RECRUITMENT COMPANIES AND TRAFFICKING

UNCLAS SECTION 01 OF 02 MANILA 001061 SIPDIS SENSITIVE DEPARTMENT FOR EAP/PMBS, G/TIP - LNORIN, EAP/RSP, DRL, INR/EAP LABOR FOR ILAB E.O. 12958: N/A TAGS: PGOV KWMN PHUM KCRM KCOR ELAB ECON RP SUBJECT: RECRUITMENT COMPANIES AND TRAFFICKING REF: A. MANILA 971 ¶B. MANILA 645 ¶C. MANILA 436 ¶1. (U) This message is Sensitive but Unclassified -- Please handle accordingly. ¶2. (SBU) Summary: Recruiting Filipinos to work abroad is an important national industry in the Philippines. The GRP regulates and licenses recruitment companies through the Philippine Overseas Employment Agency (POEA). Recruitment companies often perform valuable services for Overseas Filipino Workers (OFWs) and their families staying behind. Some recruiters, both licensed and unlicensed, however, operate outside of the law and are involved in trafficking in persons (TIP). If POEA discovers a recruitment company involved in trafficking or other illicit behavior, it may ban it from business and has done so on numerous occasions. The Arroyo administration has worked to crack down on TIP-related illegal recruiting, but more progress is needed. Mission is working to identify ways to assist the POEA and other GRP bodies track and punish those recruiters that are engaged in trafficking. End Summary. -------------- The Overseas Recruitment Industry -------------- ¶3. (U) An estimated 8.67 million Filipinos work abroad. This figure for OFWs represents roughly 10 percent of the population and 20 percent of the workforce, with OFW earnings representing roughly 10 percent of the country's GDP. The POEA, an agency of the Department of Labor and Employment, is responsible for licensing recruitment companies trying to attract OFW labor. According to the POEA, there are 1,036 licensed recruitment firms throughout the country, but the field is dominated by a few large, well-connected agencies. While licensing standards are uniform, most recruiters specialize by destination country or field of work, e.g., health care, entertainment, household help, construction and motor pool work, management, etc. -------------- Licensing the Recruiters -------------- ¶4. (U) To enter the business legally, a recruitment company must first register with the Department of Trade and Industry, the Securities and Exchange Commission, and the Bureau of Internal Revenue. Applicants must also demonstrate a capitalization of at least 2 million pesos (USD 36,000) and pass a criminal record check. POEA's policy is then to review applications and deliver a refusal or a license within 15 days. The license is valid for three years and is renewable. The POEA and other GRP bodies, including the Presidential Anti-Illegal Recruiting Task Force (PAIRTF),try to inspect the operations of licensed companies to ensure that their activities are legal. These inspections are sometimes made "sua sponte" (on the initiative of the GRP), but more often are in response to a complaint. The POEA and PAIRTF are also involved in cracking down on the many unlicensed recruitment companies. -------------- -- Profile of Recruiters: The Good and the Banned -------------- -- ¶5. (U) Many recruitment companies demonstrate remarkable corporate citizenship. The larger agencies typically have their own social welfare mechanisms, which include services to counsel OFWs and their families before, during, and after deployment. Many provide advice to their OFWs and dependents on family finances, the challenges of living abroad, and re-adjustment after return. Every two years, the POEA holds a large ceremony in Manila at which the top-performing and most respected companies receive awards for their treatment of OFWs. ¶6. (U) Some licensed companies are involved in illegal recruitment activities, however, including activities linked with TIP. Some firms cheat their OFW clients by promising services in exchange for cash payment, but then fail to deliver. It was in response to this problem that the GRP formed PAIRTF in July 2004. A much smaller subset of illegal recruitment activities involves companies that are accused of engaging in TIP. ¶7. (U) Upon investigation and administrative review, the POEA has authority to ban at least temporarily further recruitment activities by companies that have violated the rules, and in 2004 banned 36 companies. In addition, the POEA has a list of 38 companies that are &forever banned8 from recruitment; these are listed on POEA's website at http://www.poea.gov.ph. The most common reasons for banning companies include: cheating workers out of their funds and collecting unauthorized fees; misrepresentation and false advertising; deploying underage workers; and, doing harm to &public health or morality or to the dignity of the Republic of the Philippines8 (a catch-all phrase that covers TIP). In 2004, there were 2,189 cases filed against licensed recruiters on such grounds. -------------- Recruiter Involvement in TIP -------------- ¶8. (SBU) The GRP and NGOs believe that some -- but very few -- licensed companies are involved in trafficking. The figure for unlicensed firms involved in TIP is higher, notably trafficking Filipino women to Japan, South Korea, Malaysia, Singapore, and some countries in the Middle East and Europe. Profits from TIP-related recruiting typically are shared throughout the transaction chain, with the lion's share going to the recruitment companies, which often act as fronts for criminal syndicates. For example, Japanese brothel owners reportedly pay high fees to Philippine-based recruitment companies for Filipino women brought to Japan &to entertain8 clients. Headhunters, promoters, consultants, travel agencies, and corrupt officials also reportedly take a share. ¶9. (SBU) Despite the Arroyo administration's firm opposition to TIP and efforts to combat it, circumstantial and hearsay evidence indicate that recruiters involved in TIP sometimes enjoy forms of political patronage, especially from legislators and at the local level. For example, NGOs who rescue TIP victims have received telephone calls from angry mayors or members of the House. Moreover, when Japan announced in late 2004 that it was planning to implement new visa rules aimed at cutting down trafficking, there was a chorus of opposition from individual members of Congress, apparently instigated by recruitment companies (both legal and illegal). These companies, acting in concert with more legitimate recruiters who are worried about reduced OFW access to a wealthy market like Japan, as well as many OFWs and their associations, had enough influence to convince the GRP to press the GoJ to review its planned rules and perhaps cancel or re-write them. The GRP effort failed and the new GoJ rules are due for implementation beginning March 15. -------------- Comment -------------- ¶10. (SBU) The Arroyo administration, working through the POEA, PAIRTF, and other bodies, has tried to crack down on TIP-related recruiting, but more progress is needed. There are too many licensed and unlicensed recruitment companies with a connection to TIP that remain in operation. POEA and PAIRTF officials, however well meaning, face severe resource constraints that make monitoring the activities of the many recruitment firms very difficult. In addition, in a slow, inefficient judicial system that is sometimes subject to corruption, recruiters charged with crimes often worry little about convictions, despite a new drive for prosecutions and convictions in the wake of the 2003 anti-TIP legislation (and related laws). Moreover, those recruitment companies that are banned are often quick to re-form into new entities, which can be difficult for the POEA to detect. Mission is working to identify ways to assist the POEA and other GRP bodies track and punish those recruiters that are engaged in trafficking. Ricciardone