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Making workers pay - exploitation of laborers in GCC
April 22, 2017, 4:19 pm

Since the 1970s, construction sites dotted with towering cranes, cement-mixers and fleet of trucks have been the most discernible sign of development taking place across the Gulf Cooperation Council states. High-rise residential and office spaces, sprawling retail, leisure and hospitality projects, as well as mega government infrastructure and development projects, have driven growth in the region’s construction industry. Though the pace of construction activity has ebbed and flowed over the last four decades, depending largely on prevailing international oil prices, the construction industrsy has managed to sustain itself successfully over the years.

Underpinning the industry’s success are the millions of migrant laborers who work day and night in scorching heat and biting cold to see projects completed on time. The plight of these legions of laborers who help build the gleaming skyscrapers, sprawling malls and huge stadiums is rarely seen or seldom heard. These workers, many of them from South Asia, are often exploited at every stage of their contract period, right from the time they seek employment in the ’Gulf’ to the time they are retrenched and sent back home, sometimes rich only from their bitter experiences in the promised land. 

Now, a new report by New York University’s Stern Centre for Business and Human Rights titled ‘Migrant Workers Pay: Recruitment of the Migrant Labor force in the Gulf Construction Industry’ examines the current labor recruitment model of the construction industry in the GCC, and the ways in which this contributes to exploitation of migrant workers and exposes them to abuse by labor contractors. The report, which details how workers are exploited through a complex system of agents and subagents, also offers several recommendations to make the industry better for the millions of South Asian migrants who seek employment in the multibillion dollar construction industry in the GCC.

The research published last week, shows many of these laborers sell whatever meager possessions they have in their own country, to pay exorbitant amounts to middle-men for gaining the all-important visa to work in the GCC. The middle-men, who are often agents of labor contracting companies in the Gulf, extract huge sums from potential employees promising them long years of continuous lucrative work. But the harsh reality, as the report reveals, is that many of these workers spend an average of 10 to 18 months’ worth of salary just to pay off the costs related to their migration.

If they are lucky, and the construction projects they are hired to work at extends for more than three years, the workers could expect to break-even with what they initially paid to migrate for work. But again, this depends on continuous employment with the contractor and, more importantly, on receiving regular monthly or weekly payments.

However, in recent years, the slide in oil revenue — the main fuel driving economic activity in most GCC states — has impacted the government’s ability to pay for many infrastructure developments. This in turn has had a trickle-down effect on the economy, with several construction projects either slowing down or grounding to a halt, leaving workers without any income, often for months at a stretch.

Unlike large construction companies that have other sources of income and can withstand the delay in receiving government monies, the migrant laborer at the bottom of the construction totem-pole is completely dependent on receiving monthly salaries, not only for them and their families to survive, but also to pay back the cost of gaining an employment.

The research points to the ‘perverse business model’ employed by GCC construction industry, where, in order to reduce the cost of labor on mega projects, the industry passes on recruitment of laborers to callous labor contractors who charge exorbitant fees from potential workers. The study found that workers from Bangladesh pay 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, while Indian migrants pay an average of between $1,000 and $3,000.

Rather than providing an opportunity for decent pay and better livelihood, construction industry practices across the Gulf are pushing workers into extreme debt and exacerbating abuses workers are likely to face, 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. While calling on construction companies to “end the cycle of abuse” by paying for the recruitment costs of construction workers, Segull and his co-author Sarah Labowitz urge Arab governments to enforce laws against the selling of visas. The also ask migrant-sending countries to legalize and regulate their local networks of unregistered recruitment agents.

While there are laws in place against the sale of GCC visas and Gulf-based employers are banned from directly charging migrant workers for their own recruitment, these laws are hardly ever examined or enforced.

There are an estimated 25 million migrant workers across the GCC, many of whom are exploited through low-wage jobs and few protections. Most of these workers arrive in the Gulf for a very simple reason: To make a better life for themselves and be able to send money back to the families and relatives back home, even if it means paying for the work.


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