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Hong Kong Company Ordered to Pay Chinese Workers $5.4M for Saipan Labor Abuses


FILE - Chinese laborers Jingbao Zhao, left, Xiaoli Wang, center, and Yongbo Sun protest in front of the Imperial Pacific Casino in Saipan, the Northern Mariana Islands, July 26, 2017.

Legal and rights advocates say a landmark labor rights ruling earlier this week on the U.S.-administered island of Saipan is likely to have a long-term impact on forced labor disputes.

The move comes amid growing international concern and awareness about rights and labor abuses by Chinese companies operating overseas.

On Monday, a judge of the U.S. District Court for the Northern Mariana Islands ordered a Hong Kong company to pay seven Chinese construction workers $5.4 million in compensation for forced labor, human trafficking and workplace injuries during their employment on the Imperial Pacific casino construction site in Garapan, Saipan.

Chief Judge Ramona Villagomez Manglona issued a default judgment on May 24 against Imperial Pacific International (IPI) for forcing the Chinese workers to toil in “extreme, dangerous and inhumane work conditions” on the casino construction site. The workers had been “recruited in China … under false promises,” entered Saipan on tourist visas arranged by the defendants and were housed in “repugnant” dorms, according to the judgment.

Breakdown of awards

The judge ordered IPI, which is listed on the Hong Kong stock exchange, to pay the workers $2.9 million in compensatory damages and the same amount in punitive damages, offset by the amount paid to the plaintiffs in settlements with other defendants.

Individual awards depend on several factors, including the severity of injuries, pain and suffering; days worked; and the projected amount of lost future earnings. A default judgment occurs “when a party fails to respond to a court-ordered action,” according to the Cornell Law School legal information site.

The case was filed in 2019 against the plaintiffs’ former employers, Gold Mantis, a subsidiary of Suzhou Gold Mantis Construction Decoration; MCC International Saipan, owned by Metallurgical Corp. of China; and IPI, owner of the casino under construction.

MCC was the general contractor on the casino project and employed three of the workers, according to the judgment. MCC charged each worker $2,000 for the job, then forced the workers to buy their own protective gear, threatened to send them to China “given their unlawful status,” and told them that “their complaints were useless given their immigration status.”

Four — and eventually all — of the plaintiffs worked for Gold Mantis, which charged each worker $1,000 for the job, according to the ruling. A manager “threatened to physically harm and kill employees,” according to the court document. It continued: “All seven Plaintiffs sustained injuries during the course of their employment with Gold Mantis.”

IPI did not answer emails from VOA Mandarin.

Settlements

MCC and Gold Mantis settled with the plaintiffs for undisclosed sums. VOA Mandarin attempted to speak with both companies. Gold Mantis did not answer when telephoned, and contact information was unavailable for MCC.

Officials with the U.S. Attorney’s Office for the Districts of Guam and the Northern Mariana Islands told VOA Mandarin they were not authorized to discuss the case.

Aaron Halegua, the plaintiffs’ lawyer and a research fellow at New York University School of Law, told VOA Mandarin that his clients did not want to talk to reporters. He said he was pleased that the court had recognized the egregiousness of IPI’s conduct.

“This is an important decision because eradicating forced labor requires that perpetrators of such abuses face serious consequences,” he told VOA Mandarin via phone.

If IPI fails to pay the plaintiffs as ordered, Halegua said his team would take steps to collect the judgment, such as attaching the company’s assets in Saipan.

The workers’ troubles originated with IPI’s successful bid “for a single Saipan gaming license in November 2014 after promising to make … fixed payments to the cash-strapped island. Unusually, it is not required to pay any tax on revenues,” according to the trade website Casino.org.

The company had no experience in building or operating casinos, the site reported, and delays dogged the controversial project.

“In March 2017, a construction worker died after falling from a scaffold on the casino construction site, prompting an FBI investigation,” according to Casino.

“This led agents to uncover widespread visa violations among the workers, who had been brought to Saipan from China. Two contractors were ultimately charged with importing and harboring illegal aliens.”

Injuries recorded

Bloomberg reported in 2018 that the staff at Saipan’s single hospital kept an unofficial spreadsheet of injuries of Chinese laborers working on the project, describing “a grim catalog of broken bones, lacerations, puncture wounds, dislocated limbs, and eyes penetrated by flying metal.”

Halegua told VOA that while members of his legal team had originally filed for work injuries, they gradually realized that the workers' descriptions of their treatment indicated forced labor.

"The real focus in this context is whether the person was free to stop working or whether they were somehow coerced to continue working,” he told VOA Mandarin in a Skype interview.

Halegua said that taking away passports, delaying salary and making threats are “tools that employers can use to coerce the workers to make them feel that they have to keep working, otherwise they will suffer harm. And that's really the essence of human trafficking and forced labor.” He said the terms are often used interchangeably.

New York City-based rights group China Labor Watch issued a report last month saying that Chinese companies involved in China’s Belt and Road Initiative had abused Chinese workers in at least 22 countries.

Long hours, curbs on movement

According to the report, the abuses included passport retention, “restrictions on freedom of movement, excessive work hours up to 12 hours a day and 7 days a week, zero holiday allowance, unpaid wages, issuance of illegal visas, deceptive recruitment and false promises.”

The report added that workers’ “basic human rights have been severely violated, but because they are abroad, it is difficult to seek protection under Chinese law, and the Chinese companies that force these workers to work often get away with it.”

Li Qiang, founder of China Labor Watch, told VOA via phone that the ruling would have implications for future cases regarding forced labor issues.

“This ruling can be applied to all future cases in the U.S. involving forced labor or the illegal use of visa,” he said. “Meanwhile, if a specific company faces forced labor allegations for its operation overseas, and if the company is either in the U.S., has relationship with a U.S. company or has assets in the U.S., this ruling can be cited to some extent as well.”

Halegua agreed. He told VOA Mandarin that based on his experience, forced labor practices are fairly common among Chinese workers who are hired to work on overseas projects by Chinese companies. Usually, the companies are not punished, which is why the seven workers’ case against ICI will have implications for the construction industry beyond Saipan, he said.

“This case shows that the court takes this behavior very seriously and that there are very serious consequences for employers that engage in forced labor,” he said.

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