Myanmar - Thailand: Recruiter licensing

Myanmar has a fairly comprehensive licensing system. Only licensed agents can procure employment for prospective migrant workers, while a second license is required for agents to send workers to Thailand. As of 12 May 2020, there were 347 licensed recruitment agencies in Myanmar, of which 105 were licensed to send workers to Thailand. The licensing system includes a scheme of sizable deposits for reimbursing workers if subsequently required and processes for suspending/ cancelling licenses, although these are not sufficiently applied. Only 17 agencies had their licenses terminated from 2014 to 2020 - less than 1% annually - a remarkably low number given the widespread violations of the law in the recruitment industry. One major flaw in Myanmar’s recruitment system is its inability to deal with the reality of unlicensed middlemen - a significant feature of the recruitment system. There are hundreds of unlicensed agents or brokers who operate to link workers in the countryside with the recruitment agencies. Most MOU workers we interviewed had used a broker and paid three/ four times higher than the official recruitment fees. Unlicensed agents can be punished with up to 7 years imprisonment and fine, but enforcement is questionable. While the middlemen invariably increase the cost of MOU recruitment for workers, their role and impact may be more nuanced. In the absence of easily accessible labour market information at the village level, along with a general distrust of ‘outsiders’ and authorities, the local agent/ broker is seen by many prospective workers as not only reliable, but also easier to hold to account given proximity should something go wrong in the process.

Regulation of recruitment agents in Thailand only began in 2016 and remains weak. Under current law, a ‘permit’ is mandatory - as of May 2020, there were 241 recruitment agencies with permits to bring foreign workers into Thailand. These are known as the “Five million baht companies”, so named for the security deposit they need to pay as potential compensation for workers or employers. Recruitment agencies are reported to have close links to politicians and government officials and appear to have more influence on legislation and policy. A key failure of the licensing process is its inability to rein in subcontracting, which is common despite being prohibited, partly due to an opening in Thai law that allows employers to hire workers directly with much lesser security deposit. Many unlicensed firms hire workers claiming to need them as employers and then illegally subcontract the workers out to other employers. This facilitates contract substitution and places migrant workers in a vulnerable position. Unlicensed brokers are also a feature, particularly “assisting” workers already in Thailand to navigate through complicated regularisation schemes and processes.

Recommendations to the Royal Thai Government:

• In collaboration with worker groups and trade unions, institute an ethical recruitment framework into licensing and regulatory machinery such that prospective or existing recruitment agencies need to demonstrate compliance with ethical recruitment principles, and for this compliance to be verified and audited by an independent third party.
• Consider the introduction of incentives for agencies who can genuinely demonstrate due diligence, commitment to zero-fee recruitment and a duty of care for migrant workers.
• Amend the Foreign Workers Ordinance to remove the loophole wherein unlicensed recruitment agencies hire workers by representing themselves as “employers” and subsequently subcontract them.

Recommendations to the Myanmar government:

• Institute an ethical recruitment framework into the MOLIP licensing and regulatory machinery such that prospective or existing recruitment agencies need to demonstrate compliance with ethical recruitment principles, and for this compliance to be verified and audited by an independent third party.
• Commission research into the role of ‘first mile’ agents/brokers and any other middlemen, before attempting to ensure that the useful elements of the system are regulated within the existing recruitment system, while there is enforcement of the law against the exploitative elements.