China Stakes Its Claim in Latin American Energy:

where considerable Chinese financing and investment have been directed. 53

points out, “it is difficult to see why a Latin American leader would accept such a deal unless the alternative was even more costly.” 56 To avoid these conflicts, many LAC countries have crafted innovative policy responses. For example, in 2008 and 2010, Ecuador enacted a comprehensive series of labor safeguards for the country’s petroleum sector. In 2008, Ecuadorian officials imposed a restriction on subcontracted labor, “limiting it to ‘complementary’ work such as security and custodial services.” 57 Then, in 2010, the nation’s Hydrocarbon Law further bolstered protections in the oil and gas sector by requiring foreign investors to hire local laborers for “95 percent of unskilled and 90 percent of skilled jobs,” and including all employees in profit sharing. 58 Governance: How much influence does China have? Does China’s huge financial clout help to directly influence domestic governance in LAC? While the U.S. and other countries express concerns over China’s strategic position in the region, many experts find that the scope of Chinese leverage regarding LAC governments remains rather limited. In many cases,

Major projects run by Chinese in LAC generate two important sources of labor conflict. The first is the use of foreign laborers rather than locally-sourced workers. This has generated opposition from unions, civil society and opposition political parties. The second source involves differences in labor conditions between direct hires and subcontracted employees working on the same project. According to Harold Trinkunas, author of Renminbi Diplomacy? The Limits of China’s Influence on Latin America’s Domestic Politics , “these conditions effectively modify local labor and immigration regimes, The “buy China” requirement in large-scale projects also applies to the selection of suppliers and contractors. For the construction of railways and hydroelectric plants, for example, Argentina secured $7.5 billion in loans. But the money was conditioned on the successful employment of Chinese construction companies and suppliers. 55 When large-scale projects typically are obliged to use both Chinese labor and equipment, the net gain for Argentina – in this case and for other LAC nations – is insufficient and diminishes economic sovereignty. However, Trinkunas granting China a particularly privileged role in comparison with other foreign investors.” 54

INSTITUTE OF THE AMERICAS 25

Made with FlippingBook - Online catalogs