Open letter calls for end to labour ‘syndicates’ in M’sia-Bangladesh deal
Alyaa Alhadjri & B Nantha Kumar
Published: Feb 5, 2022 8:19 AM
SPECIAL REPORT | Pressure is mounting on Putrajaya to end what has been described as a “massive monopoly, exploitation and manipulation” in the hiring of Bangladeshi migrant workers in Malaysia.
This is according to an anonymous open letter circulated to the media, which is accompanied by a cache of leaked information.
The letter, dated Jan 24, was addressed to Prime Minister Ismail Sabri Yaakob and Bangladesh’s Prime Minister Sheikh Hasina
There are no signatories to the open letter, but the information provided is believed to be leaked by whistleblowers from within Putrajaya.
The main contents, including official letters from the Home Ministry and Human Resources Ministry, matched original documents sighted by Malaysiakiniand were verified by a source close to the government.
The documents include letters of intent and letters of acceptance issued by the government to IT solutions provider Bestinet Sdn Bhd and manpower recruitment agency Synerflux Sdn Bhd – two companies involved in managing processes involved in recruiting migrant workers.
Other documents are applications by Malaysian employers as well as approvals of work permits.
The open letter made references to recruitments conducted prior to 2018 and upcoming arrivals under the latest five-year Malaysia-Bangladesh agreement, alleging the revival of a politically connected “syndicate” and possible breaches of competition laws in both countries.
“Like the Competition Act of Bangladesh 2012, Malaysia too has the Competition Act 2010 (Act 712) that is very much applicable in this (recruitment) matter,” the letter reads.
“The Competition Act 2010 strictly prohibits any horizontal or vertical agreements between enterprises that significantly prevent, restrict or distort competition in any market for goods and services.
“Repeated statements by Human Resources Minister M Saravanan for 25 agencies that will be supported by 250 agencies is a clear violation of the Competition Act 2010,” said the letter’s anonymous authors.
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Human Resources Minister M Saravanan
Saravanan in a recent interview denied the existence of a syndicate or any monopoly in the appointment of Bangladesh recruitment agencies, contrary to concerns raised by the Bangladesh Association of International Recruitment Agencies (Baira) and migrant activists.
“If we want a recruitment monopoly, we can just keep the 10 agencies on the ground as stipulated in the old MOU (memorandum of understanding). But, I increased it to 275 sub-agents. There is no monopoly,” he told Malaysiakini.
The new arrangement will replace an initial three-year deal first negotiated in 2015 under Umno president Ahmad Zahid Hamidi, then home minister, to bring in 1.5 million Bangladeshi migrant workers.
‘No formal contract’
A source close to the government, who spoke on condition of anonymity, claimed that neither Synerflux nor Bestinet had signed a formal agreement with the government after both companies received their letter of acceptance (LOA).
“A massive syndication of 10 companies, now expanded to 25 because they have to look after more people, and all these are happening without a contract with the government,” claimed the source.
“The government cannot proceed with any project without signing a contract,” said the source.
The source said the latest LOA issued to Bestinet – also attached to the open letter – was dated Jan 12, 2018, seven months before then human resources minister M Kulasegaran announced the suspension of its operations following allegations of the company’s involvement in a recruitment scam that exploited Nepalese workers.
However, Kulasegaran told Parliament on Dec 5, 2019, that the allegations he originally made against Bestinet were found to be “baseless”.
Harapan took over Putrajaya from BN in 2018 after its 14th general election victory, following which Kulasegaran announced that the 1.5 million workers agreement would be placed under review.
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Former human resources minister M Kulasegaran
Kulasegaran moved to suspend recruitments from Bangladesh carried out under Synerflux’s Foreign Workers Application System (SPPA) on Sept 1, 2018, before reinitiating bilateral negotiations with Bangladesh.
“By then (2018), close to 300,000 Bangladeshi workers were hired through this syndicate and had to pay high fees of up to RM20,000 per person,” the open letter says.
“The syndicate was made up of only 10 agencies (out of 1,600 registered Bangladeshi agencies) which created a ‘super monopoly’ and workers were subjected to various exploitations and manipulation.”
A Home Ministry approval letter to Synerflux, dated Jan 23, 2017 – with a list of the 10 selected Bangladesh recruitment agencies – as well as the company’s termination letter dated April 16, 2019, was attached to the open letter.
Synerflux’s termination letter cited a letter of intent (LOI) issued by the Home Ministry to the company on Aug 26, 2015, that stated, “the government reserves the right to terminate or postpone implementation of the proposed project, or change its implementation either in scope or cost.”
“In this instance, the government will not be liable to any cost or expenditure incurred by Synerflux if the project was discontinued,” according to the LOI, also attached to the open letter.
As for Bestinet, the source said no contract was similarly signed for operations of its Foreign Workers Centralised Management System (FWCMS).
The system was previously used to manage workers from other source countries aside from Bangladesh and now remains in place for all new migrant workers recruitments.
“In the past, an old but very well-known syndicate (Bestinet Sdn Bhd, Synerflux Sdn Bhd and associated companies/agencies) led by Aminul Islam, a Bangladeshi national who now holds a Malaysian national ID card, crippled and tainted the whole process,” read the open letter.
An external representative for Bestinet told Malaysiakini the company “is not in the position to comment” on the allegations made in the open letter.
Media reports previously quoted Mohd Amin Abdul Nor as Bestinet Group CEO but Companies Commission’s records listed Aminul Islam Abdul Nor, believed to be Amin’s real name, as one of the company’s directors.
A check with Synerflux’s company records also found “Aminul Islam Abdul Nor” listed as a previous director, appointed on Nov 23, 2010, and resigned on July 5, 2015.
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Description automatically generated with medium confidenceAminul Islam Abdul Nor
In 2015, Bestinet had denied links with Synerflux in response to allegations in the wake of the company’s appointment to manage the 1.5 million Bangladeshi workers.
Bestinet described FWCMS as an “online, real-time holistic solution used by various stakeholders to improve efficiency and transparency in the entire process of management and recruitment of foreign workers.”
Bangladesh media had in the past highlighted Amin’s alleged role in controlling “syndicates” formed by selected agencies, but the company had denied direct involvement in recruiting migrant workers.
The syndication claims also involved alleged payments made by the agencies to be included in the approved list, as well as lobbies from well-connected individuals in Bangladesh and Malaysia.
Speaking to Malaysiakini, Saravanan said Amin has no record of supplying migrant workers.
“Based on records I have seen in the Human Resource Ministry – and we are working closely with the Home Ministry – this person Amin is just a system provider, owner of Bestinet and developer of FWCMS used by both ministries.
“I don’t know who has been spreading allegations (against Amin) but not anywhere has this man supplied foreign workers to Malaysia, not even a single worker,” said Saravanan.
Saravanan, however, admitted there were individuals – including BN and MIC members with connections in Bangladesh – who had personally lobbied him for a stake in the recruitment process.
“I am not entertaining anyone, the list (of agencies) comes from Bangladesh […] From day one, I have decided I am not going to entertain any of these applications,” said Saravanan, who is also MIC deputy president.
The minister is expected to table the proposal to involve 25 Bangladesh recruitment agencies at the cabinet meeting next week, according to sources.
Prime Minister Ismail Sabri Yaakob announced on Jan 28 that new applications by employers to hire migrant workers from Bangladesh are now open in stages.