Singapore's Kafala System

Qatar is facing intense heat from FIFA, the UK as well as several international human rights’ organizations for the widespread reports of migrant worker abuses by contractors working feverishly on the construction of stadia, hotels and infrastructure for the football World Cup to be held there in 2022. Shockingly, 400 labourers from Nepal and another 700 from India have already died working on these projects since the World Cup was awarded to Qatar in 2012. It is estimated that the death toll will reach an astonishing 4000 by the time the opening game kicks off in 2022. The International Labour Organisation has issued a stern rebuke to Qatar and has requested remedial measures be put in place as a matter of priority.

As well as Qatar, several Arab Gulf States adopt the kafala system in which an employer sponsors migrant labourers by applying for visas and work permits and consequently assumes responsibility for them economically and legally for the duration of their contract. This gives employers a feeling of “ownership” over the labourers and is the root of all manner of abuse including the confiscation of passports, non-payment or withholding of salaries, restriction of movement, inhumane work conditions, and unreasonable work demands. Many workers claim that contracts signed in their home countries are torn up when they land in Qatar. There is also little legal recourse for these vulnerable workers who are at the mercy of the employers.

The kafala system essentially makes the workers modern day slaves as they are unable to change employers, or in some cases, even terminate their contract and return home. Workers are beholden to their contracted employer who may wield unethical power over them particularly as the workers would have assumed debts from high agency fees or commissions paid to secure employment in Qatar.

Significantly, the kafala system is structured to ensure that workers do not apply for other jobs while in Qatar and that employers avoid competing domestically for these migrant workers. This reduces, or preserves, the market price of migrant labour and eliminates any leverage the workers may have in improving the terms of their employment.

Reading about the kafala system, one wonders if it is in fact describing the Singapore system of managing migrant workers. In addition to the components of the kafala system, the Singapore government also requires bonds be placed by employers for their migrant workers to ensure that the employers are penalized for their offenses or the delinquent deeds of their employees. This, obviously, causes nervous employers to shorten and tighten the leash on workers to a stranglehold. Whilst parents in Singapore are not legally liable for the actions of their own children, they are for the behaviour of their adult maids. Domestic workers routinely have their passports withheld, are subjected to humiliating mandatory pregnancy tests and have little to no privacy whilst being on call 24/7 as the award-winning local film, Ilo Ilo, illustrates.

Singapore received a most unflattering coverage in the U.S. 2013 Trafficking in Persons report (TIP) in which it was ranked as a Tier 2 country, which are:

“Countries whose governments do not fully comply with the (U.S.) Trafficking Victims Protection Act minimum standards, but are making significant efforts to bring themselves into compliance with those standards.

Qatar, like Singapore, is also ranked as a Tier 2 country. In fact, the reports of these two countries appear to be facsimiles of each other—except with respect to the trafficking of sex workers, which is a blemish Qatar does not share with Singapore.

In November 2012, the Singapore government made amendments to the Employment of Foreign Manpower Act (EFMA) to strengthen protections for the more than one million foreign workers by increasing both administrative and judicial penalties against errant employers as well as by giving increased powers to the Ministry of Manpower in investigating complaints.

The Acting Minister of Manpower, Tan Chuan-Jin, said then in parliament:

“… we have found some (employers) declaring higher salaries than they are actually paying their foreign workers, asking foreign workers to foot their own levies and insurance premiums, or contributing CPF to locals that do not really exist or are not actively in their employment in order to meet the required ratio of local to foreign workers, and submitting forged certificates to qualify for skilled work passes.

It is uncertain why the Ministry waited till 2012 to take such measures when local NGOs have reported the same malpractices for at least a decade prior to it.  In any case, these measures it would appear have been ineffectual based on conviction rates. The 2013 TIP report states:

“The (Singapore) government investigated more than 400 leads, yet it substantiated only 21 trafficking cases during the year; the lack of a law defining trafficking in accordance with international standards and inadequate capacity in interviewing victims thwarted law enforcement successes and left many victims without access to full government protections, including work permits or change of employer.

All of the above-mentioned trafficking cases related to trafficking of sex workers. Sadly, the report adds:

“The government has never prosecuted or convicted a labour trafficking offender.

Tan in concluding his speech made the following grandiose statement:

“This Bill also seeks to stem the worst abuses against foreign workers. This is in keeping with our values as a society, that we believe all our workers should be treated fairly, decently and with respect regardless of their nationality.

It is unclear if these values he speaks off are new ones to be adopted as we move forward because the situation with respect to migrant workers in Singapore is as dire now as it has been for a very long time. In some cases, the pro-employer government has been complicit in creating the current situation through a variety of means ranging from ignorance, inaction, and in some cases even creating new regulations specifically to allow abusive and unsafe practices to continue and so that employers cannot be prosecuted.

Notably missing from the reforms announced by Tan is a requirement for business owners to issue payslips to workers. In a separate speech in parliament last year, he explained that making such a practice mandatory would prove to be too onerous for small businesses and increase administrative costs. NGOs complain that migrant workers are often unable to provide proof during wage disputes because their companies do not issue payslips. 

As one of the largest users of migrant labourers are Government-Linked Companies, the government arguably stands to benefit most from exploiting them, ensuring the costs of hiring labourers remains low, and keeping welfare expenses to the minimum. The GLCs, to ensure that they are not directly involved in the sticky business of employing and being liable for these labourers generally choose to maintain a sufficient distance by subcontracting labour services to smaller companies. These small companies, squeezed from every direction, ultimately are the main stooges in the abuse of migrant workers. The GLCs, in the meanwhile, claim ignorance and express shock in the face of accusations as such abuses are completely contrary to their corporate values.

Meanwhile, multinational companies such as Apple, Nike, and Adidas who also subcontract work to companies are routinely taken to task and are held culpable for abuses by their subcontractors even in faraway jurisdictions such as China, Pakistan and Bangladesh. To their credit, most of these companies acknowledge their responsibilities and attempt to ensure that contractors fulfil standards far more onerous than that mandated in these countries in order to be awarded manufacturing and service contracts.

The Singapore government also profits from the employment of migrant workers by charging a levy of between $250 and $750 per worker per month. This amounts to an estimated total revenue of around $4 billion a year—the entire national budget surplus for 2014. 

The ever increasing levies are charged on the pretext of using cost as a deterrent to the employment of foreign labourers, the protection of local workers, and the need to improve productivity. However, the government contradicts itself by stating that in many cases foreign labour is a necessity in Singapore. Either way, it makes $4 billion a year on the backs of foreign workers with very little of it going to the worker in terms of welfare and support services or gratuities. It would be hard, therefore to dispute those who liken this practice to the methods of shameful middlemen in another unsavoury trade. 

It has recently come to light that 15 Bangladeshi workers employed by Pasir Ris-Punggol Town Council were accommodated in a 5-room HDB flat—a clear violation of HDB regulations.

HDB owners who sublet their flats are required to register the names of all tenants with the HDB which sets strict limits on the number of tenants in a flat. Although the Town Council and HDB will deny knowledge of this incident, it is clearly in their interests for workers working in the district to live nearby rather than dormitories as these workers are often at the beck and call of the Town Council management. Presumably the management has on its records the addresses and contact numbers of its workers and yet was unable to detect this illegal activity. It is unlikely that this is an example of an isolated incident involving one transgressing employer. It would be interesting to see what occurs as a result of this evidence being made available, how vigorously the issue is pursued, and which parties are ultimately held responsible.