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January 2012, Volume 19, Number 1

GCC: Kafala, UAE

The Gulf Cooperation Council (GCC) includes the six countries of the Persian peninsula: Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and United Arab Emirates. The GCC countries have some of the world's highest shares of migrant workers in their labor forces, as migrants are over 75 percent of private-sector workers in GCC countries.

Especially after the 1990-91 Gulf War, many GCC countries encouraged employers to shift from Arab to Asian migrant workers. In 2010, almost three-fourths of the migrant workers in GCC countries were Asian; a quarter were Arab. Bahrain is a partial exception, with a smaller share of migrant workers, less than 60 percent, and a Shia majority population ruled by a Sunni minority.

Kalfala. There were about 25 million migrants in Middle Eastern countries in 2010, plus another 10 to 15 percent irregular foreigners. There is little prospect of a reduced demand for migrant workers in Middle Eastern countries or a change in migrant worker policies.

The core migration policy is sponsorship, the so-called kafala system that requires foreigners to have local citizen sponsors known as kafeel. A kafeel grants permission for foreigners to enter the country, monitors their stay and approves their exit. Since the kafeel is responsible for all aspects of the foreigner's stay, if the kafeel withdraws sponsorship, the foreigner has no legal right to stay in the country. Disputes over wages, accommodations, working conditions or other work-related issues can prompt the sponsor to withdraw sponsorship.

Many kafeels are only nominally involved in the employment of the migrant workers they sponsor. Instead, they allow their names to be used to sponsor foreigners in exchange for payments from employers, recruiters or others. Many low-skilled migrants never meet the kafeel who is sponsoring them, and deal with their sponsors only through intermediaries who may be nationals of their country of citizenship. Some kafeels (or their agents) keep the passports of the foreigners they sponsor.

Because migrants from many migrant-sending countries are willing to pay $500 or $1,000 for sponsorships, some local citizens profit by sponsoring migrant workers they do not intend to employ. These payments to sponsors make it hard for GCC governments to abolish the kafala system.

Bahrain announced plans to end the kafala system in summer 2009, but it remained in place in Fall 2011. Migrant workers in Bahrain are allowed to change employers without the consent of their current employer, and Bahrain gives migrants with expiring contracts three months to find new employers. Kuwait also announced plans to end the kafala system to mark the 20th anniversary of the Gulf war in February 2011. Instead, like Bahrain, Kuwait kept the sponsorship system in place, but made it easier for migrants to change sponsors.

Oman in 2003 made it illegal for employers to send "their" migrants to other employers, but neither Qatar nor Saudi Arabia made significant changes to the sponsorship system. Qatar, as host of the 2022 Fifa World Cup, is drawing the attention of human and labor rights groups who say most laborers in Qatar receive 600 riyals ($165) a month, plus 200 riyals a month for food. Most migrants spend at least 4,000 riyals or six-months salary to get a job in Qatar.

The UAE has not changed the kafala system but implemented a wage protection system requiring employers to pay the wages of migrant workers directly into bank accounts to make it easier to resolve claims of non-payment of wages. Jordan and Lebanon introduced standard contracts for migrant workers, but did not changed the kafala system.

There are several explanations for the persistence of the kafala system. First, some citizens benefit from sponsorship payments, so ending kafala could end these payments; one estimate asserts that a $1 billion recruitment industry is supported by the Middle Eastern migrant labor system. Second, the kafala system helps ensure control over foreigners in countries where they often outnumber natives. Third, the Asians and Africans who have largely replaced Arabs as low-skilled migrant workers in Gulf countries are less likely to protest the restrictions on their liberties imposed by the sponsorship system.

Fourth, migrant-sending countries have been unable to exert sufficient pressure to end sponsorship. Many fear that, if they try to set minimum standards for their nationals in Gulf countries, employment opportunities will diminish. For example, Filipino and Indonesian efforts to set minimum wages for their domestic workers in Saudi Arabia in 2011 resulted in Saudi Arabia halting the entry of additional domestic workers from these countries.

Reform proposals include formalizing and making recruitment more transparent, allowing workers to change employers while in Gulf countries, and improving wage and working condition protections and dispute-resolution procedures. Kafeel-sponsors can and do use a variety of intermediaries to link migrants and employers, and these non-licensed recruiters can and do charge migrants fees (some intermediaries procure workers at no cost to employers because they collect fees from migrants via recruiters in sending countries). One reform would be to require anyone receiving fees for labor intermediation to be licensed.

Allowing workers to change employers without leaving a Gulf country could make employers more accountable, since workers would not necessarily face deportation if they lost their sponsor. There are proposals to have the Ministry of Labor handle recruitment and deal with workers who want to change employers, and some proposals would have MOLs administer an exchange for workers whose jobs have ended and are seeking another employer. Eventually, GCC MOLs could develop labor-market information systems that check employer requests for workers and transmit valid job offers to MOLs in migrant-sending countries, which could make recruitment more transparent and increase worker protections.

Other recommendations to improve worker protections in Gulf countries include minimum wage laws and improved enforcement of working condition laws. Standard contracts could make it easier to establish employer and worker rights and responsibilities and resolve disputes.

One practical difficulty is how to protect migrant workers who complain about their employers, since the employer may fire complaining workers; most fired workers are removed from the country while their cases are pending. However, if complaining workers are "rewarded" with the opportunity to find another employer or extend their stay, there may be frivolous complaints. Rewarding only workers who make "valid" complaints requires establishment of a system to deal with complaining workers until their complaints are resolved.

UAE/SA. Emiratis are 20,000 or five percent of the 3.8 million workers in the private sector in the UAE. The UAE wants private employers to hire Emiratis. Some do, but a sixth of the Emiratis who get private-sector jobs leave because, for instance, they are frustrated by the make-work jobs to which they are assigned.

Most Gulf governments have embraced nationalization or Arabization policies that require private sector employers to hire some local citizens. Saudi Arabia in 2011 announced the "Nitaqat" system to rate the 300,000 local employers by their share of Saudi employees.

Saudi Arabia employers are supposed to pay two percent of the wages of migrant workers into the General Organization for Social Insurance (GOSI). The government when implementing the Nitaqat learned that many employers were not paying the required two percent. Employers who fail to pay cannot renew the work permits of their employees, which can make migrant workers illegal.

There are about 20 million Saudis, but only four million have jobs. In January 2012, Saudi Arabia's government announced that it would begin enforcing a 2006 law that requires women to staff female apparel and cosmetic stores despite opposition from conservative religious leaders, who do not want men and women to mingle in public without male supervision. Migrant women are expected to replace Saudi and migrant men in apparel stores.

Over three-fourths of UAE citizen women have university degrees, but only 15 percent are in the labor force; UAE citizen women hold half of all government jobs. Over 55 percent of Saudi adult women have university degrees, and fewer than 15 percent are in the labor force; in Qatar, 90 percent of women hold university degrees.

Israel. Israel had about 250,000 foreign residents at the end of 2011, including 89,000 legal foreign workers, 31,000 legal Palestinian workers, 95,000 irregular foreigners who overstayed tourist visas. There were over 45,000 African "infiltrators" in Israel at the end of 2011 who entered through the Sinai over the past six years, including 28,000 from Eritrea and 13,000 from Sudan.

Africans began migrating to Israel after Sudanese camped out in Cairo parks seeking asylum were removed by Egyptian police in 2005 in an operation in which at least 28 Sudanese died.

Israel in December 2011 announced plans to build a $160 million fence on its 150-mile border with Egypt in the Sinai to slow the influx. The government reported 16,800 illegal entrants apprehended entering from the Sinai in 2011. Israel's Parliament in January 2012 approved a law that would allow indefinite imprisonment of unauthorized foreigners without trial and penalize those who help unauthorized foreigners with sentences of up to 15 years. Employers who hire illegal migrants face stiffened fines of up to $18,000.

Among the legal foreign workers, 52,500 were caretakers, 24,500 farm workers, and 8,300 construction workers. The major countries of origin for legal foreign workers were Thailand, 7,600: Philippines, 5,800: ex-USSR, 5,700: and India, 3,000.

Camilla Hall, "Labour conditions: Archaic sponsorship system in spotlight," Financial Times, December 16, 2011. Angela Shah, "Helping Emiratis Succeed in the Private Sector," New York Times, November 3, 2011.