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Know Your Agents…And Their Agents

Many companies that hire migrant workers rely on the fact that their labour agent is a licensed entity with a government licence to operate.

However, in many cases, that licensed agent will use unlicensed and unscrupulous ‘sub-agents’ to undertake the initial recruitment work for them. This is often done in remote towns and villages and can be associated with high risks of bonded and forced labour practices.

In this short article, James Sinclair explains the role of sub agents and the risks they pose to ethical labour supply chains.

At the FLA we frequently hear companies say that they have confidence in their labour agent as they are a well-established, licensed entity with a strong track record. The company may send auditors to inspect the agent. When they do, they will usually find a well-run office with appropriate paperwork filed in appropriate filing cabinets.

However, they may not be aware that their agent probably had little to do with the recruitment of their workers.

Many labour agents in source countries operate something akin to a franchise model. They will maintain a network of informal sub-agents, who are resident in remote communities. The recruitment process may then run something like this;

The sub-agent will keep a look out for potentially suitable recruits for overseas work. Such work is often perceived as relatively lucrative when compared with locally available work and this fuels the busy migration corridors, particularly those linking Asia and the Middle East.

When a sub-agent identifies a potential recruit, they will approach them with a speculative job offer, for example a security guard job in a hotel in one of the fast growing countries of the Middle East. They may even be able to produce some fraudulent paperwork about this ‘job’. The recruit is told that, to secure the role, they must pay a deposit, usually around $1,000 to the sub-agent and submit their passport and other documents. The bulk of this money and the documents are then passed to the main, licensed, labour agent. The recruit will be added to the list of potential candidates for overseas work.

When the call comes in for more migrant workers, the agent will again activate the sub-agent to contact the recruit. The balance of the ‘recruitment fee’ will then be demanded (fees vary depending on the type of work, destination country and skill levels of the recruit but usually sit in a range between $1,000 and $5,000). Such fees are banned in almost all labour source and destination countries, but remain very common.

If the recruit does not have the funds to pay the fee, and many will not, they will source the funds from a local money lender, sometimes linked to the labour agent. Rates of interest on such loans are reported to be in the region of 40% per year.

The fees and interest can take the worker many months or years to repay, reducing the amount of remittance they can send to their family, who may be reliant on such funds. It also acts as a lever of coercion, as workers fear losing their jobs, and being saddled with an unpayable debt, if they complain about their working conditions.

This illegal practice is known as bonded labour and it is a real threat both to the human rights of workers, and to the reputations of companies who hire workers exploited in this way.

At the FLA we can help companies spot the signs of unscrupulous agents and sub-agents. We can advise on how best to engage migrant work forces, so that they are selected on merit, recruited fairly and deliver high quality outcomes for their employers.

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