Since July, there has been a diplomatic flashpoint between the governments of Taiwan and Indonesia. Disagreements and diplomatic volleys have divided public support between worker and employer interest groups.
The Indonesian government, represented by Benny Rhamdani, head of the Indonesian National Board for the Placement and Protection of Indonesian Overseas Workers, has been pushing back against the excessive fees that migrant workers must pay in advance to secure employment abroad, in Taiwan and elsewhere.
Migrant workers pay these fees to labor brokerage agencies in their home country months before they begin their employment abroad. The fees have been the norm since organized cross-border labor migration became entrenched in domestic economies across the Asia-Pacific region.
This system of labor migration and the heavy fees charged up front effectively set up a two-tier system in migrant worker recruitment.
The first tier is for professional and skilled workers. It is standard for employers to cover their recruitment costs as part of the company’s human-resources expenditures.
A wholly different set of rules exist for the recruitment of low-skilled workers, who are the ones least able to bear the cost of advanced fees due to their low wages.
However, they are expected to pay the cost of their recruitment, even if they fill a crucial void in the host country’s labor market, particularly in sectors that have difficulties recruiting local workers.
In Taiwan, almost 45 percent of migrant workers are employed in industries in which jobs are typically seen as dirty, dangerous and time-consuming.
In July, after a four-month hiatus in outbound labor migration due to the COVID-19 pandemic, the Indonesian government announced plans to reopen labor migration as part of the country’s economic recovery plan.
Amid a host of measures is the plan to more effectively implement a 2017 law on the protection of Indonesian migrant workers, which stipulates that workers must not be borne with placement costs. This provision, largely an empty declaration until now, is the legal basis for the row between Taiwan and Indonesia.
Indonesia’s new position is that employers should pay part of the recruitment fees. It includes a load-sharing proposal to split the fees between the Indonesian government and the overseas employers.
The change would ensure that Indonesian labor migrants would not become heavily indebted just to secure a job abroad and thus be more vulnerable to exploitation.
The new policy, to be implemented by the beginning of next year, covers Indonesians working abroad in certain sectors and jobs, such as domestic workers, caregivers and fishers, but not yet those who work in manufacturing.
Currently, an Indonesian domestic care worker in Taiwan takes out a personal debt close to 20 million rupiah (US$1,394) before they have even set foot in the nation.
The loan would cover the air ticket, local transportation, health screening, passport and visa, training and testing, and the local recruitment agency’s service fees. The worker typically spends almost the first year of employment servicing the debt.
Taiwanese authorities have reacted unenthusiastically to the change in Indonesian policy. The Ministry of Labor argues that it was a unilateral decision, made without consultation with Taiwan.
Minister of Labor Hsu Ming-chun (許銘春) on Monday said that unilaterally asking Taiwanese employers to pay more of the recruitment fees is “a position that Taiwan cannot accept.”
Hsu said that she has contacted the Ministry of Foreign Affairs concerning the development of new labor migration channels with countries other than the four main sources of foreign laborers in Taiwan: Indonesia, Vietnam, the Philippines and Thailand.
Indonesia’s new policy has elicited strong negative reactions from employers and recruitment agencies, not only in Taiwan, but also in Hong Kong.
Since August, families with members who need special care have led protests outside the labor ministry and the Indonesian Economic and Trade Office in Taipei, fearing the increasing cost of hiring domestic caregivers.
Similarly, the Association of Hong Kong Manpower Agencies has argued that the new policy would make the hiring of Indonesian domestic workers in the territory less viable.
Despite employer and agency protests, it would be a mistake for the government to continue to frame this policy change as a diplomatic misstep.
We need to consider what is on the line in this discussion: Indonesia’s move to reduce the fees borne by outbound migrants is a modest measure compared with international standards.
Standard-setting documents by UN bodies, such as the International Labour Organization and the International Organization for Migration, have established a clear framework for migrant recruitment systems to move toward the standard of employers paying the complete cost of recruitment.
This is because recruitment costs put migrant workers at risk of debt bondage, which is included in the international prohibition of slavery.
For this reason, US Ambassador-at-Large to Monitor and Combat Trafficking in Persons John Richmond on Sept. 1 called on Taiwan to prohibit the collection of recruitment fees, service fees or pre-departure deposits from migrant workers to prevent human trafficking at this year’s International Workshop on Combating Human Trafficking in Taipei.
At this critical juncture, Taiwan has an important choice to make.
The labor ministry should explore ways to lead the way for others in the region to change migrant worker recruitment.
As a first step, we should reject the false dilemma that recruitment fees are a zero-sum game between employers and migrant workers.
Such a narrative prevents the government and other stakeholders from exploring possible remediation and compromises, such as time-limited subsidies for employers to offset the initial shock of increased recruitment costs.
The other alternative is to continue to trade words of recrimination and buck the momentum that has been growing internationally across industries and countries for a model of recruitment that minimizes the risks of debt, exploitation, human trafficking and slavery.
In doing so, Taiwan risks alienating its closest political ally on this issue, the US, which has made combating gross labor exploitation a national diplomatic priority, according to this year’s Trafficking in Persons Report by the US Department of State.
Where should Taiwan stand? There is only one constructive option forward: Work with Indonesia and other countries to usher in the global vision of a migrant recruitment system that protects workers, fulfills local economic needs — without running the risk of highly exploitative labor — and guards Taiwan’s international reputation.
Bonny Ling is an independent expert on international human rights, development and migration; and a senior research fellow and associate lecturer at the Cambridge Centre for Applied Research in Human Trafficking.
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