18th Sep 2023: Kantipur News – Doubts on the renewal of Nepal-Malaysia zero-cost migrant labour agreement

Doubts on the renewal of Nepal-Malaysia zero-cost migrant labor agreement

Kantipur News Google Translation: Doubts on the renewal of Nepal-Malaysia zero-cost migrant labour agreement – Comments by Andy Hall

Original Article: ekantipur.com – by Ashwin 1, 2080 – 18th September 2023.

“The zero-cost migrant labour recruitment MoU agreement signed between Malaysia and Nepal in 2018 has actually resulted in the opposite effect to that positively claimed or intended. Nepali migrant workers have now, since the beginning of the Anwar administration last year, been paying double or triple the previously high recruitment-related fees and costs to migrate unethically to Malaysia. This is due primarily to the systemic corruption and kickbacks culture maintained by Malaysian manpower agents, bogus Malaysian employers, and Malaysian officials. More Nepalese workers are migrating to Malaysia in severe debt bondage due to increasingly exorbitant recruitment fees and costs demanded from them than ever before. Many of these vulnerable workers are now arriving to bogus employers, no work at all, debt bondage, passport confiscation, poor accommodation, and situations akin to acute modern slavery and trafficking across many, if not all, of Malaysia‚Äôs primarily export-oriented businesses and related domestic economic sectors.”- Ashwin 1, 2080 Hom Karki.

With the agreement expiring on November 12, the date of the Joint Technical Committee meeting for renewal is yet to be decided in Kathmandu. The period of zero-cost labor agreement with Malaysia, the main destination of Nepali workers, five years ago (in 2075) is ending on November 12. Malaysia has made such an agreement only with Nepal among all of its labor source countries.

A meeting of the joint technical committee will be held within three months to decide on renewing the zero-cost migrant labour agreement

On January 18, a meeting held in Kathmandu under the leadership of Malaysian Home Minister Fuddin Nasusan Ismail and then Labor, Employment, and Social Security Minister Dol Prasad Aryal agreed to hold a meeting of the Joint Technical Committee within three months to finalize the issue of renewing the labor agreement. High officials from the ministries of home, labor, foreign affairs, and law of both countries are involved in this committee. But since the meeting date could not be fixed, the doubt about the renewal of the labor contract has increased. The Ministry of Labour, Employment, and Social Security has said that the technical meeting to be held now will renew the contract.

“Malaysia has asked for an agenda with a schedule for the meeting; we will do the internal homework and send it soon, we are preparing for renewal by October.”

Rajiv Pokharel, head of the Employment Management Division of the Ministry of Labour.

The then labor minister, Gokarn Bista, agreed with Malaysia so that the workers would not be burdened financially during the recruitment process. According to the agreement, the worker does not have to pay the visa, ticket, and service fee for the visa application process. The worker must bear the Foreign Employment Board’s welfare fund expenses, insurance, and passport only. This cost is around 13 thousand rupees at most. Manpower will get a service fee from the employer for sending workers. If the manpower of Nepal brings the demand letter directly without the participation of the manpower company of Malaysia, they will get a commission of 1,000 ringgit (about 28,000 rupees) per worker from the employer. If Malaysian Manpower participates, they will get only half of that commission. The employer has to bear the cost of 6 thousand 322 to 7 thousand 942 ringgit (1 lakh 72 thousand to 2 lakh 16 thousand rupees) to bring one Nepali worker.

Before the agreement, the workers were charged about 17 thousand rupees for using the services of Malaysian mechanisms in Kathmandu for visa processing. After the agreement, according to biometric technology, the system of having to go to take fingerprints and eye retina has been removed. This arrangement has added 36 health institutions that conduct health examinations.

The then Labor Minister Bista reviews that the full implementation of the Labor Agreement was ineffective. Malaysia also wants to bring workers at zero cost. This is a model for both countries; both Nepal and Malaysia have no choice but to make this model successful,’ he said, ‘it should be renewed and monitored closely.’

Malaysia has the most complicated recruitment processes in Nepal

After the labor agreement, the dialogue between Nepal and Malaysia at the highest level is thin. The then Labor Minister Aryal also requested Malaysia to assist in effectively implementing the fair and just recruitment policy before the Malaysian Home Minister Izmail, who came to Kathmandu in January. Among the 15 source countries for bringing in workers, Malaysia has the most complicated process in Nepal. Indonesia has the highest number of workers going to Malaysia, followed by Bangladesh and Nepal in third. Nepal is the only country with a labor contract that takes workers under the zero policy.

Malaysia has emerged as the first destination when employment opportunities in the Gulf have shrunk in the last financial year. Last year, Malaysia employed 219,000 Nepalis, which is 44.39 percent of those who received work permits for the first time. Malaysia’s minimum wage is 1,500 ringgit (Rs 42,000), which is higher than the Gulf countries. Workers involved in security guards, tourism sector, furniture, cleaning and small industrial production are obliged to pay at least three lakh rupees. Chandra Bahadur Shahi, who was sent by Galaxy Manpower to High Horse Company to make tiles, said that when he reached Malaysia, about three hundred and fifty thousand rupees were spent. “I paid 320,000 rupees to Manpower, but I don’t have a receipt for it. It costs 5,000 rupees just to come to Kathmandu. If the company runs this way, the loan will be paid in one year,” he said. No one does anything without money.’

Malaysia is also in favor of direct coordination between employers and Nepal’s manpower companies to facilitate the recruitment process for workers in a transparent manner. The conclusion of Malaysia is that by charging high fees to workers, it is notoriety in the international market as well as banning the export of products. Workers have been taken from Nepal through Malaysian Manpower Company (MRA). “Malaysia is looking at what is the proper mechanism to bring workers without a manpower company,” Human Resources Minister B. Shivakumar had recently told reporters, “We want to ensure that we don’t take high profits on labor supply.”

Nepali manpower companies pay commissions to third parties (agents) in Malaysia to receive demand letters, so the workers have to pay more. In a speech, the Prime Minister of Malaysia, Ibrahim, informed that workers from Bangladesh and Indonesia pay 20,000 to 25,000 ringgit (Rs. 750,000). He said that the Nepalese are giving 3700 ringgit (one lakh 11 thousand rupees). “The Ministry of Home Affairs will stop the agency that takes high amount,” Human Resources Minister Shivakumar said, quoting Prime Minister Ibrahim’s speech last Wednesday, “Employers should have a direct relationship with the workers to get workers.”

Challenges in implementing the zero-cost migrant labour agreement

Former Nepalese ambassador to Malaysia, Udayraj Pandey, said there were three challenges in implementing the labor agreement. “Manpower should see how to get service fees, how to control those who collect money from workers, and how to address the issue of workers who have come to Malaysia receiving medical examinations?” He said.

Rajendra Bhandari, president of the Foreign Employment Professionals Association, says that the service fee should be revised in the next contract. “Unhealthy competition has increased by not setting proper service fees; Malaysia should ensure that the manpower company pays,; Nepal should set it,” he said.

Binod Thapa, president of Non-Resident Nepali Association Malaysia, suggested that the Nepal government should draw attention to increasing surveillance from the time the visa is issued by the Malaysian government to when the workers arrive.

See also: 16th May 2023: The nightmare of Bangladeshi and Nepali migrant jobseekers in Malaysia.

See also: 3rd Feb 2023: Voices for fair recruitment grow as Nepal and Malaysia hold labour talks today in Kathmandu.

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