Philippines - Taiwan: Recruiter licensing

The Philippines regulates its recruitment sector via a comprehensive and innovative licensing regime that enables the Philippines to not only regulate Philippines-based recruitment agents, but also to exert a degree of control over the conduct of foreign recruitment agents and employers. The Philippines has detailed rules and regulations on the issuance, renewal and suspension and cancellation of licenses, and requires that recruitment agents deposit funds to compensate workers whose rights are violated at any stage in the process. It only permits the Philippines-based agencies to whom it has issued licenses to do business with foreign entities whom it has accredited. The licensing system is transparent, but the huge demand for overseas jobs places enormous power in the hands of recruitment agents. In addition to the serious problems with enforcement and implementation addressed in section 5, the effectiveness of the licensing system is undermined by countervailing laws and policies that serve to disincentive ethical actors from entering the sector: the Philippines continues to allows recruitment agents to charge placement fees, seriously disadvantaging agents who operate an employer-pays policy; regulations contribute to the perpetuation of volume-based business models; and ethical actors seeking to enter the sector must demonstrate proof of their marketing capability prior to the issuance of any license, a requirement that arguably encourages practices that the law classifies as illegal recruitment. In addition to these systemic flaws, new entrants to the market can circumvent regulations by buying pre-existing licenses, and it is not clear how effective the authorities’ measures to tackle this practice have been. Thus, despite strong regulations, the sector remains overwhelmingly dominated by the same actors and unethical practices are widespread. The Philippines is one of the few origin states to have a system of joint liability for employers and recruitment agencies, but it is not clear if it has made any substantial impact and recruitment agents and civil society alike are skeptical of its effectiveness.

Taiwan has a similarly comprehensive licensing system built into its legal and regulatory framework and, as is the case in the Philippines, broadly similar systems to license agents who recruit for land based work and seabased work. Although it is less detailed and less broad in its scope, the licensing system effectively operates in the same way as in the Philippines: a detailed and relatively demanding set of requirements to receive a license to recruit, and suspension or cancellation of licenses in line with proscribed conduct that includes contract violations and other violations of workers’ rights. Taiwan operates a broker assessment service that gives recruitment agents an A, B, or C ranking, but its effectiveness has been the subject of strong and persuasive criticism, and it currently gives no indication of the performance of recruitment agents and the extent to which they respect workers’ rights. Taiwan does not permit the charging of placement fees and has reformed laws to prevent recruitment agents from charging workers a placement fee every three years, but the practice continues. In large part due to weak enforcement, there is no evidence that the checks and balances built into the licensing system have been effective in protecting workers’ rights.

Recommendations to the Philippine government:

• Institute an ethical recruitment framework into the licensing and regulatory machinery of the Department of Labor and the POEA, 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 POEA awards system: make it open to agencies that deploy fewer than 1000 workers, change the scoring system to reward ethical recruitment agencies, and remove volume of deployment as a scoring criteria.
• Further strengthen regulations to end the practice of re-selling POEA licenses to new entrants.
• Enable prospective new agencies to obtain a license without having already identified new markets and received job orders.

Recommendations to the government of Taiwan:

• 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.
• Significantly reform the Ministry of Labour’s broker assessment service to ensure it accurately assesses and transparently reports on private employment institutions’ efforts to ensure worker protection, including fee payment and responsiveness to worker grievances. Periodic random audits and inspections by a specialised inspectorate, which should include worker interviews, should complement a broader self-assessment process.