BACKGROUND PAPER WMR 2010

BACKGROUND PAPER WMR 2010 Building State Capacities for Managing Contract Worker Mobility: The Asia GCC Context

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BACKGROUND PAPER WMR 2010 Building State Capacities for Managing Contract Worker Mobility: The Asia-GCC Context NASRA M. SHAH KUWAIT UNIVERSITY NASRA@HSC.EDU.KW

FOREWORD This paper is one of 19 background papers which have been prepared for the IOM, 2010 World Migration Report which is entitled the Future of Migration: Building Capacities for Change. The 2010 report focuses on likely future trends in migration and the capacities that will be required by States, regional and international organizations, civil society and the private sector to manage migration successfully over the coming decades. Over the next few decades, international migration is likely to transform in scale, reach and complexity, due to growing demographic disparities, the effects of environmental change, new global political and economic dynamics, technological revolutions and social networks. The 2010 World Migration Report focuses on capacity building, first because it is good governance to plan for the future, especially during a period of economic downturn when the tendency is to focus on immediate impacts and the short term period of recovery. Second, capacity building is widely acknowledged to be an essential component of effective migration management, helping to ensure the orderly and humane management of migration. Part A of the World Migration Report 2010 focuses on identifying core capacities in key areas of migration management. The aim is not to recommend one size fits all policies and practices, but to suggest objectives of migration management policies in each area, to stimulate thinking and provide examples of what States and other actors can do. Part B of the World Migration Report 2010, provides an overview of the latest global and regional trends in migration. In recognition of the importance of the largest global economic recession since the 1930s, this section has a particular focus on the effects of this crisis on migrants, migration and remittances. Frank Laczko Head of the Research and Publications Division IOM Headquarters Geneva, Switzerland Email: flazcko@iom.int

INTRODUCTION The objective of this paper is to outline current State capacities for managing migration, to assess the gaps in these capacities and to make recommendations for bridging such gaps in the future. The geographical focus of the paper is the excessively high migration region of the Middle East, comprising six Gulf Cooperation Council (GCC) countries namely, Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates (UAE) where non nationals were estimated to constitute about 38.6 per cent of the population in 2010 (UNDESA, 2009a)(see table 1). A related geographical focus is on the major migrant sending countries, especially in Asia, which account for 60 70 per cent of all contract workers in the Gulf. Countries/regions with the largest outflows include Bangladesh, India, Indonesia, Pakistan, Philippines and Sri Lanka. Table 1: Total population and estimated migrant stock in the six GCC countries, 2010 Total population Migrant stock Migrants as % of total population Bahrain 807,000 315,403 39.1 Kuwait 3,051,000 2,097,527 68.8 Oman 2,905,000 826,074 28.4 Qatar 1,508,000 1,305,428 86.5 Saudi Arabia 26,246,000 7,288,900 27.8 United Arab Emirates 4,707,000 3,293,264 70.0 TOTAL 39,224,000 15,126,596 38.6 Source: UNDESA, 2009a Capacities for managing contract worker mobility in migrant sending and receiving countries may be grouped into three broad policy approaches: (i) regulation; (ii) facilitation; and (iii) protection. While there may be some overlaps in the objectives and accomplishments of the three types of policies, the above grouping is used in this paper to identify the key elements that allow for the successful management of contract worker mobility. Furthermore, sending and receiving countries must cooperate with each other and coordinate their efforts to achieve the best results. This paper examines how the current policies might affect future patterns of migration, assesses the current capacities of sending and receiving countries for managing contract worker mobility, identifies the gaps in the existing capacity, and makes recommendations for strengthening States capacities. 5

REVIEW OF POLICIES FOR THE FUTURE The perceptions and policies of sending and receiving governments provide the context for future plans. All GCC countries, except Bahrain, considered immigration to their countries to be too high and implemented policies to lower it in 2007, while Bahrain considered the level to be satisfactory and wanted to maintain it (UNDESA, 2009b). Contrary to the above, the majority of migrant sending Asian countries had a policy to raise the level of emigration from their country. The inherent contradiction in policies is indicative of the mismatch between worker supply and demand in receiving countries, which points to the potential difficulties in regulating the process. The restrictive policies of receiving countries originated in the early to mid 1980s, but their effective implementation spans the last 10 15 years. Some reasons for the heightened focus include the ever increasing number of young nationals entering the workforce and demanding government jobs, the limited absorptive capacity of the public sector to offer jobs preferred by nationals, and the recent global recession. Unemployment among all nationals has increased in several GCC countries and is a sensitive political issue (Dito, 2006; Al Shamsi, 2006; Shah, 2007). Receiving countries have tried to curb the inflows through various means, such as specification of jobs for which only nationals may be hired, education of nationals, and specific training programmes for nationals. The training of clerical and service workers, as well as professionals such as doctors and teachers, has helped in replacing non nationals in these categories. Repeated attempts have been made to reduce the stock of non nationals through stricter regulation of visa issuance as well as by encouraging those in an irregular visa situation to depart without being punished. Attempts have also been made to impose a time limit on the duration for which a contract worker may stay in the Gulf. Bahrain had initially proposed a cap of six years and other countries, including Kuwait, have been considering such a cap (Shah, 2007, 2008). Sending countries have come to rely on labour mobility as an important means of earning foreign exchange, reducing unemployment, and encouraging overall development. Their predominant policies therefore aim to raise, or at least maintain, the level of outflows. Recent data for the major sending countries indicate that a substantial increase occurred in the annual outflows and in the stock of migrant workers in the Gulf over the last 10 years (Shah, 2009). Remittance receipts constitute a major motivator of such policies. Remittances accounted for 3 per cent of the GDP in India, 9 per cent in Bangladesh and 13 per cent in the Philippines in 2006. India received more remittances than any other country in the world about USD 25.7 billion in 2006 (or 10% of all remittances worldwide). About 24 per cent of India s remittances originated in the Gulf countries (Chishti, 2007). The Philippines and Bangladesh were the fourth and tenth largest recipients of remittances in 2006 (Ratha, 2007). Saudi Arabia was one of the two largest sources of remittances (along with the United States) in 1990 2003 (Ghosh, 2006). 6

CURRENT CAPACITIES Capacity for regulation, facilitation and protection: sending countries Among sending countries, this capacity is fairly well developed, despite the variations within the region. During the 1970s and 1980s, most of the major sending countries passed legislation for managing the expanded outflows of migration in response, particularly, to the demand in GCC countries. They set up Ministries or designated departments within the Labour and Manpower Ministries and often opened regional offices to cover the whole country. 1 The extensive rules and regulations include the specification of a minimum wage, a limit on the amount that a migrant worker may be charged for a visa and transportation, and requirement of a security bond. In order to meet the heightened demand, most sending countries established a cadre of private recruitment agents, operating under licence by the government, according to detailed rules and regulations. In receiving countries, labour and welfare attaches have often been appointed as part of embassy staff. A major role of the labour attaches involves facilitation and protection, as well as market development. The sending country embassy assists contract workers by providing consular services such as issuing passports and certifying documents. It also intervenes in matters of dispute between employers and employees, aiming to find a resolution. It assists in the departure of persons in an irregular situation and in the transport of dead persons. Some embassies also provide legal aid and assistance and play a role in enhancing the welfare of the community by organizing social events. Some sending countries have established specific welfare agencies, such as the Overseas Pakistanis Foundation in Pakistan and the Overseas Workers Welfare Administration in the Philippines. These agencies have launched special services, such as schools and colleges, magazines and brochures, pre departure orientation programmes, and assistance to migrants in distress. Embassies have played an especially important role in assisting female domestic workers, particularly those seeking protection after running away from their employer. The presence of domestic workers has increased markedly in GCC countries in the last three decades. In Kuwait, for example, there were 409,126 domestic workers in 2007 (up from 28,833 in 1980) the majority of them (64%) female constituting 12.3 per cent of the total population (PACI, 2007). 1 A comprehensive listing and discussion of major policies of the sending countries is given in Arnold and Shah (1986) and Abella (1992). A recent comparative analysis of several Asian countries may be found on the website of the Colombo Process a regional consultative initiative spearheaded by the International Organization for Migration (IOM): www.colomboprocess.org. 7

For several years, embassies have been setting up shelters to assist and house the runaway domestic workers (see Shah and Menon, 1997), and this practice continues to the present time. Capacity for regulation, facilitation and protection: receiving countries Only two of the six GCC countries have ratified the Palermo Protocols relating to the smuggling of migrants and trafficking in persons 2 Bahrain, in 2004 and Oman, in 2005, as shown by the United Nations International Migration Report 2006: A Global Assessment (UNDESA, 2009b:121, 259). In recent years, a conceptual re definition of the terminology relating to migration has occurred. GCC countries prefer to define the movement of temporary migrant workers to their countries as contract worker mobility rather than labour migration, probably because the former definition implies a fixed time limit governed by the stipulations of the contract, precluding the possibility of permanent residence. However, research indicates that the stay of most contracts workers in the Gulf spans many years (Kapizewski, 2006; Shah, 2008). GCC countries offer citizenship to only a handful of expatriates and the length of stay does not improve one s chances of becoming a citizen. Within GCC countries, detailed rules and regulations have been instituted for organizing the entry, stay and departure of contract workers through the enactment of specific labour laws. 3 Different types of visas (numbers 17 and 18) are issued for contract workers in the public and private sectors, while domestic workers are issued a visa (number 20) that is not covered by the labour laws for the other two categories, in any of the six GCC countries (Human Rights Watch, 2008). An expatriate worker may take up residence in the Gulf only upon the sponsorship of his/her employer. The worker can, in turn, sponsor his family for a residence visa, if he/she is earning a specified amount or higher about KWD 250 (USD 875), in the case of Kuwait. Female employees are usually not allowed to sponsor their husband but some in professional occupations may be able to sponsor their minor children. Male children who reach the age of 21 are usually not allowed to remain in the Gulf countries unless they are students or can find a job where their employer becomes their sponsor. A contract worker may become his/her own sponsor after a specified number of years (20, in the case of Kuwait) but they cannot take up employment with this type of residence status. Non nationals in the United Arab Emirates can now obtain a residence permit of a more permanent nature if they meet certain requirements. 2 The Protocol to Prevent, Suppress and Punish Trafficking in Persons, especially Women and Children (also referred to as the Trafficking Protocol) is a protocol to the Convention against Transational Organized Crime. It is one of the two Palermo Protocols, the other one being the Protocol against the Smuggling of Migrants by Land, Sea and Air, adopted by the United Nations in Palermo, Italy in 2000. 3 See http://www.kuwait info.com/a_state_system/ministry_mosal.asp 8

The sponsoring employer must obtain a work visa from the concerned authorities in order to bring in a worker, after adequately justifying the need for workers. Once satisfied, the authorities provide the number of requested visas free of charge to the employer. However, well connected persons can sometimes procure more visas than required by their company, or obtain visas for a business that does not exist at all. As a result of the dearth of work visas in proportion to their demand in migrant sending countries, sponsors have for many years been charging a fee for providing the visas to prospective workers. This process is known as visa trading. When workers are sold visas for non existent companies, they must try to find a job with another employer, which is illegal. While no reliable records on it are available, visa trading is reported by the press to be very widespread in GCC countries. When South Asian males were asked in a survey to report on whether they had paid for their visa, 70.3 per cent in Kuwait said that they had done so (Shah, 1998). Regulation and restriction of visa trading continues to be a challenge for receiving countries. GCC countries have been looking into alternatives whereby a contract worker may be hired through a well regulated government agency rather than through myriad private sector employers. Bahrain currently operates such a system. Once in a GCC country, a contract worker can not transfer easily from one employer to another. He/she must obtain a release from the previous employer which is usually not given without financial compensation. In Kuwait, movement from one sector to another is restricted and a domestic worker cannot transfer to the public sector without cancelling the residence, leaving the country and returning on a work visa. In terms of the protection of contract workers, receiving countries have specified several rules to ensure that workers are paid every month, are given the designated public holidays, and are given compensation for overtime, as well as benefits such as sick leave, maternity leave and compensation in case of injury or death. CAPACITY-BUILDING IN SENDING AND RECEIVING COUNTRIES 4 Continuous efforts to improve the management of contract worker mobility have been made by both sending and receiving countries for many years. Dialogue within GCC countries culminated in the issuance of a joint declaration at Doha in April 2007, where it was agreed that an annual meeting of the countries would be held on the subject. A meeting of Labour Ministers of GCC countries was held in Oman in November 2009, and the first ministerial dialogue between the 4 This section benefitted from discussions held with the labour attachés of several Asian countries in Kuwait, in a meeting arranged by IOM on 5 November 2009. 9

major sending and receiving countries was held in Abu Dhabi in January 2008 culminating in a Declaration on Contractual Labour Mobility in Asia: Key Partnerships for Development between Countries of Origin and Destination. Furthermore, several bilateral agreements have been made between sending and receiving countries for example, India has made agreements with several GCC countries, while Pakistan made a bilateral agreement with Qatar in 1987 and with the United Arab Emirates in 2006 (Plant, 2008). For optimal results, initiatives such as those mentioned above must be instituted in a sustainable manner, and effective policies and programmes for implementation, follow up and enforcement are needed to ensure that dialogues and declarations have a meaningful impact. Capacity-building within sending countries Several areas may be identified and prioritized for attention, in terms of building capacities for better management of contract worker mobility in the future. For the major migrant sending Asian countries (Bangladesh, India, Indonesia, Pakistan, the Philippines and Sri Lanka), the following are especially important: (i) providing better information to future migrants about the realities of the Gulf; (ii) more effective regulation of recruitment agents to curb migrant exploitation; (iii) building skilled worker capacity through focused vocational training; (iv) further facilitation of remittance transfers through formal channels; and (v) planning for absorption of return migrants, especially after the global economic crisis. These areas are briefly discussed below. Surveys, focus group discussions, and general conversations with migrant workers indicate that migrants are often given an incomplete and inaccurate picture of the salaries, benefits and living conditions in GCC countries, especially by recruitment agents. It is also frequently found that the contract signed by the worker in the home country is different from the one implemented in the host country, where the salary is often lower than what has been promised. In a survey of male migrant workers from four South Asian countries in Kuwait, it was reported by 45.3 per cent of those who came through recruitment agents that the conditions of the job were, in fact, worse than they had been told (Shah, 1998). Some sending countries provide pre departure orientation programmes to familiarize the prospective migrants with the conditions and culture of the host countries. Such efforts need to be strengthened and institutionalized in all sending countries. Contracts arranged in response to a request by the host country to the government of a sending country are easier to manage and subject to less fraud and exploitation. However, only a small percentage of mobility occurs as a result of this kind of arrangement. In future, governments should make an effort to increase the percentage of migrants routed through them in order to better manage the outcomes. About half of all male workers from the major sending countries are concentrated in unskilled occupations, while a majority of the female workers are in domestic service. Unskilled workers 10

are easily replaceable and are potentially subject to greater exploitation and abuse both in the home and in the host country. In future, a beneficial strategy for sending countries may consist of investment in vocational training that might enhance the skills of potential migrants to enable them to find more lucrative jobs. In fact, the exodus of skilled workers from Asian countries to GCC countries has resulted in shortages of such workers at home. Promotion of vocational training would therefore assist in building capacities within the sending country as well as providing a higher quality of workers who would be more competitive internationally. In addition to vocational training, Arabic language courses for prospective migrants would be extremely helpful. It has been noted that a substantial proportion of all remittances to developing countries are sent through informal channels, the benefits of which are not captured by the banking system. While the growth of foreign exchange companies in host countries has greatly facilitated remittance transactions, there is a need to reduce the time it takes for the funds to reach their destination. The growth of the Western Union in recent years has facilitated the transmission of money. However, there is a need for the establishment of additional facilities in the relatively remote areas where many migrants originate. Apart from press reports of mass layoffs and return of migrant workers from the Gulf (especially Dubai), not much is known about the impact of the global economic recession on migrants and their families. Observations in Kuwait suggest that the upward trend in the proportion of nonnationals in the country witnessed from 2000 to 2007 has levelled off. There was, in fact, a small decline in the total number of non Kuwaitis between June 2007 and December 2008. In view of the slow down, sending countries need to bolster their efforts to create jobs to accommodate some of the possible returnees from the Gulf. Building capacities within receiving countries In migrant receiving countries, the following goals should be addressed on a priority basis: (i) devising policies and programmes for the elimination of visa trading; (ii) facilitating the transfer of employees; (iii) passing legislation for domestic workers to be covered by labour laws; (iv) ensuring protection of domestic workers, especially females; and (v) accomplishing timely and fair resolution of employer employee disputes. Visa trading is widely prevalent in GCC countries and is a multi million dollar business. Visa traders in host countries charge large amounts of money for visas sold through intermediaries in the sending country, or friends and relatives in the host country. Buying and selling of visas is illegal in sending and receiving countries. However, successful implementation of laws banning such trade remains a serious challenge and, as a result, thousands of contract workers in the Gulf remain there illegally. In Kuwait, for example, it is estimated that the number of illegal workers is between 100,000 and 500,000. 11

Among host countries, however, there is increasing recognition of the presence and large volume of visa trading, and some countries, such as Kuwait, have appointed parliamentary committees to study the issue and suggest solutions. Sustained political will is required to tackle the problem, followed by the necessary legislation and institutional mechanisms to curb the practice. For effective implementation of policies, coordination between the sending and receiving countries in this regard is especially important. Legislation and effective implementation of policies to facilitate the transfer of workers from one employer to another would reduce the number of irregular migrants migrants employed by someone other than their sponsor residing in the Gulf. In the absence of such legislation, the transfer to another employer continues to be a serious problem in most countries. Kuwait passed a new labour law for the private sector in December 2009 that stipulated several improvements in the working and living conditions of foreign workers, although it did not change the sponsorship system. Under this law, workers would be allowed to transfer to another employer after completing three years of service. Despite the existence of such laws, however, private sector employers do not always provide the legally specified benefits, including public holidays, or transfer of visas without charging a large fee. Treatment of female domestic workers has become a particularly sensitive human rights issue for which the receiving GCC countries have often been criticized. The US Trafficking in Persons Report 2009 ranked several GCC countries (including Kuwait) at the lowest level Tier 3 (U.S. Department of State, 2009). The report claimed that these countries were not complying with the minimum standards for the elimination of trafficking. A strong reaction to this criticism was expressed in Kuwait by the Speaker and Members of the National Assembly who claimed that the ranking was neither true nor adequate and was based on inaccurate information. In the midst of this debate, the problem of runaway domestic workers persists. While many are treated well, an unknown percentage of female domestic workers are subject to physical, verbal and psychological abuse, very long working hours, no rest days, and non payment of salaries. In extreme cases, domestic workers have lost their life while trying to escape from cruel and inhumane working conditions. Running away from the employer is a persistent problem in all GCC countries. In November 2009, each of the embassies of Sri Lanka, Philippines and Indonesia in Kuwait were providing shelter to 200 250 runaway female domestic workers. As the host country, Kuwait has also set up a shelter that can house up to 70 runaway domestic workers. The country had planned to open a larger shelter to accommodate 700 workers but this has not materialized. Similar shelters are being provided by embassies in other GCC countries, such as Saudi Arabia (Human Rights Watch, 2008). Domestic workers are not protected by the labour laws in most GCC countries, as mentioned earlier. There is an urgent need to include this group in the host country s laws and provide them the necessary rights and protection. There is also a need to set up mechanisms to implement the laws and monitor their enforcement. 12

Non payment of salaries is a fundamental source of employer employee problems in the Gulf that has sometimes resulted in strikes and riots by workers. Host countries have typically reacted by punishing and deporting the leaders who organized the strike. In most cases, however, an effort is made by the concerned officials who receive a complaint about non payment to settle the dispute amicably. Despite good intentions, however, employees have a weak bargaining position and may end up in a worst situation than before, as was the case for some domestic workers in Saudi Arabia (Human Rights Watch, 2008). In the event of complaints being brought to the embassy of the sending country, the concerned officials try to find a solution through the Ministry of Labour. This process is not well organized and can take several months, during which time the workers remain unpaid. As a result, several labour attaches in Kuwait have suggested that a designated liaison officer preferably bilingual or multilingual be appointed within the Ministry of Labour to expedite the cases of dispute. CONCLUSION AND RECOMMENDATIONS GCC countries are hosts to some of the highest numbers of immigrant contract workers in the world. The United Nations estimated that, in 2010, the proportion of international migrants will be highest in Qatar (87%), followed by the United Arab Emirates (70%) and Kuwait (69%) (UNDESA, 2009a). In terms of the impacts of the global economic recession on the upward trends observed over the first seven years of this decade, no firm conclusions are possible due to the inaccessibility of such data. It is recommended that a UN agency such as the United Nations Economic and Social Commission for Western Asia (ESCWA) routinely obtain, synthesize, tabulate and disseminate the basic demographic data on the region, as it did in the past. Furthermore, all such data should be disaggregated for nationals and non nationals. Sending countries must recognize that small indications showing a downward trend in outflows are already apparent. It is also likely that the host countries will begin to implement their restrictive policies even more seriously than in the past. If done effectively, the flows and stock of non nationals would decline. However, the pace of decline is unlikely to be rapid. Nevertheless, reliance on international migration as a safety valve to manage unemployment and poverty at home is only a temporary solution and can not replace development within the sending countries. Sending countries must make additional efforts to strengthen the educational and skill levels of their resident population as well as those of potential migrants. It is only through increased investments in human resources that the sending countries will gain the bargaining strength to enhance the value of their workers. In the case of female domestic workers, banning the migration of workers is an ineffective measure since it tends to push the process underground, which may result in even greater exploitation and abuse. Efforts at protection in the host country 13

must be combined with better preparation and accurate information provided at home. The mass media could play a greater role in this than in the past. In the host countries, effective steps to eliminate visa trading must be taken, since this practice is one of the root causes of exploitation and abuse of workers. It is deeply entrenched in the entire process of migration and benefits a whole range of intermediaries in the host as well as sending countries. Eliminating the practice will therefore not be easy. Caution must be taken in seeking alternatives to the current system to avoid creating a situation whereby the old practices simply continue under a new structure and format. In order to enhance the welfare and protection of contract workers, especially the most vulnerable, such as female domestic workers, host countries must strengthen the legal aid facilities for workers and develop mechanisms to expedite disputes in a fair and just manner. Finally, host countries need to reduce their dependence on foreign workers. They must therefore re train and motivate their nationals to work in the private sector, which is currently manned largely by non nationals. 14

REFERENCES Abella, M.I. 1992 Contemporary Labour Migration from Asia: Policies and Perspectives of Sending Countries. In: International Migration Systems (M.M. Kritz et al., eds). Clarendon Press, Oxford, pp. 263 278. Al Shamsi, M. 2006 Immigration policy evaluation in GCC: future lessons. Paper presented at the meeting on International Migration and Development in the Arab World: Opportunities and Challenges, Beirut, 15 17 May. Arnold, F. and N.M. Shah 1986 Asian Labor Migration: Pipeline to the Middle East. Westview Press, Boulder. Chishti, M.A. 2007 The Phenomenal Rise in Remittances to India: A Closer Look. Policy Brief, Program on Migrants, Migration and Development, Migration Policy Institute (MPI), Washington, DC. Dito, M. 2006 Immigration policy management in GCC: opportunities and risks. Paper presented at the meeting on International Migration and Development in the Arab World: Opportunities and Challenges, Beirut, 15 17 May. Ghosh, B. 2006 Migrants' Remittances and Development: Myths, Rhetoric and Realities. The Hague Process on Refugees and Migration, The Hague/International Organization for Migration (IOM), Geneva. Human Rights Watch 2008 As If I Am Not Human : Abuses against Asian Domestic Workers in Saudi Arabia. Human Rights Watch, New York. Kapiszewski, A. 2006 Arab versus Asian migrant workers in the GCC countries. Paper presented at the United Nations Expert Group Meeting on International Migration and Development in the Arab Region: Challenges and Opportunities, Beirut, 15 17 May. PACI 2007 Directory of Civil Information: Population and Labor Force. Public Authority for Civil Information (PACI), Kuwait. 15

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