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. ********************************************* * For more reporting from Embassy Kuwait, visit: http://www.state.sgov.gov/p/nea/kuwait/?cable s Visit Kuwait's Classified Website: http://www.state.sgov.gov/p/nea/kuwait/ ********************************************* * LeBaron