Business ethics Case study Case 7: The expendables: migrant labour...

Business ethics

Case study

Case 7: The expendables: migrant labour in the global workforce

Millions of workers across the world migrate to new countries, regions, or cities in order to make a better life for themselves and their families. Whether it is Polish workers moving to the UK, Mexicans to the US, or Indians to Bahrain, migrants have become a major part of the global economy. However, migrant workers are also typically the most vulnerable members of the modern workforce. They are far from home, often with limited language skills, scant financial resources, poor support, and sometimes questionable legal status. As a result, migrant workers are at a particularly high risk of encountering poor working conditions, exploitation, and human rights violations of various kinds. In addition, they typically face discrimination and have few resources available to bargain for better conditions or to ensure the protection of their rights. For their employers, these conditions may make migrant workers an attractive, low-cost labour force, but it also injects considerable ethical risks into the global economy that are difficult to manage.

Migrant workers in Europe

With its colonial ties to much of the developing world and its close proximity to Central and Eastern Europe and Africa, Western Europe has long been a major destination for migrant workers. The expansion of the European Union to include Central and Eastern European countries gave rise to significant movements of people across the continent looking for better opportunities. In total, the UK experienced a net migration of some 2.5 million people during the first decade of the 2000s. This is credited with being one of the reasons why a slim majority in the UK voted to leave the EU in what has become known as the Brexit Referendum, in June 2016. More broadly, between 3.5 million and 4 million people migrated to and between the EU member states every year during the 2000s. Some 10% of the European population who had migrated there were born outside the EU. Europe has also been a common destination for illegal immigrants, although the numbers entering the EU illegally have been far smaller than those migrating legally. A peak influx of around 140,000 was recorded in 2011, following conflict during the Arab Spring, and a further spike followed the Syrian civil war in the mid-2010s.In the face of such growth in all kinds of migration across Europe, it has become a hot political issue in most Western European and Scandinavian countries, giving rise to a steep increase in the popularity of anti-immigrant political parties and policies. As such, the plight of migrant workers in Europe is quite challenging. Overall, they fare considerably worse than their native-born counterparts in the workplace. According to official EU statistics, first-generation migrants experience considerably lower levels of labour market participation, higher levels of unemployment, and a higher rate of over-qualification (i.e. being skilled or educated beyond what is necessary to do the job) compared with native-borns. However, far worse conditions are typically experienced by those living or working illegally in the EU, or those with strict limitations on the jobs open to them. For instance, it was estimated by the International Labour Organization in 2016 that 3.6 of every 1,000 people were victims of forced labour in the European Union, the majority being EU citizens who had migrated from one member state to another. Domestic work, agriculture, manufacturing, and construction have been identified as the industries most likely to experience forced labour among migrants in Europe.The exploitation of migrant workers in the EU is often connected to the way in which they enter the country, irrespective of whether they enter legally or illegally. Recruitment agents and middlemen operating in the workers' countries of origin may use various forms of deception or coercion to recruit workers with the promise of sometimes non-existent jobs in their destination country. Workers often borrow large amounts of money to pay recruiters for arranging transport and travel documents and a fee for securing a job in the expectation of future returns. However, if the job they finally receive upon arrival does not enable them to repay the loan, let alone to further support their family and community at home, they sometimes become trapped by huge debts and have insufficient funds to return home. These debts may be further exacerbated through inflated charges for basic accommodation and food, which are in turn deducted from their salary. In extreme cases, this can land migrant workers in debt bondage to their employer or recruiter. Consider, for example, the case of the first conviction for modern slavery in the UK. Four family members of a small construction firm were found guilty of keeping 23 workers in a state of servitude and forcing them to perform unpaid work. Living in accommodation that was deemed unfit for human habitation, the men worked for up to 19 hours a day, daily, with little or no cash payment. Physical violence and threats of violence were used to keep the workers compliant, in addition to 'mental torture', in the words of one victim.

Migrant workers in the Middle East

In other parts of the world migrants make up a still larger proportion of the workforce. Nowhere is this more evident than in the Middle East, and the Persian Gulf in particular. Taken together, the Gulf states of Bahrain, Kuwait, Qatar, Saudi Arabia, and the UAE are the largest recipients of temporary migrant workers in the world. In some Gulf states, such as Qatar and the UAE, more than 80% of the population consists of non-nationals, the majority of whom are contract workers. Most of the foreign workers in the Middle East are Asianthe major countries of origin being Bangladesh, India, Indonesia, Pakistan, Philippines, and Sri Lanka. Two-thirds of migrant workers are men, the majority of whom are engaged in low-skill occupations in production, construction, and service sectors. Women, meanwhile, have typically been employed in domestic service. Abuses of foreign workers in the Middle East have been documented for many years, but the issue made international headlines over a period of more than a decade from the mid-2010s, followingreports of hundreds of foreign worker deaths and reputed conditions of 'modern-day slavery' in the construction boom generated when Qatar was awarded the right to host the 2022 FIFA World Cup. Thousands of construction workers from India and Nepal are recorded as having died, because of extreme temperatures, enforced 12-hour working days, and limited access to water. Evidence emerged of workers routinely having their documents confiscated, pay being withheld for months, inadequate safety standards, and squalid labour camps with overflowing sewage and insufficient water supply. Conditions were so bad, according to the International Trade Union Confederation (ITUC), that the Qatar World Cup construction would 'leave 4,000 migrant workers dead' before the tournament kicked off in 2022.Migrant workers are critical for the Qatar economy but have long been plagued by limited rights and freedoms. There are 1.4 million migrant workers in Qatar, representing 94% of the country's entire labour force and approximately 85% of the population. However, the average migrant worker makes about $300 a month, compared to the average national salary of $2,140 a month and gross national income per capita of $80,000. So, while revenues from oil and natural gas have enabled Qatar to attain the highest GDP per capita in the world, the majority of its foreign workforce continues to experience low salaries and poor working conditions.The plight of migrant workers in Qatar is exacerbated by the state-run 'kafala' sponsorship system, which also operates in Saudi Arabia and a number of other Gulf states. Under the kafala system, workers must have an in-country sponsor (typically their employer) who is responsible for their legal status. Workers are therefore unable to change jobs or leave the country without their sponsor's permission, making them highly dependent on their employer, and giving them limited means of seeking redress when faced with exploitation. Moreover, certain categories of workers in Qatar are excluded from labour law protections and only Qatari workers are allowed to form or join trade unions.Following revelations of systematic abuse of migrant workers in the construction industry in Qatar, organizations such as Amnesty International, the ILO, the ITUC, and the UN all called for Qatar to repeal or revise its labour laws in order to provide better protections for foreign workers. Companies involved in the construction sector were also urged to take action and institute more effective due diligence policies and procedures to prevent labour exploitation, including among subcontractors and suppliers, where much of the abuse was found to occur. Following a severe ruling by the ILO, the ITUC stated that companies were 'on notice that doing business with Qatar goes against international laws. Until Qatar brings its laws in line with international norms, companies face the reputational and legal risks of using forced labour in Qatar.'In the face of such major international pressure, the Qatari authorities made substantial reforms to their labour laws in 2014. This included a strengthening of laws related to recruitment agency fees, mandatory requirements for firms to pay workers by electronic bank transfer rather than arbitrary cash payments, an end to foreign workers needing their employer's permission to leave the country or change jobs, and a commitment to phase out the kafala system. According to Amnesty International, it was a 'missed opportunity' that fell 'far short of the fundamental changes needed to address systemic abuses against migrant workers'. The problems continue. In a chilling reflection of the ongoing state of play in 2017, Human Rights Watch found that protection from heat and humidity was 'woefully inadequate', and that hundreds of construction workers were dying each year, and their deaths are by no means fully acknowledged or reported. They say that any initiatives in place only cover a tiny minority of workers. As World Cup fever takes over from concerns about how those beautiful stadia were created, in the run-up to the games, critics angrily claimed that Qatar's workers are actually enslaved, building mausoleums, not stadia.

Migrant workers in China

Migrant workers are not always intent on crossing national boundaries. China, for example, is home to more than 282 million domestic migrant workers who have been drawn from rural areas to cities insearch of higher incomes and an escape from poverty. By 2016, the rural migrant worker population represented over a third of the total workforce. Chinese rural migrant workers have been crucial to China's economic growth, fuelling the supply of low-cost labour for the country's booming export economy. Internal migrants are typically young, poorly educated, generally healthy, and highly mobile. Short-term employment sectors, including manufacturing, construction, and social services industries, account for over 60% of such migrants. As with cross-border migrants in Europe and the Middle East, domestic migrants in China also face major inequalities. Local urban workers tend to predominate in the primary labour market (which offers high salaries, stable employment, and good working conditions), while rural migrants have mainly been employed in the secondary labour market (characterized by lower salaries, insecure employment, and poor conditions of work). Rural migrants are particularly disadvantaged by the hukou systemrules that keep rural residents from obtaining jobs in the formal sector, and that prevent them from obtaining many of the same services as urban residents, including health and unemployment insurance, pensions, free education for children, and subsidized housing. This has not only led to continued income disparity between urban and rural populations, but also to the mistreatment of migrants. Discrimination or harassment from employers and co-workers is common. A further problem with migrant workers in China concerns the fate of their families. Studies have reported that there are more than 60 million 'left-behind children', whose parents have been forced to abandon them in the home village when moving to the city. These children face a number of challenges and often struggle with emotional and developmental problems. On the other hand, the 30 million children who have been able to migrate with their parents have faced their own problems, mainly due to the lack of time and financial means on the part of their parents to provide a decent upbringing. The plight of migrant workers in China was brought into sharp relief in the West by a spate of worker suicides at Foxconn plants in Southern China, where products for Apple, Hewlett-Packard, and other technology brands are produced. Foxconn remains the single largest supplier in mainland China. China also experienced a surge in labour protests by migrant workers seeking better pay and conditions, threatening the Chinese authorities' vision of a harmonious society. Such problems have not gone unnoticed. While companies have sought to address poor labour conditions and discrimination with codes of conduct and supplier training, the Chinese government has instituted various labour market reforms, including attempts to reform the hukou system. To date, these have met with some success, but deeper change has been difficult to achieve due to the complex nature of the current system and problems with enforcement given the entrenched nature of rural discrimination in the country.

Question:

Using examples from the case study, explain why migrant labour can be exploited by unscrupulous employers?