Managing International Labor Migration The Philippine Experience

1. Managing International Labor MigrationThe Philippine Experience Aniceto C. Orbeta, Jr. & Michael Abrigo Philippine Institute for Development Studies Different Streams, Different Needs and Impacts Managing International Migration in ASEAN Regional Policy Conference Hyatt Hotel and Casino Manila, Philippines 19 July 2011

2. Presentation Outline • Objectives and Methodology • Trends in International Migration • Philippine Migration Management System • Review of Migration Laws • Impact of Regulation • In general • On Household Service Workers (HSWs) • Summary and Policy Implications

3. Objectives and Methodology • Examine prevailing migration management infrastructure using Regulatory Impact Analysis (RIA) • Describe the evolution of management infrastructure • Review migration laws and regulations • Understand impact of regulations • Quantify as the data allows • General review of management infrastructure & indications of impact • 2 background papers • Legal review by IDEALS • Impact analysis on HSW by SMC

4. Characterizing Migrant Flows • Dominated by temporary migrants; increasing proportion of rehires; circular migration? • Largely in the Middle East and in East Asia; substantial permanent migrants in North America and Europe • More female migrants than males – relatively new phenomenon for temporary migrants

5. Characterizing Migrant Flows • Sizeable proportion of deployment facilitated by private sector: ~90% of new hires

6. Characterizing Temporary Migrant Flows • HSWs comprise biggest block of new-hires by occupation Deployed New-Hire Overseas Filipino Workers – Top Ten Skills by Sex, 2008

7. Rationale for Regulation • Deployment a job-worker matching problem • Asymmetric information between buyers (job seekers) and sellers (recruitment agents) • Job seekers know little about the extent and quality of placement services provided by the recruitment agencies until after those services are supplied/purchased; particularly true for first-time job seekers using placement services • Recruiters knows little of skills of workers before deployment • Imbalance in bargaining power between jobseekers and recruitment agents • Information problem complicated when matching workers and jobs across borders

8. 3 Components of Management System • Limiting entry of actors • Local recruitment agencies • Foreign principals • Government • Workers • Destination countries • Rules on fees and standard contracts • Monitoring and redress

9. Components of Management System • Limiting entry of actors • Local Private Recruitment Agencies • Ownership • 75% Filipino-owned • Board members with no derogatory record (NBI, AIRB) • Owners of travel agencies barred • Minimum capitalization and escrow deposits • Joint and solidary responsibility (JSL) with foreign employer, and other guarantees to the worker • Ensures that they choose foreign employers well • Enables redress of grievances in the Philippines

10. Components of Management System Schedule of Fees and Other Requirements (Partial) for Application of License

11. Components of Management System • Limiting entry of actors • Foreign Principals • Registered and accredited by POEA • Documentary requirements • Recruitment agreement with local recruitment agency • Master employment contract • Manpower request • Valid business license / registration certificate or equivalent • Documents verified by nearest POLO

12. Components of Management System • Limiting entry of actors • Governments • Handled by POEA-GPB • Terms vary by government or by project • Contribute to Guarantee Trust Fund to cover monetary claims arising from non-compliance with contractual obligations

13. Components of Management System • Limiting entry of actors • Workers • Technically fit – possession of skill is ultimate protection; Testing and certification by various agencies • Physically, Mentally, Medically fit • Cultural and allied job-related readiness – PDOS and Comprehensive Pre-Departure Orientation Program (CPDEP) for Household Service Workers (HSWs)

14. Components of Management System • Limiting entry of actors • Destination Countries • Has labor and social laws protecting migrants • Signatory to and/or ratifier of multilateral conventions • With bilateral agreements • Positive and concrete measures to implement first three • Only 76 of 192 countries certified as of May 2011; top two destination countries in GCC (KSA and UAE) not yet certified • Diplomatic implications?

15. Components of Management System • Rules on fees and standard contracts • Placement fee of at most one month salary, when applicable • Costs chargeable against foreign employer • Minimum provisions in standard employment contracts (see next table)

16. Components of Management System Minimum Provisions in Standard Employment Contracts Prescribed by POEA

17. Components of Management System • Monitoring and redress • Specific units within POEA to document, screen and monitor local participants; POLO assistance overseas • Adjudication, welfare and adjudication services available

18. Migration Institutions

19. Migration Legislations • With over ten migration-related laws in the past four decades • Related provisions in Constitution • Legislations passed by Congress • Administrative issuances by executive departments • Entered into 37 Bilateral Labor Agreements (BLAs)

20. Some Observations (IDEALS, Inc.) • Joint and several liability (JSL) is not absolute • Not applicable to rehires and government-hires • Re-enactment of unconstitutional provision in new law RA 10022 • Serrano v. Gallant Maritime Service, et. al. (2009), on particular limitations on reimbursement of salary • Bilateral Labor Agreements should be preferred over nonbinding MOUs • POEA administrator can initiate a criminal action in behalf of migrant workers

21. Some Recommendations (IDEALS, Inc.) • Special courts for illegal recruitment cases • Strict implementation of no placement fee policy can unclog courts • Positive and negative list of destination countries accompanied by dissemination of reasons • BLAs and and Bilateral Social Security Agreements (BSSAs) should be pursued

22. General Impact of regulations • Number of disputes per deployed worker appears to be stable in spite of changes in laws • Resolution of welfare and adjudication cases satisfactory but there is mounting unresolved cases of illegal recruitment despite being the smallest in number • Fines maybe so low so that these do not compel agencies to comply with existing rules and regulations as indicated by the number of repeated violations • There appears to be laxity in enforcement as recruitment agencies that had several violations and should have been suspended continue to deploy workers

23. Performance on OFW-related cases

24. HSW Reform Package • Deliberate effort to professionalize domestic work and minimize vulnerabilities of HSWs • Additional Requirements: • Minimum age set at 23 years • NC II requirement for Household Workers • Attendance to Comprehensive Pre-Departure Orientation Program (CPDEP) • Additional Benefits: • No placement fee • Minimum salary set at USD400

25. Some Observations (SMC) • Low awareness of basic rights and government regulations such as those in HSW package despite enhanced PDOS • Many let employers decide about work conditions • CPDEP represents additional costs which has never been assessed for its benefits • Minimum salary of USD400 not honored (except in HK, Taiwan, Italy, Israel) • Deliberate attempt to circumvent regulations – “repro” phenomenon; salary deduction for (banned) placement fee

26. Role of Host Country: The Case of Singapore • Shows limitations of local policies when applied across borders • Easy entry facilitated by no-visa policy and availability of budget airlines • Employment facilitated by personal network or by employment agencies outside jurisdiction of POEA • POEA work permit not required only MOM Singapore work permit required • Other policies at destination contrary to set domestic policies • Minimum wage; intervention on employment conditions (day off, hours of work) • Host country actions (ChiaSiowYue, 2011) • Prescribing acceptable employer behavior and strictly enforcing them • Social pressure: naming and shaming violators in media

27. Some recommendations (SMC) • Better information dissemination to promote awareness and understanding of basic polices, rights and decent work conditions • Post-arrival orientation to be done by POLOs • Review of HSW reform package • Clear and coherent policy on deployment of HSWs

28. Summary and Policy Implications • Regulation is only as good as capacities to implement - the mounting unresolved cases of illegal recruitment indicate the capacity to implement maybe lagging behind; violators continue to deploy workers • Better coordination between branches of government needed - re-enactment of a provision rendered unconstitutional by the Supreme Court implies the need for better coordination between branches of government; POEA and POLO • Better understanding of implementation problems, costs and benefits of regulations – (a) the case of gross violation and worker’s ignorance of the main provisions of the HSW reforms of 2006 ; (b) resistance to mandatory insurance when this was supposed to be designed to cover contingent liability under the JSL

29. Summary and Policy Implications • Better reading of signs of resistance to regulation - the case of “repro” HSWs to lower categories to circumvent minimum wage regulation; salary deductions for placement fees; agree to lower than prescribed minimum wage prior to departure • The role of destination countries on whether intended protection of adopted regulations can be achieved or not –as the case of Singapore emphasizes – the certification by DFA that a country has safeguards to protect rights of migrants maybe able to address this • Sending mixed signals weakens credibility – e.g., setting a minimum wage and agreeing officially that its okay to pay at lower rates