Proudly (NOT) South African

A senior ANC member of parliament is the central figure in a scandal involving a Chinese sweatshop making merchandise of Zakumi, the 2010 soccer World Cup's official mascot.

Organisers of the tournament this week announced an investigation into how the 10000m² factory in China's largest city, Shanghai, landed several international subcontracts, worth as much as R840-million.

Shanghai Fashion Plastic Products & Gifts has agreements with companies in Europe, North America and South Africa to make 2.3 million toy figures of the dreadlocked leopard mascot.

About 100000 of the figures arereportedly destined for Ascendo Industrial, a heavily guarded factory and distributor in Newcastle, KwaZulu-Natal, that is owned by ANC MP Shiaan-Bin Huang and his wife Su-Luan.

Huang insisted on Friday that the subcontract was approved by both world football governing body Fifa and its product licensing and brand management partner Global Brands Group (GBG).

He admitted having visited the Shanghai factory, as did representatives of GBG.

"I cannot control the factory. This is not our factory ... but this was approved by GBG, so what is the problem?" he said.

He said "at the moment it is very difficult" to make merchandise locally. He added the design was patented in China and approved by GBG and Fifa.

But Fifa has denied that any of its representatives had ever visited the factory.

The Local Organising Committee said on Friday that merchandise was handled by Fifa.

A Fifa spokesman said GBG would be investigating the use and conditions of the Chinese factory.

"Due to the serious nature of the allegations, discussions are ongoing between Fifa and GBG, who have already launched an investigation and will be taking the necessary measures if required."

Trade union federation Cosatu, which has fought against government trade agreements with China that threaten local textile industry jobs, slammed the manufacturing of World Cup merchandise abroad.

Cosatu spokesman Patrick Craven said: "Cosatu has consistently demanded that all World Cup paraphernalia must be manufactured in South Africa so that we can create jobs and inherit a legacy from the tournament.

"We are utterly appalled that even Zakumi, the official mascot, is being made, under such appalling conditions, in China."

Young workers spend up to 13 hours a day making the merchandise in a squalid Shanghai factory, according to an investigation by the British newspaper News of the World.

More than 500 workers are paid R23 a day for making the Zakumi figures, which sell for about R360 each.

Asked about labour conditions at the factory, Huang said, "I understand, but it was approved ... there were many processes and procedures."

He said he had signed a code of conduct with GBG and Ascendo had ordered 50000 units at R85 each, which might eventually retail at a discount price of around R199 in SA. He said Ascendo had requested permission to distribute in the UK and US, but this had yet to be granted.

Posing as potential buyers from the UK, a team from News of the World visited the factory and discovered that the workers had just completed an order of 30000 Zakumi figures destined for South Africa.

The workers were adding final touches to another 70000 orders for South Africa and an order of 300000 for Switzerland.

The newspaper reported that dozens of workers in the factory are often unable to cope with the tough conditions, including freezing winter and hot summer temperatures.

Several workers interviewed described the factory as "the worst around" in terms of wages, with workers slaving up to 13 hours a day for a meagre £90 (about R1080) a month.

Huang, who serves on parliament's economic development committee, is a prominent figure in Newcastle, where he has also been deputy mayor and regional chairman of the IFP.

His family business, Ascendo Industrial, was awarded a product licence by GBG in September last year - entitling it to use Fifa's logo on products it manufactured and distributed.

Huang then negotiated a product licence deal with Shanghai Fashion Plastic Products & Gifts.

According to the agreement signed by Huang and David Lau, CEO of Shanghai Fashion Plastic & Gifts, in September last year, "the Zakumi products will be manufactured in China-Shanghai Fashion Plastic Products & Gifts Co and distributed by Ascendo Industrial in South Africa".

Huang - who states on his ANC parliamentary profile that "we need more opportunities in order to bring more projects into the country" - travelled to China with a KwaZulu-Natal government delegation in 2008.

Although the Companies and Intellectual Property Registration Office (Cipro) shows that Ascendo Industrial is solely owned by Su-Luan, Shiaan-Bin Huang acted as the company's managing director when he signed the contract with the Chinese last year.

And while Cipro shows that Shiaan-Bin Huang resigned as a director of Ascendo in September 2006, parliament's register of members' interests had him listed as a director last year.

Lau told the British newspaper how South African tournament organisers and Fifa gave him permission to make 2.3 million Zakumis after visiting the factory four times. "There were about a dozen of them who came each time and they spent a long time inspecting our factory and our production lines," he said.

The soccer officials reportedly gave Lau the contract even after apparently seeing workers shivering in coats and scarves at dimly lit workstations at 11pm.

Lau boasted of the profit he could make, claiming Fifa insisted the firm pay it 17% of the wholesale cost of the figures upfront. "We had to pay millions of US dollars but we are a big, powerful company and that is not a problem if it will make us a lot of money."