Union officials say nearly 30 foreign workers at a company on the New South Wales South Coast are earning under $4 an hour and are living in squalid conditions.

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Officials from the Construction, Forestry, Mining and Energy Union discovered the workers, after performing a safety check at the Manildra Ethanol Plant in Bomaderry.

The CFMEU says the 13 Chinese nationals and 16 Filipino nationals have been working on 457 visas.

Organiser Dave Curtain says the men are employed by a chinese company, which is paying them less than four dollars an hour.

Mr Curtain says the situation is alarming and the federal government needs to take more responsibility for foreign workers.

“What are they doing and why are they allowing this to happen, where are the checks and balances?” he said.

“It appears that they just open the flood gates and allow more and more and more of these people to come here and be exploited.”

“They’re human beings, they’re not animals.”

Mr Curtain says it is a digrace given the joblesness rate on the South Coast.

“If you can’t find enough workers to do the job out here, in times of rising unemployment, not a problem,” he said.

“I love having the people from overseas come here, it’s fantastic, they’re some of the best people that you’ll meet.”

“But this system is being rorted and unfortunately the system has just been absolutely opened up by the federal government.”

The ABC understands all of the workers have been living in a five bedroom, one bathroom home in Worrigee.

Shoalhaven Mayor Joanna Gash told ABC Illawarra she is not yet across the details, but is defending the Manildra plant.

“It basically goes back to the person who is providing the contract as to what they have done” Ms Gash said.

“I think it’s a darn shame that Manildra has been caught up in this because they have been a very exemplary manufacturer here, participant in our city, and it’s a difficult one for them,” she said.

“I am sure but I will be interested to hear more as the story progresses.”

ABC Illawarra listener Daniel White said the situation was outrageous given Nowra’s high unemployment rate.

“Nowra currently has an unemployment rate of 12.9 per cent with a youth rate nearly triple that rate” Mr White posted on Facebook.

“How is it that a major company in the area is allowed to get away with, denying jobs for locals, and to make matters worse they’re exploiting 457 workers!!” he said.

“This is outrageous!!”

The ABC is seeking a response from the local federal member Ann Sudmalis.