BE2C2 Report (Updated) — South Asian workers employed in the multi-billion dollar construction industry in Gulf countries are shouldering the costs of their own recruitment fees while companies and their clients are reaping the benefits from inexpensive labor, according to a study released Tuesday.
The research by New York University’s Stern Center for Business and Human Rights found that workers spend an average of 10 to 18 months’ worth of salary paying off the fees that help facilitate their migration.
In order to reduce the cost of labor on mega projects, a weak system for recruitment is passing on the costs to the workers themselves, says the study.
Workers from Bangladesh are paying the highest fees in the world. Bangladeshis earning just a few hundred dollars a month in the Gulf are paying recruitment fees ranging from around $1,700 and $5,200. Indian migrants are paying an average of between $1,000 and $3,000. A similar scenario prevails for invariably all Pakistani migrant workers, a BE2C2 study revealed.
In a related note, Sri Lankan recruitment offices have nearly doubled the fees they charge from Saudi Arabian agencies recruiting Sri Lankan housemaids, according to a Saudi recruitment official quoted by a local daily. Sri Lankan recruitment offices have raised their housemaid recruitment fees by about 92 percent from US$ 1,560 to US$ 3,000 in disregard to the official agreement.
The Stern study describes it as a “perverse business model.” Rather than providing an opportunity for decent pay and better livelihood, construction industry practices across the Gulf are pushing workers into extreme debt and exacerbating abuses workers are likely to face, such as an inability to change jobs or move to another country due to indebtedness.
David Segall, and his co-author Sarah Labowitz, say construction firms and their Gulf-based clients can help “end the cycle of abuse” by paying for the recruitment costs of construction workers who are needed to build the region’s skyscrapers, stadiums, hotels, theme parks and sprawling malls.
The report, titled “Migrant Workers Pay: Recruitment of the Migrant Labor force in the Gulf Construction Industry,” details how workers are exploited through a complex system of agents and subagents who gross hundreds of dollars in profit per worker. Workers are paying several times more than the real cost of recruitment, which is closer to $400 to $650 , excluding the cost of airfare.
It calls on Arab governments to enforce laws against the selling of visas and on migrant-sending countries to legalize and regulate their local networks of unregistered recruitment agents.
There are laws in place banning Gulf-based employers from directly charging migrant workers for their own recruitment. Selling visas is also illegal in the six Gulf Cooperation Countries (GCC) of Saudi Arabia , the United Arab Emirates , Qatar , Kuwait , Oman and Bahrain.
The study found that governments in the Gulf provide migrant worker visas to multinational and local construction companies for free or at a nominal cost, but Gulf-based agents turn around and sell them at a markup to recruiters in South Asian countries who then pass on the cost to the lowest-paid and most vulnerable workers.
There are around 25 million migrant workers across the GCC, in some countries outnumbering the local population. Often hailing from South Asian countries, the workers accept low-wage jobs with few protections for a chance to send money to relatives back home. They are allowed to return for a visit once every few years.
“At the end of the day, most of these people are coming for a very simple reason: They’re coming for a better life,” Segall said quoted AP.