PROJECT: ALLEGED SWEATSHOP OPERATIONS - NEWCASTLE, KWAZULU-NATAL (PART 2)
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CRIMINAL ELEMENTS IN SUPPLY CHAIN EXPLOITATION
Specialised Security Services (SSS) would like to share an analytical review of the Newcastle garment industry controversy following media reports, parliamentary interventions, and regulatory inspections during 2026.
Please read our initial project:
The review indicates that these operations may constitute criminal offences, including:
Employment of undocumented foreign nationals.
Fraudulent wage practices below statutory minimums.
Exploitation of vulnerable workers.
Occupational health and safety breaches.
Organised avoidance of regulatory detection.
Retailers implicated include:
Mr Price Group.
Pepkor.
Pick 'n Pay.
SSS finds that accountability is shared but stratified.
It includes criminal liability and accountability across three levels: factory operators, retailers, and the State.
It is important to understand why Specialised Security Services (SSS) is closely monitoring this controversy:
beyond labour violations, the Newcastle sweatshop situation contains a clear criminal dimension.
The allegations involve the illegal employment of undocumented workers, fraudulent wage practices, exploitation of vulnerable populations, and deliberate evasion of regulatory oversight.
These elements constitute potential criminal offences under South African law, including labour law contraventions,
immigration violations, and possible human rights abuses.
SSS’s interest is therefore focused on the criminal investigation aspect — identifying perpetrators, tracing responsibility,
and uncovering organised structures that facilitate ongoing exploitation and illegality within the supply chain.
This goes beyond administrative compliance, highlighting the need for criminal accountability at multiple levels.
Newcastle is a key hub for garment manufacturing.
Media reports and regulatory inspections in 2026 revealed that some factories operated in blatant violation of South African law, producing goods under conditions that constitute criminal exploitation.
Vulnerable populations, including undocumented migrants, were reportedly employed under coercive conditions, with wages far below legal minimums, unsafe working environments, and no recourse for complaints.
COSATU and parliamentary committees have demanded accountability from both factory operators and major retailers.
CRIMINAL LEGISLATION IMPLICATIONS:
Potential offences include:
Labour-related crimes under the Basic Conditions of Employment Act and the National Minimum Wage Act.
Occupational Health and Safety offences under the OHS Act.
Immigration violations under the Immigration Act.
Human exploitation crimes, including potential trafficking or forced labour.
SSS regards the matter as a criminal investigation priority due to the systemic exploitation of vulnerable persons and organised evasion of law enforcement.
FINDINGS:
1. FACTORY OPERATORS – PRIMARY CRIMINAL LIABILITY:
Evidence shows factory operators may be criminally liable for:
Hiring undocumented workers.
Paying illegal wages (as low as R50/day).
Operating unsafe, hazardous workplaces.
Concealing operations to evade inspections.
These constitute direct statutory offences, exposing operators to both criminal prosecution and civil liability.
2. RETAILERS – SECONDARY CRIMINAL EXPOSURE:
Retailers publicly claimed:
Suppliers acted independently of their control.
Suppliers violated contractual codes of conduct.
Internal audits are ongoing.
SSS notes that criminal exposure arises from negligent oversight:
Failure to detect illegal labour practices within supply chains may amount to willful blindness.
Retailers’ economic leverage over suppliers implies responsibility for preventing criminal exploitation.
In some cases, ongoing transactions with unlawful operations could constitute complicity or abetment, depending on evidence of knowledge or reckless disregard.
3. GOVERNMENT – SYSTEMIC CRIMINAL ENFORCEMENT GAPS:
The State is responsible for:
Enforcement of labour, immigration, and safety laws
Protection of vulnerable workers
SSS identifies criminal risk in enforcement gaps:
Reactive inspection models allow illegal operations to persist
Inadequate interdepartmental coordination impedes investigation
Fear of deportation suppresses whistleblowing, allowing exploitation to continue
Governmental shortcomings do not absolve operators or retailers of criminal liability, but they create structural vulnerabilities that enable criminal activity.
The Newcastle case demonstrates:
Human rights violations – exploitation of undocumented workers constitutes criminal abuse.
Financial crime risks – illegal wage practices distort competition and defraud employees.
Organised criminal structures – subcontracting opacity facilitates systemic evasion of law.
Reputational and legal exposure for retailers complicit through negligent oversight.
These conditions can escalate into broader organised exploitation schemes, if left unchecked.
CULPABILITY:
The Factory Operators are responsible for direct statutory violations, exploitation and regulatory evasion.
The Retailers’ statements emphasised that ethical compliance is insufficient to mitigate criminal accountability:
Audits and supplier codes are preventative, not extenuating.
Public relations statements do not address the criminality of illegal employment and exploitation.
They are guilty of negligent oversight, potential complicity, and failure to prevent exploitation.
And as so frequently proven, the Government is culpable of weak enforcement architecture, inadequate worker protection, and enabling ongoing criminality.
RECOMMENDED NEXT STEPS:
Conduct a full criminal investigation of implicated factories and supply chains.
Implement mandatory independent audits and supply-chain transparency by retailers.
Establish protected reporting mechanisms for vulnerable workers, including undocumented employees.
Strengthen interdepartmental intelligence-sharing and enforcement frameworks.
Evaluate legal liability of retailers for negligent supply-chain oversight.
Specialised Security Services identifies the Newcastle sweatshop controversy as a criminal matter with systemic implications:
Factory operators engaged in clear statutory offences.
Retailers’ governance failures facilitated ongoing criminal exploitation.
Government enforcement gaps enabled continued illegal practices.
SSS will continue to monitor, investigate, and support criminal accountability for all parties involved,
with priority focus on the protection of exploited workers and enforcement of South African criminal and labour law.
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