Malaysia’s new government has pledged to reform the country’s ineffective migrant worker management systems. Workers from 15 countries will be brought into Malaysia to meet the demands of labour-starved employers quickly, cheaply and effectively. Regularisation or “recalibration” schemes will ensure millions of irregular workers in the country become officially employed and legal.

Original Article Available at: Free Malaysia Today – Letter to the Editor – From Andy Hall – 13th February 2023

The prime minister and the human resources minister have warned of a shake-up to migrant worker management processes, particularly regulating the role of “agents”. Malaysia’s home minister travelled last week to Bangladesh, Indonesia and Nepal to discuss achieving these lofty goals.

The new administration is right to focus on abuses by intermediaries (or agents) as a key cause of the abusive and ineffective migrant worker management in the country. Concerningly, however, nothing has yet been said about addressing ingrained corruption also embedded in these same systems.

Many migrant worker dependent industries in Malaysia use in-country intermediaries because they want to pay a “legal” fee to wash their hands of illegalities. Intermediaries engage with corrupt officials (allegedly linked to politicians) to secure migrant quotas for their clients, often bypassing official rules and regulations concerning accommodation quality and migrant-to-local employee ratios.

These same intermediaries, many not licensed under the Private Employment Agencies Act 1981, also facilitate recruitment of workers into Malaysia, regularisation of irregular workers, and worker’s housing and transport. Their service fees are high while their flight, hotel and even leisure activities are charged to workers and source country intermediaries. Employers are often billed the same costs.

When Prime Minister Anwar Ibrahim implied these intermediaries, or “agents”, were the root cause of the ineffective migrant worker management processes in Malaysia, it’s only part of the reality. These facilitating actors are more often just vehicles for the ingrained corruption embedded for decades in these systems.

Payments of bribes by these intermediaries to corrupt government officials or politicians to facilitate recruitment and regularisation of foreign workers on behalf of employers or workers, need to end if we are to start solving Malaysia’s foreign worker challenges.

Bribes or kickbacks paid to ministry staff and Malaysian intermediaries by source country intermediaries must also stop. Currently, it is the source country’s manpower agencies that pay the highest commission to Malaysia that secure the most orders for recruiting foreign workers.

Allegations have been thrown at numerous Malaysian governments over the years of syndicates and systemic corruption in the way contracts have been awarded to private sector actors to manage overly complicated migrant worker management systems.

Worker and employer data management systems and software, multiple health checks both at source and destination, quota, security and visa approval processes, regularisation management – the list of bloated expenses involved in hiring a foreign worker goes on. The alleged profiteering must stop.

Regularisation processes for irregular workers are beneficial. Human, economic and national security gains arise from making workers legal in-country, given the failure over decades of numerous administrations to keep foreign workers regular, protected and employed.

However, bogus employers and intermediaries, including corrupt government officials and politicians, have extorted irregular workers as part of these regularisation processes for too long. Too many workers have been left irregular, in debt and at high risk of forced labour and modern slavery as a result.

All the bribes, commissions and costs involved in hiring a foreign worker are either paid for by an employer or a worker. That means vulnerable and often poverty-stricken workers coming into Malaysia from some of the poorest communities in the world continue to be burdened by these costs and end up in debt bondage, systemic forced labour, and hence modern slavery.

The new administration should consider the risks to vulnerable workers of securing and regularising foreign labour quickly to satisfy its industry constituents. The faster recruitment and regularisation are done, if corruption is not addressed, will result in greater risks to prospective workers and employers.

If the new administration doesn’t control spiralling costs by effectively revising migrant worker policies, ending corruption and properly regulating intermediaries and employers, the risks to vulnerable workers of forced labour from debt bondage will increase. Indebted slaves who involuntarily work non-stop in Malaysian companies to pay back their debt will become more commonplace.

This likely rise in abuse of vulnerable migrant workers will undermine Malaysia’s commitment to address forced labour and modern slavery. Malaysia’s economic security and potential for more inward sustainable investment could well be impaired as the international community and a global business community, increasingly concerned with due diligence and prevention of forced labour, retreat.

An effective migrant worker management system requires balancing national, economic and human security priorities of a state. Human security is the right of workers and citizens. Protecting migrant workers from abuse can easily exist alongside a strengthening of national security by minimising corruption and a strengthening of economic security by reducing unnecessary costs on employers.

The challenges for Malaysia in effectively reforming migrant worker management currently start not with ridding the system of “agents”, as the prime minister implied, but with tackling corruption. Then one can address the poor company practices before ridding the system of the often unnecessary, abusive intermediaries. The essential actors remaining after this reform then need to be made more professional.

One way to ensure responsible migrant worker recruitment is by ensuring employers cover all or most of the related recruitment costs for their workers. Then make selection processes for recruitment intermediaries that remain essential to be transparent and objective. Through a closely monitored open tender process, intermediaries get business based on the benefit they provide, and their ability.

There are indeed some ethical recruitment practices already existing in Malaysia and worker source countries. These need to be highlighted and scaled up in economically and practically effective ways.

Irregular worker regularisation processes should prioritise the rule of law and worker welfare. Corruption should end, and unnecessary intermediaries between employers and workers removed.

Finally, Malaysia’s migrant worker policy development processes and implementation systems need reform. Migrant worker policy should be developed and implemented holistically by a governance structure led by the prime minister, without one ministry dominating the discussions and outcomes.

Andy Hall is an independent migrant worker rights specialist.

Background Articles on Current Malaysian Migration Debates

• FMT 11^th Feb 2023: Sub-agents, commissions, bribes and other woes of migrant workers in Malaysia
• FMT 11^th Feb 2023: Implement zero recruitment cost policy to end ‘debt bondage’, says ex-MP
• Malay Mail 9^th Feb 2023: HR minister to stop agencies from monopolising hiring foreign workers
• NST 9^th Feb 2023: Govt to work out best mechanism to hire foreign workers without using agencies
• Vibes 8^th Feb 2023: Govt to allow hiring migrant workers without agents: PM Anwar
• FMT 8^th Feb 2023: Stop using agents to recruit foreign workers, says PM Anwar
• Bernama 22^nd Jan 2023: FMM welcomes foreign worker hiring initiative to meet urgent needs
• FMT 17^th Jan 2023: Relaxed rules for hiring migrants only for 5 sectors, says govt
• Vibes 10^th Jan 2023: ‘Bangladeshi recruitment cartels’ grip must end
• FMT 10^th Jan 2023: Govt’s migrant recalibration scheme to continue till year-end
• FMT 10^th Jan 2023: Approval for foreign labour now takes only 3 days, says Saifuddin
• Malay Mail 10^th Jan 2023: PM Anwar: Putrajaya eases rules on the hiring of foreign workers
• Malay Mail 10^th Jan 2023: PM Anwar to ‘cleanse’ Malaysia’s foreign manpower hiring system by going digital

See also: 21st March 2023: Political will needed to revamp intake of foreign workers in Malaysia.

See also: 26th Feb 2023: Malaysian glovemakers must show ‘no forced labour’ to sell to UK’s National Health Service.

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Two activists involved with Malaysian migrant workers talk about the problems that cause high recruitment costs. Many foreign workers are charged high recruitment fees by third-party agents.

Original article: Free Malaysia Today – Predeep Nambiar – 11th February 2023.

PETALING JAYA: A labour rights activist said Prime Minister Anwar Ibrahim’s call to not use agents to hire foreign workers might be ill-advised, as the real issue lies elsewhere.

Adrian Pereira of North-South Initiative (NSI) said the real issue lies in the recruitment process, which starts with the involvement of “sub-agents” in the country of origin of these migrant workers.

“These sub-agents are part of a larger syndicate of many actors who demand a piece of the recruitment cost. This has gotten out of control. They are not on the radar,” he told FMT.

Pereira said the sub-agents dictate and broker what fees need to be paid, holding the migrant worker and the agent at “ransom”.

Pereira said Malaysia needs a comprehensive law or agreement with the migrant workers country to clearly define and cap recruitment fees.

At the same time, he said there was a need for Malaysia to update laws and bilateral agreements in line with the International Labour Organization (ILO) principles to ensure recruitment costs were not passed back to workers.

Pereira said the government should streamline all migrant worker applications under the human resources ministry instead of the home ministry.

“This alone could solve 90% of the forced labour problems,” he said. “It is not late for the Anwar administration to do so.”

There should also be no conflict of interest among bureaucrats, or politicians with a special interest in recruitment companies.

“Mismanagement in the various ministries and the privatisation of services are the cause of failures here, as there is someone always profiteering,” he said.

Migrant activist Andy Hall said another reason for the high recruitment cost is the “commission fees” charged by intermediaries in Malaysia for flight costs, hotel stays and leisure activities for agents at the source country being passed off to the incoming migrant worker.

“If the new administration doesn’t regulate the agencies, employers and third parties, extortion will be rampant and the risks of forced labour from debt bondage will increase,” he said.

“What’s important is to stop the payments of commission or bribes to Malaysian human resource staff, agents and recruitment intermediaries by source country agents or other intermediaries.”

‘‘Employers should insist on recruitment agencies overseas being transparent, so only the ethical and professional ones are used to hire workers.’’

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

See also: Malaysian government to probe unethical labour practices.

See also: 10th July 2023: Migrants in Malaysia: Hundreds left stranded in recruitment scam.

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