NGOS SAY NEW DOMESTIC LABOR CONTRACT IS A FIRST

C O N F I D E N T I A L KUWAIT 004351

SIPDIS

NOFORN
SIPDIS

FOR NEA/ARP, INL/HSTC, AND G/TIP

E.O. 12958: DECL: 11/04/2016
TAGS: PGOV PHUM ELAB IN SL ET KU TIP
SUBJECT: NGOS SAY NEW DOMESTIC LABOR CONTRACT IS A FIRST
STEP, SUGGEST FURTHER IMPROVEMENTS

REF: A. KUWAIT 3993

B. KUWAIT 2569

Classified By: Ambassador Richard LeBaron for reasons 1.4 (b) and (d)


1. (C/NF) Summary. After more than a year of delay, the
GOK recently implemented a rule that all domestic laborers
coming to Kuwait must sign a standard, three-party
(recruitment agency, worker, employer/sponsor) contract. The
contract provides for, among other things, minimum wages and
daily, weekly, and yearly rest periods. Post's domestic
labor contacts agree that the new contract is a positive
move, but stress that it is only a first step. One NGO
thinks the role of recruitment agencies needs to be
controlled and suggests excluding them from transfers of
workers already in Kuwait from one employer to another.
Another important contact doubts the ability of the
government to enforce the contract and suggests a plan
whereby private industry would provide insurance to defray
the costs incurred by both employers and workers when
problems occur. This contact's company has already begun
such programs and reports good preliminary results. A Post
contact within the Sri Lankan Embassy notes hesitation about
signing onto such a program for fear of jeopardizing the flow
of remittances earned by workers in Kuwait. While the
criticisms leveled are valid, the implementation of the
contract is a positive step for workers and fulfills a key
element of Kuwait's TIP action plan. End Summary.


2. (C/NF) After more than a year of delay, on October 1 the
GOK implemented a rule that all domestic laborers coming to
Kuwait must sign a standard, three-party (recruitment agency,
worker, employer/sponsor) contract (ref A). (Note: ref A
stated that it was not clear whether Kuwaiti embassies abroad
had begun the administrative procedures necessary to
implement the contract. Since then, the MFA as well as
Kuwait's Ambassador to Indonesia have confirmed to PolOff
that the embassies have received instructions to implement
the contract and are preparing to do so. End Note.) The
contract provides for, among other things, minimum wages and
daily, weekly, and yearly rest periods. Post's domestic
labor contacts agree that the new contract is a positive
move, but stress that it is only a first step.

NGO Critique: Contract Does Not Curb Recruitment Agencies
-------------- --------------


3. (C/NF) Faisal Al-Masoud, Vice Chairman and Executive
Director of the Social Work Society, noted that the new
contract would set minimum standards and therefore was an
improvement. His position, however, is that the contract
does not sufficiently control the recruitment agencies, whom
he sees as causing problems. As an example, he described to
PolOff a scheme where agencies shuttle domestic workers from
employer to employer without proper oversight. These
domestic workers, he asserted, are especially likely to face
problems.


4. (C/NF) Al-Masoud claims that his personal contacts were
instrumental in convincing Ministry of Interior (MOI)
officials to pass the three-party contract and says that he
is now working to get the MOI to issue a two-party contract
as well. According to Al-Masoud's plan, the three-party
contract would be used for workers coming from abroad. The
two-party (worker and sponsor) contract would be used for
workers who are already in Kuwait in order to cut the
recruitment agencies out of the process.

Private Sector Critique: Contract Enforcement is Unlikely
-------------- --------------


5. (C/NF) Hashem Maged, who serves as the General Manager
of both the Kuwait Union of Domestic Labor Offices (KUDLO)
and the Al-Haqooq law firm, predicted to PolOff that the new
contract would be ineffectual. (Note: Hashem Maged is an
energetic entrepreneur who owns three domestic labor
recruitment agencies in addition to running the day-to-day
operations of Al-Haqooq, a law firm specializing in
collections, and KUDLO, a trade association of recruitment
agencies. The lines between the two organizations are
sometimes hard to discern. Maged has told PolOff that
Al-Haqooq has a lower profile so he likes to use it for more
controversial projects. He also said that he will be
applying for an NGO license relating to domestic workers
soon. His business interests would seem to lie in making
money off domestic laborers, not looking after their human
rights. However, he has also clearly spent an extraordinary

amount of time putting together proposals and studies and
implementing projects that all have to do with improving
workers' rights. End Note.) Maged argues that the logistics
of the new contract -- namely, that Kuwaiti embassies in the
labor-sending countries must certify it -- make it unlikely
to be implemented. He noted that as many as 2,000 domestic
laborers leave countries like Sri Lanka and Indonesia for
Kuwait every month and that embassy staff is far from
sufficient to handle such a workflow. Furthermore, he added
that having women from rural parts of Indonesia make the
multiple-day trek to Jakarta just to sign a contract is
unrealistic. Lastly, he asserted that the real problem is
enforcement, not legal statutes.

Private Sector Proposal: Source Country Cooperation
-------------- --------------


6. (C/NF) Maged thinks he has a better solution. The
Al-Haqooq law firm signed an agreement with the Indian
Embassy, which went into effect June 1, whereby every Indian
domestic worker will sign a contract drawn up by Al-Haqooq.
The contract is also signed by the employer, the Kuwaiti
domestic employment agency, KUDLO, and the Indian Embassy.
According to P.M. Thomas, the Indian Embassy in Kuwait's
Labor Attache, the Indian government requires any worker
leaving India for Kuwait on a domestic worker visa to produce
a copy of the contract. The contract's terms are slightly
more beneficial to the worker than the government contract:

-- The contract sets a normal working day at eight hours,
and stipulates that additional hours should be paid at an
overtime rate according to Kuwaiti Labor Law. (Note:
Domestic labor is specifically exempted from the protections
of the labor law. End Note.) The government contract
specifies rest periods but does not explicitly limit the
number of working hours.
-- The government contract says the salary should be "not
less than 40 Dinars (140 USD) per month," whereas Al-Haqooq's
contract says the domestic worker "has agreed to work for 45
Dinars (155 USD) per month." In reality, Kuwaitis rarely pay
more than the minimum salary, so the Al-Haqooq contract is
probably more favorable for the worker.
-- The Al-Haqooq contract mandates that the worker sign a
receipt for the salary. The government contract makes no
mention of this important provision, though the Ministry of
Interior's Domestic Worker's Administration says it enforces
this law in practice. Non-payment of salary is the biggest
complaint of domestic workers in Kuwait.
-- The Al-Haqooq contract clearly states that the passport
belongs to the Government of India and must be produced upon
the Embassy's request. (Note: Passport holding by employers
is a significant problem in Kuwait. Employers hold the
passport, hoping to get the employee's next employer to pay a
fee in order to take over the sponsorship of the worker. End
Note.)
-- The Al-Haqooq contract makes KUDLO responsible for
sending the worker back to India if working conditions are
found to be unacceptable at any time before the completion of
the two-year contract. The Arabic version of the government
contract says the recruitment agency has such responsibility
if something prevents the worker from working. (Note: in
English it says "the sponsor or the recruitment agency." The
Arabic is legally binding. End Note.).

Indian Embassy and Al-Haqooq Require Insurance
-------------- -


7. (C/NF) Thomas also told PolOff that the Indian
Government requires all workers to show proof of insurance
before they leave India. Maged says the Indian Embassy has
authorized him to be the sole provider of this insurance.
According to Maged, his company's insurance protects both the
worker and the employer. For the worker, the insurance pays
medical benefits, repatriation costs, and legal fees if the
worker files a case. For the employer, the insurance pays
for repatriation and medical costs that normally would be the
employer's responsibility.


8. (C/NF) Al-Haqooq charges 50 Dinars (170 USD) for this
insurance, which is paid by the employer. In response to
PolOff's concern that the fees would be passed on to the
worker, Maged says that this cost, plus a 15-Dinar (52 USD)
processing fee charged by the Indian Embassy, is hidden in
the recruitment agencies' fees. Maged gave an example of
the fees for procuring a maid at his own agency: 290 - 380
Dinars for a Filipina, 290 - 350 Dinars for an Indonesian,
and 220 - 250 Dinars for a Sri Lankan. None of these

domestic workers have the insurance policy that covers their
medical or legal fees in Kuwait. Meanwhile the agency makes
Indians available for an average of about 280 Dinars (Goans
cost 300 Dinars, Keralans fetch 250 - 280 Dinars, and
Hyderabadis go for 220 - 250 Dinars),and these prices
include the cost of insurance. (Note: In meetings with labor
attaches from various sending countries, PolOff has learned
that many of the source-country embassies fear that insurance
requirements will make workers from their countries more
expensive and will thus make employers less willing to hire
them. End Note.)


9. (C/NF) Thomas said he was not aware of an agreement to
give the insurance concession solely to Al-Haqooq. (Note:
Thomas is new in his position and seemed to be less than
fully informed about the subject. End Note.) Thomas did
confirm, however, that the Embassy has been referring all
Indian domestic worker complaints to Al-Haqooq and that it
has been pleased with the results. It noted that most
disputes were settled out of court within a few days, but
that Al-Haqooq had proceeded to court with those cases that
could not be solved amicably.


10. (C/NF) Maged told PolOff that he has already signed
4,000 insurance contracts since July 1st. He produced a
statistical analysis showing that in that time Al-Haqooq has
brokered amicable resolutions to problems for 323 domestic
workers, repatriated 80, and reached "settlements" (defined
as convincing the sponsor to provide restitution for some
kind of wrong committed) in 7 cases. Maged also provided
statistics from January 1 through October 20 showing that
Al-Haqooq had taken on 377 cases, including 150
salary-dispute cases, 50 cases of physical abuse, and 22 rape
cases. The results of these cases were not immediately
available.

Al-Haqooq Tries to Expand, Faces Embassy Resistance
-------------- --------------


11. (C/NF) Al-Haqooq is trying to expand its operations.
It has signed an agreement with the Ethiopian Embassy, which
has only recently seen significant numbers of domestic
workers coming to Kuwait. The firm has been providing free
legal services to the Sri Lankan Embassy as well, probably in
an effort to sign a similar contract with the Sri Lankans.
Maryam Naleemudeen, a Sri Lankan lawyer who works for
Al-Haqooq and is stationed at the Sri Lankan Embassy to
provide legal services for cases ranging from non-payment of
salary to rape, said she has asked the staff in the embassy
to consider signing an agreement with Al-Haqooq to provide
insurance that would cover legal and medical costs. Much to
her chagrin, however, the staff is resistant. They prefer to
send domestic workers, most of whom are female, back to Sri
Lanka rather than pursuing their cases in the courts.
Naleemudeen implied that while they would like to protect
workers' rights they are ultimately more concerned with
hiding problems so that the flow of worker remittances does
not stop. (Note: The GOK prevented Bangladeshi workers from
entering the country for approximately a year after
Bangladeshis staged an unruly protest over working conditions
in April 2005. Recent press reports say a new ban has been
imposed, though the Bangladeshi Labor Attache said he has not
heard anything official on this matter).


12. (C/NF) Naleemudeen, whose father was the Sri Lankan
ambassador to Kuwait until several years ago, used her
connections in the foreign ministry on a recent trip to
Colombo to meet one Mr. Ansar, whom she describes as the
Director General of the Sri Lankan foreign service. Mr.
Ansar claimed not to know the difficulties faced by Sri
Lankan housemaids in Kuwait and told Naleemudeen that he
would press to make insurance of the type offered by
Al-Haqooq mandatory if Naleemudeen could present him with
evidence that India had already launched the program. The
officers about whom Naleemudeen complained, however, are from
Sri Lanka's Labor Ministry, so it remains to be seen how the
internal politics of Sri Lanka's ministries will play out.

Comment
--------------


13. (C/NF) The new contract is an important step forward
and the GOK should be recognized for finally implementing the
contract in the face of opposition within the Ministry of
Interior and the general public. The contract sets legal
minimum standards and is a clear win for domestic laborers.
However, the criticisms of the new contract point to

necessary next steps. SWS' suggestion to exclude the
recruitment agencies is useful since workers may want to
transfer from one employer to another without the involvement
of a recruitment agency. The new contract would seem to
force a worker to go through an agency even for an in-country
transfer. The agency will surely take a fee, and such costs
are often passed on to the worker. On the other hand, the
contract explicitly forbids the passing on of such fees and
the association of a worker with an agency would provide the
worker with a body that could intervene in case of disputes.
More important is Maged's assertion that enforcement is key.
His scheme to monopolize the selling of insurance to poor,
uneducated workers naturally raises questions. Thus far,
however, independent sources (the embassies) have been happy
with Al-Haqooq's services. Even though the Sri Lankan
example suggests some embassies may prefer not to address
problems head on, it is unlikely that the embassies would
knowingly accept the wide-scale fleecing of their
constituents by a private business. Currently Maged claims
to be losing money, but even if he profits from the
arrangement, the service he has been providing so far seems
beneficial and may prove a useful model for mitigating the
situation of domestic workers in Kuwait. This may be a case
where a private initiative will work better than a cumbersome
government-run program.


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