Laws of the People's Republic of China

The Ministry of Commerce

Circular of the Ministry of Commerce of the People's Republic of China on Printing and Issuing the Provisional Measures for Administration of Labor Service to Foreign Contracted Projects

Overseas labor service to foreign contracted projects represented an organic part of the labor service hereto in China. In recent years, with the sustained expansion of foreign contracted service in China, the multiplication of labor service to foreign contracted projects played an active role for guaranteeing the due completion of related projects and promoting the developing this service. Meanwhile, however, the imperfect administration of some foreign contracted projects triggered annually escalation of disputes in foreign contracted projects, sit-ins and demonstrations by overseas labor service personnel in contravention of local laws, even massive and malicious conflicts with local police. The above-mentioned accidents not only hindered the operation of foreign contracted project, but blemished the whole image of Chinese enterprises, even exerted side effect upon the bilateral trade and diplomatic relations.

The following are the reasons for the frequent occurrence of labor dispute: first, some enterprises went against the provisions for labor service to foreign contracted projects when sending contract workers abroad, failed to put into practice the standardized management in the process of recruiting, sending and administrating contracted workers, giving excessive priority to the process of sending while ignoring the relevant administration; second, foreign contracted units contracted or subcontracted the labor service to even enterprises without any operation qualification, which resulted in difficulties and even failure to confirm and fulfill managerial responsibility; third, some avaricious enterprises sought interest by improper means such as reducing labor service cost, deduction and arrearage of wages, maliciously infringing the lawful rights of contract workers; fourth, the imperfection of the prevention administrative measures and systems resulted in insufficient fulfillment and undue treatment of labor disputes; five, some contracted workers, for their own interest, intentionally provoked disputes, intensified conflicts which resulted in the escalation and deterioration of labor disputes.

In order to strengthen the administration of labor service to foreign contracted projects, further perfect the related systems, guarantee the lawful rights and interests of personnel sent abroad to the foreign contracted project, promote the sound and orderly development of foreign contracted enterprises, the Ministry of Commerce, in accordance with the related administrative measures on foreign labor cooperation, hereby formulated, printed and distributed to you Interim Measures for Labor Service Foreign Contracted Projects (hereinafter referred to as Measures). Please transmit it to related local sectors and departments for its strict implementation.

The business administrative authorities in charge, the related enterprises as well as the commercial

institutions in abroad embassies and consulates shall, in accordance with the above-mentioned Measures, conduct thorough investigation on the labor service for the foreign contracted projects under construction, correct promptly the newly discovered problems, and submit the investigation results and treatment proposals to the Ministry of Commerce (Department of Foreign Economic Cooperation) prior to a designated date of 2006. Please report promptly when any problems occurred in the process of the implementation of the Measures. We now give you the Notice.

Appendix: Provisional Measures for Administration of Labor Service to Foreign Contracted Projects

The Ministry of Commerce

December 1, 2005 Appendix:Provisional Measures for Administration of Labor Service to Foreign Contracted Projects

Chapter I General Principles

Article1

In order to strengthen the administration of labor service to foreign contracted projects, guarantee the lawful rights and interests of personnel sent abroad to the foreign contracted project, and promote the sound and orderly development of foreign contracted enterprises, Interim Measures for Labor Service Foreign Contracted Projects (hereinafter referred to as Measures) is formulated in accordance with the related administrative measures on foreign labor cooperation and characteristics of personnel sent abroad to the project contract.

Article2

"Overseas labor service to foreign contracted project" as mentioned in the Measures refers to the economic activities where the enterprises with operation qualification of foreign contract (hereinafter referred to as related enterprises) send various labor service personnel to the abroad contract projects( including subcontract project). The various labor service personnel shall be employed by the related enterprises instead of the employer of the foreign party.

Article3

Overseas labor service to foreign contracted projects represents an organic part of the labor service hereto. In order to support the development of foreign contracted project, the related enterprises are allowed to send various labor service personnel to foreign contracted project, provided that the related issues shall be conducted in accordance with the relevant provisions.

Chapter II Responsibilities and Obligations of the Enterprises

Article4

Foreign labor service to foreign contracted project shall be operated by the general contractor (foreign contracted unit) or in accordance with such means as the general contractor subcontracts part of project as well as the total labor service hereto to subcontractor with operational qualification of foreign contracted project.

Article5

The general contractor shall not subcontract singly the foreign labor service. The subcontractor shall not subcontract overseas labor service to the contracted project.

Article6

The general contractor or subcontractor shall sign with personnel lending abroad Labor Sending and Employment Contract, shall not entrust any intermediary agency or individual to recruit personnel to be sent abroad for labor service.

Article7

The general contractor and subcontractor shall nail down their own responsibilities and obligations. The subcontractor shall be subject to the relevant administration upon the labor service given by the general contractor. The general contractor shall be the chief body responsible for overseas labor service management to the whole project.

Article8

The general contractor and subcontractors shall both, in accordance with Interim Measures for the Reserve Fund in Overseas Labor Service Cooperation (No. 7, 2001 of The Ministry of Foreign Trade and Economic Cooperation and the Ministry of Commerce) and the Decision for the Reserve Fund in Overseas Labor Service Cooperation ( No.2, 2003 of the Ministry of Commerce and the Ministry of Finance), implement the reserve fund system for overseas labor cooperation.

Article9

The general contractor and subcontractors shall sign Labor Sending and Employment Contract with the personnel prior to their departure for overseas labor service. The Contract shall comply with the relevant provisions of Notice of the Ministry of Foreign Trade and Economic Cooperation on Printing and Distributing Main Clauses of Labor Service Export (Wai Jing Mao He Fa[1996] No. 105), and guarantee the salaries hereof no less than that of personnel of the same type of labor service, and maintain and guarantee the lawful rights and interests of the contract workers.

Article10

The general contractor and subcontractors shall, in time of conducting training for overseas labor service, thoroughly and genuinely introduce in detail the related situations, working conditions and salaries and treatment of the destination country and the related particulars of the related project, and instruct the personnel to be sent abroad to abide by the related law and rules of the country where the project is located and not to intensify conflict by any improper means.

Article11

The general contractor and the subcontractors shall, in the construction process of the project, take seriously the problems and rational proposals put forward hereby and give promptly reply and proper settlement.

Chapter III Project Checkup

Article12

The related enterprises shall, when applying for bidding (negotiated tendering) licensing of foreign contracted projects, submit the related documents to the Ministry of Commerce as well as the following documents:

(i)

Form of Overseas Labor Service to Foreign Contracted Project( see Appendix). If the general contractor subcontracts part of the project as well as the overseas business hereof, the general contractor shall submit the subcontract as well as the Form of Overseas Labor Service to Foreign Contracted Project.

(ii)

The documents about the definite proposal hereon issued by the commercial organs of the related China's abroad embassy (or consulate).

Chapter IV Settlement of Labor Service Dispute

Article13

The local administrative commercial authorities, the commercial institutions of the abroad embassy( consulate) as well as the related enterprises shall attach great importance to the labor dispute on foreign contracted project and the treatment of accidents and establish rapid response mechanism hereof, deal with the problems promptly so as to protect the lawful rights and interests of the personnel sent abroad for labor service, and to prevent accidents from happening that might damage the fame of our nation or trigger diplomatic dispute.

Article14

The local administrative authorities responsible for commerce shall strengthen the administration and guidance upon the related enterprises, supervise the related enterprises and press them to establish accountability system.

Article15

The economic and commercial institutions in abroad embassy (or consulate) shall specially assign person(s) to be responsible for the acceptance and settlement of labor dispute or accidents.

Article16

In case labor disputes or accident occur, the related enterprises shall in no way prevent the overseas personnel for labor service from reflect the situation to the economic and commercial institutions in the embassy (or consulate) by proper means.

Article17

In the process of dealing with labor dispute or accidents to foreign contracted project, the related authorities, in their labor division and treatment process, may conduct in accordance with Notice of the Ministry of Commerce on the Related Issues Concerning Treatment of Overseas Labor Dispute or Accidents ( Shang He Fa[2003] No.249)

Chapter V Penalty Provisions

Article18

The Ministry of Commerce shall, in accordance with the related provisions, give appropriate penalty in light of the seriousness of the cases.

Chapter VI Others

Article19

The Ministry of Commerce shall be responsible for the interpretation of the Measures.

Article20

The Measures shall come into effect as of 30 days after its promulgation.

Appendix 2:Form of Overseas Labor Service to Foreign Contracted Project

the Ministry of Commerce

November 1, 2005 Appendix 2：Form of Overseas Labor Service to Foreign Contracted Projecthtm/e04706.htm

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