china recruitment fees - ihrb.orgenormous 36% of china’s workforce (china labour bulletin, 2015)....
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TWC2RecruitmentCostsResearchWorkingGroup
ResearchBriefMigrantWorkerRecruitmentCosts
China
JiangHaolieJuly2016ThePeople’sRepublicofChinaisamajorcountryoforiginforlow-skilledmigrantworkers,whileatthesametime,itisalsoanemergingcountryofdestinationforirregularandfrequentlyundocumentedlow-skilledlabourfromneighbouringcountries.Themigrationtrendsaretheresultofrapideconomicdevelopment and the labour overcapacity of themassive Chinese population. Unequal economicprosperityandopportunityinChinahasalsocontributedtomassiverural-urbandomesticmigrationfromtheruralinnerterritoriestotheindustrialisedcentresofthecountry.Inadequatelegislation,poorenforcementofexistinglawstoregulaterecruitmentfees,complicatedbythegeographyofChina,andthemagnitudeandcomplexityofthelabourmigrationmarket,resultsinprevalentandexorbitantrecruitmentfeesinChina.
RecruitmentCosts–China,July2016 Page2of15
Background
TheThreeMigrationFlows
AsmuchasthePeople’sRepublicofChinaisanundisputedeconomicpowerhouse,itsGDPpercapitaat
$14,107in2015,the84thintheworld,isindicativeofserioussocialinequalityandconcomitantsocial
problems.(InternationalMonetaryFund,2016)
ThemassivebutuneveneconomicdevelopmentandgrowthofChina’surbancentres,togetherwiththe
labourovercapacityofthe1.36billionChinesepopulation,hascontributedtolargescaleeconomic
migrationoflow-skilledChineseworkers(NationalBureauofStatisticsofChina,2014).Thismigration
takestheformofbothinternalrural-urbanmigrationandoutwardinternationalmigration.Chinahas
alsoseenincreasinginwardcross-bordermigrationoflow-skilledlabourfromneighbouringcountries.
WhileChinahashadahistoricalrecordofbeingagargantuancountryoforiginforlow-skilledeconomic
migration,theeconomicpoliciesinitiatedinthe1980s1havecontributedtoanewwaveoflow-skilled
labourmigrationoutofChinaofsustainedandenormousmagnitude.Asof2015,anestimated0.69%of
allChinesecitizenslivedoutsideofChina–awhopping9.43millionChinesecitizens(International
OrganisationforMigration,2015).Ofthis9overmillion,theUNestimatesthenumberofChinese
internationallow-skilledmigrantlabourat685,000,althoughtheactualnumbersarelikelytobegreater
(UnitedNations,DepartmentofEconomicandSocialAffairs,2012).Singaporeisthesecondmostpopular
countryofdestinationforChineselow-skilledmigrantlabour,afterJapanasof2011(Chan,2011).African
nationsandEuropeannationsaswell,arepopularcountriesofdestination.
Atthesametime,thepoorereconomicopportunitiesoftheChineseruralinteriorhaveprecipitateda
burgeoningrural-urbandomesticmigrationofChineselabourtotheindustrialisedurbancentres.Atan
estimated260millioninthefallof2012,thiscategoryofrural-urbanmigrantworkersmakeupan
enormous36%ofChina’sworkforce(ChinaLabourBulletin,2015).Theseworkers,largelyintheservice
andconstructionsector,faceaglaringlackofaccesstosocialwelfare,suchashealthcareandeducation
benefitsandpensions–theresultofa1950sMao-erapolicyofhukou.Thehouseholdregistration
system,orhukou,tethersaccesstosocialwelfareservicestotheirresidentialprovincesandstatuses,
thuseffectivelyseveringrural-urbanmigrantsfromsocialwelfare(Branigan,2014).Although
governmentaleffortstocalibratethehukousystemhavebroughtalimitedmeasureofalleviationto
rural-urbanmigrantswithsomemigrantsreceivingurbanhukous,morefuturecomprehensivereforms
arebeingdeliberated.
1DengXiaoping’seconomicreformsinitiatedin1978,reversedalongperiodofChineseeconomicstagnationbyintroducingasocialistmarketeconomywithopenaccesstoexternaltrade.ThemarketeconomyhasbeencontinuedbysuccessiveChineseadministrationsandhasledtorapideconomicdevelopmentandresultantsocialchange.
RecruitmentCosts–China,July2016 Page3of15
36.2%oftheserural-urbanworkersareemployedunderlabour-dispatchagencieswhichfunctionasthird
parties,matchingandhiringoutworkerstoemployersundertemporaryshort-termcontracts(Liu,2014).
Labour-dispatchisprevalentinChinawheremanufacturingindustriesrequirelargebulksoftemporary
low-skilledlabourrespondingtoseasonaldemandsandunder-capacity.Theyarepaidlessthan
traditionaldirect-hirelabour,althoughthe2014InterimRegulationsonLaborDispatchandtheir“Equal
PayEqualWork”regulationnowinprincipleprohibitsthis.Asthelawonlycameintoeffectin2016,its
effectivenessremainstobeseen.Workersunderlabour-dispatchalsohavereducedaccesstolabour
protectioncomparedtopermanentlocalstaffduetotheroundaboutemploymentoflabour-dispatch
whichexploitsloopholesinChineselabourlaws.Figure1belowillustratesthelabour-dispatchsystem.
Inthisregard,workersmayseekredressthroughthelabourdisputeresolutionsystem.Enactedbythe
1993RegulationsonHandlingLaborDisputesinEnterprisesandfurtherrefinedbythe2008Labor
DisputeMediationandArbitrationLaw,labourdisputesgothroughafour-stageprocessofconsultation,
mediation,arbitrationandlitigation.Mediatedsettlementshowever,aresaidtobethepreferredroute
amongChineseauthoritiesandlabourcourtinstitutions(ChinaLabourBulletin,2015).
Beyondoutwardinternationalmigrationanddomesticmigration,thegrowthoftheChineseeconomyhas
madeChinaanemergingcountryofdestinationforeconomicmigration.Thisisparticularlysoof
neighbouringBurmese,VietnameseandNorthKoreanmigrantworkers,mostofwhomenterChina
throughirregularandillegalmeans,andhencenaturallyincurheftyrecruitmentfees.TheBurmeseand
VietnamesemigrantstypicallyfindemploymentinSouthernChina,attractedbythepromiseofhigher
wages,whereastheNorthKoreansarescatteredinNorth-easternChineseprovinces.Theproportionof
Figure 1: The Labour-Dispatch System in China
RecruitmentCosts–China,July2016 Page4of15
NorthKoreanlabourhasfallensincethe1990sattheheightofthefamines2,butBurmeseand
Vietnamesemigrantlabourerscontinuetonumberinthe“tensofthousands”3(Skeldon,2011).In
addition,asizeableandincreasingnumberofmigrantsfromAfricanstatesworkintheservicesectorin
China,adevelopmenthighlightedbytheemergenceofan“AfricanStreet”enclaveinGuangzhou(J.Fan,
personalinterview,31July2016).TheestimatedforeignmigrantstockresidinginChinaisestimatedat
978,046in2015(UnitedNations,DepartmentofEconomicandSocialAffairs,2015).
Theissueofrecruitmentfeesisprevalentandsevereinallthesethreemigrationflowsin,outandwithin
Chinaduetotheinadequatelegislation,laxenforcementoflawsregulatingrecruitmentfees,geography
andcomplexityofthelabourmigrationmarket,andexploitationbyrecruitmentmiddle-menwho
facilitatemigrationandemployment–anecessaryevilunderpresentconditions.
2Large-scalefloodingin1995,devastatedlargeswathesofNorthKoreancropsandagriculturalinfrastructure,leadingtowidespreadfamine,fuellingirregularflowsofNorthKoreanlabourintoNortheastChina.3Estimatesareuncertainduetotheunder-reportedandundocumentednatureoftheiremployment.
RecruitmentCosts–China,July2016 Page5of15
Detailsofpolicy
ModesandRegulationofExternalMigration
ExternalmigrationofChineselabouroccursthroughfourgeneralchannels:labourrecruitmentagencies,
directemploymentwithcompaniesworkingonoverseasprojects,migrationfacilitatedviaconnections
withrelativesworkingoverseasandtheirforeignemployers,orlessfrequently,illegalhumansmuggling
syndicates.
TermedasForeignLaborServiceCooperation,migrantlabourrecruitmentagencieshavetobelicensed
bytheMinistryofCommercetosendworkersoverseasandareregulatedunderthe2012Regulationson
ManagementofForeignLaborServiceCooperation(MinistryofCommerceofthePeople'sRepublicof
China,2012).Theserecruitmentagenciesareevolveddescendantsof1950sstate-directed“labour
export”policies4buthavesincebeenprivatised,and,numberingover8005,serveadiverserangeof
industries,fromseafaringtoconstruction.ForeigncompanieshavetoliaisedirectlywiththeseForeign
LaborServiceCooperationagenciesthatwillinturnsourceforandprovideworkers(Chen,2010).These
ForeignLaborServiceCooperationagenciesarealsotaskedwiththevocationaltrainingofworkerswho
havetoundergo40–80vocationally-relatedtrainingsessionstoqualifyforcertificationinordertogo
overseas.
Theseagenciesarelargecorporations,sometimesstate-ownedenterprises,thatoperateontheregional
levelandoutsourcetheimmediaterecruitmentofworkersinthetown,provincialandsub-regionallevel
toalargewebofsmallerintermediaterecruitmentagencies.Theseintermediaterecruitmentagencies,
whichlacklicensestosendworkersoverseas,dealprimarilywiththedirectsourcingofworkers,while
themaincertifiedagenciesmanageliaisonwithforeignfirmsandthesendingofworkersoverseas.Only
thecertifiedagencieshavethelicensetosendworkersoverseas,hencethesmallerintermediate
recruitmentagencieswillhavetorefertheworkersdownstreamtothemaincertifiedagencies.
Uncertifiedorillegalagenciesthatsendworkersoverseashavebeeneradicatedthroughthecombined
effortsoftheMinistryofCommerceandtheauthoritiessincetheRegulationswerepassedintolawin
2012(J.Fan,personalinterview,31July2016).
Itshouldbenotedthatthesmallerupstreamintermediaterecruitmentagencies,whilenotlegitimisedby
thepurviewoftheRegulations,arenottechnicallyillegalfortheyessentiallyfunctionasinformalsub-
contractorsorbrokersofthemaindownstreamcertifiedagencies.Nonetheless,thecorebusinessfocus
oftheintermediaryagenciesis,infact,therecruitmentofworkersforlocaljobs,ofwhichtheyarelegally
4Chinain1950-1970deployednumerousskilledtechniciansaspartof“FriendshipAid”projectstoAfricannations(Politzer,2008)5Sourcedfromthe“ListofInt’lLaborCompanies”onthewebsiteoftheMinistryofCommerceofthePeople’sRepublicofChina
RecruitmentCosts–China,July2016 Page6of15
certifiedtodoso.TheirrecruitingservicesforForeignLabourServiceCooperationagenciesaresecondary
totheirmainbusinessfocus(J.Fan,personalinterview,31July2016).
Thesemainagenciesthemselvesontheotherhandaresubjecttostringentandprohibitivequalifying
standardsfor“certification”orlicensingunderArticle6oftheRegulations6.
Buildingonpreviouslawsmanagingmigrantlabour,theRegulationsprovideaseriesofmeasures
protectingthewelfareofmigrantworkersrecruitedbyForeignLaborServiceCooperationagencies,
mandatingtheagenciestoprovidepersonalaccidentinsuranceforworkers,totracklivingandworking
conditionsofmigrantworkersoverseasandtoassistworkersabroadintimesofdifficulty,amongother
measures7.Unlikeprecursoremploymentagencies,theForeignLaborServiceCooperationagenciesalso
havetoensurethatthepromisedemploymentinthecountryofdestinationisindeedavailable;andthis
iscorroboratedbytheChineseembassyinthecountryofdestination,therebypreventingscams.
Article25oftheRegulationsalsoexplicitlyprohibitsthecollectionofrecruitmentfees,termedas“service
fees”,fromworkersbytheForeignLaborServiceCooperationagencies.Violationsaremadepunishable
undertheclausesofthe2008LaborContractLawofthePeople'sRepublicofChina,whichmandatesfines
ofbetween1000to5000yuan(150-770USD)perworkertogetherwithde-licensing8.
However,inpractice,recruitmentfeesarenotjustpresentbutsevere,duetothepracticeofoutsourcing
ofrecruitmenttonumerousandcomplexnetworksofintermediaterecruitmentagenciesonthesub-
regionallevelmentionedabove(Chan,2011).Workersgothroughmultipleintermediaterecruitment
agenciesfromtown-leveltoprovinciallevels,andaresometimesbouncedaround,untilfinallybeing
referredtothemaincertifiedagenciesthatretainthesoleauthorisationtosendworkersoverseas.These
intermediaterecruitmentagenciesinturnexploitthecomplexityoftherecruitmentsystemandtheir
geographicalmonopolyonthetown-levelmigrantlabourrecruitmenttoextractprofitsfromrecruitment
feesateverypoint.Thefeespaidtotheintermediariesareestimatedtobeat600to800RMB(90–120
USD).
FewForeignLaborServiceCooperationagenciesthemselvescomplystringentlywiththeregulations.This
isevidentfromtheconsistentprevalenceofrecruitmentfeesamongChinesemigrantworkersrevealed
throughresearch(OpenWorkingGrouponLabourMigration&Recruitment,2014).Workersdeparting
forSingaporehavebeenreportedtobechargedbetween30,000to40,000yuan(4,500–6000USD)in
6Theseincludeapaid-upcapitalof6millionyuan(916,000USD),legalrepresentativeswithnocriminalrecordsand“asoundinternalmanagementsystemandanemergencyhandlingsystem”7TheseclausesareprovidedforunderArticle13and16oftheRegulationsonManagementofForeignLaborServiceCooperation8ThesecanbefoundunderArticle44oftheRegulationsonManagementofForeignLaborServiceCooperationandArticle93ofthe2008LaborContractLaw
RecruitmentCosts–China,July2016 Page7of15
recruitmentfees,whileemploymentinJapanandSouthKorea,asaresultofhigherdemand,incurfees
ashighas60,000yuan(9000USD).
Thisprevalentandblatantviolationoftherecruitmentprohibitionsistypicallymadepossiblebyavoiding
theuseoftheterm“recruitmentfees”whenchargingworkers,therebycircumventingtheclausesofthe
Regulations.Suchexorbitantfeesmaybeattributedtothehighcostsincurredbytheagenciesin
deploying“marketingteams”overseastosourceforandliaisewithemployers.However,itisreported
thatsuchfeesareone-timepaymentsandarenotchargedagainwhenmigrantworkersrenewtheir
expiredcontracts(J.Fan,personalinterview,31July2016).
Thismodeofexternalmigrations,despiteitsprohibitivecosts,accountsforalmosthalfofalllow-skilled
externalmigrationoutofChina,regardlessofindustry(MinistryofCommerceofthePeople'sRepublicof
China,2016).
Aseparateandsimplermodelofrecruitmentalsoexists,althoughitisnotasprevalent.Inthismodel,a
singleChinesecompany,typicallyaconstructioncompanycontractedtoworkonanoverseas
constructionproject,fulfilstheroleofbothrecruitingagenciesandtheeventualemployer(Chen,2010).
CertifiedbytheMinistryofCommerceasaForeignServiceLaborCooperationenterprise,theChinese
companyisabletosendtheirownbodyofcontractedworkersoverseas.ThisisillustratedinFigure2
below.
Whiletheirworkersarealsoprotectedbythe2012Regulations,theystillforkoutrecruitmentfees.
Nevertheless,unliketheworkerswhogothroughmultipleintermediariesandsignmultiplecontracts,
theirworkerssignonlyonecontract,andthuspaylowerrecruitmentfees.AnILOreport9onChinese
9Chen,Xiao.(2010).SoulsinExile:AStudyofChineseMigrationWorkersinRomania.InternationalLabourOfficeforChinaandMongolia.Beijing:InternationalLabourOrganisation.P.39
Figure 2: Direct recruitment and employment of Chinese workers
RecruitmentCosts–China,July2016 Page8of15
workersinRomaniaindicatesthatworkersemployedunderthismodelpaidabout65,000yuan(9900
USD),comparedtothetypicalfeesof75,000to100,000yuan(11,400USDto15,200USD)forother
migrantworkersrecruitedthroughthelegalagencyroute.
Despitetheaffordabilityandeaseofmigrationinthismodeofmigration,itremainsuncommonasitis
firstly,restrictedtoskilledlabourand,secondly,utilisedonlybyconstructionfirmsduetotheirunique
manpowerrequirements.Moreover,thelackofinformationandinaccessibilityofthesefirmstoChinese
workerscompoundsthepooruptake.
Thethirdmodeoflabourmigrationisthroughdirectconnectionstoforeignemployersfacilitatedby
relativesorfriendsalreadyworkinginthedestinationcountries(J.Fan,personalinterview,31July2016).
Inthispopularmodeofmigration,workersneedonlyregisterforanexitpermittogetherwithevidence
ofemploymentwiththeforeignemployer.Recruitmentfees,ifpresent,aremodest.
MigrantswhogothroughthefinalchannelofillegalmigrationareunprotectedundertheRegulations
andareatthemercyofthesesyndicates.Knownassnakeheads,syndicatessmuggling10migrantworkers
outofChina,whilecommoninthe1990s,havebecomerarewithbettereconomicconditionsandthe
adventofproperrecruitingchannels(Keefe,2008).Nonetheless,snakeheadsprovideapromiseof
lifetimemigration,ratherthancontract-basedmigrantlabour,buttheillegalityofthemodeofmigration
incursexorbitantfees11whilethehazardousmeansoftravelareinfamousfortheiroccasionalfatalities12
(Thompson,2003).Thesnakeheadtradeisalsoprecipitatedbydemandforemploymentincountriesof
destinationthatofferhighwages,likeJapanandSouthKorea,whichhavestringentannualquotasonthe
entryofmigrantworkers(J.Fan,personalinterview,31July2016).
Thesemigrantsalsohavetofindtheirownemployment,unlikethepreviousthreemodeswhere
migrationispackagedwithemployment.
Internalrural-urbanmigrationandregulations
Whilerural-urbanmigrantworkersaredisenfranchisedbythehukousystem,theirbasiclabourrightsare
nonethelessprotectedinprinciple,underthe2008LaborContractLaw.Recruitmentfeesareprohibited
underArticle60oftheLawandArticle37ofthe2008LawofthePeople'sRepublicofChinaonPromotion
ofEmployment,buttheyremainprevalentnevertheless13.Thismaybeattributedtothelabour-dispatch
10Humansmugglingisdistinctfromtrafficking,intermsofthefullconsentofsmuggledindividuals,completeknowledgeofrisksandterminationofinteractionsbetweensmugglersandcustomeruponarrivalatthedestination,unlikethemarkedlymoreexploitativehumantrafficking.11Theaveragefeein2008was$70,000USD(Keefe,2008)12Inaninfamouscasein1993,10ofthe286illegalChineseimmigrantsonboardthecargoship,GoldenVenturedrownedwhentheshipranagroundthebeachatQueens,NewYork(Faison,1993).13AppleInc.in2015forceditsChina-basedsupplierstoremoverecruitmentfeesthatits1.1millionChineseworkersface,underscoringtheprevalenceofrecruitmentfees(Kan,2015).
RecruitmentCosts–China,July2016 Page9of15
system,which,toanextent,exacerbatesthemalfeasanceofemployersandtheirabilitytobypasslabour
protectionlaws(Liu,2014).
Thisloopholehowever,isbeingpatchedupwithclarificationsonexistinglegislationandsweepingnew
regulationsonlabour-dispatchfromMinistryofHumanResourceandSocialSecurity.The2014Interim
ProvisionsonLaborDispatchpromulgategreaterlabourprotectionforlabour-dispatchworkers,inline
withtheLaborContractLaw(Xu,2016).Itdoesnothoweverindicateanyprohibitionofrecruitmentfees.
Nonetheless,thoseworkersseekinglegalredressthroughtheLaborDisputeArbitrationCommittee
(LDAC)havebeentepidlysuccessful,withworkershavingaclearwininjust35.2%ofthe711,044cases14.
Workersarefurtherdisadvantagedanddis-incentivisedbythefinancialcostandtimeoflitigation
procedures(ChinaLabourBulletin,2015).
Inwardmigration
Asinthecaseofrural-urbanmigration,the2008LaborContractLawwouldinprincipleprotectforeign
migrantworkersinChina.However,thesemigrantworkersaresimilarlyalsoaffectedbythelabour-
dispatchsystemandtherecruitmentfeesthatcomewiththecontracts.Moreover,inlightoftheir
undocumentedandillegalstatus,mostillegalforeignmigrantworkersworkinginChinaareverylikelynot
coveredbytheLaborContractLaw.
Furthermore,theChineseauthoritieshavebeenhostiletowardsundocumentedmigrantworkersand
haveoverhauledthe1985LawOfThePeople'sRepublicOfChinaOnEntryAndExitOfAliens,in2012
withtheExitandEntryAdministrationLaw,afteraneight-yearprocessofdeliberations(Haugen,2015).
Thenewlawparticularlyimposesheftierpunishmentsonundocumented,low-skilledmigrantworkers.
14Whileemployerswononly11.6%ofthetime,53.2%ofthecases,howeverhadnoclearwinner
RecruitmentCosts–China,July2016 Page10of15
ProsandCons
OutwardMigration
AtthecoreoftherecruitmentfeesissueforoutwardmigrationinChinaisinsufficientlegislationand
inadequateenforcementofexistinglegislation.ThishasallowedForeignLabourServiceCooperation
agenciestointerprettheRegulationsvaguelysuchthattheymayextortexorbitantrecruitmentfeeswith
impunity.
Inasimilarvein,themassiveandunregulatednetworkofintermediaterecruitmentagencies,illustrated
inFigure3belowisabletoretainanimmenselatitudetoextractrecruitmentfees.Fundamentally,the
largegeographyofthePeople’sRepublicandtheresultantlackofaccessibilityandprofitabilityof
certifiedagenciesreachingouttoruraltownsdirectly,necessitatestheexistenceofthisintermediary
networkthatbridgesthegap.
Thelackofawider,calibratedregulatoryframeworktoaccommodatethisbiggernetworkofsmaller
intermediariesisatthecruxofthisproblem.Foronething,thestringentqualificationsforcertificationof
aForeignLaborServiceCooperationagencyincreasesthebarrierstoentryseverely,therebycreatinga
readyandprofitableinformalmarketforsub-regionalintermediaterecruitmentagencies.Thisinturns
restrictsthecapacityofthestatetoregulaterecruitmentprocessesbeyondthelevelofthecertified
agencies.
Understandably,therecruitmentfeesissueisaggravatedbyvirtueoftherealitythatthenumberof
smallerintermediatefirmscouldpossiblyrunintothetensofthousands,giventhatthemainlicensed
Figure 3: Foreign Labor Service Cooperation and intermediaries in the Chinese foreign labour market
RecruitmentCosts–China,July2016 Page11of15
onesalreadynumberover800.InNantongCity,Jiangsuprovincealone,a“LabourStreet”hasover100
mid-sizedintermediateagencieswithwhichalargerpoolofevensmalleragencieshavecontacts(Chen,
2010).
Thisthusalsoillustratestheotherfundamentalproblemofthelackofallocatedresourcestoenforce
labourregulationsamidstthesheernumberofForeignLabourServiceCooperationagenciesandtheir
intermediariesscatteredacrosstheimmensegeographyofChina.Themagnitudeofthelabourmigration
market,andunder-staffingandunder-funding,oftheresponsibleprovincialleveloffices,resultsinlax
enforcementofregulations.Furthermore,theeconomicbenefitsofallowingtheunregulatedmarketto
goonincentivisesdisinterestamongstateplannersandprovincialofficialsinenforcingthelabourlaws.
Thus,thecomplementinginabilityandinstitutionaldisinterestinenforcementleadstoacontinued
proliferationofrecruitmentfeesandlabourabuse.
Ontheflipside,ithasbeennotedthatthemarkedlymorehazardousandexorbitantchannelofthe
snakeheadtradehasbeenundercutbybettereconomicconditionsandaccesstothefruitsofChina’s
economicgrowth(Keefe,2008).Inthisregard,the2012Regulationscanbearguedtohavefacilitated
accesstoeconomicopportunitiesthroughincreasingthereliabilityandaccessibilityoflegalmigration
options.Thoughimpairedbythelackofenforcementandthehugenetworkofsmallerintermediate
agencies,thestatecertificationandstringentqualificationsofthemainrecruitmentagenciesprovidea
tokenofcredibilityandlegitimacythatincreasesappealtowould-bemigrantworkers,therebycutting
intothemarketofpatentlylessreliablesnakeheadtrade.
Similarly,thenetworkofsmallerintermediaterecruitmentagencies,althoughcomplexandalegalgrey
areathatopensamajorloopholeforthechargingofrecruitmentfees,hasallowedforthisincreased
accessibility,openingin-roadsforlegallabourmigrationoptionstothetownlevel,andultimately
economicmobility.
TheinstitutionoftheForeignLabourServiceCooperationscheme,whileflawed,hasalsoaffordedbetter
protectionsformigrantworkersasopposedtoitsprecursoremploymentagenciesthatexistedbefore
the2012Regulations.Forexample,workersareunlikelytobescammed,aspromisedemploymenthasto
beassuredtoexistbyboththeagencyandtheChineseembassyinthecountryofdestination.This,
amongotherstandardisedrequirements,isanevidentimprovementtotheoldmodesofexternal
migration.
Withrespecttotheissueofrecruitmentfees,the2012Regulationsalsoaptlytargettheprimaryavenue
whererecruitmentfeesareincurred–themiddlemenofthelabourmigrationprocess.Althoughseverely
limitedinscopeandenforceability,thelegislativefocusofthelaw,ifexpanded,calibratedandenhanced,
hasthepotentialtoeffectivelyregulatelabourrightsandrecruitmentfeesintherecruitmentprocess.In
thisrespect,theexistingqualificationsforlicensingofaForeignLaborServiceCooperationagencymay
RecruitmentCosts–China,July2016 Page12of15
provideausefulprecedentforfutureenhancementsofthelawthatcouldbeexpandedintoseparate
qualificationsfordifferentcategoriesand“levels”ofrecruitmentagenciessuchasthemainrecruitment
agenciesandtheirintermediary“sub-contractors”.
ItisalsounrealisticfortheChinesegovernmenttoimposeazerorecruitmentfeespolicyonall
recruitmentagencies.This,ifstringentlyenforced,erodestheprofitabilityofthelabourmigration
middlementrade,andwillproliferateanundergroundeconomyofunregulatedrecruitmentagencies,in
lightofhugedemand.
Instead,thestreamliningoftherecruitmentprocess,fromtowntotheactualForeignLaborService
Cooperationagency,whileambitious,couldbeconsidered.Suchstreamlininghasalreadybeenachieved
inthesecondmodeloflegalmigrationthroughthedirectionemploymentofworkersbyChinese
companiescontractedtoworkonoverseasprojects,albeitwithlowuptake.Thislowuptakeisindicative
ofthechallengessuchamodelwillhavetosurmountinordertogainfurthertraction:outreachtoa
widercross-sectionofworkers,andadaptationtodifferentindustriesandtheirlabourrequirements.
SuchamodeloflabourmigrationneverthelessretainsthepotentialtomatchChina’sburgeoning
populationofmigrantworkerstotheirpreferredemploymentandcountriesofdestination,withthe
greatesteaseandatthelowestpossiblecost.
Rural-UrbanMigration
Ontheotherhand,therecruitmentfeesissueinrural-urbanmigrationisbecominganon-issuewith
increasinginstitutionalattentionandreformofthehukouandlabour-dispatchsystem,whichthereby
removesthesystemicgroundsforrecruitmentfees.Whileeffectivenessofthenewlawsremainstobe
seen,thisdevelopmentclearlydemonstratestheobviouswherewithaloftheChinesegovernmenttoact,
whenaccompaniedwithadequatepoliticalwill.Thisisespeciallysogiventherelativelyenormousscope
of260millionrural-urbanmigrantworkers,comparedtoamere8.4millionexternal-migrationmigrant
workersandmere“tensofthousands”ofinward-migrationworkers.
InwardMigration
Conversely,therecruitmentfeesissueinundocumentedinwardmigrationisadiametricoppositewith
abjectinstitutionalneglect–theresultofalackofpoliticalinterestandpopularsilence.
TheauthorwishestoacknowledgeFanJiaoyanforherinvaluableinsightsandinputaswellasJohnGee
forhelpinproofreadingandediting.
RecruitmentCosts–China,July2016 Page13of15
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Thegreatmajorityofmigrantworkerspaylargesumsofmoneyinorder
to obtain jobs in other countries. The costs, often exorbitant, leave
workers debt-ridden and in a more vulnerable position to pernicious
labourabuse. AtTWC2,werecognisetheconsequencesofrecruitment
costsandtheurgentneedtoeliminatesuchfees.
This report ispartofa seriesofpapersanalysing thepolicies invarious
countries regulating recruitmentcosts.Through thisevaluativeprocess,
we hope to be able formulate effective policy recommendations in
reducing the recruitment costs of workers who come to Singapore.
–
TransientWorkersCountToowww.twc2.org.sg5001BeachRoad,#09-86GoldenMileComplexSingapore199588
ThefulllistofourcountrybriefsandotherTWC2reportscanbefoundat:http://twc2.org.sg/category/articles/research/
TWC2RecruitmentCostsResearchWorkingGroup