DUBAI: South Asian migrants working in the multi-billion dollar construction industry in Arab 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.
A slide in oil prices has slowed down the pace of construction in the Gulf and affected governments’ abilities to pay for major infrastructure costs, but there is still strong demand for millions of low-wage construction workers. Qatar is investing heavily in the construction of stadiums for the 2022 World Cup.
Dubai is building up a vast desert area that will be the site of the 2020 World Expo.
In order to reduce the cost of labor on mega projects, a weakly controlled 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 to $5,200. Indian migrants are paying an average of between $1,000 and $3,000.
The study describes it as a “perverse business model.” Rather than providing an opportunity for decent pay and a better livelihood, construction industry practices across the Gulf are pushing workers into extreme debt and exacerbating abuses, such as an inability to change jobs or move to another country due to indebtedness.
“Companies should strive to be in compliance with local law in areas where they are operating,” said David Segall, one of the authors of the report. “As we’ve seen in other industries, the dam holding back reputational damage tends to break suddenly and without warning and irreversibly so I think it would be to construction companies’ benefit to come ahead of the curve on this one.”
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 members of the Gulf Cooperation Council: 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 Asia, 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.
The Stern Center for Business and Human Rights, which advocates for business practices that abide by human rights standards, receives funding from NYU’s business school, foundations, individuals and companies.