Recruiting agencies threaten to return operation licences to the government

Chandan Kumar Mandal 

Recruiting agencies that supply Nepali migrant workers to various countries have once again come strongly against the government decision of hiking guarantee amount which they need to deposit for obtaining the licence to run their business. Disgruntled for months over the increase in guarantee amount-- as high as Rs60 million, a twenty-fold increase from the previous Rs3 million, recruiting agencies have said they would not be paying the amount if the government does not come up with measures to reprieve them off the “massive financial burden”.

Nepal Association of Foreign Employment Agencies —the umbrella organisation of recruiting agencies— has demanded that the government pay interest on the amount deposited as bank guarantee. “We have decided that we will ask the government to offer us interest on the amount that we will be depositing as guarantee,” Rohan Gurung, the association’s president, told the Post.

By amending the Foreign Employment Act-2007, the government in last February had revised the guarantee amounts for recruiting agencies on the basis of the number of workers they send abroad annually. With the amendment, agencies that send more than 5,000 workers annually will have to deposit Rs60 million—Rs20 million as cash and other Rs40 million as bank guarantee. Likewise, those firms that send 3,000-5,000 workers every year will have to deposit Rs40 million—Rs10 million cash and Rs30 million as bank guarantee. The third category of recruiting agencies that send up to 3,000 workers annually will have to deposit Rs20 million—Rs5 million as cash and Rs15 million as bank guarantee.

The new deposit amounts will be enforced from August 25 this year. Recruiting agencies have warned of submitting their licences to the government if their demands are not addressed by mid-June. “Even the lowest guarantee amount of  Rs5 million set for the agencies sending the fewest number of workers is too high. Just to pay the interest on  that amount, an agency needs to send a minimum 10 workers,” said Gurung. “This may lead small recruiting agencies to resort to dishonest practice like charging more money from migrant workers in a bid to collect money to pay their interests.”   

Meanwhile, a task force consisting of officials from Ministry of Labour, Employment and Social Security, Department of Foreign Employment and the representatives from recruiting agencies, have been formed in a bid to address the dissatisfaction over the increased guarantee amounts. Bhola Nath Guragain, spokesperson of the department, said the government was waiting for the amendment in the Foreign Employment Rules which will clearly talk about the mechanism and the procedures regarding the increased guarantee amount. “The new provision will be implemented within six months of the amendment to the act.

We are waiting for the Rules now,” Guragain told the Post. “Recruiting agencies have suggested that the provision should be changed in the upcoming Rules.”    Last year, Labour Minister Gokarna Bista had proposed a hike in guarantee amount to deter and limit the number of employment agencies. The plan was aimed at lowering the number of recruiting agencies by encouraging merger among small companies, consequently reducing the incidence of dubious agents cheating naïve migrant workers. The proposal was welcomed by labour migration experts. They had said it would help manage the foreign employment sector mired in controversies, mainly over exploitation of migrant workers.

Published on: 11 May 2019 | The Kathmandu Post