Nine Dragons dismisses sweatshop claim

PUBLISHED : Thursday, 08 May, 2008, 12:00am
UPDATED : Thursday, 08 May, 2008, 12:00am

Nine Dragons Paper (Holdings), the mainland's largest maker of containerboards, yesterday hit out at accusations that its factories in Dongguan in Guangdong province are sweatshops, according to the mainland press.

'We became wealthy because we found the right business model to change used paper into treasure - not by treating workers harshly,' said Nine Dragons chairwoman Cheung Yan, who is the country's richest female entrepreneur, according to the 2006 Hurun rich list.

'We don't have temporary workers any more now that the labour contract law has been passed.'

The accusation centred on the use of so-called 'assisting' workers, who allegedly did not receive all the benefits of normally contracted full-time workers at Nine Dragons.

Ms Cheung, who was responding to the issue for the first time, said the company's 'assisting' workers, accounting for about 20 per cent of the total workforce, received a monthly salary of 1,500 yuan (HK$1,675), which was more than the average salary of 960 yuan in Dongguan.

But Yau Tse-wai, spokesperson of Students and Scholars against Corporate Misbehavior (Sacom), said: 'The company did not explain why their assisting workers receive fewer benefits than contract staff. We will not rule out the possibility of strike action.'

On April 15, Sacom, which was established by about 50 university students and scholars in Hong Kong, published a report calling Nine Dragons 'a shame of Hong Kong enterprise' that 'turns blood into gold'.

The report said the company last November forced its 2,000 temporary workers, mainly employed in the raw material department, to sign a contract confirming a pay cut from 1,500 yuan to 960 yuan to cut costs.

After a three-day strike by its employees in December, Nine Dragons withdrew the pay cut but insisted on changing temporary workers into assisting workers, who have to sign contracts with independent human resource firms and are not entitled to the company's dormitory, weekly day-off, overtime pay and pension.

Ms Cheung, who had just completed a three-week overseas road show for a US$300 million convertible bond issue, briefed mainland press yesterday, saying Sacom's accusation was 'ridiculous', according to

'We have deducted 1.07 million yuan from our employees who violated the factory's rules. However, they can get back the money if they perform well in the next six months,' she said. 'The policy is a means of ensuring production safety. We granted bonuses of over 21 million yuan to encourage safety and efficiency last year.'

Ms Cheung, a delegate to the National Committee of the Chinese People's Political Consultative Conference, the country's top political advisory group, previously called for the scrapping of the provision allowing employees to pursue open-ended contracts in the labour contract law, arguing it gave them an 'iron rice bowl', or a job for life.