By staff reporter Fu Yanyan

A dispute over working conditions at one of the world's largest paper packaging companies, Nine Dragons Paper (Holding) Ltd., has embroiled a trade union, labor experts and one of China's wealthiest women.

The row began in April when a Hong Kong-based NGO --  Students and Scholars Against Corporate Misbehavior (SACOM) -- condemned Nine Dragons (HKSE: 2689) as a “sweatshop” operation with dangerous working conditions and a pattern of labor law violations. The company is chaired by its wealthy founder, Cheung Yan.

A follow-up investigation by the Guangdong Provincial Trade Unions Federation denied SACOM's sweatshop accusation but uncovered alleged management problems as well as violations of workers' rights.

Kong Xianghong, vice chairman of the union, said Nine Dragons has been urged to improve its management conditions and company communications with workers.

However Chen Bulei, an industrial relations researcher at Renmin University of China, said a Chinese union cannot determine whether any company runs a sweatshop.

And labor law expert Zuo Xiangqi told Caijing that Chinese unions lack real power in defending worker rights, creating an environment that's responsible for an increase in labor disputes nationwide.

Nevertheless, the Guangdong union's May 26 report did not leave Nine Dragons unscathed. According to the report, the company has overworked and mistreated managers, and imposed excessive penalties on employees. More than 70 percent of the workers were fined a total 1.07 million yuan last year.

The union investigation also found unsatisfactory safety conditions. Last year alone, two workers were killed and eight seriously injured in some of the 51 industrial accidents recorded by the company.

But the union dismissed SACOM's sweatshop charges, saying Nine Dragons, also known as ND Paper, has done well by signing labor contracts and providing for its workers. Kong said the union has never received a complaint from a company worker.

Meanwhile, Kong told Caijing the union has launched pilot projects at 100 companies in the region to monitor worker-management relations, with the goal of reducing labor tension.

1 yuan = 14 U.S. cents