Improving the Management of Migration Systems: Challenges for China and Europe, by Roger Plant, Bucharest, October 2009

Presentation to Workshop on “Addressing the Demand Side of Chinese Migrant Workers in European Countries”, Bucharest, Romania, 11-12 October 2009

Statement | Bucharest, Romania | 13 October 2009

Distinguished representatives of the Government of Romania, of the Chinese and Romanian business community, invited guests, ladies and gentlemen,

It is a real honour to be back in Bucharest, for only the second time in my life. It is important for me for several reasons.

First, after almost eight years heading the ILO’s technical cooperation programme against forced labour and trafficking, this will be my last public presentation before leaving the ILO next week. One of my first visits in 2002 was to your magnificent Parliament building, honoured to participate in one of the Ministerial meetings of the OSCE’s Alliance against Trafficking.

Second, because the subject of this week’s workshop is one of considerable importance for China, as a rapidly growing economy with the world’s largest population, and EU countries including Romania which have to deal with complex labour market challenges. European populations are on the move, and can have a serious demand for temporary overseas workers in some sectors of their economy. And China, despite its rapid growth and steadily improving economic prospects, is constantly seeking opportunities to deploy some of its workers overseas for at least a period of time.

This workshop, and also the study on the recruitment and employment of Chinese migrants in Romania, have their origin in a long cooperation that our programme has had with the Government of China, and most recently with EU member States, which aim to prevent forced labour, and also to stem irregular Chinese migration and trafficking to Europe, through capacity building for improved migration management including the better operation of recruitment systems and agencies.

We have also been conducting research on forced labour and human trafficking in countries throughout the world, including the EU countries and Romania itself. Ten years ago in 1998, the ILO adopted its Declaration on Fundamental Principles and Rights at Work which requires its member States to respect and promote core labour standards including the elimination of all forms of forced or compulsory labour. In 2001, the ILO established the Special Action Programme to Combat Forced Labour (SAP-FL), as one of several measures taken to promote the 1998 Declaration. SAP-FL’s mandate is to raise awareness on forced labour and trafficking globally, to press for changes in policy and laws in cooperation with governments and social partners, as well as to increase the knowledge base on the scope and forms of forced labour in the world today. Since then, it has given much attention to the forced labour outcomes of human trafficking and, in some circumstances, irregular migration. Research studies have focused on the root causes or trafficking, recruitment mechanisms, demand factors, and forms of exploitation in major economic sectors.

Our earlier Romanian research, led by Dr. Catalin Ghinararu, focused on issues of labour and sexual exploitation affecting the migrant workers trafficked out of Romania to other European countries. While accepting that more research was needed, it argued that trafficking for labour exploitation is an emerging issue if the Central and Eastern European region, and particularly in Romania. During an earlier workshop held in Bucharest in 2003, it became evident that abusive recruitment mechanisms can play a major role in making persons vulnerable to trafficking at a later stage. Thus a training programme on the monitoring of private recruitment agencies was developed, and tested with a reference group in Romania the following year. Guidance manuals on forced labour and trafficking have since been prepared for a rage of different target groups, including labour inspectors, employers and business actors, judges and prosecutors, and others.

Our research on the situation of Chinese migrants in Europe was first undertaken as part of a cooperation programme between the ILO and the Government of China, on “Forced labour and trafficking: the role of labour institutions in law enforcement and international cooperation in China”. The four main objectives of this project were to: strengthen the law and policy framework on forced labour and trafficking for labour exploitation; address emigration source areas through implementation of pilot programmes to prevent forced labour and trafficking; improve transparency of the migration process, and reduce the risk of potential migrants being trapped into forced labour and trafficking; and promote communication between the governments of China and destination countries to combat forced labour and trafficking for labour exploitation. Over a period of several years this project has involved a rich experience in China itself. Activities have included national and provincial seminars on trafficking, with participation by officials from a range of different government agencies; a successful pilot awareness raising programme in the provinces of Fujian, Jilin and Zhejiang; the distribution of training materials for private employment agencies; and extensive research on recruitment mechanisms in source areas for migrants; and inputs to the five –year National Action Plan on Anti-trafficking of Women and Children, 2008-2012.

The ILO is shortly to publish the findings of our first set of research studies on Chinese migrants in Europe, covering France, Italy and the United Kingdom. It paints a mixed picture. In recent years, in Europe and the rest of the world, some of the most serious cases of human trafficking and smuggling have involved Chinese criminal networks exploiting their own fellow citizens. In other cases, Chinese workers have been able to leave their country through legal channels, though often paying high charges to different recruiting agents and intermediaries, and also enduring harsh working conditions together with severe indebtedness in the destination country.

The earlier ILO research also pointed to some good business practice, a thing which should be of interest to the participants at this workshop in Romania. For example, as part of the global movement to promote corporate social responsibility, Chinese ethnic businesses have sometimes joined programmes to reinforce the capacity of employers to conduct “self-regulation” of their business practices. Some positive practices were detected in Italy, where some Chinese businesses have started to move towards full compliance with local labour regulations. Through a pilot project, some Chinese companies voluntarily accepted inspection by social auditors, and were certified by internationally accredited organizations. Chinese workers have also become more aware of their rights under Italian law.

A few years ago, we designed the follow-up programme, implemented jointly by the ILO and the International Organization for Migration (IOM) and funded by the EU’s Aeneas Programme, to promote further cooperation between the EU and China. It has been an exciting and creative project, much appreciated by the EU and also the several participating agencies in China itself, as my colleague Lanlan Lu will explain to you later. The project seeks to promote cooperation between China and the EU in the field of migration management, including the prevention of human trafficking. It is jointly implemented by the International Organization for Migration (IOM) and the ILO, in close partnership with the Ministry of Foreign Affairs, Ministry of Human Resources and Social Security, and the Ministry of Public Security of the People’s Republic of China.

The CBMM project has been designed as a comprehensive one, with parallel activities in China itself and several EU countries. In China, the ILO has assumed responsibility for activities including: awareness and information campaigns in selected regions on risks associated with irregular migration; capacity building for law enforcement agencies in charge of licensing private employment and recruitment agencies; and support for a migration policy review and capacity building for the provinces. In Europe, the emphasis has been on country specific research, examining the recruitment and employment conditions of Chinese workers in different sectors, in part to gather the information needed for the awareness raising activities in China. A further area of activity has been addressing the demand side in Europe of labour migration from China, through discussion for a in select EU countries including government officials, business actors and other concerned stakeholders.

As ILO, we felt that improved practice could be achieved, not only by bringing the Chinese and European governments together, but also by promoting dialogue between the Chinese and European business community, whether small enterprises or event the larger companies in construction, textiles or other relevant industries. So we envisaged a combined approach of research and social dialogue. Research should identify the sectors most prone to employ Chinese workers, whether in a regular or irregular situation. Lead researchers would also identify the best means to approach employers and business actors. Meetings would then take place in selected countries (of which Romania is one), to promote mutual understanding between the Chinese community and local society, raise awareness of business actors with regard to the risks of engaging irregular migrants and trafficking victims, identify alternatives to abusive forms of recruitment, and seeks a strategic approach to integration of Chinese business in local society, with full respect for local legislation and regulations. The meetings should also review modalities for the engagement of Chinese migrant workers in EU countries, including the use of subcontractors and other labour market intermediaries.

So this is the backdrop to the Bucharest meeting this week, and its overall objectives. Before turning to the findings of our commissioned study in Romania, I should say a few things about our broader work with Chinese employers, and also share some conclusions of a similar meeting we had last month in the United Kingdom.

In China we have had a series of activities, sometimes with the China Enterprise Confederation (CEC) as the ILO’s principal employers’ partner, at both central and provincial levels, and sometimes with individual companies and their suppliers. Just a couple of weeks ago I was at a week long event in Shanghai, when one major textile company brought its major suppliers from all over the country for separate training sessions on forced labour, trafficking and discrimination. At the policy and guideline level, the ILO and the CEC have now issued a joint code of practice for preventing forced labour and trafficking. It is divided into guiding principles (covering such concerns as legal compliance, freedom of employment, termination of employment, labour contracts, holding of personal documents, coercion related to wages, working hours and overtime, the operations of recruiters and labour market intermediaries, and prison labour); and principles of implementation (including human resource practices, assessment and corrective action, handling grievances, and application to suppliers and sub-contractors). One important principle – perhaps useful to discuss at the present meeting – is that no fee or cost for recruitment should be charged directly or indirectly, in whole or in part, to the worker, including costs associated with the processing of official documents. The labour market intermediary should not retain any part of a worker’s remuneration. And workers should have the right to terminate their labour contracts with labour market intermediaries at any time without penalty.

The China code of practice should be taken together with our Handbook for Employers and Business on Combating Forced Labour, which has been amply distributed in Chinese, and of which English language versions are available to participants today.

The UK workshop provided a perspective rather different from Romania, with a far larger Chinese population distributed around the country, and a tendency for Chinese workers to be employed by their own nationals in ethnic industries, particularly in restaurants and catering. The Chinese Embassy estimated that the total size of the ethnic Chinese community in the UK had grown to as much as 600,000, including those of Chinese and British nationality and some 100,000 students, but excluding irregular migrants. Recent official statistics are that Chinese nationals are now the fastest growing ethnic group in the UK, growing at almost 10 per cent over the past decade, and reaching some 400,000 by 2007. In recent years there has been a major influx of Chinese from all over China, in particular from Fujian province in the south-east, and from the North-eastern provinces. The background paper prepared by a Chinese researcher observed that the economic recession and strict migration management measures in the UK had reduced the flow of illegal immigration and human trafficking from China on the one hand, while on the other hand they had a severe impact on the working conditions of many Chinese migrants, and especially irregular Chinese migrant workers. Members of the Chinese community made a strong plea to regularise the situation of the irregular migrants who were already in the UK saying that this was the only way to prevent their exploitation, and to address the problem of a severe labour shortage in the Chinese catering industry.

I can now turn to the situation, recruitment and employment conditions of Chinese workers in Romania. This is clearly a different scenario from that in the West European countries where we have done previous research. Though there is a mix of regular and irregular Chinese migration, with some evidence of trafficking, two issues stand out. First the numbers are small compared with say France, Italy and the UK, Second, the Chinese workers are brought in through different modalities to carry out temporary work in specific sectors and industries, rather than being restricted to some form of ethnic niche. They are also brought in through different recruitment mechanisms, which are reviewed in some depth in our consultant’s report.

The study first provides background information on longer standing and more recent patterns of Chinese migration to Romania. Second, it compares different models of recruitment for these Chinese workers, examining both the fees paid and other costs associated with recruitment and job placement. Third, it discusses aspects of their living and working conditions, including healthcare, and refers to some recent labour disputes in particular since early 2009. The findings are based largely on testimonies collected directly and indirectly from approximately 500 Chinese workers in Romania. The study focuses mainly on Chinese workers in the construction industry, but also discusses the situation of other Chinese migrant workers in Romania, particularly in the textile and shipbuilding industries. Finally it identifies issues where improvements can be achieved through better cooperation between the authorities of China and Romania, within the spirit of the EU funded project.

I will omit the background information about the Chinese in Romania, with which I a sure you are more familiar than myself, and begin with the observations on recruitment channels and mechanisms. The research distinguishes between what is called the “chain model” involving various recruitment agents, and systems in which the recruitment is subcontracted to Chinese agencies.

The chain model generally operates as follows. Because of the current shortages in the Romanian labour market, a construction company that wins a contract or decides to invest in a project is permitted to apply for permits to bring in international workers. Generally speaking however, the applications of small companies will not be successful. They will then have to pay labour brokers who are well-connected to officialdom and know how to operate the application process. The two parties will enter into a contract or sometimes only an oral agreement, under which the construction company entrusts the broker to find workers and agrees to pay a fee for this service. The contract or agreement will generally only cover the broker’s undertaking to find the workers and the fee to be paid by the employer. It will not include any clauses covering salaries, work skills or work conditions; any agreements of this nature will be oral rather than written.

These broker agencies still tend to be run by Israelis who reportedly register in Romania instead of Israel to avoid Israeli taxes. Their previous experience with Chinese brokers in the Middle East means they are already in position to pass the request for labor on to large Chinese labour brokers, most of them national level human resources companies, who are legally authorized to send workers abroad. The two sets of brokers will enter into a contract, generally specifying matters such as the number of workers the Israelis broker is requesting from the Chinese partner each year, without, once again, any coverage of issues like salaries and so on.

Under this model, the large Chinese labour agencies then pass details as to the workers needed to several regional agencies, often operating at provincial or sub-regional level. The transaction is not technically a sub-contract as no paper contract exists. Generally, provincial and even some sub-regional brokers will then “sub-contract” further, to town-level brokers. At the end of this chain, it is the town brokers and a few sub-regional brokers who then attempt to contract individual workers.

The chain then operates in the opposite direction, again normally without any paper contracts. Lower level, often county-level brokers send workers to higher level brokers, who pass them up until they reach the initial contracting broker. If the workers are approved by the end brokers, the town brokers will receive a payment related to how many workers they have provided and the other brokers, at provincial and sub-regional level will also receive their cut.

At this point, under Chinese law, a labour contract clearly specifying such items as salaries, work hours and so on, should be concluded with the workers with the large, “top of the chain” labour agency acting as the other party to the contract. The workers should be clearly informed about the terms of employment before agreeing to depart.

The agencies at the top of the chain are also responsible for obtaining visas and other necessary documentation for the workers and for arranging their travel. Some irregularities in the procurement of work permits and visas which occur at this stage and which impact so strongly on the workers’ experience once in Romania, are discussed in more detail below.

When the workers arrive in Romania, representatives of the large agencies there assume responsibility for them and receive the remainder of their commission. Usually they will hire a travel agency or rent buses to send the newly arrived workers to their employers. A Chinese translator should be on hand to brief the new arrivals on cultural and work matters and verify that the contracts signed with Romanian employers are in accordance with both Romanian law and also the contracts previously agreed between the workers and the labour brokers in China. If these matters are deemed to be in order, and the employers are satisfied that they have received the type of workers and skills requested, the contract is considered successfully concluded.

The agency system can operate in different ways, involving different actors. Overall, the main parties to the employment relationship will be a Romanian construction company and the Chinese workers. Yet between these two, there are customarily at least three to four brokers, one Romanian broker, one large broker in China who is legally qualified to send workers abroad, and smaller brokers who find the workers for the larger firm.

Under another and less complex arrangement, the Romanian construction company may seek not only workers, but also sub-contractors capable of filling the required labour quota. The employer would typically divide the particular project it wishes to complete into several components. Parts of the project are then sub-contracted to a Chinese construction company which then puts together a construction team in China to carry out the work in Romania. Thus, the eventual workers will work in Romania but for the Chinese company. The Romanian company signs a contract with its Chinese partner, specifying the project that the Chinese partner is to complete and how much it will be paid. Under this model, the Chinese construction workers will not have to sign contracts with the Romanian company, as they will not deal directly with each other. The Chinese company not only sends workers, but also supplies a management team to run the program, as well as service personnel for the team, such as doctors and cooks. The Romanian company also appoints several managers to monitor the construction project as a whole; Romanian managers will also oversee specific components of project.

There are several advantages to this system. Firstly, without small agency intermediaries, the workers pay smaller commission fees. Secondly, there is no risk of discrepancies between contracts as there will be only one contract. Thirdly, the broker directly supervises the workers’ working and living conditions, so that in theory there can be good communication between the workers and those who are actually managing their work conditions and salaries.

Moreover, some workers may never sign a contract at all: brokers may sign the contract in the worker’s name or “black-market brokers” may simply completely ignore the legal requirement for a contract. In fact, some 15% of the workers interviewed in the course of this study said they had never signed a contract to work in Romania.

The research also provides evidence of fee charging by recruitment agencies, often at high rates, together with interest payments on the debts accumulated by workers, fee charging for Romanian administrative procedures, as well as certain hidden costs associated with migration while the Chinese workers await the opportunity to migrate for employment. It also cites some deficiencies in labour contracts, as for example when the clauses of certain contracts can change between the place of origin in China and the Romanian place of destination. There can also be unexplained deductions from wages, and problems related to the issuance of visas. Finally the research documents the well known Chinese workers disturbances in early 2009, which led to remedial action by the Romanian Ministry of Labour, Family and Social Protection, acting in close cooperation with the Chinese Embassy in Bucharest and also the Chinese Ministry of Commerce.

In conclusion, the research paper points to a number of areas where improvements are needed, through both clearer laws and regulations as well as strengthened monitoring and enforcement of the laws, in order to ensure that the treatment of these migrant workers is consistent with both Romanian standards and the international labour standards to which Romania is a party.

The findings suggest that the issues need to be addressed through improved cooperation between China as a sender country, and Romania as a destination country for migrant workers. Though both demand and supply may have fallen over the past year, first in the context of economic and financial recession, and second in the aftermath of the protests by Chinese workers in early 2009, it is nevertheless important to examine the measures that could be taken by the governments of both China and Romania, where possible in close cooperation with the representatives of employers’ and workers’ organizations, in order to increase the scope for legal and well managed migration that responds to both the demand of employers and the need to safeguard the rights of the workers. Issues to be addressed include the following:

Appropriate regulations on recruitment and employment agencies

There is a need for clear regulations concerning the operations of private employment and recruitment agencies. A useful framework is provided by the ILO’s Private Employment Agencies Convention, No. 181 (1997), which the ILO is now encouraging more member States to ratify. It has many provisions which can strengthen Romania’s efforts to curb abusive practices. Article 8 provides for measures (where appropriate, in cooperation with other Members), to provide adequate protection for and prevent abuses of migrant workers recruited or placed in its territory by private employment agencies. These shall include laws or regulations which provide for penalties, including prohibition of those private employment agencies which engage in fraudulent practices and abuses. Moreover, where workers are recruited in one country for work in another, the Members concerned shall consider concluding bilateral agreements to prevent abuses and fraudulent practices in recruitment, placement and employment. Article 7 establishes the general principles that private employment agencies shall not charge directly or indirectly, in whole or in part, any fees or costs to workers. Article 10 provides for the creation of adequate machinery and procedures, involving as appropriate the most representative employers and workers organizations, for the investigation of complaints, alleged abuses and fraudulent practices concerning the activities of private employment agencies.

International cooperation to harmonize recruitment practices

The study has identified different forms and channels of recruitment, through a complex network of different agencies in China, Romania and also third party countries. It is important that migrant workers receive one contract in the place of origin, identical to that in the place of destination, which clearly explains the rights of workers as well as their obligations, covering wages and the payment of wages, hours of work and other issues. Vigilance needs to be taken, to prevent the risk of the “substitution” of the original contract by different contracts n the place of destination. Both Romanian consular officials in China, and Chinese consular officials in Romania, can play an important role in monitoring the enforcement of contracts and bringing any grievances to the attention of relevant authorities.

Enhancing the monitoring capacity of public institutions

Many public institutions and agencies have a role to play, in ensuring orderly migration management, while safeguarding the rights of all workers. An inter-Ministerial coordination mechanism may be useful, to review the work permit and visa application process, and to improve monitoring of recruitment activities. The licensing and registration of private employment and recruitment agencies is an effective way of ensuring compliance with existing labour legislation.

Importance of social dialogue

Social dialogue, involving employers and workers organizations as well as government agencies and NGOs with relevant expertise, is important at different levels. First it is essential that any new regulations, or any new licensing and monitoring mechanisms, should be adopted through consultation with employers’ and workers’ organizations and should reflect their concerns. Second, there is a need for strengthened dialogue between the sender and destination country, bringing both Chinese and Romanian trade unions and employers’ organizations together to discuss common platforms, and preferably agree on concrete measures to assist the migrant workers and redress their grievances. For example the All China Federation of Trade Unions has recently established a new initiative to assist Chinese migrant workers. Officials from all countries, at all levels, also need to assume responsibility for ensuring that workers understand their rights, and that employers and recruiters are fully familiar with legal procedures.

Guidance to prevent forced labour and trafficking

At their worst, abusive practices can constitute not only a breach of labour law but also the criminal offences of forced labour and trafficking. The ILO has now produced a number of guidance manuals on the prevention or prosecution of forced labour and human trafficking, targeted at different audiences including: employers and business, labour inspectors, judges and prosecutors, and legislators and law enforcement. Employers and workers organizations in Romania, as well as government agencies, academic institutions, can play an important role in adapting such materials to the Romanian context, and ensuring their wide dissemination in the country.

Roger Plant

Head, Special Action Programme to Combat Forced Labour

International Labour Office, Geneva