Coal Mining Safety: China’s Achilles’ Heel Tu Jianjun* Tragedy of Necessity? Coal is a dilemma for China’s energy security. On the one hand, coal will be irreplaceable as the primary form of energy driving China’s economic juggernaut for the foreseeable future.1 Despite major growth in the oil industry after the discovery of the Daqing oilfield in 199, coal has never accounted for less than 70 percent of China’s energy resource supply over the past 0 years. Since 000, coal consumption has increased at an astonishing rate of more than 10 percent annually. It is unlikely that China’s coal utilization will drop below 0 percent of China’s energy mix before 00. Furthermore, with limited petroleum resources, China’s energy planners have relied heavily on domestically abundant coal to fuel modernization ambitions. Even after decades of intensive development, alternative energy sources (mainly hydro electricity) have never constituted even close to 10 percent of China’s primary energy demand. On the other hand, coal is also fueling a safety (and environmental) crisis in China. Extracting coal from the earth has never been a safe activity, but China’s numerous, tragic mining accidents make for a particularly stained history of coal mining. A methane gas explosion in 19 killed 1,9 miners at the Benxihu mine in Liaoning province; 68 miners died from the 1960 Tu JianJun is a Vancouver-based energy consultant, and a research associate of the Canadian Industrial Energy End-use Data and Analysis Centre. China Security, Vol 3 No 2 pp. 36 - 53 ©2007 World Security Institute 6 China Security Vol 3 No 2 Spring 2007 Coal Mining Safety: China’s Achilles’ Heel explosion at the Laobaidong mine in Shanxi province; and in 00, at the Sunjiawan mine in Liaoning province, 1 more perished. The list goes on. Official statistics put the number of coal miners killed by mining accidents since 199 at more than 0,000. Unofficial numbers are sure to be higher. More importantly, however, is whether the danger of working in China’s coal mines has improved over the years. According to an independent assessment in 006, China’s annual coal mine fatalities during the early 190s, 1980s and 1990s were estimated to be approximately 70,000, 0,000 and 10,000 deaths respectively. At face value, this would indicate an improving fatality rate, however these figures obscure the fact that it began from a very low point in safety. Secondly, despite a reduction of fatality rates from . deaths per million metric tons (Mmt) of coal in 199 to .0 in 006, official annual fatality statistics continue to range from ,76 to 6,99 deaths per year over the past decade. In other words, China’s coal mines remain highly risky working environments. Moreover, China’s mining accident rates sharply contrast with those of other countries around the world – industrialized and developing nations alike – where mining risks have dropped dramatically. For instance, in the Coal Production in China, 190-00** China Security Vol 3 No 2 Spring 2007 7 Tu Jianjun United States, the fatality rate per Mmt of coal was a mere .0 in 006. Even India, a sizable developing country with a notorious coal mining safety record of its own, was able to reduce its rate to just  percent of China’s in 006.6 Viewed against the context of the global death rates from mining accidents, China’s mining accidents and deaths remain high. In fact, China still cur- rently accounts for approximately 80 percent of the total deaths in coal mine accidents worldwide.7 Given China’s reliance on coal and the continually growing economy, these alarming statistics do not bode well for the future of coal mining safety in China. Exploring the unique complexities of China’s coal mining industry reveals its intractable features as well as plausible measures to ameliorate its worst impact. The issue of safety in Chinese coal mines reflects other socio- economic ills in Chinese society and therefore, a solution must go beyond merely stricter regulations. It will require a fundamentally different way of coal mining in China as well as an improvement in the status of those who work in the mines. The Stagnant Flow of Information Despite the bleak picture painted by the statistics above, the reality may be even worse. A chronic lack of accurate information, at many levels, combined with poor statistical measures probably underestimates the severity of coal mining safety challenges in China. Independent experts state that China’s actual death tolls are much higher than reported.8 The discrepancy between reported coal mine deaths and true fatality levels is due in part to the govern- ment practice of concealing information about major accidents, a problem that was particularly acute during the first three decades after 199 (founding of the People’s Republic of China [PRC]). For instance, the Chinese govern- ment classified the deadly coal mine methane explosion at Laobaidong mine in Shanxi province in 1960, which killed 68 miners, as a ‘state secret’. It suppressed the event for more than three decades until it was finally revealed in 199.9 Although the discrepancy between reported coal mine deaths and true fatal- ity levels has been narrowed down in recent years, it has not been eliminated, mainly due to a lack of transparency. This is evidenced by the fact that inde- pendent reports continue to be significantly different from official figures.10 Unofficial data provided by a senior work-safety bureaucrat suggests that as many as 0,000 miners actually die each year. That count does not include the 8 China Security Vol 3 No 2 Spring 2007 Coal Mining Safety: China’s Achilles’ Heel tens of thousands more miners who die of lung afflictions and other mining- related diseases every year.11 A further obstacle to accurate information comes from the mine operators and owners, who routinely falsify death counts in order to avoid mine closures or fines. While Beijing imposes increasingly stringent regulations to counter the widespread corruption in recent years, colliery owners – often in collusion with local officials – withhold fatality figures in mining accidents. For instance, when 81 miners died in Nandang County on July 17, 001, local officials quickly teamed up with the coal mine owner to cover-up the accident.1 After the catastrophe was disclosed, it was revealed that the head of Nandang County had received The issue of safety .1 million RMB ($1,000 USD) in bribes in Chinese coal during the prior two years. Even the media, which is officially tasked mines reflects other with disseminating information to the public, socioeconomic ills. does not always function the way it is supposed to. Since the inception of the PRC, media in China has long been regarded as the propaganda machine of the state and rul- ing party.1 Unsurprisingly, the reporting of major catastrophes was controlled by the government.1 However, journalists and reporters have become more critical, particularly regarding coal mines, but the focus remains on rescue op- erations and seldom provides in-depth coverage of collusion between officials and colliery owners. There is even less follow-up on the impact on victims’ families.1 In May 00, a legislative bill intended to hinder media exposure of such accidents was initiated at the Standing Committee of the National People’s Congress. If passed, any reporting on a major emergency event without permission could incur a fine between 0,000 and 100,000 RMB ($6,00 and $1,800 USD).16 To make matters worse, even the media itself is not immune from the widespread corruption in the coal-mining industry. Some journalists have found the extortion of private mine owners a lucrative business.17 There is still a long road ahead before the Chinese media can fulfill its role as an independent watchdog for coal mine accidents. Coal Mining with Chinese Characteristics Regardless of how much coal mining statistics are underreported or misre- ported, there is no denying the extreme dangers associated with coal mining in China. Such risks are not new to the industry, but there is a need to understand China Security Vol 3 No 2 Spring 2007 9 Tu Jianjun Number vs. Fatality Rate of TVE Mines, 1980-00 why these conditions persist today in China when there are tenable solutions that many other countries have pursued successfully. Importantly, China remains highly reliant on underground operations as the primary method of coal extraction. In most countries, this form of mining has increasingly given way to surface mining, due to the great advantage the latter has in terms of productivity and safety. The mechanization of underground mining has increased productivity from less than one ton per man-shift in 1900 to six tons per work hour today, however, surface mines can easily have a productivity of three to four times that amount.18 As a result, the share of coal derived from surface mines in the United States has increased steadily from  percent in 199 to 67 percent in 00.19 By contrast, China is the only coal superpower with a minority share of its mining in the form of surface mines (approximately 10 percent).0 Its productivity reflects this as well. In 00, China mined 00 tons of coal per employee per year compared with 1,000 tons per employee in Australia.1 One reason for why China relies heavily on underground mining is be- cause China’s reserves of the lower quality sub-bituminous coal and lignite (more likely to be located in shallow coal seams), remain low. Moreover, as burning lower-quality coal actually requires more advanced technology and 0 China Security Vol 3 No 2 Spring 2007 Coal Mining Safety: China’s Achilles’ Heel investment, higher quality coals (bituminous and anthracite) continue to be the industry preferences. The private sector in China is resistant to the capital- intensive surface mines, leaving 9 percent of Chinese coal mines to keep their underground operations. The different mining techniques have had a dramatic impact on mine safety as well. Slope failure, the principle hazard of surface mines, is much easier to control than underground mining dangers, which include gas explosions, flooding and roof collapse. In addition, due to the low productivity of China’s coal industry, about  million workers are necessary for China’s coal-mining industry to meet the growing demand for the resource. The high number of workers often leads to crowded underground mines and explains why ac- cidents in China often have very high fatality rates. The dominance of township and village enterprise (TVE) collieries has also influenced the nature of China’s coal mining industry. TVE coal mines began forming in large numbers with the opening of the economy in 1979. Prior to that time, state coal mines accounted for an overwhelming share of national output. The extreme dangers However, a rapid rise in demand for coal associated with coal dramatically raised their numbers (peaking at 100,000 in 1991) and by 199, their market extraction persist in share had reached 6 percent. The large amount China. of TVE mines soon led to problems of regula- tion, tax evasion, environmental degradation and mounting mining accidents. Despite a decade-long effort by the central government to close them down, thousands continue to operate.  The problem with most TVE mines is their unwillingness (or lack of capital) to invest in proper safety mechanisms. Coupled with poor regulation enforce- ment, TVEs have created a coal mining industry that constantly operates at a capacity far beyond its safe threshold. In 00, 19 of the 7 coal producing provinces/regions in China supplied coal at 10 percent over capacity while some of them were working at more than 0 percent over capacity.6 Even state mines could not observe the safety regulations. Moreover, the mispercep- tion of a long-term coal surplus in late 1990s convinced Beijing to compete aggressively with other major coal exporting countries in the international market. As a result, China’s coal exports grew from 17 Mmt in 1990 to 9 Mmt in 00.7 This not only aggravated the supply and demand balance, but pushed coal output beyond the capacity of China’s mines, increasing worker China Security Vol 3 No 2 Spring 2007 1 Tu Jianjun fatigue, safety violations and equipment failures that have increasingly become a catalyst for deadly accidents. Although TVEs currently produce about one- third of the national coal output, they account for 70 percent of the industry’s fatalities.8 China’s highly undesirable coal mining conditions have also made it nearly impossible for the coal mining industry to attract and retain qualified employ- ees. With the hardships that come with the job and constant negative media exposure, many engineers and technicians in the industry have extremely low morale. This creates a The coal mining widespread brain drain that results in a shortage of industry places little expertise required to raise mine safety standards. To value on the life of a compensate, in as early as 196, state coal mines in China began short-term contracting with peasants miner. to fill the void of workers for these unwanted jobs by permanent staff.9 Since then, migrant peasants have gradually become the back bone of the industry. According to an official survey, even China’s large state-owned mines have to rely on peasant workers to fill 80 percent of their underground mining positions.0 This phenomenon has significant consequences for this coal mining working class. Voice of the Powerless The majority of peasants laboring in the coal mines come from poverty- stricken rural regions with large numbers of desperate job seekers. Many coal mining companies take advantage of this vulnerability and push peasant workers to fill the most dangerous underground mining positions without adequate training or equipment. Insufficient safety measures coupled with work fatigue from long shifts increasingly explains many coal mine accidents in China.1 It is not surprising then that compensation in the coal mining industry is the second lowest of 9 industries in China. In 000, the annual average in- come for employees was 1,000 RMB ($1,00 USD) and 7,00 RMB ($9 USD) in key and local state mines respectively. The annual pay in TVE mines is significantly lower. In some collieries in northwest China, miners were allegedly paid only 1,00 RMB ($1 USD) per year in 00 (compared to the salary of experienced coal miners in the United States who can make more than $100,000 USD per year). The coal mining industry in China places little value on the life of a miner  China Security Vol 3 No 2 Spring 2007 Coal Mining Safety: China’s Achilles’ Heel – an unfortunate reality with direct consequences for the safety record of many coal mines. Prior to 00, compensation for the death of a miner ranged from 10,000 to 0,000 RMB ($1,00 - $6,00 USD). This low price tag on human life makes it much easier for coal mine owners to settle privately with the families of victims’ in exchange for their silence. Such behavior also reduces the incentive for colliers to improve safety practices and equipment and has also led to an underreporting of deaths in the coal mines. In 00, the Shanxi provincial government took the significant step of increasing the amount of compensation to 00,000 RMB ($,000 USD) per coal mine fatality to redress this problem.6 An upsurge of positive reaction to the Shanxi government’s action from the media soon led to an initiative for other major coal-producing provinces to follow suit.7 In fact, even this higher level of compensation remains only a small percentage of the industry’s gross annual profits, which are at least 0 million RMB ($6. million USD) per Mmt of coal produced. Given that the 00 fatality rate in China was .7 miners per Mmt of coal, the penalty imposed by the new regulation repre- sented only 1 percent of the gross profits collected by mine owners. While the benefits of raising the compensation for miner fatalities seems positive on the surface, it has the effect of a ‘divide and control’ strategy; that is, individual families are bought off and silenced, reducing the impetus for group dissat- isfaction and social mobilization. The Shanxi provincial government quickly realized the new regulation was insufficient. Rather than increase the level of compensation to families, officials imposed an additional fine of one million RMB ($18,000 USD) per coal mine fatality, payable to the local government itself.8 This had the unintended consequence of not only turning coal mine accidents into a lucrative source of revenue for the authorities who collected the fines, but also increased the incentive for mine owners to buy the silence of victims’ families. Under these conditions, the plight of mine workers in China seems bleak. They are the most vulnerable group in society and lack the means to advocate for safe work conditions, income levels, adequate training, or other job-re- lated issues.9 Unionizing and public expression of discontent is met by fierce repression by mine operators, local governments or both.0 As a result, there is a grave imbalance in the power between those who own or operate China’s coal mines and those who work in them. Therefore, it is the responsibility of the government to enact fundamental reform of the coal mining industry to redress these contradictions. China Security Vol 3 No 2 Spring 2007  Tu Jianjun Failure to Reform Many government attempts to bring China’s vast and atomized coal in- dustry to heel have proved unsuccessful. Indeed, it may be an impossible task as the country’s demand for coal grows ever higher along with the industry’s power and vested interests. Most important among the measures to reign in the power of the coal industry’s leaders has been to eliminate the endemic corruption throughout the industry. As Beijing becomes less and less tolerant with coal mining related corruption, provincial governments are taking more action. A notable example of this occurred in 006 when seven director-level officials at various coal mine safety administrations in Shanxi, China’s largest coal producing province, were prosecuted for coal mine-related corruption.1 However, there remains many places in China where “the mountains are high, and the emperor is far away.” That is, China’s historic and chronic difficulty of compelling local officials to obey central policies remains as real as ever. Even capital punishment is often an insufficient deterrent to greedy officials as the gains at stake are huge. On Aug. 6, 00, Beijing launched a drive to cleanse the coal mining industry of shareholding by officials (widespread amongst TVEs), requiring all government employees and heads of state enterprises to withdraw their personal ‘invest- ment’ in collieries. However, the new anticorruption campaign immediately bogged down at the local level, when officials in some coal-producing regions refused to withdraw their investment and some even threatened (privately) to resign; others simply transferred their shares to relatives and friends. The sharp contrast between Beijing’s increasingly stringent punitive mea- sures and the rampant corruption at local levels suggests that the perceived probability of being caught in a coal mining corruption related accident is still too low. Given the degree of collusion between local officials and colliery owners, bringing corruption to light is particularly challenging and would necessitate that the central government use its own State Administration for Worker Safety (SAWS) to directly investigate deadly coal mine accidents. The heavy work load for SAWS officials, however, inevitably limits their ability to operate at strategic and managerial levels. Establishing a stable regulatory framework for safety standard setting and enforcement is also imperative, though the government has yet to be com- pletely successful in this endeavor. From the inception of the PRC, coal mine safety regulations have been subject to turbulent government restructuring,  China Security Vol 3 No 2 Spring 2007 Coal Mining Safety: China’s Achilles’ Heel leaving it largely ineffective. A pre-1999 safety inspection system for coal mining was flawed due to a lack of proper national integration, partial cover- age (only state mines) and a lack of independence from the coal production administration it was designed to oversee. The State Council fixed some of these deficiencies with the creation of two agencies, the State Administration of Coal Mine Safety (SACMS) in 1999 and SAWS in 001. However, the constant flux of bureaucratic reorganization continued to impair their inspec- tion work. An acute shortage of inspectors has also left the agencies ineffective. The number of coal mine inspectors in China is wholly inadequate for the task thought the government is expanding the inspection force. Furthermore, the majority of inspectors are employees of state mines, creating a clear conflict of interest. Beyond administrative limitations, however, an over-simplification of the problem solving associated with the coal mining industry has led to counter- productive government responses. SAWS has recently banned all ‘greenfield’ coal mines with capacity of less than 00,000 tons per annum (for the 11th Five Year Plan, 2006-2010), and a plan to shut down all small collieries with annual output less than 0,000 tons by the end of 007.6 However, not all small coal mines are operating dangerously. Closing coal mines solely based on capacity unfairly shuts down those small coal mines that strive to meet safety requirements. It is important for the government to maintain a healthy pres- ence of licensed small TVE mines to induce competition in the coal mining industry and attract long-term investment from the private sector. Closing mines without careful consideration has other negative conse- quences. Following the 00 Daxing mine accident that killed 1 miners in Guangdong, the local government temporarily shut down all collieries within the mine’s geographic vicinity.7 Putting underground mines out of commission in this way, however, often leads to an accumulation of methane, increasing the chances of explosion once they are put back to operation.8 Moreover, fearing negative impact on the performance review of provincial cadres, the Guangdong government eventually closed all collieries across the province permanently. This decision deeply impacted the interests of all stake- holders in Guangdong’s coal mining industry, especially the colliery owners and thousands of migrant peasant workers. Perhaps more destructive than a miscalculated government strategy is the failure of government regulations to be implemented in practice. After China Security Vol 3 No 2 Spring 2007