Kafala System

Recently, the Kafala System is in the news following Saudi Arabia’s plan to cancel this sponsorship system and replace it with a new contractual system between migrant workers and employers in 2021. Hence, it is important to know the relevant facts about the Kafala system for the IAS Exam.

The topic ‘Kafala System’ can be asked in both IAS Prelims and Mains. To complement UPSC 2023 preparation, candidates can check the following links:

  1. Government Schemes
  2. Daily News Analysis
  3. Static GK
  4. Current Affairs
  5. Best of PIB
  6. UPSC Mains GS 2 Strategy
  7. 100 Difference between Articles
  8. All India Radio Spotlight for UPSC
  9. UPSC Notes PDF
  10. NCERT Notes PDF

What is the Kafala System?

It is a sponsorship system that binds migrant workers to one employer (a sponsor) in many countries of West Asia. It emerged in the 1950s with an objective to provide temporary and rotating labourers in the period of economic boom.

The practice of the Kafala System has been prevalent in the following countries or group of countries:

  1. Gulf Cooperation Council (GCC) – Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and UAE
  2. Jordan
  3. Lebanon

Components of the Kafala System – How does it work?

The Kafala system revolved around three bodies:

  1. A migrant labourer
  2. An employer who is the sponsor and is called Kafeel.
  3. A contract period

The Kafala system functions in the following manner:

  1. A migrant worker in the countries that practise this sponsorship system is legally bound to his employer.
  2. Without Kafeel’s permission, the migrant worker cannot enter or leave the country; nor transfer his/her employment.
  3. To enter a country, a migrant gets tied to one sponsor who coordinates with the immigration authorities about the former’s arrival and departure as per the contractual agreement.

Cons of Kafala System

The migrant workers are completely dependent on the Kafeel for their livelihood and stay of living under the Kafala system.

  1. Many times, the passport and travel documents of the migrant labourers are seized by the Kafeel in the destination country.
  2. International Labour Organization (ILO) in one of its reports, mentioned the Kafala System as a contemporary form of slavery due to the control of Kafeel over the migrant worker.
  3. The migrant workers are not considered as the permanent labourers as also is reflected by the GCC official use of terms like, ‘Guest Workers’ or ‘Expatriate Manpower’ to refer to these workers. Hence, even after years of working in a destination country, the migrant workers do not acquire citizenship rights.
  4. The Kafala System theoretically has restrictive immigration policies that limit the stay of the workers in the destination countries.
  5. There is a tendency of irregular employment under the Kafala system as the migrant worker is not allowed to stay in the country beyond the contract despite the need of labour.
  6. Fraudulent practises by the Kafeels like:
    • Contract substitution
    • Charging of workers the equivalent of several months’ salary for visas, air tickets and other related recruitment costs
  7. The control of Kafeel over the migrant labourers tends to breach the international labour standards.
  8. Poor conditions of work and lack of occupational health safety.
  9. The percentage of migrant workers that are included in the labour laws is less.
  10. Lack of dispute settlement mechanisms complimented with the absence of alternative compensation schemes. A migrant is termed as absconding if he/she leaves work without the sponsor’s permission. ‘Absconding’ from work is a criminal offence.
  11. In GCC countries and Lebanon, the responsibility to manage the migrants’ employment is with the Ministry of Interior in place of the Ministry of Labour.

As per the ILO Committee of Experts on the Application of Conventions and Recommendations (CEACR), “the kafala system may be conducive to the exaction of forced labour and has requested that the governments concerned protect migrant workers from abusive practices”.

Aspirants can check the related article links given below to assist their upcoming Civil Services Exam –

World Confederation of Labour India and Migration
Challenges of Migration International Organization for Migration
Unemployment in India Gist of Yojana: Employment and Self-Employment
Right Against Exploitation – Articles 23 – 24 Labour Reforms – Labour Codes Explained
Labour Sector in India India and Migration
Challenges Of Migration International Organization for Migration (IOM)

How has the Kafala System benefited countries and workers?

As per the ILO’s study, the following points mention the benefits of the Kafala System:

  1. Creation of jobs – Multiple jobs are created with the need for labour. The jobs are created in various sectors like:
    • Oil and gas industry
    • Agriculture
    • Transportation and
    • Hospitality
  2. Majority of migrant workers are employed in domestic work and construction jobs.
  3. Increase in remittances for migrant workers and their families – Around 124 billion US Dollars was remitted from the Arab States region in 2017

Visa-Trading is one of the cited reasons for the lack of interests from countries to reform the Kafala System. Know what is visa-trading below:

  1. The GCC nationals who have business licenses are given work visas for a given number of immigrants.
  2. These visas are often sold to others leaving immigrants undocumented.
  3. Visa-trading industry is reported to be a million-dollar industry.

Reforms in the Kafala System

In 2009, Kafala System’s reforms were initiated. Bahrain and Kuwait are the two nations who have brought the maximum number of reforms in their respective Kafala systems. Important reforms in Kafala System brought in so far are mentioned below:

Country Reform
Jordan 2003: Introduction of standard contract

2008: Domestic workers included in the domestic laws

2009: Law against people trafficking

Lebanon 2009: Unified Standard Contract
Oman 2003: Made it illegal to loan workers to other employers
UAE 2009: Introduction of the wage protection system
Saudi Arabia The only country to address the long-term and second-generation migrant.

It provides citizenship on the following ground:

  • Fluency in written and oral Arabic
  • Adherence to Islam
  • Resident in the country for 10 years
  • High-Skilled (attended university)
  • introduced a monthly minimum wage of 750 riyals ($206)
  • agreed to work closely with the ILO, which now has an office in the capital.
  • in September 2018, approved legislation to scrap the “kafala”, or sponsorship, a system that required that foreign workers obtain permission from their employers to leave the country.
  • introduced a series of labour reforms since its selection as the 2022 World Cup host, with the event setting in motion a huge construction programme employing foreign workers.
  • is set to abolish its controversial exit visa system for all foreign workers. The new law allows most workers to leave the country without exit permits from their employers.

Recently, Saudi Arabia has proposed a reform to end individual sponsorship in the country. The salient features of Saudi Arabia’s reform in the Kafal system are pointed below:

  1. In place of Kafeels, the individual sponsorship will be transferred to the placement agencies that will hire out the employees.
  2. A ‘Ministry of Foreign Workers’ Affairs Agency’ will be established.
  3. An insurance program will be launched that will look after both employers’ and migrants’ losses:
    • Compensation to employers if workers’ create issues
    • Airfare to migrant workers in case of deportation
    • Six months of workers’ wages to be provided to the worker against the delay of payment of wages by the employer.

Way Forward

ILO has brought in a few recommendations in favour of reforms:

  1. An alternative policy should be launched and the Kafala system should be abolished.
  2. Constructive dialogue mechanism should be adopted by the Colombo Process (regional and consultative process on the management of overseas employment and contractual labour for countries of origins in Asia.)
  3. The Kafala System reforms should be inclusive of migrant domestic workers.
  4. There should be a private recruitment process to hire workers.
  5. In place of an individual sponsorship system, the Ministry of Labour should be the apex authority coordinating with both migrant workers and employers.
  6. The provision of employment visa should be rolled out that will enable the migrant worker to resign with serving a formal notice and allow him to enter/leave the country on his/her own will.
  7. Punishment or fine to be imposed on the employers who seize travel documents, passports or mobile phones of the migrant labourers.
  8. The migrant workers should be accorded the right to freedom of movement.
  9. Policies on labour mobility should be developed with reference to the ILO Multilateral Framework on Labour Migration (2006) to ensure a rights-based approach
  10. Establishment of a working dispute settlement system for fair and impartial redress.
  11. Implementation of ILO conventions:
    • C97 on Migration for Employment and Recommendation (Revised) of 1949
    • C143 Migrant Workers (Supplementary Provisions) of 1975
    • C181 on Private Employment Agencies of 1997
    • C189 concerning Decent Work for Domestic Workers of 2011

The above details would help candidates prepare for UPSC 2023.

Related Links

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