Watchdog grills Hong Kong authorities for failing to act on restaurants operating illegally in industrial buildings

The Ombudsman has accused the government of failing to crack down on restaurants operating illegally in industrial buildings, and turning a blind eye to potentially disastrous fire and hygiene risks.

The watchdog’s latest report, released Thursday, said many eateries in industrial buildings were operating with a factory canteen licence, which allows for more relaxed hygienic requirements.

Such businesses also avoid paying premiums to the government for the added value that their property attracts after changing land use to accommodate commercial operations.

Holders of a factory canteen licence are only allowed to serve factory employees. They are also forbidden from having an entrance or exit leading to a public road, displaying promotional material, or having transparent external walls, such as glass windows.

“Nevertheless, in recent years, many factory canteens also serve public customers in a high-profile manner,” Ombudsman Connie Lau Yin-hing said.

“It is very doubtful whether the facilities for fire safety and food hygiene of such canteens are suitable for serving public customers. Past incidents have shown that a fire outbreak in an industrial building could bring disastrous consequences.”

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In one case, a canteen in a factory building had been serving non-factory workers for more than 30 years, using the fire escape for customer access and displaying a promotional signboard.

Food and Environmental Hygiene Department officers failed to gather evidence against the eatery after all customers claimed to be employees of the building.

And although the restaurant breached land lease conditions, the Lands Department refrained from enforcement actions because it was located in a shared area, which would have concerned the building’s 104 owners.

In another case, 15 restaurants were found operating in a single industrial building, serving the public multiple cuisines, selling alcohol, providing a children’s menu and even cooking classes.

The FEHD said it had prosecuted the restaurants, however, the Lands Department said it was not a priority because there was no hazardous storage.

There were 471 factory canteen licence holders across Hong Kong, according to the Ombusman’s report. However, between 2012 and 2015, the FEHD only issued one verbal warning for a breach of licence conditions.

Lau called for a review the factory canteen licensing system, which was set up in 1980.

“We welcome the government to introduce new policies to ensure that these restaurants operate in accordance with public safety and land premium requirements,” Lau said.

An FEHD spokeswoman agreed with the Ombudsman’s findings and said it would comprehensively review its licensing system. She added that between April 2016 and March this year, the department prosecuted 31 factory canteens for commercial operation.

A Lands Department spokeswoman said it would review its factory canteen waiver system and look at whether it needed to charge a premium.

If a restaurant is found to have breached land lease conditions in an industrial building with hazardous storage, she said the department would order the relevant property owner to correct the situation within 14 days or be forced to surrender the land.

Alternatively, if the involved building did not have hazardous storage, she said the owner needed to make corrections within 28 days, or the department would register the breach with the Land Registry, which would lead to a decrease in property value.