This article first appeared in The Edge Malaysia Weekly on October 30, 2023 - November 5, 2023

THE conclusion of the independent committee’s report on the foreign worker system highlighted what everyone already knew but about which not many were willing to speak out — that the government should undertake and effectively implement a revamp of the national foreign worker management system.

The main reason why Malaysia itself is in disarray when it comes to the foreign worker management system is the lack of a single government entity mandated with implementing a coherent set of policies within the strategic framework for the management of foreign workers, noted the committee.

Over the years, activists and employers alike have called for a revamp in order to protect the welfare of migrant workers and to stem corrupt practices within the system. But there has been little progress.

Nonetheless, it is interesting that the call this time came from a study commissioned by the government itself in 2018, which some say is an acknowledgement of sorts of the issues faced by the industry.

The committee also emphasised that the strategic framework underlying the policies to reform the foreign worker management system needs to be a comprehensive and holistic one and hence should not be done in a piecemeal manner, in order to avoid or delay the parts that are likely to face resistance.

“If undertaken in this manner, the result is likely to be a return to the current directionless and dysfunctional system. The failure to act and demonstrate political will to fully implement the recommended reforms in its entirety is not an option,” it warned.

It also said that the government must secure sufficient buy-ins from stakeholders and continue to stay the course when faced with resistance and pushback from certain stakeholders.

“The government is likely to face resistance from powerful vested interests, especially those who have knowingly participated in profiteering, rent-seeking, monopolistic and non-transparent administrative arrangements at the expense of the government, employers and workers. Resolute actions would be needed to identify any wrongdoings and to seek redress,” it added.

A comprehensive revamp of policies seems to be a long time coming for many stakeholders, as the committee highlighted that the stakeholders that they have interacted with have high expectations of an effective management system of foreign workers.

It recommended that immediate steps should be taken to give the Ministry of Human Resources (MoHR) sole responsibility for the foreign worker management system. It ought to be a cabinet decision and would include the reversal or variations of previous decisions on the responsibilities of other agencies in the area of foreign worker policies, it said.

According to the committee, putting the responsibility in the hands of the MoHR makes sense because its existing mandate involves expediting the labour market needs of the economy and oversight of industry compliance with employment laws and alignment with international norms and practices.

Adrian Pereira, executive director and co-founder of North South Initiative, says plans to give the MoHR responsibility to manage the foreign worker system had been in the works but somehow failed to materialise.

“We were all very excited and waiting for it throughout 2022, and hoping that when Prime Minister [Datuk Seri] Anwar Ibrahim came into office, it would be done. But he reverted it back to putting MoHA (Ministry of Home Affairs) in charge.

“We realised that there could either be gross incompetence in the government or there are some people in the deep state who are making a lot of money from this. It is mind-boggling. There is also a high possibility that the prime minister was misled to revert on this policy,” he claims.

Our Journey director Sumitha Shaanthinni Kishna, who provides legal representation to migrants and refugees in labour, immigration and criminal cases, also emphasised that only MoHR should be in charge of the process of approving and managing migrant workers.

“Of course, we need leadership in MoHR who have the political willpower and good knowledge of labour issues to derive such policies, including the ability to revamp the current recruitment system to prevent agents, employers, touts and unlicensed third parties, including government officials, from partaking of and making money from the system,” she stresses.

The recruitment process of foreign workers is known to be complicated. International Labour Organisation’s (ILO) principle dictates that migrants should not pay for any of the recruitment fees and that it is the responsibility of the employer to foot the bill.

“The cost can be complicated as well — passport, training, local transport, even a meal or transit hostel is also included in recruitment fees. In the event that the migrant has paid the fee, the remediation process begins — that is another business by itself. The company in charge of the remediation will do some data collection and give an average proposal to the employer to pay back the migrant,” says Pereira.

According to him, the amount in recruitment fee collected from a Bangladeshi worker is between RM20,000 and RM25,000 while a Nepali pays half as much, or between RM10,000 and RM12,000.

“The money goes to various pockets; the main people will be the recruitment agents on both sides of the border. But then, there is also the element of corruption, so there are definitely government officials involved, those who approve the quotas. We suspect that people at the highest levels in the ministry are involved but we don’t have the paper trail,” he concedes.

Pereira says his investigations also found kickbacks being paid to human resources managers in companies when a deal was struck with the recruitment agents. “There are many rational and criminal purposes that cause recruitment fees to blow up to RM20,000 to RM25,000,” he adds.

The independent committee also recommended that the management of the migrant workers require a holistic online end-to-end integrated monitoring module to ensure comprehensive coverage, verification, data collection and effective monitoring.

Currently, the Foreign Workers Centralised Management System functions as the centralised online system for application for hiring migrant workers from all origin countries. It links various stakeholders involved in recruitment, management and monitoring of migrant workers in Malaysia.

Nevertheless, Sumitha says the applications are complicated and time-consuming, so much so that employers still use agents to manoeuvre the system.

“Even though the application process saw improvements through the introduction of online systems, there were, however, several unrelated online systems that were deployed. The online systems also do not have completely integrated modules to conveniently accomplish the multiple-step processes involved in the application, recruitment, renewal, replacement and repatriation stages in the administration of foreign workers,” said the report.

Pereira says some recommendations made by the committee were great and would require follow-ups, for example the recommendation of an immediate post-mortem parliamentary White Paper study on undocumented workers with particular focus on rehiring, vendor abuse, exploitation and malpractices, including illicit collection of fees, appointment of multi-tier brokers, breaches of Immigration and Ministry of Home Affairs (MoHA) ICT system operations, and rampant ministerial approval of quota to non-qualified rent-seekers.

The other recommendation highlighted by activists that they say should be followed through is for an immediate transition committee to be formed and to begin the process of transferring the management of foreign workers’ recruitment, retention and repatriation from MoHA and other ministries and agencies to MoHR.

The report also recommends that the one-stop centre be immediately transferred to MoHR. It is currently under the purview of the MoHA.

The centrepiece of the committee’s recommendations is the implementation of a Multi-Tiered Levy System (MTLS) to eliminate discretion and delays in the foreign worker approval process as well as widen revenue collection.

According to the committee, the MTLS will revolve around the Dependency Ratio Ceiling (DRC) comprising foreign workers over the total workers in the respective sector based on historical five-year averages.

The various thresholds of DRC will serve as tiered limits in foreign worker employment, with employers having to pay higher levies the higher their DRC.

The additional revenue collection envisioned from the MTLS will enable the development of an efficient end-to-end online foreign worker management system and database, according to the committee.

Sumitha adds that the purpose of the levy, according to the government, was to deter the intake of migrant workers. But with the growing number of migrant workers in the country today, the purpose no longer holds water.

“Many civil societies in this field will tell you that a significant number of migrants are still paying the levy, defeating the purpose of the levy. Having differing levy payments for different sectors has also been abused by employers and agents where we see many migrants in other sectors holding plantation and agricultural work permits — which is the lowest levy paid for a formal sector. I would rather call for the abolition of the levy since it contributes to migrant workers being in debt bondage with the employer, which equals forced labour,” she suggests.

At the heart of it all, the committee is right in pointing out that a comprehensive revamp of foreign worker management is needed in the country.

“A comprehensive national policy is a must or nothing will change as there are too many stakeholders who want to profit from the sweat and blood of migrants,” says Pereira.

But decades on and millions of foreign workers later, do the powers that be have the will, courage and determination to finally do the right thing? 

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