Recruitment of labour migrants

One common feature of labour migration from South and South-West Asia is the large role played by private agencies in the recruitment process. While these agencies have facilitated labour migration, experience has shown that it has not been easy to regulate their activities, particularly with regard to the fees that they charge for their services. In order to reduce the cost of recruitment, governments are constantly looking for more effective policy tools to influence their behaviour. The level of government regulation of private recruitment agencies varies by country of origin and destination. For example, the Republic of Korea has entered into bilateral agreements for government-to-government recruitment, excluding private intermediaries completely.

Bangladesh

According to government data, about 60 per cent of Bangladeshi migrants leave on their own accord, 39 per cent leave with the help of private recruitment agencies, and 1 per cent leave by way of Bangladesh Overseas Employment and Services (BOESL) and other channels.13 However, most of the 60 per cent who leave “on their own” in fact depart with the help of private recruiting agents who are said to coach migrants to claim they are leaving on their own (Martin 2009).

There were 801 licensed recruiters by BAIRA in June 2009 (831 in summer 2010), but only 100 were reportedly active in deploying migrants.14 Most recruiters receive two-year licences after submitting a police report attesting to their crime-free record and recommendations from two members of BAIRA, and pay a 100,000 taka ($1,400) license fee and post a 1.5 million taka ($21,500) bond with the BMET (Ray and others 2007).

Some NGOs and migrant advocates contend that most recruiters do not provide any real service and that they are merely Dhaka-based intermediary businesses that depend on foreign recruiters to provide job offers and layers of sub-agents known as Dalals to find migrants to fill them. Critics also point out that many recruitment agencies are located in Gulshan, one of the most expensive parts of Dhaka, and that some licensed recruiters just sell, rent, or trade their recruiting licenses to others. On the other hand, BAIRA recruiters defend their business, saying it is vital to Bangladeshis seeking upward mobility, and is beneficial to the Bangladeshi economy.

Recruiters point to the relatively few complaints, less than 400 in 2008, to conclude that most migrants are satisfied. Critics assert that the nature of recruitment makes it hard for complaining migrants to win compensation, discouraging them from filing complaints. For example, Afsar (2009) reported that several migrants who were interviewed alleged that sub-agents and recruiters cheated them, but since they lacked receipts for the funds they said they paid, they were unable to be compensated. The Bangladesh 2005 Poverty Reduction Strategy Paper asserts, “The recruitment industry will be regulated more effectively. The renewal of licenses of private recruiters can be made contingent on their performance,” (Bangladesh Planning Commission 2005, p.80).

BAIRA recruiters say their effectiveness is diminished by roadblocks to conducting business with countries of employment. For example, some have reportedly complained about the difficulty in obtaining visas to visit GCC countries, which restricts their ability to get information about potential employers and their recruitment partners in the host countries.

A report from Ray and others (2007) blame Bangladeshi government regulations for some recruitment problems. For example, it recommended that the Bangladeshi government allow recruiters to deal legally in foreign currency, which could reduce bank-related migration fees. In the Philippines, recruiting licences cannot be sold or lent, and recruiters who do not deploy at least 100 migrants a year can lose their licences. The most common reform proposals involve substituting technology for recruiters, that is, use computers to record foreign job offers and to register potential migrants, and make recruitment fees a share of expected foreign earnings instead of a fixed amount.

Several foreign governments have halted the recruitment of Bangladeshi migrants temporarily because of recruitment issues, such as forged skills certificates and high pre-departure debts that encourage migrants to take second jobs or stay abroad (Martin 2009). Without long-term relationships between Bangladeshi recruiters and particular foreign employers or recruiters, some may have an incentive to send unqualified or indebted Bangladeshis abroad. For example, a low-skilled Bangladeshi may offer to pay more for a work visa for a plumbing work contract promising $250 a month than for a visa for a labourer contract paying $175 a month. A Bangladeshi trained as a plumber may not accept the $250 wage, but the low-skilled worker who pays more gets the visa and goes abroad as a plumber. This is likely to leave the foreign employer dissatisfied because the worker he gets does not have plumbing skills.

The Bangladeshi recruitment system leaves many low-skilled migrants in debt as they depart (Martin 2009). Pre-departure migration costs are often twice the official maximum charge, which was 84,000 taka ($1,220) in 2009,15 and the men who predominate among Bangladeshi migrants pay higher recruitment costs than migrant women.16 Many borrow some or all of this money from private moneylenders, sometimes at interest rates of 10 per cent a month. Under such conditions a $2,000 debt can double in a year.17

BOESL is a government agency created in 1984 to provide migrants with a low-cost recruitment option. In 2009, BOESL had 38 employees and a budget of 20 million taka18 ($270,000) to publicize the availability of Bangladeshi workers in foreign countries through its own offices and in collaboration with local partners.

BOESL handles only about one per cent of Bangladeshis leaving for foreign jobs; most of the migrants it sends abroad are sent to the Republic of Korea. The Agency specializes in providing skilled and professional migrants for large civil engineering projects abroad, screening Bangladeshis interested in these foreign jobs, inviting foreign employers to Bangladesh to interview potential employees and helping Bangladeshis selected to fill foreign jobs to obtain the necessary documents and certificates. In most cases, foreign employers cover the pre-departure costs of BOESL-deployed workers, although migrants going to the Republic of Korea, most of whom are relatively low-skilled, must pay for Korean language training in order to have their names placed on the BOESL list from which employers from the Republic of Korea select migrants.

Between 1999 and 2006, when private recruiters sent Bangladeshi workers to the Republic of Korea, the maximum recruitment fee was 210,000 taka ($2,800). Under the Republic of Korea-Bangladesh labour migration MOU signed in 2006, only BOESL can recruit migrants to fill jobs under the Employment Permit System (EPS).

Bhutan

Bhutan employers must recruit foreign workers through licensed recruitment agencies and provide migrants and local workers with personal accident insurance and additional coverage for work-related disabilities and death. A copy of the insurance certificate must be given to the Ministry of Labour and Human Resources. Recruitment agencies may charge employers (not the foreign workers) up to 20 per cent of the monthly wage of the foreign worker, and are jointly liable with the employer for claims arising from the contract, including payment of wages, death and disability compensation and the expense of returning to home country.19

Employer sanctions for hiring unauthorized workers are stiff, including imprisonment of three to five years and a monetary penalty of 108,000 to 180,000 Bhutan Ngultrum (Nu.) ($2320 to $3866). If an employer is found to have employed a foreign worker beyond the validity of the work permit, the employer will be liable for a penalty of Nu.3,000 ($64) plus a progressive fine of Nu.100 ($2.15) per day per worker from the date the work permit expired (Bhutan MoLHR 2008).

India

Indians with ECR passports use four major channels to migrate abroad to work, namely individuals can arrange foreign jobs through friends and relatives, foreign employers may recruit Indians in India, India-based firms with foreign projects can send their employees abroad and Indian recruiters can match Indians with foreign jobs. Many sub-agents also operate between migrants and recruiters, both in India and abroad. They are not regulated, and their qualifications and fees vary widely.

The 1983 Emigration Act (amended in 2009) regulates India-based recruiters by requiring them to obtain licences normally valid for three years. It also calls for the creation of three levels of bonds that recruiters must post based on the number of migrants they send abroad.20 Registered recruitment agencies that send fewer than 300 workers abroad a year must post a bond of 300,000 rupees ($6,400), those that send 301 to 1,000 migrants a year must post a 500,000 rupee ($10,700) bond, and those that send more than 1,000 migrants must post a one million rupee bond. Amendments to the 1983 Emigration Act in 2009 require recruitment agencies to post a 2.5 million rupee ($54,000) bond good for 10 years, which serves as a guarantee against any future claims of workers for unpaid wages.

Maximum recruitment fees that registered recruitment agencies can charge migrants were 2,000 rupees ($43) for low-skilled workers in 2008, 3,000 rupees ($64) for semi-skilled workers and 5,000 rupees ($107) for skilled workers; amendments to the 1983 Emigration Act in 2009 substituted a maximum recruitment charge of 25,000 rupees ($537) or 45 days foreign wages, whichever is less. Media reports suggest that many Indian migrants pay far more. For example, an Indian gardener in Dubai reported paying $2,745 in 2008 to get a three-year contract offering $136 a month for a 48-hour week, suggesting that over half of his basic earnings would go to repay recruitment fees (Migration News 2009).

In 2005, a total of 4,300 recruitment agencies had obtained registration certificates but only 1,835 were operating (Rajan 2008). Recruiters pay service fees to POE that reflect the skill of the workers they send abroad. For instance, they pay 2,000 rupees ($47) to have the POE check the contract of low-skilled worker; 3,000 rupees ($64) for semi-skilled workers; and 5,000 rupees ($107) for skilled workers. In 2008, the Government of India began requiring foreign employers who do not use authorized recruitment agents to post a $2,500 bond for each Indian migrant they recruit, with the bond returned to the employer when the migrant returns to India. This is meant to provide some guarantee against failure of the foreign employer to live up to their end of the contract, but it also encourages foreign employers to use registered recruitment agencies.

About two-thirds of Indian migrant workers leave from South India (20 per cent each from the states of Kerala and Tamil Nadu). A survey of Kerala migrants found that 80 per cent of them learned of foreign jobs from friends and relatives (Rajan and others 2008). Zachariah and Rajan (2010) found that the average cost of migration was 57,000 Indian rupees (INR) ($1,223), including $735 for the foreign work visa and $300 for air travel to the foreign destination.21 No migrants reported receiving bank or government assistance to cover recruitment costs. It also found that migrants who used recruitment agents had higher recruitment costs than migrants who used friends and relatives to go abroad. Commissions on fees charged to migrants appeared common and in some cases, recruiters collected a payment from approved medical centres for each migrant they refer for the mandatory health check.

About 60 per cent of the jobs in Western Asia held by Indian migrants in a survey paid $200 a month, making recruitment costs equivalent to 6 to 10 months’ earnings (Rajan and others 2008). Some Indian migrants reported much lower wages, often $100 a month, while 10 per cent earned $500 or more a month in GCC countries. Once they reach these countries, some Indian migrants say they are presented with new contracts offering lower wages, are assigned more tasks than expected, or do not receive promised benefits, such as time off and a return airfare. Indian recruiters say that the source of many of these problems lie in the GCC countries, blaming the need to buy work permits from GCC-based agents. They also allege that GCC-based recruiters keep transportation and other fees paid by employers, requiring them to charge migrants for costs for which the employer has already paid (Rajan and others 2008).

A number of activists would like the government to eliminate emigration-check-required passports, make it illegal for Indian recruiters to charge fees to Indian migrants and to negotiate minimum wages for Indian migrants abroad. There are efforts to transmit electronically the key provisions of contracts signed in India to the United Arab Emirates Department of Labor, which should help to resolve controversy over allegations of broken promises once migrants get to the United Arab Emirates.

Nepal

In fiscal year 2009, about 80 per cent of the 294,000 Nepalese who migrated abroad left the country with the help of recruiters while the rest were presumably directly hired by foreign employers. This 80/20 recruiter/individual contract ratio continued in the first month of the fiscal year 2010.22
The Nepal Association of Foreign Employment Agencies (NAFEA) has contended that many Nepalese going to GCC countries ostensibly on direct hire by employers actually head to Iraq, and has consequently asked the government to halt individual contract migration to GCC countries.

Nepal has a long tradition of migration abroad. However, there is a sharp contrast between the informal and low-cost migration of Nepalese to India23 and the much more formal and expensive migration of Nepalese to non-Indian destinations with the help of recruiters. Reports of abuse of Nepalese migrants abroad tend to blame Nepalese recruiters and recommend stricter regulation of recruiters rather than consider alternatives such as deregulation to reduce recruitment costs. An increasing number of Nepalese women appear to be going to GCC countries and Lebanon to work as domestic helpers, leaving from Indian airports with individual contracts.

The 650 members of NAFEA acknowledge problems in the recruitment system.24 Licensed recruiters are required to post a bond of 3 million Nepalese Rupees (NPR) ($40,000) and the Government establishes the maximum fee they can charge migrants. NAFEA says that potential migrants must spend NPR 10,000 ($134) to obtain a passport and make contact with recruiters and NPR 50,000 to 125,000 ($670 to $1,675) to obtain a foreign job, but the government-set maximum recruitment fee for migrants headed to GCC countries is NPR 70,000 ($938). Many migrants borrow money to pay recruitment fees, often at high interest rates. Also of note, migrants are required to participate in an orientation session about their foreign job before departure.

Pakistan

About half of Pakistani migrants find employment abroad through one of the private Overseas Employment Promoters, which numbered some 1,122 in 2007; most of the remaining migrants go directly or with the help of friends and relatives abroad. The Overseas Employment Promoters are licensed by the Ministry of Labour, Manpower and Overseas Pakistanis to recruit workers for up to three years abroad (renewable). Notably, Arif (2009) found that only 3 per cent of all those recruited to go overseas between 1971 and 2007 used the services of a state corporation established to undertake recruitment, the Overseas Employment Corporation. It also determined that this share has declined to only 1 per cent in recent years.

Under current regulations migrant workers recruited by overseas employment promoters (OEPs) should not incur expenses more than 7,150 Pakistani Rupees (PKR) ($82), based on a maximum service charge of PKR 4,450 ($51), a membership contribution of PKR 1,050 ($12) to join the Welfare Fund, insurance premium of PKR 650 ($7.40), registration fee of PKR 100 ($1.14), and for national identity card that costs Rs 900 ($10).25 Those hired directly do not pay a service charge. Each worker recruited through an OEP deposits PKR 4,450 ($51) with the Bureau of Emigration and Overseas Employment; three days after a migrant’s departure, OEP may request a return of the deposit. However, studies indicate that migrant workers pay much more, with the average being PKR 80,000 ($915) (Arif 2009).

Sri Lanka

About 75 per cent of Sri Lankan migrants go abroad with the help of licensed recruiters. The country had 746 licensed recruiters in 2009, up from 626 in 2008, according to the government’s database of licensed recruiters.26 All recruiters must be licensed by the Sri Lanka Bureau of Foreign Employment (SLBFE) and, until 2009, were required to belong to the Association of Licensed Employment Agencies (ALFEA); since 2009, membership in the ALFEA is voluntary, and membership has dropped from 650 to 350. Licensed agents must post a cash bond with the SLBFE and provide a bank guarantee of 750,000 Sri Lankan rupees (LKR) ($6,815) that the SLBFE can tap if there is a valid worker complaint against the recruiter.

The Government of Sri Lanka has extensive oversight on foreign jobs and the recruitment process. Foreign employers must have their job offers approved by the mission of Sri Lanka in that country, with the job offer-contract logged into the SLBFE database before recruiters in destination countries contact Sri Lankan-based recruiters to lawfully seek Sri Lankan workers to fill the jobs.27 Sri Lankan recruiters may place ads in newspapers to attract migrants, or use sub-agents to find workers in rural areas.

Once a Sri Lankan worker is selected by a foreign employer or recruiter, Sri Lanka-based recruiters normally help Sri Lankan workers to obtain passports and visas, arrange for medical exams, and schedule a pre-departure training course for first-time migrants required by SLBFE. The final steps in the process involve the recruiter usually taking the worker’s passport, the approved foreign job offer and the worker’s training or experience certificate to SLBFE, where the data are entered into a database that enables the mission of Sri Lanka in the country to check and ensure that there are not several workers being recruited to fill one job.

Village-based sub-agents often match Sri Lankan migrants with licensed recruiters. Sub-agents can charge high fees and make (verbal) promises that are not met, as when they charge domestic helpers $200 to $300 to guide them to a licensed recruiter. When migrants complain about fees or unmet promises, they have no proof that the licensed recruiter collected such fees or made these promises, making it difficult to resolve complaints. Between 1994 and 2006, SLBFE received 101,000 complaints from migrants and settled 74,000 of them, paying $660,000 (Del Rosario 2008).

In 2011, SLBFE began to require that sub-agents, classified as business promotion officers, register with the Bureau and notably that registered business promotion officers are prohibited from collecting fees from migrants. Furthermore, the Bureau requires licensed recruiters to include recruitment fees in their advertisements, and to get approval from it before running advertisements seeking Sri Lankan workers to fill foreign job offers. This effectively allows SLBFE to regulate advertised recruitment fees.

The Sri Lankan Foreign Employment Agency (SLFEA) is a self-supporting government agency established in 1996 to place Sri Lankan workers in foreign jobs. According to information provided by SLFEA directly to the author, the Agency has placed about 1,000 workers a year in foreign jobs, charging foreign employers and Sri Lankan workers fees to support itself. Another alternative to private recruiters involves the International Organization for Migration (IOM), which recruited 500 Sri Lankan workers for a Brazilian company constructing an international airport in Tripoli, Libya. Many of the Sri Lankan migrants, who were to earn at least LKR 58,000 ($527) a month in Libya, were forced to return in spring 2011 due to internal conflict.

Most recruiters and SLFEA post the job orders they receive from foreign employers at SLBFE and transmit them to “independent” sub-agents in the villages from which most migrants originate (SLBFE 2010). However, SLBFE job order data on the number of foreign jobs available tend to get inflated. For example, if an order for 100 clerks is sent to four recruiters, each of whom post it at SLBFE, 400 foreign jobs for clerks would be posted, not 100. If only 80 of them are filled, some reports will claim that there are “shortages” of qualified Sri Lankan workers because of apparent difficulty in finding qualified workers to fill foreign jobs.28, 29

Turkey

Organized Turkish labour migration to Western European countries began with the agreement between Turkey and Germany in 1961 that allowed German employers to recruit Turkish guest workers; Turkey subsequently signed labour-recruitment agreements with Austria, Belgium, France, the Netherlands and Sweden. Governments of European countries that host labour migrants and the Government of Turkey made assumptions about how this labour migration would evolve that were not fulfilled. The Governments of Germany and other host countries assumed that Turkish and other guest workers would rotate in and out of their labour markets, and Turkey assumed that remittances and the return of workers with newly acquired skills would speed up economic and job growth. These assumptions underpinned the Ankara Association Agreement of 1963 and the Additional Protocol of 1973 that promised Turkey a steady reciprocal lowering of tariff and migration barriers.

These bilateral labour agreements regulated the procedures for recruiting migrants, which was only through government agencies on both sides. For example, the agreement between Turkey and Germany required potential migrants to register at the Turkish Employment Services in Turkey. Officials of German Employment Services and either employers from Germany or their representatives in Turkey had the final decision on the selection of migrant workers (Sari 2003).

Bilateral Cooperation

The countries discussed in this report have had to rely first on national or unilateral measures when confronted with the challenges of managing migration. Most of the issues raised, from labour shortages in host countries to flawed recruitment procedures in countries of origin and destination, have been dealt with unilaterally, sometimes with the help of international organizations and NGOs. Several of the countries under study have developed national policies to improve the management of labour migration with the help of international organizations, such as the International Labour Organization (ILO) or IOM, and NGOs within the country successfully lobbied for changes in these policies. However, it is evident that since sovereignty does not extend across national borders the effective management of migration cannot depend on unilateral measures alone. The cooperation of host countries is essential to effectiveness, from combating fraud in recruitment to enforcing employment contracts.

While most Asian countries of origin have sought to enter into formal bilateral treaties with host governments, most agreements are memoranda of understanding (MOU) that do not require legislative action in the contracting countries to become effective. MOUs regarding migration are negotiated at the ministry level, usually by labour ministries, and specify who is responsible for implementation. They vary significantly in content, with the general MOUs expressing intention that labour migration will be mutually beneficial to MOUs that specify the obligations of each party. A MOU between India and Qatar, for example, specifies that employers should pay for the transport of the workers from the country of origin and their return (provided they fulfil their contract). It also includes the procedure to be followed for certifying work visas, the adoption and use of model employment contracts and the procedure for their registration, and the establishment of joint committees to oversee the operation of the agreement.

The agreements between the Republic of Korea and 15 Asian countries of origin, including, among others, Bangladesh, Nepal and Sri Lanka, are perhaps the best example of detailed MOUs, laying out a government-to-government recruitment system that guarantees the rights of migrant workers. Ministries of labour in countries of origin test and select workers, and their names are sent to the Human Resource Development Agency of Korea. ILO has been involved in promoting consultations and better coordination of policies and procedures. Bilateral cooperation among trade unions (as for example Nepal-Malaysia) can also make on-site assistance available to migrant workers, a complementary approach promoted by ILO.

 

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13 See www.bmet.org.bd.

14 The non-active BAIRA member recruiters reportedly assist Bangladeshis who have received foreign job offers through friends and relatives abroad, or who are returning to foreign employers, to complete required paper work in Bangladesh. These migrants are classified as going “on-their-own” in Bangladeshi migration data.

15 The 84,000 taka ($1,100) government-set maximum recruiting charge, effective in 2006, applies to migrants going to GCC countries and Malaysia. It was raised in stages from 8,000 taka ($105) in 1992 to 30,000 taka ($400), 50,000 taka ($660), 70,000 taka ($925), and 80,000 taka ($1,060). The maximum recruitment fee to send workers to Italy was set at 230,000 taka ($3,040) in 2002. Recruiters have generally charged migrants at least twice the official maximum recruitment charge (Islam 2009).

16 Karim-Rajput (2010) estimated the average cost of migration at 106,000 taka ($1415) for Bangladeshi women and 141,000 taka ($1880) for Bangladeshi men in 2010.

17 Rural moneylenders charge very high interest rates, often 60 to 100 per cent. Migrants with few assets sometimes find a local guarantor to co-sign the loan; the guarantor often receives 10 per cent of the value of the loan for each year that a guarantee is provided.

18 Six million taka, 30 per cent of the budget, represents BOESL salary costs.

19 See www.molhr.gov.bt/publication/BHUREA_Aug08.pdf.

20 See http://poeonline.gov.in.

21 Passports cost 1,170 rupees ($25) and emigration clearance 1,425 rupees ($30).

22 Nepal News, August 23, 2010. www.nepalnews.com/main/index.php/business-a-economy/8583-outflow-of-nepali-migrant-workers-declines.html.

23 This type of migration is facilitated by the Indo-Nepal Treaty of Peace and Friendship of 1950, which allows Nepalese citizen to legally cross the border and take up work in India.

24 See http://nafea.org.np/.

25 All workers must take out insurance with the State Life Insurance Company.

26 The largest recruiter in 2009 was Lord Manpower, which sent 10,600 migrants abroad, followed by Nafa Travels, 5,400 migrants, and Gulf Line, 3,100 migrants.

27 The SLBFE plans to launch a web based recruitment system in 2011 that will allow foreign employers and recruiters to view the qualifications of Sri Lankan workers registered with SLBFE.

28 The author obtained the information while on an advisory mission.

29 For example, fewer than 10 per cent of the 6,900 job orders for professionals, such as accountants and engineers, were filled in 2008, as were less than 10 per cent of the 11,300 job offers for mid-level managers and nurses. About 19 per cent of the 445,000 job orders for domestic workers were filled in 2008. Foreign employers may specify Christian or Muslim domestic workers, and a quarter of the jobs for Christian domestic workers were filled, but only three per cent of those for Muslims.