 23), and policies (Fig 24). The general director of Nanjing JT Mr. Zheng said they would like to let the employees know what are going on clearly and then participate in actively. The interviewed employees expressed that they could receive various information of the company quickly and in time through JT intranet, I9 system, and Active Messenger.

25

Fig 19 Poster on the wall about first training for logistics management staff in 2020

Fig 20 Board on the wall about SOP of goods collection

Fig 21 Board on the wall about safe driving

26

Fig 22 Banner of ‘All quality concept, full quality management’

Fig 23 Bulletin board about the 2019 excellent staff

Fig 24 Bulletin board (left: personal tax rate policy; right: quality knowledge)

27

4.3.3 Tangshan Sub-project

Tangshan sub-project is still under construction. The information disclosure is more about safe construction (Fig 25), environment monitoring (Fig 26 and 27), and workers’ rights protection (Fig 28).

Fig 25 Safe construction knowledge on the way to the construction site

Fig 26 Bulletin boards (left: green civilized construction requirement; right: name list of managerial staff and monitoring telephone number)

28

Fig 27 Bulletin boards (left: representative of various entities; right: name list and contact ways of various representatives who are responsible to monitor dust pollution on the construction site)

Fig 28 Bulletin board (Notice for migrant workers in construction industry to protect their rights)

29 4.4 Grievance Redress Mechanism

Employee related grievance redress

According to Mr. He, the director of Human Resource Department at JT corporate, there are four channels for the employees to appeal their grievances. (i) Employees can express their opinions, suggestions or grievances on JT’s online internal forum. (ii) CEO mailbox is set for any JT employee to express their opinions, suggestions or grievances. General manager mailboxes are also set at the subsidiary level (see Fig 28). (iii) General managers of regional subsidiaries must allocate two days every month to host employees. They listen to the employees’ grievances or problems and find the solution means. (iv) JT has a Discipline Inspection and Supervision Department, which especially deals with the reported corruption. However, there is no special policy established about the grievance redress mechanism, clearly telling the employees what they could do when they want to complain.

Client related grievance redress

JT has set client service hotline (400-800-8888) and client service center to deal with the inquiries and grievances from the clients. Client service staff answer the clients’ call or online enquiry, record their inquiries, requirements or grievances in the JT’s internal online system, then distribute the response task to the pertinent staff for solution, who are required to respond in regulated time. All the steps in the process are recorded in the online log (see Fig 29). After resolving the problem, client service staff will make a return visit call to check the clients’ satisfaction.

Fig 29 A response log of client’s complaint about goods loss

30 4.4.1 Hainan Sub-project

Hainan JT confirmed Mr. He’s introduction of four channels for grievance redress. At Hainan JT, the Enterprise Management Department is responsible for addressing the employees’ grievances. The Distribution Department is responsible for addressing the external grievances from clients or business partners.

During the construction period, the JT project manager set a bulletin board with his mobile number on the construction site. If the contractor failed or delayed the payment to its workers, the workers could report to him directly and he would help with the solution. Also, if the nearby villagers had any complaints about the noise, dust or waste water, they could call him directly. Or the villagers could complain to the management center of the industrial park. Then the enterprise secretary, the liaison between the management center and the enterprises, would forward the complaints to Hainan JT for solution. Further, the vice director in charge of administration has the Wechat numbers of the village cadres of the nearby villages for any issues. No complaints were reported during the construction period. Although there were channels for the communities to complain and for solutions, Hainan JT has no clear policy or procedure regarding management of community grievances.

4.4.2 Nanjing Sub-project

Nanjing JT confirmed Mr. He’s introduction of four channels for employees to raise grievances. They added that labour union also receive the employees’ grievances. Their general manager’s telephone number is also publicized to the employees for expressing grievances or for suggestions. Anonymous and real name reporting are both accepted. The employees can also directly email to the general manager through intranet.

On the construction site, the telephone numbers of local Safety Supervision Station and Quality Supervision Station are disclosed for the reporting of safety risks, payment delay and work injury disputes (see Fig 29). However, there is no specific worker grievance mechanism which explains clear steps for complaints raising and management.

As per the construction manager of Nanjing JT, a board was attached to the outside wall of the company yard to let the nearby companies or communities know the construction project. The telephone numbers of both the construction company and the administration office of Nanjing JT were left on the board for the complaints about construction. No complaints have been reported during the construction period. Beyond the telephone number which is publicly posted, there is no specific procedure which community members can access to raise complaints.

31

Fig 30 Mailbox of General Manager

Fig 31 Posters (right: name list and mobile number of managerial staff, and monitoring telephone number)

4.4.3 Tangshan Sub-project

On the construction site of Tangshan JT, the mobile numbers of JT and contractor’s project mangers are disclosed (Fig 32) in case there is any payment delay. Workers are also told to keep all the materials as the proof of employment relationships, such as time sheet, employment contract, employee’s card, bank card for payment and etc.

A board is attached outside the company yard, disclosing the mobile numbers of both the construction company and Tangshan JT project managers, to receive the complaints about dust and muck from nearby companies or communities (see Fig 33). Also, local people can

32 complain to 12345, a local major hotline to receive various complaints. No complaints have been reported during the construction period. The subproject does not have specific documented procedures which guide the management of complaints raised by either workers or community members.

Fig 32 Notice board of workers’ rights protection

Fig 33 Notice board of mobile numbers for complaints about dust and muck

33 4.5 Labor and social protection

The Human Resource Department at the JT corporate developed the Human Resource Management Manual in 2013, then updated in 2016. It covers human resource planning, recruitment, training and development, qualification certification, performance management, salary and welfare, employee management, human resource management control and enterprise culture. HR departments at the subsidiary level are requested to follow the Manual but they are also allowed to make changes as per local situation.

Complying with the employment documents issued by the State Council and the Human Resource and Social Safeguard Ministry, JT corporate issued its own Guidance Opinion about Payment Calculation and Attendance Management during the Covid-19 period, for the corporate and all subsidiaries.

4.5.1 Hainan Sub-project

Hainan JT HR manager Ms. Qin stated that they comply with national and Hainan provincial labor/employment pertinent law and regulations. They also follow the HR Management Manual but made minor changes. Based on the Manual, they issued their own management measures about attendance, welfare and subsidy, talent pool, and training.

As JT corporate requires (see the Staff Handbook and CSR reports), Hainan JT promises that equal employment chances are provided to all staff and applicants without discrimination for sex, age, hometown, disable reasons. Now Hainan JT has 135 permanent employees including the chef, security and cleaners. Many staff involved in logistics are residents of Hainan. Two are ethnic minority people and one is disabled.

All the employees enjoy ‘Five insurance and one fund’ required by the national labor policies. Distributors, drivers, sales staff, interns and senior manager enjoy the extra accident insurance. Employees also enjoy the welfare of holidays, communication, transportation and birthday, and the subsidies of working age, profession titles, wedding, holidays, Spring Festival transportation, and hot weather.

Hainan JT provides free accommodation. Employees receive meals missing subsidy it they are outside the company for business. Every employee has at least a bed in the dormitory whether they use it frequently or not. Usually four single employee share one flat. One family can have one flat. The managers can have a single flat. Each flat has independent toilet and bathroom. Each flat is equipped with beds, tables, chairs, wardrobe, and air conditioner. Since Hainan JT is newly built, the condition of the dormitory is said to be better than other places. Employees’ direct relatives can also enjoy one week’s free accommodation when they visit the employees.

Employee’s payment is composed of fundamental pay, merit pay, piece pay, percentage of sales, over-time pay and bonus. Currently, there are sufficient human resources to manage

34 the workload and employees do not need to work over time. Even the drivers and distributors can return to the company before the off-work time. Those who need to work overtime will get the over-time pay as the national and provincial policies regulate.

During the Covid-19 period, to respond to JT corporate’s call on return and ‘open as usual’ during the Spring Festival, high and middle level mangers, and local employees kept staying in or came back first to Hainan JT to guarantee the operation. Except for distributors and drivers, all the staff were kept inside the company. Covid-19 prevention measures were taken to protect the employees, like distributing the facial masks, testing the temperature everyday, wearing protection clothes, separate dining, sterilization of public area.

Complying with JT corporate’s Guidance Opinion and Hainan Province employment pertinent documents during the epidemic period, those who worked between Jan 25 and 27 were triple paid. Those who worked between Jan 21 and 24, Jan 28 and Feb 2 were double paid. After Feb 3, Hainan Province’s return work date, the returned employees were paid as normal. The employees who could not return but work at home were paid as normal only if their work has been recognized as normal by the managers. The employees could not return for their home towns’ control measures and could not work at home would keep the post with 70~80% of local lowest wage rate as living subsidy. The employees infected by Covid-19 or suspected cases who could provide the hospital’s certification would get normal pay.

Hainan JT adopted EPC mode. The EPC contractor was Jiangsu Zhongnan Construction Group Co., Ltd. Hainan JT didn’t require the contractor to comply with national or Hainan provincial labor/employment laws and regulations in the contract. But the contractor did promise no payment delay to migrant workers in their bidding documents. Also, both Hainan JT and the contractor had to deposit the wage guarantee for migrant workers in the bank account designated by local labor security supervision agency before the start of the project. The contractor provided its workers with dormitory on the construction sites, following the pertinent national and provincial regulations. The contractor complied with national and provincial labor laws and policies. No violation has been reported.

Fig 34 Female staff’s dormitory Fig 35 Male staff’s dormitory

35 4.5.2 Nanjing Sub-project

Nanjing JT HR manager Mr. Huang stated that they comply with national and Jiangsu provincial labor/employment pertinent law and regulations. They also follow the guide of the HR Management Manual. The differences among subsidiaries in various regions are the vacation days, welfare rate and lowest wage standard, which local governments may have various regulations. Another is the intern management since 2nd-level subsidiaries have many interns while 3rd-level subsidiaries have few interns. .

Nanjing JT also promises that equal employment chances are provided to all staff and applicants without discrimination for sex, age, hometown, disable reasons. Now Nanjing JT has 563 employees. About 90% are permanent. The others are interns and temporary workers dispatched by the labor service company. Of the permanent employees, two are ethnic minority people and four are disabled.

All the employees enjoy ‘Five insurance and one pension’ required by the national labor policies. Employees enjoy various welfare and subsidies as described above. The standards might be different from those of Hainan JT.

Nanjing JT also provides free accommodation. The policies are similar to those of Hainan JT. Nanjing JT also issued its own documents of dormitory allocation and dormitory management. Employees with different work age, post, position, and education level enjoy different dormitory treatment. Men and women have their own dormitories.

Fig 36 Female staff’s dormitory Fig 37 Male staff’s dormitory

36 Fig 38 Middle level manager’s dormitory Fig 39 Couple staff’s dormitory

Nanjing JT employee’s payment composition is similar to that of Hainan JT although they have different standard of fundamental pay since their scale, market occupation and profit level are different. Every year various contracts are signed between JT chairman of the board and general managers of subsidiaries, general managers and chief directors, chief directors and various departments’ managers including KPIs or requirements (Fig 40 and 41).

Fig 40 Contract signed between Jiangsu JT general manager and chief administration director

Fig 41 Contract signed between chief administration director and the manager who is responsible for safety

During the Covid-19 period, Nanjing JT established the Epidemic Emergency Response Working Team and made the Covid-19 Prevention and Control Manual. The Manual covers

37 the knowledge of Covid-19 virus and detailed prevention and control measures to be taken at various aspects like logistics, sterilization, canteen, dormitory, office, solid waste clearance and etc.

Nanjing JT complied with JT corporate’s Guidance Opinion during the epidemic period to pay the employees. The return work date of Jiangsu Province was extended to Feb 10th. Many employees kept working during the Spring Festival and the extension. Some returned to work gradually and some worked at home. The interviewed employees confirmed that they had been paid fully and they clearly knew the special payment policy from the Intranet.

Nanjing JT adopted EPC mode. The EPC contractor is Zhejiang Sanmen Construction Co., Ltd. Nanjing JT asked the contractor to comply with all present laws and regulations in the contract, excluding words especially about labor or employment. To comply with national requirement of no payment delay to migrant workers, the contractor had to deposit the wage guarantee fund for migrant workers in the designated bank account. Nanjing JT had to deposit at least 20% of the progress payment into a separate bank account set by the contractor especially for migrant workers. The contractor provided its workers with dormitory on the construction sites, following the pertinent national and provincial regulations. The contractor complied with national and provincial labor laws and policies. No violation has been reported.

4.5.3 Tangshan Sub-project

Tangshan JT adopted EPC mode. The EPC contractor is Tianyuan Construction Group Co., Ltd. In the contract with the contractor, Tangshan JT required the contractor to pay the workers fully and in time. The contractor should supply the proof of payment to workers first and then Tangshan JT would make the progress pay. Complying with national and Tangshan Provincial regulations, Tangshan JT and the contractor together delegated a local branch of China Construction Bank to set a special bank account and pay the migrant workers. Tangshan JT has to deposit the bank account no less than 4% of the total contract value before applying for the construction permit, 8% before the base acceptance, and another 8% before the main body acceptance. The contractor has to supply all personal and work information of migrant workers. The bank’s payment needs the signatures or stamps from Tangshan JT, the contractor and the construction supervision entity.

38

Fig 42 Delegation agreement about deposit account of migrant workers’ wage

Fig 43 Construction bank’s payment list

4.6 Gender issues

In the Staff Handbook made by JT corporate, JT promises that equal employment chances are provided to all staff and applicants without discrimination for sex, age, hometown, disable reasons.

4.6.2 Nanjing Sub-project

Nanjing JT signed a Special Collective Contract about Female Employees’ Rights Protection with its Labour Union in March 2019. Comparing with Hainan JT, this contract covers all necessary aspects but with more details, like the breast-breeding leave could last for one year. It can be extended to 1.5 year if the child is proved to be weak.

During the site visit, female employees from various departments and levels were invited to attend the FGD. They confirmed being treated equally in various aspects including employment, training, payment, promotion, and performance evaluation. They expressed that personal capability is the most important in various competition rather than gender reason. They know the training information since it pops out during I9 system and one special managerial staff in every department forms everyone. As per the training program provided by the HR department of Nanjing JT, most training are provided to all the staff in one department. Only a few are specially for the talent pool and mid/high level managers.

39 Female employees can enjoy half a day’s leave and subsidy or gifts on March 8, the International Women’s Day. They can have half a day or one day’s leave with pay for their menstrual period. For the International Children’s Day the company organized the activities for the employees’ children. In the annual party, spouses and children are invited to attend. Since JT has close communications with doctors, various workshops have been held for female employees like women health and traditional Chinese methods for health. They didn’t hear any sex harassment cases, even gossips.

Female and employee’s dormitory are separate in different stories or buildings.The reason why no special breast-breeding room is only because the dormitory and workplace are so close. One interviewed female employee confirmed that she had the breast-feeding leave for one hour per day lasting for one year. There is the fridge in the flat for her to store the breast milk.

The present staff composition by sex is listed in the following Table. The ratio of total male and female employees is 51.7:48.3. The percentage of female employees is higher than that of Hainan JT and the average ratio of JT Corporate. The percentage of female managers at the mid level are near to 30%, much higher than Hainan JT.

During the construction period, as Mr. Hu, the manager of Asset Management Department, reminded that about 20% of contractor’s workers were women. Female and male workers’ toilet and bathroom were separate.

Nanjing JT has limited contact with nearby communities. But they do have close relationship with local schools and some entities. During the Covid-19 period, Nanjing JT donated the facial masks and disinfectant to local schools, neighbouring enterprises, sanitation workers, and traffic policemen. They especially provided kindergarten teachers and sanitation workers (many are women) with medicine and sanitation knowledge training.

Table 5 Staff composition by sex of Hainan JT

Item Total Male Female Female(%) High level managers 13 10 3 23.1 Middle level managers 34 24 10 29.4 Base level managers 53 30 23 43.4 Normal employees 463 227 236 51.0 Total 563 291 272 48.3

4.6.3 Tangshan Sub-project

Tangshan JT is still under construction. Female and male workers’ toilet and bathroom were separate.

40 According to Mr. Li, the site manager of the contractor, there are 10 female workers of the total 80 workers during the site visit and there were 10 female workers of the total 160 workers during the peak time. These women are accompanied with their husbands. Their wages are piece-rate pay with their husbands.

According to the interviewed villagers, local women prefer to work in local supermarket or shopping mall since it is more decent and lighter work than builders. They think the job on the construction site is too hard and dirty. It might be the reason to explain why the percentage of female workers is low.

Fig 44 Female and male workers’ toilet and bathroom

4.6.1 Hainan Sub-project

Hainan JT has drafted a Collective Contract with its Labour Union, which will be signed and stamped first and then submitted to local labor safeguard administrative department for approval, then publicized to all the JT staff. Inside the Contract, one chapter is especially about female employees’ rights protection. It requires Hainan JT to comply with national and Hainan Provincial female employee pertinent laws and regulations. It requires Hainan JT to follow the rule of gender equity in the training and promotion, and equal pay on salary, welfare and bonus. It specifies the special protection of female staff during their menstruation, pregnancy, childbirth, lactation, menopause period. It also specifies the welfare of gynecological test, international Women’s Day and subsidy, and maternity insurance.

Interviewed Hainan JT HR manager Ms. Qin is also the female employee committee member. She thought their female employees are treated equally in various aspects including employment, training, payment, promotion, and performance evaluation. She confirmed that female employees are provided with physical and gynecological test once a year, half a day off on the international Women’s Day and subsidy or gifts, and maternity insurance. There are

41 no special occupational diseases in the pharmaceutical distribution to threat female employees’ health. There was no sex discrimination or harassment reported by now.

Female and employee’s dormitory are separate in different stories. There is one dormitory managerial staff, who is a woman from nearby village affected by land acquisition. She is satisfied with her job in Hainan JT since it is near to her home and the payment is good. The reason why no special breast-breeding room is only because the dormitory and workplace are so close.

During the operation, the staff composition by sex is listed in the following Table. The ratio of total male and female employees is 58.3: 41.7. The percentage of female managers at the mid and high level are both less than 30%.

During the construction period, as Mr. Liu, the manager of Asset Management Department, reminded that about 30% of contractor’s workers were women. Female and male workers’ toilet and bathroom were separate.

Hainan JT has limited contact with nearby communities. Except for the recruitment, it didn’t contribute to local women especially.

Table 6 Staff composition by sex of Tangshan JT

Item Total Male Female Female(%) High level managers 4 3 1 25.0 Middle level managers 7 6 1 14.3 Base level managers 13 9 4 30.8 Normal employees 108 59 49 45.4 Total 132 77 55 41.7

4.7 Conclusions and Recommendations/Corrective Action Plans

Land acquisition undertaken long before JT’s arriving. To avoid the involvement in land acquisition, JT prefers to choose the sites in local Development Zones or Industrial Parks or Logistics Parks and purchased the land from local government through formal procedure. For the proposed three sub-projects, land acquisition was at least four or five years before JT subsidiary received the official land use/real estate certificate.

With the help of IFC, JT developed the Instruction for Land Acquisition Survey to guide the land acquisition due diligence. JT prepared the Land Survey Table of three sub-projects for ADB’s review. However, there were no attached supporting documents for proof. The procedure requires some enhancement to properly screen and categorise to ensure avoidance or minimization of displacement impacts associated with its investment locations.

42 Affected villagers understood their entitlement and have been compensated. Although the interviewed villagers could not remind the accurate compensation rates, they knew the percentage distribution of land compensation between the collective and the villagers clearly. They expressed that the compensation had been paid. There are no outstanding issues with regards to compensation.

Consultation conducted and grievance redress system established for the LA affected villagers. Affected villagers have been involved in the DMS and consultation meetings have been organized. Land acquisition and compensation schemes have been issued formally. GRM has been established for the affected villagers. The relevant activities complied with the national requirements.

No outstanding issues. No outstanding issues about land acquisition and compensation have been reported during the site visit.

No significant impact on indigenous people. Three sub-projects didn’t impact any local indigenous people.

JT corporate and subsidiaries pay attention to the information disclosure, consultation and participation of various aspects during the construction and operation. JT corporate and subsidiaries open diverse communication channels for employees, clients, even the contractors’ workers to express their grievances. Especially for the clients, GRM system has been well established.

JT corporate and subsidiaries comply with national and provincial labor pertinent laws and regulations. Equal employment chances are provided to all staff and applicants without discrimination for sex, age, hometown, disable reasons. Employees enjoy various welfare as regulated. Especially JT provides free accommodation. During the Covid-19 period, JT subsidiaries kept the operation to support the pandemic control. Serious Covid-19 prevention and control measures were taken inside the companies to protect the employees. Various types of employees were also paid fairly. However, JT has no written commitment to International Labor Organization (ILO)’s Core Labour Standards.

JT subsidiaries often focus on the payment delay issue about the contractors. But they didn’t require for more from the contractors about labor issues, e.g. no child labor, no discrimination to employ female workers, equal pay, no discrimination, and etc.

JT subsidiaries comply with national and provincial women related laws and regulations. Female employees enjoy various welfare as regulated. They are treated equally during the work. Equal pay, promotion, training, anti-harassment have been referred to in the Special Collective Contract about Female Employees’ Rights Protection. However, there is still the difference among subsidiaries and some can do better.

43 Complaint channels established for communities during the construction and employees and customers during the operation. Various channels have been set for the communities, employees and customers to express their complaints or grievances. However, JT has no formalized GRM policies or procedures guiding its staff/managers to appeal/redress the grievances from the communities and employees.

Limited community engagement at the subsidiary level. Since located in the development zone or industrial parks, JT subsidiaries have limited contact with nearby communities. JT subsidiaries can do better in implementing its social responsibility, e.g. disseminating the employment information directly in the nearby LA affected villages and give priority to local LA affected villagers. Also, JT may financially support the vulnerable people in the nearby LA affected villages.

Corrective Action Plan or advices for subsidiaries is listed as following.

44 Table 7 Corrective Action Plan/ and advices

Concerned Remedial Actions/recommendations Completion Indicator Timeframe item

Short of data ⚫ Land survey table needs supporting documents that Supporting documents attached to the In the first AESPR related to required in the Instruction of Land Acquisition Survey, existing land survey table for proof, sites especially for Tangshan sub-project provided as the appendix in the first Annual Environment and Social Performance Report (AESPR)

No ⚫ Comply with the International Labor Organization’s Contained within agreement signed Prior to disbursement requirement Core Labor Standard (ILO CLS), as required by the between client and lenders to comply revised Corporate’s policies about human resource, with ILO procurement and contract management CLS

No ⚫ Implement the corporate Workers’ GRM policy and Revised SOP submitted to ADB for Corporate worker’s GRM subproject procedure at subproject level for the employees and clearance. cleared by ADB prior to specific contractor’s workers, including processing procedure disbursement. Workers’ and requirement, e.g. responsible person, grievance Subproject adoption of GRM to be GRM redress log or documentation reported in AESPR. Subproject adoption within 6 months of disbursement.

No ⚫ Implement the corporate Community GRM policy and Revised SOP submitted to ADB for Corporate community subproject procedure at sub-project level for communities and clearance. GRM cleared by ADB prior specific other stakeholders, including processing procedure to disbursement Community and requirement, e.g. responsible person, grievance Subproject adoption of GRM to be GRM redress log or documentation reported in AESPR

Need to ⚫ Develop and implement the community engagement SOP developed and submitted to ADB for Within 6 months of enhance plan / framework made by the corporate and have the clearance. disbursement. social flexibility to develop their own responsibility

45 Concerned Remedial Actions/recommendations Completion Indicator Timeframe item

Strengthen ⚫ Provide more training especially for women, e.g. how Compliance reported in the AESPRs Ongoing gender to keep balance between work and family, how to mainstreami keep physical and psychological health, how to ng improve women’s leadership, etc. (advisory)

⚫ Require the contractor to give priority to female workers when appropriate (advisory)

⚫ Guarantee the women in the nearby communities to know the employment information and take measures to attract female workers or employees. (advisory)

⚫ Focus more on women when implementing social responsibility, e.g. the poverty alleviation donation targeted at more rural women or girls (advisory)

46 Appendix 1 JT Organization Chart

47 Appendix 2 Attendance Sheets

(1) Hainan JT’s Attendance Sheet

Name Sex Minority Position Mobile

Fu Shaoyue Female Han Quality Management 16689583210

Huang Jianguo Male Han Sales 16689583258

Liu Youguo Male Han Assets Management 18971071639

Zhang Male Han Logistics Management 16689583300 Xiaozhen

Liu Chao Male Han Administration 16689583198

Qin Yan Female Han Human Resources 16689583218

Zhang Xiangfei Male Han General Manager 18666188025

Zhong Shifu Male Han Head of Diandu Village Group 18876988989

48 Naning JT’s Attendance Sheets

Name Sex Minority Position Mobile

Zheng Zhihua Male Han General Manager 15651916266

Chen Shiwei Male Han Financial manager 13965024830

Wan Kaixiang Male Han Administration manager 15651916233

Hu Kangyue Male Han Zhejiang Provincial Sanmen 15955303636 Construction and Installation Co. LTD

Hu Hongbing Male Han Construction manager 15692287004

49 Name Sex Minority Position Mobile Married Age

Tian Female Han Operation 18602540499 Yes 32 Yanqing Service Center

Cao Xue Female Han Administration 18168087350 Yes 31

Li Female Han Quality 15950551052 Yes 28 Chunchun management

Li Female Han Team leader of 13584085075 Yes 39 Yingping internal checkers

Song Female Han Internal 13914784487 Yes 46 Xiaotao checker

50 (2) Tangshan JT’s Attendance Sheets

Name Sex Minority Position Mobile

Dong Zhi Male Han Vice director of Fengnan 13832558877 Economic Development Zone Management Committee

Jin Xuesheng Male Han Vice Chairman 18802750071

Hua Biao Male Han Project manager 18872761123

Chen Zhuwen Male Han Water and electricity 13260515018 engineer

Dong Baiming Male Han Civil works engineer 15972953288

JIn Jian Male Han Supervision engineer 17719826312

Hao Libao Male Han Supervision engineer 15232628518

Liu Hao Male Han Water and electricity 15231509699 engineer

Li Zhongyuan Male Han Tianyuan Construction 15710055485 Group Co. LTD

51 Name Sex Minority Position Mobile

Sun Zhong Male Han Head of Yujiaboqian Village 15232756916

Gong Male Han Village representative 15931551895 Guagnxin

Zhao Shufen Female Han Female representative 13663154394

Bo Wenyue Male Han Secretary of Yujiaboqian 15233312611 Village

52 Appendix 3 Documents reviewed

├─1 land acquisition │ ├─corporate │ │ 2019 IFC document.docx │ │ Instructions for Land Acquisition Survey.docx │ │ Land acquisition survey table for 3 subprojects.xlsx │ │ │ └─subprojects │ ├─Hainan │ │ │ Attachment compensation rate.JPG │ │ │ Confirmation of DMS outcome.JPG │ │ │ Confirmation of land ownership.JPG │ │ │ Interview with villagers.JPG │ │ │ Investment agreement.JPG │ │ │ LA agreement 1.JPG │ │ │ LA agreement 2.JPG │ │ │ Land deal confimration letter.JPG │ │ │ Notice of LA Compensation Scheme.JPG │ │ │ Notice of tomb relocation.JPG │ │ │ photo of DMS.JPG │ │ │ Project development & Land use permission agreement.JPG │ │ │ village 1.JPG │ │ │ village 2.JPG │ │ │ village 3.JPG │ │ │ │ │ ├─Hainan Endowment insurance │ │ │ IMG_6511.JPG │ │ │ IMG_6512.JPG │ │ │ IMG_6513.JPG │ │ │ IMG_6514.JPG │ │ │ IMG_6515.JPG │ │ │ IMG_6516.JPG │ │ │ │ │ └─Hainan JT real estate certificate │ │ real estate certificate 1.jpg │ │ real estate certificate 2.jpg │ │ real estate certificate 3.jpg │ │ real estate certificate 4.jpg │ │ │ ├─Nanjing │ │ Land lease confirmation letter.pdf │ │ Nanjing JT Land use certificate.png │ │ Nantong investment proposal.doc

53 │ │ │ └─Tangshan │ │ Land lease contract.JPG │ │ │ └─Tangshan JT real estate certificate │ Tangshan JT real estate certificate 3.jpg │ Tangshan JT real estate certificate 1.jpg │ Tangshan JT real estate certificate 2.jpg │ Tangshan JT real estate certificate 4.jpg │ ├─2 Labor │ ├─Corporate │ │ 2018 labour dispatch sub contract.PDF │ │ staff manual 2015 version.pdf │ │ │ └─Subprojects │ ├─Hainan │ │ Attendance management methods.JPG │ │ Intern Management methods.JPG │ │ Special collective contract of payment.JPG │ │ Special collective contract.JPG │ │ Talent pool management methods.JPG │ │ Training management methods.JPG │ │ Welfare&subsidy management methods 1.JPG │ │ Welfare&subsidy management methods 2.JPG │ │ │ ├─Nanjing │ │ construction contract.pdf │ │ Dormitory management methods.pdf │ │ Handbook of staff 1.JPG │ │ Handbook of staff 2.JPG │ │ Handbook of staff 3.JPG │ │ HR management manual 1.JPG │ │ HR management manual 2.JPG │ │ HR management manual 3.JPG │ │ Jiangsu Province special regulation of Female employees protection.JPG │ │ labor policies.JPG │ │ Nanjing JT personnel.JPG │ │ Organization chart.pdf │ │ Performance contract 1.JPG │ │ Performance contract 2.JPG │ │ safe contract.JPG

54 │ │ safety responsibility.JPG │ │ construction performance contract.pdf │ │ Dormitory allocation management methods.pdf │ │ │ └─Tangshan │ construction contract supplementary agreement.JPG │ Delegation agreement of migrant workers payment.JPG │ Migrant workers payment application.JPG │ sub-contract 2.jpg │ sub-contract 3.jpg │ sub-contract 1.jpg │ Migrant workers salary deposit.jpg │ ├─3 Information disclosure, consultation │ ├─Corporate │ └─Subprojects │ ├─Hainan │ │ Info disclosure bulletin board.JPG │ │ │ ├─Nanjing │ │ award list.JPG │ │ Dormitory safety.JPG │ │ Fire prevent scheme 2.JPG │ │ fire prevent scheme 4.JPG │ │ Fire safety check.JPG │ │ individual tax policy & quality knowledge.JPG │ │ managerial personnel & monitoring telephone.JPG │ │ operation standard.JPG │ │ quality awareness.JPG │ │ safe drive.JPG │ │ Safe production banner.JPG │ │ safety production.JPG │ │ Training info.JPG │ │ │ └─Tangshan │ dormitory rules.JPG │ Layout of construction site.JPG │ managerial personnel name list & monitoring telephone.JPG │ Migrant workers rights protection.JPG │ Responsibility persons.JPG │ Safety education.JPG │ safety knowledge 1.JPG │ safety knowledge 2.JPG

55 │ safety knowledge 3.JPG │ workers rights protection.JPG │ ├─4 Grievance redress system │ ├─Corporate │ │ │ client service center--complaint.png │ │ │ client service center –enquiry about account opening.png │ │ │ client service center grievance redress record.docx │ │ │ │ │ └─general manager redress grievance record │ │ general manager mailbox.jpg │ │ general manager host day news 123.docx │ │ Henan general manager host day.docx │ │ │ └─Subprojects │ ├─Hainan │ ├─Nanjing │ │ General manager mailbox.JPG │ │ │ └─Tangshan ├─5 Gender │ ├─Corporate │ │ 2017 collective contract female employee.PDF │ │ │ └─Subprojects │ ├─Hainan │ │ 20.06.15 Hainan Personnel.xlsx │ │ men dormitory.JPG │ │ women dormitory 1.JPG │ │ women dormitory 2.JPG │ │ women dormitory 3.JPG │ │ │ ├─Nanjing │ │ Couple dormitory.JPG │ │ Dormitory 1.JPG │ │ Dormitory.JPG │ │ FGD with female employees.JPG │ │ Manager's dormitory.JPG │ │ Men dormitory.JPG │ │ women Dormitory.JPG │ │ │ └─Tangshan │ Couple dormitory.JPG

56 │ Men dormitory.JPG │ men toilet &bathroom.JPG │ women toilet &bathroom.JPG │ ├─6 CSR │ CSR-2018.pdf │ CSR-2019.pdf │ └─7 General documents ├─Corporate │ 1. request list-译文-orgstructure.pptx │ 1、总部部门职能 headquarter department function.docx │ 3-5-6. request list.pptx │ 33 34、English Names of all SOPs relatedto EHS topics.docx │ 35、overview of sites certified EHS.docx │ JT univ training program.xlsx │ └─Subprojects ├─Hainan ├─Nanjing │ Nanjing subproject introduction.ppt │ └─Tangshan

57 Appendix 4 Relevant national land law and regulations

Law of Land Administration of the People’s Republic of China (1999) The national Law of Land Administration defines ownership and rights of use for land in PRC. It also describes the basis for requisitioning land for construction purposes, together with the types of compensation and assistance that must be provided. The important and relevant clauses are summarized below: ⚫ Compensation should be made for land acquisition based on the original purposes of the land requisitioned. ⚫ Compensation fees for cultivated land acquisition should include land compensation fee, resettlement allowances as well as compensation for land attachments and in-ground crops. ⚫ The land compensation fee for cultivated land shall be 6 to 10 times the average annual output value of the land in the previous three years preceding land acquisition. ⚫ The resettlement allowances of acquired cultivated land shall be calculated according to the agricultural population to be resettled. The resettlement allowances for displaced farmers shall be 4 to 6 times the average annual output value in the previous three years. ⚫ The standards of compensation and resettlement fees for other land acquisition shall be determined by the provinces, autonomous regions or municipalities in reference to the cultivated land acquisition. ⚫ If the land compensation fee and resettlement allowances are still insufficient to restore the original standard of living for displaced persons, the resettlement allowances may be increased with the approval of the Provincial Government. ⚫ State Council may raise the land compensation fee and resettlement allowances under special circumstances according to the socio-economic development level of the Project Area. ⚫ After the plan for land acquisition compensation and resettlement is finalized, related local people's governments shall make an announcement and hear the opinions of the rural collective economic organizations and peasants whose land have been requisitioned. ⚫ Rural collective economic organizations shall make public to its members the receipts and expenditures of the land related compensation fees for land acquisition and accept their supervision. ⚫ Land users should sign contracts for temporary use of land with related land administrative departments or rural collective organizations or villagers’ committees depending on the ownership of the land and pay land compensation fees for the temporary use of the land according to the standard specified in the contracts.

Implementing Regulation on the National Law of Land Administration (1999) It defines requirement of land acquisition plan and timeframe for disbursement of compensation for land acquisition. The important and relevant clauses are summarized below: ⚫ Land acquisition plan should be prepared and the purpose of land acquisition,

58 acquired land scope and area, compensation of land acquisition, resettlement plan and compensation registration deadline should be public to peasants losing land and consult their opinions. ⚫ Compensation and resettlement fees will be fully paid to village collectives and individuals within 3 months of the date of approval of the resettlement and compensation plan ⚫ Compensation for land belongs to the village collective economic organization. Compensation for objects on the land and for young crops belongs to the owner of the object or crop.

Notice on Further Improving the land acquisition and management (Decree No. 96) It defines the implementation of unified annual output value of land and regional composite land price in land acquisition. Recommends agriculture based resettlement (land for land compensation). The important and relevant clauses are summarized below: ⚫ For the new development project, it should use unified annual output value of land and regional composite land price in land acquisition. ⚫ Regional should establish land acquisition compensation dynamic adjustment mechanism, according to local economic development level and local people annual income increase scope, land compensation standards should adjust every 2 to 3 years, gradually raising the level of land acquisition compensation. ⚫ Use multi resettlement approach, guarantee the livelihood of lost land peasant, recommends agriculture-based resettlement. ⚫ If the compensation should pay to lost land peasant, it to be paid directly to peasants individuals. ⚫ Involved lost land peasants into the social security system, it is an effective approach on solving the long-term livelihood of lost land peasants. ⚫ Household affected by physical relocation should get house compensation and other government compensation, and the total amount should ensure they can purchase the easonable living levels of housing. (The development of 19 developed well pads did not affect any houses).

Methods of Land Acquisition Notice (Decree No. 10) It establishes the requirement for public consultation and the requirement on public disclosure of land acquisition plan and relocation & compensation plan; it also defines the procedure for public hearings. The important and relevant clauses are summarized below: ⚫ Written notices shall be publicized at production team level and village level for land acquired from rural collective entity, land acquisition program and compensation for land acquisition, resettlement proposal whereas written notices shall be publicized at county (town) level for land acquired from rural collective entities of counties (towns). ⚫ When land is acquired, the rural collective entities, villagers and other stakeholders

59 shall hold land propriety certificates and go to specified location within duration stated in the land acquisition notice to proceed with relevant compensation procedures. ⚫ A hearing request shall be raised to competent land resource departments of relevant municipal and county government within 10 working days after the issuance of notice of land acquisition compensation program and resettlement proposal by those rural collective entities, villagers and other stakeholders who hold different opinions on the compensation programs for land acquisition and resettlement. ⚫ The competent land resource departments of relevant municipal and county government shall look into the different opinions held by the rural collective entities, villagers and other stakeholders on the compensation programs. Hearings shall be held up to requests. Requests for modifying the compensation programs for both land acquisition and resettlement shall be carried out in accordance with relevant regulations, laws and land acquisition programs.

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