By John Sexton

A report by a student group campaigning to improve working conditions at Coca Cola bottling plants in China says there has been “disappointing” progress in fulfilling a pledge to convert temporary staff to full-time employee status.

The report from the Coke Concerned Student Group (CCSG) follows earlier highly critical reports that claimed Coca Cola’s systematic use of contract staff was a legal device to avoid providing benefits full-time employees are entitled to. The reports also said that long-term use of contract staff is illegal under China’s labor law.

In December 2009, CCSG was invited to meet in Beijing with managers from Coca Cola and some of its partner companies. Following the meeting, Hong Kong–based Swire Beverages, which operates several Coca Cola bottling plants across China, announced it was planning to convert most production line staff from contract worker status to full-time employees.

CCSG’s latest report, published on Christmas Day, presents the results of a recent investigation of conditions at Swire bottling plants in Guangzhou, Huizhou and Hangzhou. It concludes that, while some contract workers have been given full-time status, a much larger number were simply dismissed without adequate compensation. In March, the report says, 100 contract workers, two-thirds of the total, were dismissed from Swire’s Guangzhou plant. And at their Hangzhou plant only a small number of skilled workers were given full-time status.

“We are forced to reflect is this the way a major international brand should behave? Is it the way a socially responsible company should behave?” the report says.

CCSG also says that tests to assess workers’ suitability for conversion were unfair and discriminatory. The net result was that relatively few contract workers benefited from the conversion program. And problems highlighted in previous reports, such as arbitrary wage deductions, paying lower than the minimum wage, and health and safety issues, have yet to be adequately addressed.

In contrast to Swire, Coca-Cola itself made no commitment to convert any staff to full-time status. The company has always insisted its use of contractors is entirely lawful, citing third party audit reports, which however, remain unpublished. In a fourth plant in Dongguan, operated directly by Coca Cola, the report says there has been no change in the numbers of contract workers employed.

Manufacturers in China make widespread use of contract staff, known locally as dispatch workers, who are not legally employed by the factories where they work, but by separate, labor contract agencies.

The harsh management style of some contract agencies was highlighted in 2009 when a CCSG investigator was beaten up by agency managers when he went to collect his wages. Local police failed to press charges and even briefly detained the victim of the assault, although they later claimed they were merely trying to establish the facts of the case.

The Coke Concerned Student Group blog (in Chinese only) can be found at http://followcoca.blog.163.com