TWC2 volunteer Larisa (left) makes salary calculations for worker Mohin (back to camera) as intern Zi Qing (right) observes.
Singapore’s marine engineering industry is as notorious as our construction sector when it comes to exorbitant recruitment fees borne by migrant workers. In another aspect, it is even worse because the typical salary of a first-time worker in a shipyard is lower than that for a new construction worker.
We met with a worker recently whose experience was exactly that. But before we get to his story, perhaps some background might be useful.
Our recent article A shipyard worker’s salary over ten years told of a shipyard worker whose starting basic salary ten years ago was $442 a month. It took him about ten years to reach a basic salary of $546 a month.
Our 2019 article, Recruitment cost up to 22 months’ salary for shipyard workers, showcased eleven men and the amounts they paid to get their jobs. Six of the men were in their first jobs and each paid about 20 times their monthly basic salary as recruitment cost. The five others in the group who were in their second jobs paid less (for those second jobs), except for one man who also paid nearly 20 times this basic salary, even for his second job.
To have to buy a job for 20 times one’s basic salary is, in effect to provide 20 months for free labour. Virtually all men from South Asia have had to borrow to raise money for recruitment and the debt will hang over their heads for a long time. They won’t be able to pay off the debt even in 20 months, because there is no way a man can devote all his earnings to debt repayment; he still needs to eat and support his family. In real life, a recruitment cost that is 20 times basic salary can mean being in debt for as many as four years if all goes well.
In the meantime, the worker simply cannot afford to lose the job. It would be financial disaster if he did, for then he would still have to repay the loans, yet be jobless and without income. Under such a burden of debt, even if he is still in the job, he will find himself stripped of bargaining power and unable to resist unreasonable demands from his employer for fear of losing the job. Internationally, such recruitment fees and the debt they entail are increasing seen as indicators of forced labour and human trafficking.
The International Labour Organisation, in its 2019 publication General principles and operational guidelines for fair recruitment and definition of recruitment fees and related costs, clearly states on page 13 of its PDF report that “No recruitment fees or related costs should be charged to, or otherwise borne by, workers or jobseekers.”
Making prospective employees pay for their jobs is seen as a violation of fair recruitment and a human rights breach.
Mohin
Mohin (not his real name) is a young man from Bangladesh. He came to Singapore in February 2023 to work in a shipyard in Tuas. He was then only 22 years old. We look at his In-Principle Approval letter (see Glossary for explanation) and note that his monthly basic salary is only $381 a month. That is absurdly low.
We ask him if he had to pay an intermediary (“agent”) for the job.
“Yes, six lakhs,” he replied.
Six lakhs in Bangladeshi currency was about $7,700 at the exchange rate of early 2023. It is twenty times his basic monthly salary of $381, a ratio very similar to what we found with the eleven workers in 2019 mentioned above.
Mohin explains that the agent was someone in Bangladesh. This is consistent with what’s stated in his IPA – that no Singapore agent was involved, as can be seen from the portion of the IPA imaged below. But if there was no SIngapore agent involved, then the agent in Bangladesh probably dealt directly with the boss or management of the company that eventually hired him.
We cannot help but wonder whether all $7,700 was pocketed by the agent, or whether some portion of it was shared with other stakeholders in the recruitment process. Other workers have told us that their employers or supervisors took a share of proceeds from what they had paid as recruitment fee. We do not know whether this was the case with Mohin’s recruitment but it’s a thought we simply cannot set aside.
For an agent in Bangladesh to pocket this whole amount without other stakeholders wanting a cut of it is, in our thinking, an unlikely scenario.
Supply chain concerns
With multinational corporations paying more attention to forced labour and other human rights violations in their supply chains, Singapore needs to clean up our act. We recently highlighted (see article Council of the European Union adopts new supply chain rules) how legislation in the EU and other OECD countries are moving to higher standards as well.
The focus is on human rights violations in the supply chain, not just in the country that made the final product. Singapore’s usual way of fending off criticism by saying that since the agents were not operating in Singapore, it is not our problem, simply won’t work anymore.
(Actually, it was never true that the agents are always outside Singapore. In some cases, workers have reported agents operating in Singapore and charging vast sums of money. In other cases, the associated stakeholders benefitting from dirty money such as the employer or supervisor, are also in Singapore.)
TWC2 has heard that international customers of the shipyards are pressing them to clean up their act. These customers need to comply with incoming legislation in their countries, otherwise they will be exposed to legal liability. TWC2 understands that there are claims of progress by the yards, but so far the attention is only being paid to the way the yards’ direct employees are recruited.
The important detail of course is that Mohin was not employed by either Sembawang or Keppel, but by a company we presume is a subcontractor at the yard. Nonetheless, Mohin was clearly working in a shipyard he calls “Keppel-Fels”. Sembawang and Keppel Offshore and Marine merged in February 2023 and was soon after renamed Seatrium. Mohin therefore was contributing to whatever final product was being built by Seatrium at the yard.
“I get seven days training and then I work there,” he reports.
Mohin would be more typical of workers in shipyards, where the majority are not direct employees of Sembawang, Keppel or Seatrium. They are employees of subcontractors. Yet, they are part of the supply chain, as were their agents in India or Bangladesh. Shipyard owners such as Seatrium should look beyond their own direct recruitment and ensure that none of their contractors are hiring through dirty channels.
What his story shows is that Singapore is a long, long way from being able to satisfy our trading partners that we’re not a hub of forced labour and human trafficking.
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