KATHMANDU, July 10: The decision of Ministry of Labor and Foreign Employment (MoLE) to enforce 'minimum cost system' for workers heading to Malaysia and six Gulf countries has pushed foreign employment agencies into the street.

Responding to the decision, foreign employment firms have shut down their offices and stopped processing recruitment of migrant workers. The government has also said that it will issue work permit to only those workers who are offered free visa and round trip airfare. The number of workers heading to overseas job destinations has decreased significantly because of the ongoing dispute between the government and recruitment agencies.
If the decision is implemented, the 'minimum cost system' protects workers from the financial exploitation at the hand of recruiting firms. The decision, however, is likely to make impact on demand for workers in the destination countries for the coming few months if not longer.

One of the arguments of foreign employment firms is that the government's decision will lead to a slump in demand for Nepali workers. This argument cannot be simply dismissed under the pretext that these firms are hell-bent on overturning the decision just for the sake of their business.

DO ALL EMPLOYERS OFFER FREE AIRFARE, VISA?

While some labor demands from receiving countries or companies come with free airfare and visa facility, many demands, however, involve some cost that have to be borne by the workers.

According to Tanka Raut, former vice president of Nepal Association of Foreign Employment Agencies (NAFEA), only around 30 percent of the demands cover airfare or/and visa cost of workers while the remaining demands require workers to cover such expenses. The government has made it legitimate by fixing a ceiling of fee that foreign employment can levy on workers.

The sudden decision to enforce the 'minimum cost system' will now make it impossible for foreign employment firms to accept demands placed by foreign employers or labor receiving countries. It will lead to reduction in number of Nepali workers, which currently stand at around 1,500 per day, heading to these seven job destinations. Drop in the number of workers heading to foreign employment, meanwhile, will have a direct impact on remittance flow to the country.

The only possibility of retaining the number of workers is through intense marketing by foreign employment firms and the government in labor destinations. Or the government itself should begin sending workers, like it does for South Korea. Given the government's limited capacity and laid-back approach, it's naïve to expect that the government will be able to boost the demand for workers.

Foreign employment agencies argue that implementation of 'minimum cost system' will divert the demand for Nepali workers to other countries like Bangladesh or the Philippines who are ready to bear expenses of airfare and visa to get more demand for workers" "Why would recruiting firms offer job quotas to Nepal, where workers won't pay for airfare and visa, when workers in Bangladesh or some other countries are ready to pay whatever it costs to get the jo"," Kumud Khanal, senior vice president of NAFEA, told Republica. "This means all such quota will be diverted to other countries where workers are willing to pay that price. Ultimately, it will be us and the Nepali workers who will be losin"."

LABOR AGREEMENTS MUST

Stakeholders say the government should first sign labor agreements with receiving countries before enforcing the 'minimum cost system'. They say such agreements will give Nepal an upper hand to provide such benefits to Nepali workers. The need for such agreement as a condition for implementation of the 'minimum cost system' was also reinforced by the recent decision of the International Relations and Labor Committee of legislature-parliament. Concluding that the decision of MoLE might lead to reduction in demand for Nepali workers and divert such demand toward other countries, the meeting of the committee held on June 29 had directed the government to implement such system only after signing labor agreement with receiving countries.

"The committee has directed the ministry to implement free airfare and visa system only to countries with whom Nepal has signed MoU. We have directed the ministry to start process to sign MoU with other countries so that minimum cost system can be included in the MoU," Prabhu Sah, chairman of the committee, told Republica.

FOREIGN EMPLOYMENT FIRMS CRY FOUL

Foreign employment firms have flayed the decision, arguing that it was introduced by Minister of State for Labor and Employment Tek Bahadur Gurung without consulting with them" "Such sensitive decision has been taken without holding consultations with foreign employment firms which are the major stakeholders of the foreign employment industr"," Rohan Gurung, newly elected general secretary of NAFEA, told Republica.

He also accused Minister of State Gurung for taking 'reckless' decision" "Bangladesh is signing labor agreement with Malaysia on July 17 which will ensure employment opportunities for 1.5 million workers of Bangladesh in Malaysia in the next three years," he said, adding, "Minister of State Gurung is helping to divert demand for workers to Bangladesh by enforcing the 'minimum cost system"."

Foreign employment entrepreneurs also criticize the government for showing double standard on implementing 'minimum cost system'. " "The government itself sends workers to South Korea under the Employment Permit System and make workers pay for airfare and visa fee. However, it asks us not to make workers pay for airfare and visa fee. This is sheer hypocrisy," general secretary Gurung said.

Minister of Sate Gurung did not answer Republica's phone calls for comments.

IMPLEMENTATION UNCERTAIN

Even if the government enforces 'minimum cost system', ignoring protest of foreign employment agencies, the possibility of agencies charging workers for airfare and visa fee cannot be ruled out completely. It is an open secret that most of the foreign employment firms have been asking workers to pay more than the ceiling set by the government. Department of Foreign Employment, the regulating body of foreign employment business, has remained mute spectator over such misdeeds of the recruiting firms. This is reflected in the DoFE's report of fiscal year 2013/14 which shows that it settled only 499 cases out of 2,551 complaints filed by the workers against foreign employment firms.

Foreign employment firms will continue to charge workers even after implementation of 'minimum cost system', as there is no strong and credible monitoring and supervision mechanism that brings such firms into book" "There is no mechanism which can distinguish free quotas with those that need workers to bear the cost. This means that many workers are being charged by foreign employment agencies even for free-cost quot"," Som Prasad Lamichhane, general secretary of Pravasi Nepali Coordination Committee, said" "This decision should be fully implemented for the benefit of workers. The government should build strong foundation to implement this decisio"."


Published 10 July 2015. Republica.