It’s an open secret. The global trade in low-level labour is a dirty one. And Singapore is a willing participant. We import tens of thousands of migrant workers each year ostensibly because no other Singaporean will do the jobs they do, for the kind of pay they’re willing to accept. But the truth is that for years now, dozens of unscrupulous local companies and middlemen have colluded with manpower agents to cheat thousands of workers of their savings. It’s a multi-million dollar scam. And it is thriving right under our noses. MOM has indirectly admitted the problem exists and says it is working hard to remedy the situation. But is it?

How The Trade Works

Migrant workers looking for jobs in Singapore often do so through manpower agents in their home countries, who charge hefty “recruitment fees”. The agent then contacts a middleman here, who approaches a local company to procure what’s known as an IPA, or “In-principal Approval”. Essentially, it’s a computer-generated piece of paper granting a worker the right to travel to Singapore for the purpose of taking up employment. As incentive for obtaining the IPA, the company gets a substantial share of the recruitment fee.

Agents we spoke to in Bangladesh say Singaporean companies can make anything from $3,000 to $6,000 for each permit. MOM issues tens of thousands IPAs each year. Unscrupulous opportunists have been known to set up multiple companies simply for the purpose of bringing in workers. It’s an extremely lucrative trade. And under the Employment Agency Licensing Regulations, it is also illegal.

Turned Away By MOM

Last year, a group of workers came to us with paper evidence showing that their agent had transferred money to their employer as a kickback for hiring them. They had been promised two-year contracts but their employer had cancelled their work permits after a year and was planning to send them home. Naturally, the workers wanted to stay. We told them to lodge a complaint at MOM. They agreed. But at the Ministry, an officer said there was nothing he could do and sent them away WITHOUT even looking at the evidence.

MOM must get dozens of similar complaints each day because they’ve recently decided to make things easier for themselves by writing into the IPAs that they have no time for such cases. The new text was apparently inserted ever so quietly sometime late last year:

Enforcement of Agreement with Home Country Agent

4. The Singapore Government is unable to enforce any terms of your agreement with your home country’s employment agency. For example, if your employment is prematurely terminated, the Singapore government is unable to recover the agency fee you have already paid to your employment agent in your home country. In the event of any dispute, you are advised to seek help from the authorities in your home country.

The wording suggests that the “home country agent” should bear the blame in the event of a premature termination of a worker’s contract. But what about rogue Singaporean employers? What happens to companies that accept illegal kickbacks, and then fail to provide their workers with proper jobs? MOM appears to think that it isn’t a problem for Singapore to solve. Why not? Especially since so much of the worker’s recruitment fee winds up in our country.

The IPA trade is one that involves millions, possibly BILLIONS of dollars. Why do we allow this kind of crime to flourish here? An illegal activity is an illegal activity. Is it less illegal simply because the victims are lowly migrant workers?

Plugging A Loophole…. Not

The following was also added to the new IPAs:

Work is not Guaranteed

5. Regardless of the validity period of your work permit, your employer may terminate your employment and cancel your work permit at any time without compensation, unless your contract says otherwise. If your employer terminates your employment, you are not allowed to stay in Singapore to find another employer. Therefore you should consider this when deciding how much to pay your agent to work in Singapore.

This is simply a restating of policy that’s been in place for some time. Employers have a right to cancel work permits and repatriate their workers whenever they like. This means that companies looking to make a quick buck can collect recruitment fees, bring in workers even when they have no jobs for them, then send the workers home after a few months. Strange, that instead of plugging that loophole, MOM has chosen to remind unscrupulous employers that it exists!

Language Issues, Or In Singlish, What Talking You?

The new IPA also tells workers that their companies should not deduct money from their salaries, or make them pay for expenses such as their security bond, or workers’ levy. It all seems very sensible – inform workers of their rights and potential pitfalls BEFORE they set foot in Singapore.

The problem though is that IPAs are written in English. How many Bangladeshi/Indian/Sri Lankan/Burmese/Thai migrant workers can read English, let alone understand the law?

More importantly, how many actually get to see their IPAs BEFORE handing over the recruitment fee? Rogue companies don’t have any incentive to act without first getting paid. Which means, workers, even if they understand English, will only have a chance to read the Ministry’s very important, and very useful message, when it is way too late.

Move It, MOM

Raising the levy for migrant workers
, and inserting a few useless paragraphs into IPAs. Are these measures really the best MOM can come up with?

An oft-heard complaint on the streets of Singapore is that our little island is being overwhelmed by cheap foreign labour. Cracking down on the IPA trade is one way of combating the problem. Unscrupulous companies won’t import workers they don’t need if they know they can’t get away with receiving illegal kickbacks. MOM should know that the situation isn’t likely to improve if all they do is tell cheated workers to seek solutions at home. It resolves nothing. Change has to start here. And it needs to start now.


For more about the scams and corrupt practices that plague the manpower trade, watch our documentaries, The Human Trade and Migrant Dreams.