There has been much discussion about a new worker recruitment memorandum of understanding (MoU) recently signed between Bangladesh and Malaysia. Reports suggest that under this arrangement, only 25 Bangladeshi recruiting agencies will be authorised by Malaysia to recruit Bangladeshi workers for Malaysian employers.
While some positive features contained in the leaked draft of the MoU suggest employers may cover some recruitment related costs incurred in Malaysia, all the costs of recruitment in Bangladesh are said to be borne by the workers. Also of concern is that Malaysian recruitment agencies are required in the recruitment process and financial deductions from worker’s salaries can be made for certain costs.
The actual MoU signed between the two countries has not been published, nor its terms and conditions clarified. This is despite Malaysia’s commitments in its recent National Action Plan on Forced Labour to promote more transparency on migrant worker recruitment issues.
Lack of transparency means there are fears, denied by some, that the system being developed under the MoU will reestablish an illicit syndicate to manage recruitment between the two countries. Due to alleged corruption that will result from the selection of agencies, this could increase migration costs for workers that will, in turn, result in debt bondage and systematic forced labour.
As is seen in different contexts around the world, it has become normal to pass the extortionate and unregulated recruitment costs from employers onto workers. This is despite international standards, increasingly adopted by investors, buyers and brands, stating that almost all of the costs related to ethical recruitment and employment of migrant workers should be borne by their employer.
A willingness of workers to pay exorbitant and often unregulated recruitment costs can result from intense competition for overseas jobs in their home countries, like Bangladesh. High levels of unemployment stemming from a lack of job opportunities as well as civil, economic and political strife are also enabling factors.
Recruitment costs are too often covered through high interest loans that lead migrating workers into situations of debt bondage. The pressure to repay debt which workers have incurred to migrate overseas limits their future choices. For many workers, returning to home countries with continuing debt is not an option, even though they remain exploited in countries like Malaysia. Workers hence end up bonded in forced labour or modern slavery.
For years, migration between Bangladesh and Malaysia has been under scrutiny. Malaysian authorities have halted recruitment from Bangladesh no less than 5 times in 20 years. Every time migration between the countries is stopped, accusations emerge about various types of fraud committed by influential persons and agencies. High costs have always fallen on the workers.
In November 2012, Malaysia signed a bilateral deal with Bangladesh for direct government-to-government recruitment of workers. The aim was to reduce migration costs by reducing the role of private recruitment intermediaries. However, under this model, ultimately undermined by the private recruitment sector, only 10,000 Bangladeshis were recruited into the plantation sector.
In response, in early 2016, the two governments agreed on a new “G2G Plus” system. This led to a two-year cartel in which ten recruitment agencies conducted recruitment at extortionately high costs. In 2018, when the manipulation in this recruitment procedure became more public, it was stopped. But around 220,000 workers had already migrated to Malaysia at an average cost of around $5, 000.
Malaysian companies as well as investors and global brands also became embroiled in the abusive recruitment between Bangladesh and Malaysia, with their reputation and profit margins suffering. The US deemed those recruited from Bangladesh as victims of forced labour, owing to debt bondage. This led to Malaysian companies paying back recruitment fees to ensure they could continue to export to the US. Bangladeshi workers were remediated 18,000 RM to 20,000 RM per person.
All those involved in migration between source countries of workers like Bangladesh and Malaysia whether governments, recruiters, employers and buyers or investors should ensure if manpower agencies are used in recruitment, they are chosen and regulated through a transparent process. Selection can be based on proven track record to professionally deliver ethical recruitment alongside value for money.
Workers, employers, buyers, consumers and investors would all benefit from this. Risks of human rights abuses and negative impact on business would also very much be reduced.
This scenario is seemingly not playing out now, however. Instead, manpower agencies chosen to be part of a syndicate across the Bangladesh-Malaysia migration corridor will likely again be chosen based on ability to pay off syndicate leaders who were implicated in previous mismanagement of recruitment that led to earlier exploitation and forced labour of workers.
This is nothing new, as all stages of the foreign worker recruitment process into Malaysia have allegedly been mired in corruption and abuse that has implicated the top levels of governments in both Malaysia and in worker’s source countries.
Constructive action is needed by the international community of investors, buyers, brands and their suppliers, all doing business in Malaysia, to raise their voices about abusive foreign worker recruitment. They should all be prepared to boycott all recruitment of workers from Bangladesh or other countries to Malaysia conducted through syndicates and processes that are not transparent, free or fair and that lead to debt bondage and forced labour.
Recruitment of workers from Bangladesh or other countries to Malaysia under a syndicate cannot adhere to basic corporate governance standards requiring free and fair competition. Governance is a central part of ESG principles that international actors are required to comply with. The repercussions will be felt, on companies’ bottom lines and on the country’s reputation, sooner or later.
Or course, a corporate governance standpoint is not going to help workers abusively recruited into smaller companies, where employers need not adhere to ESG principles. Already SMEs have stated they would not bear high costs of migration for workers they desperately need under a non-binding MoU.
The international community should therefore stand firm against unethical recruitment, demanding a revision of how any recruitment schemes work to ensure they are open, fair, free of syndication.
Most importantly, recruitment costs should be wholly or for the most part covered by employers (and their buyers, brands and investors) and not placed as a burden on the workers themselves.
The reopening of recruitment from Bangladesh and other countries to Malaysia’s labour starved economy at this time is a real opportunity for the positive reform envisaged in Malaysia’s recently developed National Action Plans both on Forced Labour and Business and Human Rights.
The international community should hold the Malaysian government and its private sector to these commitments which are not consistent with a syndicated recruitment process where extortionate costs are borne by impoverished, bonded workers who again become victims of modern slavery.●
Andy Hall is an independent migrant worker rights specialist who can be contacted at @atomicalandy.