Recruitment Costs, Debt Bondage and the Impairment of Asian Migrant Workers’ Rights

The rights of migrant workers start eroding even before their journey begins. Workers, particularly low-skilled, rely on a recruitment industry charging them hefty fees. When their journey starts, migrants have often incurred in substantial debt, forcing them to work for a considerable period of time to repay it. In such cases, workers’ rights are in peril due to a lack of freedom to exercise them.

The paper starts by identifying the costs charged to Asian migrant workers, especially agency fees, and discusses the working visas’ market and the inducement payments for contract renewal and agency selection. After exploring their financing strategies and the reasons they create a cycle of debt, the paper highlights different regional initiatives to prevent such cycle and subsequent debt bondage. Besides governments fixing maximum charges, the paper considers the shortcomings of conventional banks in dealing with migrants’ needs and the operation of specialized financial institutions charging low interest rates for collateral free loans. The paper continues with an analysis of the restraints to the exercise of rights in a debt bondage situation and contends they are aggravated when private sponsorship systems operate. In order to break away from the debt cycle, the paper argues in favor of government-led recruitment processes, supplemented by ethical recruitment policies applied to the private sector applying “no fee” policies.

The Asian experience can be useful for Europe, embarking in some sponsorship-like schemes, as it shows alternative ways precluding money from being a determinant factor in the enjoyment of migrant workers’ rights.