by Jay Chen

Photo Credit: I-Ta Tsai/CC

THE TAIWANESE Ministry of Labor has condemned the Indonesian government for seeking to abolish broker fees, claiming that the Indonesian government was acting unilaterally in doing so, and seeking to displace costs onto Taiwanese consumers. This, however, is an incident in which the Ministry of Labor has sought to defend exploitative practices by brokers under the current broker system for migrant workers.

According to Minister of Labor Hsu Ming-chun, the Indonesian representative office has informed that Taiwanese employers will be required to pay eleven new categories of fees starting on January 1st. These are fees regarding visa applications, passport applications, airplane tickets to and from Taiwan, and costs currently paid by overseas manpower agencies. Domestic workers, caregivers, and migrant fishermen are among the category of migrant workers that are affected by the new change.

The Ministry of Labor. Photo credit: Solomon203/WikiCommons/CC

In effect, what the Indonesian government is proposing is to do away with the current broker system that exists for arranging employment in Taiwan. Migrant worker advocates have long called for the abolition of the broker system, with the view that it is exploitative in nature, and results in debt bondage from Taiwanese workers.

Namely, workers are made to pay broker agencies exorbitant amounts in return for arranging for their transportation to and from Taiwan, leaving migrant workers in debt to either brokers themselves or loan agencies. Brokers also deduct fees for lodging and board.

Consequently, migrant workers have long expressed grievances that they are made to shoulder costs that should normally be shouldered by their employers, as a means of displacing costs onto migrant workers from their employers. Likewise, in some cases, brokers are paid lodging and board for facilities that are, in fact, provided by employers. And the labor broker system imposes such few costs onto the actual employers that some employers, particularly factory owners, do not pay brokers at all, who find it sufficiently profitable to extract fees from only migrant workers themselves.

In effect, then, while the Taiwanese Ministry of Labor has condemned the Indonesian government for what it claims to be a unilateral action, the Tsai administration is here attempting to attack another government for being more progressive than it on migrant worker rights. It may not be surprising that the Tsai administration has taken action to defend exploitative labor practices in Taiwan, however—one notes that migrant workers cannot vote in Taiwan, whereas their Taiwanese employers can.

Groups thought to be connected to labor brokers such as the Taiwan International Worker-Employment Relations Harmony Development Association have demonstrated outside the Indonesian representative office regarding the new change. Such groups have suggested that Taiwanese employers may switch to hiring workers from countries apart from Indonesia, given the change.

It is to be seen whether this will be the case. Certainly, this is not impossible, given market conditions. But, in order to maintain the competitiveness of Indonesian workers, it is unlikely that the Indonesian government would have taken such a course of action if it were so easy for Taiwan to switch away from migrant workers. There are over 265,000 workers in Indonesia in Taiwan currently and—particularly given current travel restrictions because of the ongoing COVID-19 pandemic—it would not be so easy to replace them.

Migrant worker groups, particularly the Taiwan International Workers’ Association, have in past years called for the abolition of the current broker system and instead called for what is referred to as G-to-G hiring. This refers to direct government-to-government hiring, conducted between governments rather than broker agencies. Some Taiwanese companies, such as I-Mei, have also instituted direct hirings conducted by traveling to other countries, though I-Mei is known to still rely on brokers for some job positions that it needs filled.

Foreign workers’ consulting counter at Taoyuan International Airport. Photo credit: 玄史生/WikiCommons/CC

But as the reaction of the Tsai administration goes to show, pushing for the institution of G-to-G hiring may be easier said than done. The attitude of the Tsai administration proves that the current government has little interest in instituting such practices and instead is focused on preserving the current broker system, having claimed in the past that the broker system is a necessary market mechanism that the market still requires.

To this extent, while the Indonesian government may be an exception, one also suspects that other regional governments that Taiwan hires large numbers of migrant workers from may be disinterested in abolishing the broker system as well. Many brokers are known to enjoy close ties with the governments of their respective countries, which see the broker system as a cheap and effective way to export domestic labor. This, too, may be slow to change.

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