23rd February 2024: ICIJ – Amazon pays $1.9 million to migrant workers in Saudi Arabia harmed by labour abuses and unethical recruitment practices

Amazon pays $1.9 million to migrant workers in Saudi Arabia harmed by labour abuses and unethical recruitment practices

23rd February 2024: ICIJ – Amazon pays $1.9 million to migrant workers in Saudi Arabia harmed by labour abuses and unethical recruitment practices

Systemic issue of migrant worker unethical and extortionate recruitment practices in Saudi Arabia, this never ends. (Amazon response copied below at bottom of article)

Andy Hall’s Comments:

Do most of these major global companies (with their advisors and consultants in toe) really understand the real problem or challenges of why migrant worker recruitment is so unethical/extortionate/expensive in the first place, so as to be able to find (or at least brainstorm to find) the necessary solutions in terms of policy development and then implementation.

I still have doubts, based on my ongoing experiences.

Amazon supply chain in Malaysia face similar challenges with systemic payment of kickbacks between employers and recruitment actors meaning systemic corruption costs that workers end up shouldering.

Same across Asia and the Middle East, and into many other parts of the world too.

Some of the solutions to unethical recruitment practices are relatively easy to plan for and implement (including amongst other things ensuring open tender processes to select recruitment actors transparently, closely monitoring all financial transactions, removing unnecessary destination country actors and intermediaries) if you understand the problems in the first place to find the actual solutions that work.

Too often too many people (and companies and industry associations and consultants) still think the main problem regarding irresponsible recruitment practices stems from unethical and incompetent source country recruitment actors overcharging migrant workers, which is rarely the case.

The primary cause of irresponsible recruitment practices today generally starts and ends with destination country actors (employers/recruitment intermediaries) and their corrupt actions and behavior. And too often with brand/buyers practices contributing negatively to the overall processes too.

Remediation is important, but prevention is better.

23rd February 2024: ICIJ – Amazon pays $1.9 million to workers in Saudi Arabia harmed by labor abuses

Payments come after the International Consortium of Investigative Journalists and its media partners exposed exploitation of Asian migrant workers who labored at Amazon’s Saudi operations.

Original source: ICIJ by Pramod Acharya and Michael Hudson – 23rd February 2024

Amazon has paid $1.9 million to hundreds of current and former workers in the wake of revelations by the International Consortium of Investigative Journalists and other media partners about abuses against migrants who labored at the online retail giant’s warehouses in Saudi Arabia.

Amazon said in a statement that it paid reimbursements to more than 700 migrant workers who had been required to pay recruitment fees and other costs to secure work at the company’s distribution centers in Saudi Arabia. In announcing this action, the company said it’s committed to “fundamental human rights and the dignity of people connected to our business around the world.” Amazon said last fall that it employed nearly 1,500 permanent and seasonal workers in Saudi Arabia.

These payments came after the recruitment fees and other unfair practices were exposed by a joint media investigation by ICIJ, The Guardian, NBC News and Arab Reporters for Investigative Journalism.

All of the 54 workers from Nepal interviewed for the media partners’ investigation said that recruiting firms in their home country had required them to pay stiff fees — ranging from roughly $830 to $2,300 — as a condition for getting placed in jobs at Amazon warehouses in Saudi Arabia. Those amounts far exceed what’s allowed by Nepal’s government and run afoul of American and United Nations standards

An illustration of a worker pushing a cart marked "Amazon" through a maze of shelves.

INVESTIGATIVE REPORTING: Workers at Amazon warehouses in Saudi Arabia claim they were deceived, exploited, trappedOCT 10, 2023 

Illustration of silhouetted businessmen overlooking a line of workers.

LABOR TRAFFICKING: Audits aimed at flagging labor abuses are ‘designed to fail,’ investigation findsOCT 16, 2023 

FAQSFrequently asked questions about the Trafficking Inc. investigationOCT 10, 2023 

Forty-eight of the Nepali workers added that recruiters misled them about the terms of their employment, falsely promising they would work directly for Amazon. Instead, these workers said, they ended up working for Saudi labor supply firms that placed them in short-term contract jobs at Amazon warehouses in the Arab kingdom, then siphoned away much of their wages and in some cases demanded thousands of dollars in exit fees to allow them to go back to Nepal.

The human rights group Amnesty International also issued a report on these issues. Amazon has said that its own internal monitoring system identified these problems before it became aware of the separate investigations by Amnesty and the media partners.

ICIJ and the Guardian recently talked to 40 workers from Nepal, India, Bangladesh and Pakistan who said they had received payments from Amazon or were expecting to get them soon. An Amazon spokesperson confirmed that workers from those countries had received payments and said workers from additional countries had also received reimbursements for their recruitment fees, but declined to name those countries.

“I never expected that I would get the money back,” said Bishnuman Shrestha, a Nepali laborer who worked for Amazon in Saudi Arabia from 2021 to early 2024. “I worked in Qatar and other countries before but never heard of workers getting their recruitment fees back. I never thought about it even in my dream.”

He said he received more than $1,800, which covered the amount he paid as a recruiting fee, plus interest. He told a reporter for ICIJ and the Guardian: “Keep doing this for other workers as well. It means a lot.”

The average reimbursement to the workers appears to exceed $2,500.

I never expected that I would get the money back.

— Bishnuman Shrestha, a Nepali laborer who worked for Amazon in Saudi Arabia

In its statement, Amazon said it had engaged a labor rights consulting firm to “conduct a focused assessment of foreign migrant worker issues” at two Amazon facilities in Saudi Arabia. The review, Amazon said, found multiple violations of its labor standards. Along with charging of recruitment fees, these included “substandard living accommodations, contract and wage irregularities, and delays in the resolution of worker complaints.”

The company said it has strengthened its internal controls relating to its work with labor supply firms and other “third-party” vendors, providing additional training to labor vendors and clarifying its expectations for these partner firms.

Amazon said it has also improved its communications mechanism that allows contract workers to share complaints with Amazon’s management and ensured that a Saudi labor supply firm that had provided contract laborers from Nepal was “making significant progress to improve workers’ housing.”

Update on Amazon’s response to violations of our supply chain standards involving contracted workers in the Kingdom of Saudi Arabia 

Sourced from: Amazon by Amazon Staff – 22nd February 2024

Amazon is committed to respecting internationally recognized human rights through the ethical treatment of our workforce and the people who support our entire value chain. Our long established approach codified in our Global Human Rights Principles and Supply Chain Standards, demonstrates our support for fundamental human rights and the dignity of people connected to our business around the world. We believe transparency is critical in driving continuous improvement and helping address systemic issues affecting supply chain workers. We are committed to continuously strengthening our approach over time, ensuring all individuals connected with our value chain are treated with dignity and respect.

In 2023, Amazon found violations of its Supply Chain Standards through an independent audit of a third-party licensed temporary labor agency (third-party vendor) Abdullah Fahad Al-Mutairi Co. (AFMCO) in the Kingdom of Saudi Arabia (KSA). Following these findings, similar concerns were also raised by external organizations about the treatment of AFMCO employees who support our operations in the region.

In cases when our own review, credible independent research, or employee concerns reveal findings in violation of our Supply Chain Standards, our first priority is to work with the associated third-party vendor to investigate, remediate issues, and improve conditions for contracted workers. We then implement long-term strategies and improve controls with third-party vendors to prevent recurrence and raise overall standards for those workers.Amazon believes all people who support our business deserve fundamental dignity and respect, and although contracted workers are not Amazon employees, we are equally committed to workers who support our operations through third-party vendors.
Significant progress on remediation has been made

Amazon engaged a third-party labor rights expert, Verité to conduct a focused assessment of foreign migrant worker issues and to investigate worker-paid recruitment fees at two Amazon facilities in KSA. Contracted workers employed by AFMCO were interviewed and worker-paid recruitment fees were investigated, all in support of remediating issues. Verité’s findings included violations of our Supply Chain Standards such as: worker-paid recruitment fees to obtain employment with AFMCO, substandard living accommodations, contract and wage irregularities, and delays in the resolution of worker complaints.

Through audits conducted over the past few months, Amazon has verified that AFMCO has remediated the most serious concerns, including making significant progress to improve workers’ housing. Among these changes are upgrades in living accommodations, providing lockers for personal belongings, limiting the number of occupants per room, upgrading fire safety systems, and ensuring living conditions meet our standards. We have also secured AFMCO’s commitment that after its employees cease working at Amazon, AFMCO will pay its employees in line with their contracts and will not move them to a new accommodation site that fails to meet Amazon’s standards. AFMCO also established a more robust system to enable workers to anonymously raise grievances. We’ll continue to monitor improvements and progress through ongoing site visits.

As a result of our findings with AFMCO, we conducted a deeper dive into practices of our third-party vendors throughout KSA. We found instances where contracted workers were required to pay fees, including recruitment fees and other costs, to secure employment—a violation of our Supply Chain Standards. To expedite the reimbursement process, Amazon partnered with a third-party human rights expert, Impactt Ltd., to engage directly with workers. The organization also established and independently managed a temporary helpline dedicated to addressing workers’ concerns during the reimbursement process. Amazon and Impactt worked together to establish reimbursement amounts, and manage data collection and repayment. To determine reimbursement amounts, Amazon considered key factors including the payments reported by workers, changes in historic exchange rates, compound inflation, and interest. As a result of this work, Amazon paid $1.9 million (USD) in reimbursements to over 700 contracted workers.

Amazon is committed to providing continuous education for our third-party vendors and enforcement our Supply Chain Standards. Our goal is for all of our vendors to have management systems in place that ensure safe and healthy working conditions; this includes responsible recruitment practices. While we require our vendors to bear the cost of worker-paid recruitment fees, in this case, Amazon provided the reimbursement to expedite repayment to workers impacted.
Enhanced controls to reduce the risk of recurrence implemented

Amazon supports contracted workers’ safety and prevents risk by insisting our third-party vendors uphold our Supply Chain Standards, including those outlining responsible recruitment practices and applicable laws in KSA. Efforts to enhance controls include:

  • Strengthened third-party vendor contracts to clarify expectations regarding compliance with our Supply Chain Standards
  • Reviewed vendors’ wage policies, including clarification that illegal wage deductions are prohibited
  • Provided additional training to vendors in the region on how to implement our Supply Chain Standards, including responsible recruitment practices
  • Improved our communication mechanism that enables contracted workers to share concerns directly with Amazon’s management

Committed to ongoing and continuous improvements region-wide

Amazon remains dedicated to continuously strengthening and improving protections for all contracted workers who support our business. We remain grateful to those who brought attention to this issue, and above all, appreciate the willingness of all the workers who participated throughout this process and shared their experiences. Our priority at all times is the safety and well-being of workers throughout our supply chain.

Additional Reading:

See more: 15th February 2024: Bloomberg Businessweek Feature – Andy Hall ‘Playing God’: This Labor Activist’s Relentless Emails Force Companies to Change

See more: 10th Oct 2023: McDonald’s and Amazon’s ties to alleged labor trafficking: Five key takeaways

See more: 5th March 2023: Saudi Arabia arrests ex-officials of its Dhaka embassy, Bangladeshis over visa scam

See more: 9th Oct 2023: Nepal’s migrant workers suffering ‘alarming’ rate of fertility problems

Leave a Comment

Your email address will not be published. Required fields are marked *

Scroll to Top