A Durban company accused of “locking in” employees and demanding they meet daily targets in producing medical equipment, even though it operated without the required certification, pleaded guilty in court this week.
A Durban company accused of “locking in” employees and demanding they meet daily targets in producing medical equipment, even though it operated without the required certification, pleaded guilty in court this week.

Chinese-owned firm fined for locking workers inside Durban building until they met targets

By Mervyn Naidoo Time of article published Jul 5, 2020

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A Durban company accused of “locking in” employees and demanding they meet daily targets in producing medical equipment, even though it operated without the required certification, pleaded guilty in court this week.

Chen Lu Fragrances CC forced 14 employees, split into two shifts and housed at its Glen Anil business premises, to each produce 500 surgical face masks each day.

Workers were told they could leave and not return if they were dissatisfied with the terms and conditions, at a time when stage 5 of the lockdown was in effect and job opportunities were scarce.

The company’s indiscretions were unmasked when police raided the factory on March 28 after they were alerted by some disgruntled workers.

Ming Lai He, Chen Lu Fragrances’ chief executive, was the company’s nominated person to enter into a plea settlement with the State this week.

The matter was finalised at the Durban Specialised Commercial Crimes Court before Magistrate Garth Davis on Thursday.

The State was represented by Prosecutor Ronitha Singh while attorney Reeves Parsee of law firm Larson Falconer Hassan Parsee acted for the company.

The company was charged with forced labour (excessive working time), failing to maintain an environment that was safe and without risk to their employees’ health and failing to licence as a manufacturer and trader of medical devices.

It also emerged that masks produced by the company and worth over R200000 were donated to the SAPS and the Office of the Premier.

On count one (forced labour), the company received a R20000 fine, of which R15000 was suspended for five years, provided the same offence was not committed in that period.

For failing to provide a safe and healthy working environment for their staff, the company was fined R20000, with R15000 of it suspended for five years, provided they did not commit the same offence in that time.

And for failing to obtain the required license to manufacture and trade (count 3), Magistrate Davis confirmed a R50000 fine, of which R35000 was suspended for five years, on condition they did not repeat the offence during that period.

It has been said in National Prosecuting Authority (NPA) circles that the conviction secured on count three is the first of its kind in the country.

In preparing for the technically loaded prosecution, Singh and her support team waded through voluminous information about the legislation, regulations and guidelines of the South African Health Products Regulatory Authority (SAHPRA), Department of Trade, Industry and Competition, Department of Labour and the SA Bureau of Standards.

Warrant Officer Andre Moses of the KZN Provincial Investigation Unit headed the investigation.

The core business of Chen Lu Fragrances was to import various goods, mostly paper products, from China and other parts of Asia, which is sold mainly to wholesalers.

When Covid-19 broke locally, the company, with assistance from the Counsel General of China, imported machinery to manufacture surgical masks.

The equipment arrived on March 20 and within days it was set-up in Glen Anil and 14 workers were drawn from an associate company.

On March 26, Premier Sihle Zikalala visited the site and received a donation of 10000 masks for the SAPS.

On the same day, Chen Lu Fragrances applied for a Covid-19 business operation permit with the Companies and Intellectual Property Commission.

Due to the shortage of masks in the province, the Chinese Consulate ordered the company to donate a further 20000 masks to the provincial government.

Ming Lai He was arrested following the police raid and later granted bail.

When reading the plea statement in court, Parsee said his client paid overtime, but accepted that the number of hours the employees worked exceeded regulations.

While the company provided their workers with personal protective equipment, they were not trained in its use, Parsee said.

No physical distancing demarcations were provided by the employer and it was established that the workers slept in cubicles set up in the factory.

Parsee also said his client accepted they had failed to apply to SAHPRA to manufacture masks.

Therefore, the company pleaded guilty to the charges.

In mitigation, Parsee said the company made regular donations to various KZN charities and while employees worked long hours, they were paid overtime.

Singh reiterated the seriousness of the charges which related to the lives of the workers and the general public.

She pointed out that the donated masks to the police and health workers were issued without testing its integrity, and the company’s conduct had “unlawfully and intentionally undermined the country’s justice system and rule of law”.

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