Regulating the Business of Labour Migration Intermediaries
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As many recipient countries have created high entry barriers, especially for low-skilled workers, migrants are often at the mercy of informal recruiters. In the worst case, they end up in the clutches of unscrupulous smugglers and traffickers.
The growing trend towards informal labour migration intermediation creates regulatory challenges, which are discussed in the book. Which regulatory regimes are best suited to formalize the migration intermediation business, and to protect migrants from exploitation and abuse? Under what conditions will they most likely occur?
The study uses a mix of qualitative methods, including a comparative analysis of the regulation of labour migration intermediaries in the United Kingdom and the Russian Federation. In both countries, international standards, particularly on human trafficking and private employment agencies, guided regulatory initiatives. Their outcomes, however, depended on a range of factors, including the creation of alliances between business and workers.
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Regulating the Business of Labour Migration Intermediaries - Beate Andrees
1 Introduction
1.1 Context and problem statement
The global integration of national economies has increased the flow of goods, services, information, and, albeit to a much lesser extent, the flow of people across borders. While many skilled professionals found employment in new production zones and service centres, low skilled migrant workers struggle against entry barriers imposed by destination countries. Labour migration intermediaries (LMIs), such as labour recruiters, employment agencies and a wide range of informal intermediaries, promise jobseekers different ways to overcome these barriers. They have grown in importance by exploiting restrictions on labour mobility and situations of imperfect information between workers and employers in source and destination countries. They offer information about job opportunities abroad, organise transportation, facilitate money transfers and provide loans to finance migration. While informal networks play a crucial role, formal employment agencies are increasingly entering the market, hoping to benefit from the migration bonanza that the global integration of markets has created.
All across the world, however, reports about the abuse of migrant workers by unscrupulous labour recruiters are emerging in disturbing numbers. Almost every day, a listener or reader of global media will hear about cases of severe exploitation: Burmese migrants lured on board Thai fishing vessels against their will, Nepalese workers tricked and trapped on construction sites in Qatar, severely indebted Bangladeshi workers assembling computers in Malaysia, or Romanians working in Germany’s slaughterhouses under precarious conditions.
The tragedies unfolding in the Mediterranean and elsewhere at high Sea also point to the failure of existing migration and asylum regimes to respond to crises and to provide safe migration routes. The depletion of natural resources in many parts of the world, conflict, violence and war will push more people to leave their countries and communities searching for security and employment.
Most of them depend on smugglers who provide crucial information and transportation but may also treat human beings like cargo that can be abandoned and shoved around. Informal LMIs, including criminal networks, facilitate job placement in recipient countries, often illegally as long as refugees are barred from formal access to the labour market during their asylum procedures.
Forced migration as well as the reception and integration of refugees are complex issues to which this study cannot do justice. However, it is important to note that the border between labour migration and forced migration are often blurred, and LMIs play an important role in both migration contexts.
LMIs, whether they are legitimate or not, promise a way out of misery. They flourish in an environment where employment opportunities are scarce, where labour supply beats demand and where legal migration channels are limited. For many families, especially in the Global South, migration has brought relative wealth and higher social status. However, for some, the journey has gone terribly wrong, and where it did, it often started with an abusive labour migration intermediary.
The history books are full of stories about the forced and fraudulent recruitment of people against the backdrop of war, colonialism, and widespread destitution. People were bought and sold as if they were goods under the ancient institution of slavery, under colonial rule and with the emergence of indentured and contract labour under capitalism. Nevertheless, people also resisted their exploitation, and over the course of history, moral consciousness was changing too. The struggle towards the abolition of slavery and the transatlantic slave trade fundamentally altered the perception of what was morally acceptable and what was not. It was only a precursor to the emerging labour movement at the end of the 19th and early 20th century which claimed, Labour was not a commodity
, a principle that later became enshrined in international norms. For a brief period in history, the services relating to the recruitment of workers were considered to benefit the public and profit-making recruitment agencies were banned from most countries. This period ended with the global restructuring of labour markets in recent decades and the introduction of flexible labour arrangements. Yet the protection of workers, in particular migrants, from exploitation and abuse remains a creed in international law and practice.
Considering the progressive strengthening of international norms related to the recruitment of migrant workers, reports of their continued exploitation are puzzling. The question is:
What makes it so difficult to set up a functioning regulatory system for international labour recruitment, which ensures that employers can find the workers they need and that workers are protected from abuse, especially those who are recruited across international borders?
The following research project emerged that seeks to blend theoretical and methodological reflections with empirical evidence and policy-relevant recommendations starting with this catalyst question.
1.2 Identification of research gaps
Labour migration intermediaries (LMIs) connect national labour markets by transporting millions of workers across countries and back again. Their astonishing growth and proliferation across the globe has prompted debates seeking for an explanation. As reports about fraud and abuse continue to surface, the search for regulatory options to limit the excesses of private labour migration intermediaries has also intensified. Yet the understanding of how LMIs operate, how they interact with different models of regulation, and how they are embedded in broader structures of production is still in its infancy.
In the late 1990s, researchers dealing with migration started to look at, what was then coined, the migration industry
², that is the web of brokers, moneylenders, transporters, smugglers and traffickers that connects employers and migrant workers across source, transit and destination countries. The specific role of LMIs in the labour market, in particular private labour recruiters, however, remained an under-researched subject. As one scholar described it: if migration is the most under-researched of the global flows, the role of private agents is among the most understudied aspects of international labour migration
.³
A range of detailed empirical studies emerged in recent years, mostly describing recruitment practices in specific migration corridors. The majority of those studies analysed the role of LMIs from the perspective of migrant workers, thereby highlighting both negative and positive aspects of such services. The emphasis is usually on recruitment agencies and their regulation at source instead of destination countries of migration. The majority of those studies have focused on the recruitment of migrant workers from South Asia to the Middle East and from Mexico to the United States. Very little is known about labour recruitment practices and their regulation in other parts of the world.⁴
Despite this wealth of empirical and policy-oriented studies, the theoretical understanding of LMIs is still underdeveloped. There is a need to systematize and assess these empirical studies within a broader theoretical framework, which would explain the emergence of LMIs and their interaction with different regulatory models. While labour market intermediation has received growing attention in the economics literature the specifics of labour migration intermediation and its regulation have been studied less.⁵
Under a different body of research, scholars concerned with labour relations and labour market regulation have analysed the rise of labour market intermediaries and the evolution of employment relationships in industrial and post-industrial societies. Much of this research has focused on the organisation of work and production within vertically and horizontally integrated corporations.⁶ A sub-category of this research is concerned with human resource management, including skills development. Various studies have sought to understand the rationale of firms using temporary labour or outsourcing certain tasks or jobs. Other scholars emphasised the perspective of workers who are placed and employed by private employment agencies, the gendered fragmentation of work and evolving models of labour market governance. While this body of research sometimes makes explicit reference to migrant workers, LMIs are not their primary focus.⁷
This research project is situated at the intersection of migration research on the one hand and research concerned with the evolution of labour markets, employment relations and regulations, on the other. By connecting these different strands of research, this study aims to address several research gaps. First, the lack of a broader research design, which goes beyond the specifics of empirical cases. Second, the gap in empirical understanding with regards to the interaction between LMIs and different models of regulation. Third, the lack of focus on LMIs in destination countries as opposed to LMIs in the source countries of migrant workers.
1.3 Purpose of the study and research questions
The purpose of this study is to compare and analyse the interaction between LMIs operating in different migration corridors, and regulatory regimes that are aimed at limiting abusive and exploitative practices of LMIs. The aim is to draw policy-relevant conclusions from such comparative analysis, which are based on empirical evidence and informed by theoretical reflections on the role of LMIs and their regulation. The assumption is that abusive and exploitative practices are more likely to occur in low-skilled and labour intensive economic sectors. The study will therefore be limited to LMIs operating in those sectors, as opposed to executive search agencies (head hunters
) or other labour market intermediaries operating within the highly skilled spectrum of the labour market.
The overarching question of this research project is as follows:
Which regulatory regimes are more likely to protect migrant workers against abusive and exploitative LMIs? Under what conditions do such regimes emerge?
This question can be broken down into three sets of sub-questions:
• What are the different types of LMIs and how do they operate within selected migration corridors?
What explain the emergence of LMIs, in particular those operating in lowskilled and labour intensive economic sectors? Which exploitative and abusive practices are used by LMIs?
• Which regulatory regimes exist at national and international levels?
How have international norms aimed at regulating LMIs evolved against the backdrop of growing labour mobility and labour flexibility? What are the main features of regulatory regimes in source and destination countries? To what extent do they conform to international standards?
• Following from the above, which regulatory regimes are more likely to reduce the exploitation and abuse of migrant workers during their recruitment process?
Under which conditions do such regimes emerge in destination countries (at the demand side
of labour recruitment) and what impact could they have on the supply side
of labour? What is the role of different interest groups (e.g. government, business, trade unions, non-governmental organisations) in shaping those regulations?
1.4 Concepts and definitions
The central terms and concepts used in this study are ill defined in international law. Various academic disciplines have attempted to define them but their use varies according to context. The purpose of this introductory section is therefore to provide some clarity on the use of the key terms. They are grouped together as appropriate.
Labour migration intermediary: LMIs are private or public entities that facilitate workers’ movement across international borders. There are many types of LMIs, such as individual labour recruiters, public employment services, and private companies offering job matching or financial services, criminal networks or philanthropic organisations. The focus of this study is on profitseeking LMIs who recruit and/or contract workers across borders. LMIs acting as labour recruiters provide specific services based on an agreement or contract established between the provider and the recipient of those services (typically the employer and the worker/job-seeker). They are brokers between demand and supply within international labour markets. Recruitment involves several stages: canvassing, testing, (pre) selection, placement, and in some cases, repatriation of workers. These stages can also involve ancillary services, such as document processing, medical tests, transportation, harbouring and transfer of workers to the premises of the employer.
LMIs can also act as labour contractors who recruit workers and make them temporarily available to a client enterprise, also called temporary work agency. Temporary work agencies or labour contractors are recruiters and employers at the same time. Workers thus find themselves in a triangular employment relationship: employed by a temporary employment agency, but working at the premises of an employer (the client enterprise
) who contracted the agency. While many agencies can act as both labour recruiter and labour contractor, the focus of this study is on the former.⁸
(Forced) Migration/migrant worker/refugee: Migration refers to the movement of people across borders. According to the International Convention on the Protection of the Rights of All Migrant Workers and Members of Their Families, a migrant worker is a person, who is to be engaged, is engaged or has been engaged in a remunerated activity in a state of which he or she is not a national
(Art. 2 (1)). Migration can also occur within countries, although it is not legally defined. It can involve crossing internal administrative borders or international borders within a common labour market (e.g. in the European Union).⁹
Migration can be voluntary or forced, regular or irregular. In the international context, irregular migration refers to the breach of immigration laws, including laws regulating the entry, residence or employment of non-nationals. Irregular migration is sometimes linked to smuggling, which involves the illegal transportation of a person across international borders.¹⁰ In some cases, irregular and regular migration amounts to human trafficking, which is defined further below.
Forced migration refers to the movements of refugees and internally displaced people (displaced by conflicts) and people displaced by natural or environmental disasters, chemical or nuclear disasters, famine, or development projects.¹¹ Refugees are people who flee from conflict or persecution on various grounds as per Article 1 A (2) of the 1951 Convention and its 1967 Protocol relating to the status of refugees. Internally displaced people and refugees may also seek to enter the labour market of their new destination, but they are often prevented from doing by law or in practice. This means that they can only rely on informal LMIs, including criminal networks, for obtaining information and access to the labour market.
Exploitation/abuse/trafficking in persons (or human trafficking)/decent work: LMIs, like any other business operate along a continuum of compliance and non-compliance with regard to national and international standards on labour recruitment. This continuum’s extreme ends can be considered human trafficking
on the one end and decent recruitment for the purpose of decent work
on the other. At the core of the distinction between human trafficking and decent work is the concept of exploitation.
The concept of exploitation has been widely debated across various social science disciplines with different outcomes. There is a consensus that exploitation can occur within interpersonal relationships – which can be called human exploitation
– or in relation to an object (e.g. natural resources) or species other than human beings. The focus here is on human exploitation.
Human exploitation involves any situation where someone takes advantage of someone else – someone exploits and someone is being exploited. This in itself may not be considered morally wrong; it can be based on mutual benefit and consent. Throughout most of human history, social relations have been exploitative, based on unequal access to resources, social status and different degrees of freedom.¹²
In the context of this present study, human exploitation refers to the exploitation of labour. From a Marxian point of view, exploitation is inherent to capitalist societies where workers are forced to sell their labour in order to survive, while the owners of the means of production (capitalists) pay them less than the full value of their labour. The capitalist therefore accumulates the surplus value of labour, which is called profit. In neoclassical theory, this is translated into paying workers less than the marginal product of their labour.¹³
Exploitation is enshrined in the concepts of human trafficking, forced labour and slavery but it also related to non-respect for international and national labour standards, such as unfair remuneration, long working hours and unsafe and dangerous working conditions. If combined with coercion and control over another person, substandard working conditions can amount to forced labour, human trafficking or slavery. Each of those concepts has been defined in various international instruments. Common to all of them are the notions of coercion, control and the vitiation of consent, such as through deception.¹⁴
From a legal perspective, the adoption of the UN Protocol to prevent, suppress and punish trafficking in persons, especially women and children,¹⁵ has spurred a fresh debate about the concept of exploitation. The Protocol does not offer a new definition. However, it contains an open-ended list of exploitative practices, to include at a minimum the exploitation of the prostitution of others or other forms of sexual exploitation, forced labour or services, slavery or practices similar to slavery, servitude or the removal of organs
(Art. 3a). The other parts of the UN trafficking definition refer to the the recruitment, transportation, transfer, harbouring or receipt of persons, by means of the threat or use of force or other forms of coercion, of abduction, of fraud, of deception, of the abuse of power or of a position of vulnerability or of the giving or receiving of payments or benefits to achieve the consent of a person having control over another person, for the purpose of exploitation
(ibid).
There is continued debate as to whether movement or migration are necessary elements of the definition of trafficking, or not, whether the definition of exploitation should remain limited or be extended and how to define the notion of consent. For the purpose of this study, trafficking in persons (or human trafficking) is situated at the extreme end of the continuum of human exploitation, referring to a process and to the means used to move a person into a situation of forced labour or slavery.
LMIs may be complicit in trafficking for exploitation by using various abusive and fraudulent practices. These are: a) charging recruitment fees to workers (which may lead to debt bondage); b) threats and intimidation, including verbal and psychological abuse; c) deception with regards to contracts, working and living conditions as well as failure to disclose relevant information prior to recruitment; d) restriction of freedom of movement; e) retention of identity documents to control workers; f) physical and sexual violence; g) recruitment of children below working age; h) recruitment of workers into hazardous and unsafe work.¹⁶ Such abuse and fraud are closely linked with exploitation.
The concept of decent work has first been developed by the ILO as an aspirational tool and as an umbrella term to encompass productive employment with fair wages, security at work, social protection, rights at work, including freedom of association and collective bargaining, social dialogue and the promotion of gender equality. The ILO has also developed a detailed framework of decent work indicators.¹⁷ Decent and fair recruitment practices (which are the opposite of those listed above) are further defined by separate ILO guidelines, which are discussed in chapter 4.5.
Regulation: Regulation is defined as a conscious and ‘sustained effort to create or limit rights, and to shape the conduct of individuals and collectives through a set of rules, norms and measures of enforcement. Rules and norms can contain positive and negative incentives to obtain the desired result’. They can be statutory, i.e. laws which are administrative decisions that are enacted by a legislative body or government authority and enforced by a government entity. This is often referred to as centric
or command-and-control regulation.¹⁸ Alternatively, regulation can be voluntary or mixed
, i.e. measures by an industry or business association, certification or labelling initiatives. They can also be the outcome of a collective bargaining process or other nonstatutory process of negotiation. Some authors have called this de-centric or polycentric regulation
(ibid).
In particular, labour market regulations aim to protect workers through the formalization of the employment relationship, including labour market intermediation. Labour migration regulations determine the entry and exit of foreign workers, their access to the labour market, to education, trade unions and other institutions in the country of destination.
1.5 Content and structure of the dissertation
This study consists of three parts: the first part reviews major theoretical perspectives of relevance to this subject. This is followed by a presentation of the research model, which incorporates central tenets of institutional and critical theory. The model provides a typology of LMIs and a framework for analysing and classifying different regulatory approaches, which aim to change or constrain the behaviour of LMIs. The hypothesis seeks to correlate regulatory regimes with the degree of exploitative and abusive practices used by LMIs. The main method applied is a qualitative case study approach. Such an approach will test the hypothesis’s plausibility, but its empirical verification would be subject to further research.
The second part of the study starts with a desk review of existing data and literature about the growing importance of LMIs against the backdrop of labour migration and the global restructuring of production. The desk reviews also highlight manifestations of exploitative and abusive practices used by LMIs and the evolution of international norms to protect migrant workers from these practices. Based on this literature review, thirty countries have been selected from different geographical regions for further empirical analysis of labour recruitment and its regulation. The countries are situated along major migration corridors, and are either source, destination or both. The focus is in particular on labour recruitment in low-skilled economic sectors, such as agriculture, manufacturing, construction and domestic work. This empirical country review is followed by an in-depth comparative analysis of two destination countries of migrant workers, namely the United Kingdom and the Russian Federation. Each chapter will review the migration context and recruitment practices, and explain the factors that determined a specific regulatory regime’s emergence.
The third part of the study interprets the results, analyses the research model, and concludes with recommendations for further research and policy development.
² The term migration industry
was first used by John Salt and Jeremy Stein: Migration as a Business: The Case of Trafficking
; in: International Migration, 1997, 35: 4: 467-494. Their focus was on profit-making individuals, agencies and institutions which can be legitimate (formal) or illegitimate (informal), also called trafficking. The terms was widely publicised by Castles, Stephen and Mark J. Miller: The Age of Migration: International Population Movements in the Modern World, Third edition, New York: The Guilford Press, 2003. See also following publication by Martin, Philip. Merchants of labor: Agents of the evolving migration infrastructure. Geneva: ILO, 2005; Massey, Douglas S., et al. Worlds in Motion: Understanding International Migration at the End of the Millennium: Understanding International Migration at the End of the Millennium. Clarendon Press, 1999. For further background, see: Spener, David: Some Critical Reflections on the Migration Industry Concept, Paper presented on May 29, 2009, at the Migration in the Pacific Rim Workshop, University of California, Los Angeles. See also a recent publication, which takes a much broader perspective on the concept of migration industry
: Gammeltoft-Hansen, Thomas and Ninna Nyberg Sorensen (eds.): The Migration Industry and the Commercialization of International Migration, New York: Routledge, 2013.
³ Quoted in: Martin, Philip: Merchants of labour: Agents of the evolving migration infrastructure, Geneva, 2005: ILO (Summary page).
⁴ Many of those empirical studies were commissioned by international and other organisations more interested in policy responses rather than advancing a theoretical understanding of LMIs. See for example: IOM (Jones, Katherine): Recruitment monitoring and migrant welfare assistance: What works? Geneva, 2005; Rannveig Agunias, Dovelyin: Regulating Private Recruitment in the Asia-Middle East Labour Migration Corridor, Migration Policy Institute (August 2012), Kuptsch, Christiane (ed.), Merchants of labour, International Labour Organization, 2006; Andrees, Beate: Forced Labour and Trafficking in Europe: How people are trapped in, live through and come out, ILO Working Paper, 2008; Andrees, Beate, Alix Nasri and Peter Swiniarski: Regulating labour recruitment to prevent human trafficking and to foster fair migration: models, challenges and opportunities, International Labour Organisation, Geneva 2015; Verité: Help wanted: Hiring, human trafficking and slavery in the global economy; 2010; download at: http://www.verite.org/Reports/HelpWanted [accessed 20 July 2015]; Wickramasekara, Piyasiri: Regulation of the Recruitment Process and Reduction of Migration Costs: Comparative Analysis of South Asia, Global Migration Policy Associates, Geneva, October 2013; International Labour Migration Working Group: The American Dream Up for Sale: A Blueprint for Ending International Labour Recruitment Abuse, download at: https://fairlaborrecruitment.wordpress.com/report/ [accessed 20 July 2015]; Jones, Katherine: For a Fee: The business of recruiting Bangladeshi women for domestic work in the Middle East, ILO Working Paper, 2015.
⁵ See Martin (2005), op. cit. and Autor, David: The economics of labor market intermediation: An analytic framework, No. 3705, Institute for the Study of Labor (IZA), 2008. See also chapter 2 for a discussion of relevant theoretical approaches and their contribution to a better understanding of LMIs.
⁶ See for example: Peck, Jamie. Work-place: The social regulation of labor markets, Guilford Press, 1996; Ward, Kevin. Going global? Internationalization and diversification in the temporary staffing industry
Journal of Economic Geography 4.3 (2004): 251-273; Theodore, Nik, and Jamie Peck. The Temporary Staffing Industry: Growth Imperatives and Limits to Contingency
Economic Geography 78.4 (2002): 463-493; Peck, Jamie A., and Nikolas Theodore. Temped out? Industry rhetoric, labor regulation and economic restructuring in the temporary staffing business
Economic and Industrial Democracy 23.2 (2002): 143-175.
⁷ For a review of the existing literature on temporary staffing see: Coe, Neil M., Katharine Jones, and Kevin Ward: The business of temporary staffing: A developing research agenda.
Geography Compass 4.8 (2010): 1055-1068; See also: Vosko, Leah F.: Temporary Work: the gendered Rise of a Precarious Employment Relationship, University of Toronto Press, 2000, Fudge, Judy and Kendra Strauss (eds.): Temporary work, agencies and unfree labour: insecurity in the new world of work, New York and London: Routledge, 2013.
⁸ See chapter 3 for a detailed description of services and a typology of LMIs. A legal definition of Private Employment agencies is provided in the ILO Private Employment Agency Convention, 1997 (No 181), Art. 1 (1). It encompasses recruitment and contracting services as outlined above. It also refers to other job-seeking related services.
⁹ For further information in internal migration see: UNDP: Human Development Report 2009: Overcoming barriers: Human mobility and development, download at: http://hdr.undp.org/sites/default/files/reports/269/hdr_2009_en_complete.pdf [accessed 23 July 2015]
¹⁰ Gallagher, Anne and Fiona David: The international law of migrant smuggling, Cambridge University Press, 2014.
¹¹ Definition adopted by the International Association for the Study of Forced