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Indonesia's scrapping of placement fees for migrant workers welcomed - except by agencies, employers

South China Morning Post - September 27, 2020

Raquel Carvalho – Indonesian migrant workers will no longer be required to pay their own placement and training fees under new regulations being introduced by Jakarta in a move that has been welcomed by workers and advocates alike, but that has Hong Kong employment agencies arguing it will make hiring domestic helpers from the country too expensive.

Domestic workers from Indonesia have been charged about 15 million Indonesian rupiah (US$1,007) to secure a job in the city, though "in reality" many end up paying double that amount or sometimes more, according to Sringatin, chairwoman of the Indonesian Migrant Workers' Union, who like many Indonesians goes by only one name.

"It depends on the recruitment agency," she said. "Some agencies even borrow money on behalf of the Indonesian workers and then we need to pay to the debt collector."

The new regulations, which Indonesia's government approved in July, are expected to be implemented within six months.

"The aim is to protect Indonesian migrant workers from problems caused by their inability to afford the high cost of placement fees. Migrant workers often deal with financial problems like heavy debts in their effort to pay placement fees, which puts them in a helpless situation," said a spokesman for the Indonesian consulate in Hong Kong.

The list of migrant workers who will no longer need to bear placement costs includes, among others, domestic workers, carers, chefs and seafarers on fishing vessels.

"The regulation further stipulates that the cost of such placement will be borne by the government of Indonesia and the respective job provider or [employer]," the spokesman said.

Sringatin said workers appreciated the move, but there were concerns about how it would be implemented. "Since 2012 the government introduced limitations on agency fees, but many workers continue to pay excessive fees," she said.

Hong Kong hosts about 400,000 foreign domestic workers, most of whom hail from the Philippines and Indonesia. Studies conducted in recent years have shown that indebtedness because of excessive agency fees is a major reason such workers remain vulnerable to abuse.

A 2017 undercover investigation found that more than 70 per cent of employment agencies in the city charged domestic workers excessive fees, withheld their passports, or otherwise engaged in illegal practices. Many workers take out loans – willingly or otherwise – to pay unscrupulous agencies and often also end up being charged excessive interest rates.

Sringatin said there needed to be clear guidelines for the implementation of the new rules. "We want to know the details about how the migrant workers can access justice if some violation happens during implementation," she said. "We know that some agencies will still ask the domestic worker to borrow money in Hong Kong and the domestic worker will still be the one who pays the full fees in the end. How can the victim get justice?"

She called for a more straightforward complaint mechanism to be set up in Hong Kong with the collaboration of Jakarta and local authorities, responding to workers' claims within a specified number of days.

Sringatin further suggested doing away with agencies as intermediaries and considering a system of direct hiring instead.

Teresa Liu Tsui-lan, chairwoman of the Association of Hong Kong Manpower Agencies, said the new regulations would make the hiring of domestic workers from Indonesia more difficult.

"Currently, we charge about HK$11,000 (US$1,419) to the employer. But [under the new terms] we will have to charge some HK$18,000 to HK$22,000 to employers for workers with no experience," Liu said. "We don't know if they will still be willing to employ Indonesian workers. It's not fair for Hong Kong employers."

Liu said that workers should be willing to cover the costs of finding a job in cities like Hong Kong. "You need to get training and show you are qualified to work in Hong Kong. Of course you have to pay certain fees. It's not fair for the employer to pay for everything," she said.

"We hope our Labour Department will discuss this with the consulate and the Indonesian government, because we do not accept these terms."

A spokesman for the Hong Kong Labour Department said they were in "close liaison with the Consulate General of the Republic of Indonesia to learn more about... their government's regulation on the abolition of placement fees for Indonesian migrant workers to be implemented in January 2021."

At the same time, he said the Labour Department had also contacted employers' groups and employment agency associations for their views and concerns over the new regulation.

The Hong Kong government "attaches great importance to safeguarding the employment rights of foreign domestic workers, as well as providing support to employers," the spokesman said. "The government will strive to maintain Hong Kong as an attractive place for foreign domestic workers to come to work and meet the demands of local families."

Meanwhile, Taiwan's Ministry of Labour said early this month that foreign governments should not decide on labour agreements between their nationals and Taiwanese employers, the Taipei Times reported. It said that expenses, such as air tickets, training and visa fees, should be agreed upon by the employer and worker, not the government in the worker's country of origin.

David Bishop, a principal lecturer in accounting and law at the University of Hong Kong who is a founder of the non-profit organisation Migrasia that seeks to support solutions to migration-related issues, said that the new regulations offer further protection to migrant workers.

"Anyone who cares about the human rights of the workers is very excited about this news, because this meets the international standards set by the International Labour Organisation and the International Organisation for Migration," he said.

"Workers have been paying for jobs... In the past, the men and women leaving Indonesia seeking a better life elsewhere have been taken advantage of. The new regulations put the burden on the party that benefits the most, the employers, who are also in the best position to shoulder those costs. It's a good shift of incentives."

Bishop noted that employers already had to pay a fee and the new terms "should not impact them very much". He rejected introducing direct hiring, however, as he said this carried the risk of encouraging human trafficking.

"The answer is not to remove the agents. They are important and [exist] for a reason, notably to protect both employer and employee in a transaction that's highly risky for both sides," Bishop said. "The answer is to enforce the law and hold agents accountable if they breach their fiduciary obligations."

Betty Wagner, case manager at the non-profit group Help, said the new regulations to be introduced by Jakarta could bring positive change.

"Migrant domestic workers are already burdened with many concerns such as supporting their families back home. Any move to lighten this burden is a welcomed change and a step in the right direction," she said.

Wagner said she had seen many cases where domestic workers remain in abusive or exploitative conditions because they fear losing their wages.

Removing placement fees is "a recognition by the Indonesian government of the undeniable contribution made by overseas domestic workers to the economic development of Indonesia," the support worker said, adding it "would be an important step in protecting migrant domestic workers from exploitation and abuse".

Source: https://www.scmp.com/week-asia/economics/article/3103122/indonesias-scrapping-placement-fees-migrant-workers-welcomed