Ensuring Temporariness Lessons from Existing Practices by Rupa Chanda Professor, IIM Bangalore WTO...
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Transcript of Ensuring Temporariness Lessons from Existing Practices by Rupa Chanda Professor, IIM Bangalore WTO...
Ensuring TemporarinessLessons from Existing Practices
by
Rupa ChandaProfessor, IIM Bangalore
WTO SymposiumGeneva
September 22-23, 2008
OutlineBackground and motivation
Ensuring temporariness under bilateral labour agreements
Ensuring temporariness under unilateral arrangements
Ensuring temporariness under broader and regional agreements
Role of source countries
Common features and desirable practices
Lessons for the GATS mode 4 negotiations
Background and Motivation
Temporary cross border movement of labour is an integral part of globalization
Several organizations and governments are increasingly recognizing the importance of managing temporary cross-border movement in a mutually beneficial manner
The General Agreement on Trade in Services (GATS) under the WTO provides a useful framework for managing temporary labour flows under mode 4 or movement of natural persons
But countries are unwilling to make binding multilateral commitments on mode 4 under GATS, especially for low and semi-skilled workers
However, a growing number of initiatives outside the GATS manage cross-border temporary movement of workers, including low and semi-skilled workers in services, seasonal work, agriculture, and industry
Initiatives are at the national, bilateral, and regional levels
Key issue in mode 4 liberalization is ensuring temporariness, especially for certain categories of service suppliers
Several questions are raised by such arrangements that facilitate mode 4 outside the multilateral context
Why has there been more progress outside the GATS?
Are these other arrangements more conducive to ensuring temporariness?
If so: What makes them more conducive? How do they operate? What kinds of institutional mechanisms do they involve? What are their good practices? Are there lessons for the GATS?
Ensuring Temporariness under Bilateral Labour Agreements
Bilateral labour agreements can be classified as guest worker, seasonal worker, cross-border worker, contract, project linked worker, working holidaymaker, and trainee arrangements
Serve bilateral interestsReceiving countries address labour shortages, promote
strategic interestsSource countries provide employment to surplus labour,
earn remittances
Work through defined administrative mechanisms, shared responsibilities, coordinated processes
Operational aspects regarding recruitment, entry, return, financial transfers, and capacity building help in ensuring temporariness
Ecuador-Spain
Agreement on Regulation and Planning of Migratory Flows signed in 2001
Recruitment, entry, return
Spain periodically forwards job offers to Ecuador
Bilateral technical unit screens and selects workers, helps selected workers with contract and visa related issues, provides pre-departure training, other assistance
Carriers must closely check all entry documents, failure subject to legal penalties
Contracts for several months (9), extendable within overall limit
Efforts to curb informal recruitment channels, regularize and make pre-entry process subject to scrutiny and administrative control including
communication of offers
establishment of an exclusive unit for recruitment
support structure for getting visas and contracts
regulation and checks in transport process
protection of workers from exploitation by unscrupulous employers
temporariness clearly specified, but performance rewarded
Spanish authorities can deny work authorizations to an employer if:
previous violations of immigration rules and contract terms
not guarantee the worker continued activity during duration of authorization
not demonstrate sufficient means to meet contract obligations
falsify information or documents in petitioning process
failure to tie up with Spanish social security system within 1 month of entry
Return obligations on temporary workers
required to sign commitment to return to Ecuador on contract expiry
report to Spanish consular office in Ecuador within month of return, failing which disqualified from future employment in Spain
early repatriation if fail to meet contract terms
Coordination across ministries and agencies on both sides to document and track return
Financial transfers
Remittances facilitated by:
reducing costs of transfers in cooperation with financial institutions
special savings account plans for returning migrants
directing remittances towards productive investments in Ecuador
Other development initiatives
Capacity building and development efforts
Training of migrant workers and aiding reintegration
Co-development projects between sending and receiving regions
Workers associations play important role
Canadian Seasonal Agricultural Worker Program (CSAWP)
Between Canada and Mexico, Canada and Caribbean countries
To serve mutual interest and facilitate movement of seasonal agricultural workers
Subject to determination of need by Canadian authorities
Heavy involvement of state in monitoring movement of workers, ensuring no local labour displacement
Elaborate institutional framework for managing migration, extensive coordination, various stakeholders involved, with scope for periodic amendment
Recruitment, entry, return
Hiring must be need based, supplement not displace Canadian labour
Canadians First principle, must show attempt to hire locally and failure to do so to justify petition for foreign workers
Overseas workers hired at premium as additional costs for travel, lodging
Workers screened and recruited by agencies/ministries in source countries based on job offers communicated by Canadian authorities
Liaison officers from source countries to monitor migrant workers’ living and working conditions, provide orientation, resolve disputes, provide legal and other assistance, communicate information on arrivals, returns, transfers
Clearly specified work contracts on duration, benefits, obligations for employers and workers
Penalties for unauthorized employment and transfers
Transfers possible to other employers subject to time limit on total stay
Re-hiring possible by naming of workers, such requests processed on priority basis, facilitating circular migration
Recognition bonus provisions for those staying for long period with single employer incentivizing strong employer-worker ties
Premature repatriation if failure to meet terms of contract
Cost structure for transport ensures accountability of employers and workers, penalties for non compliance, and right choice of workers
Financial transfers
Compulsory savings scheme for Caribbean workers
25% of workers’ wages withheld and remitted to source country governments
Ensures minimum level of remittances, used to cover admin expenses
Ensures use of formal banking channels
Incentivizes return to claim money
What incentivizes temporariness? What enables market access?
Recruitment and entry process involves:Obligations on employers and workersSpecified institutional structures and responsibilities Incentive cum disincentive based approach to facilitate entry
and penalize violationsUse of established systems (social security) for tracking and
ensuring complianceFlexibility within overall limits Scope for customization and reviewCoordination across multiple agencies, across sending and
receiving countries
Financial transfers and capacity building efforts in source regions create incentives to return
Ensuring Temporariness under Unilateral Arrangements
Some countries use unilateral schemes to target certain groups of workers
Seasonal and guest worker arrangements, temporary foreign worker programs, sector based schemes
Not signed with particular countries though flows tend to be from certain countries driven by geography, historical, social, cultural ties
Unilateral schemes often preferred as can be adjusted to host country’s economic cycle, used selectively to protect certain sectors and groups of workers
Korea’s Employment Permit System for foreign workers
Allows employers who are not able to hire Korean workers to legally employ sufficient number of foreign workers
Korean Ministry of Labour concludes MoUs with source countries, prepares roster of job seekers, issues employment permits, coordinates with multiple ministries and designated agencies
Government stipulations on type and scope of business able to avail of scheme Manufacturing, construction, fishery, service industries where
high rate of labour shortage
Quotas for individual sectors/industries to prevent adverse effects on local workers and prevent dominance of foreign workers in any industry
Quotas assigned across selected countries with which MoUs based on their performance on return and entry
Source country government selects candidates
Maximum duration of employment specified
Name hiring possible, reward for good performance and circular migration facilitated
Minimum stay required on return in source country before reentry possible
Capacity building element with training of workers post entry in Korea
Institutional mechanisms to prevent illegal stay, unauthorized transfer of jobs by worker, penalize contract violations
What incentivizes temporariness? What ensures market access?
Defined institutional mechanisms and structures
Customizing entry to suit local requirements
Coordination across multiple agencies
Prospects for re-entry
Outcome and performance based future entry
Restrictions and monitoring within host country
Understanding with sending countries
Source country obligations in screening
Ensuring Temporariness under RTAs
Broader agreements covering economic cooperation, trade and investment flows, with provisions for managing mobility of service providers and workers
Variety of approaches usedSome cover full mobility of labourSome allow/facilitate market access for selected groups of
workers and service providersSome have provisions for special visa arrangementsSome facilitate market access under existing visa regimes
Mostly focus on ICTs, Business Visitors, professionals, skilled suppliers
Majority provide only special access/facilitate access under existing immigration schemes, while retaining broad discretion
But several noteworthy elements
Chapters on movement of specific types of persons
Provisions in investment chapters for select categories linked to investment
Protocols for gradually easing labour mobility on a regional basis, right of establishment, residence
Detailed definitions for covered categories- ICTs, business visitors, professionals
Removal of labour certification or LMTs for covered groups
Port of entry visas for select categories, renewable, longer term
Explicit requirements to avoid measures that hurt trade in goods or services or investment activities
Attempt to develop and adopt common criteria, definitions, interpretations, creation of consultation groups
Role of Source Countries
Source country policies and administrative structures in many areas important for managing mode 4
Screening and selection prior to departureEducation and training pre-departureFacilitating remittances through formal channelsChanneling financial transfers to productive usesFacilitating reintegration of returning workers with
employment, loan schemes, setting up of enterprises
Multiple agencies involved within country
Good Practices
Some of these relate to:
Deeper level and wider range of institutional and stakeholder involvement
Regulation of pre-admission process
Regulation of period of stay through institutionalized mechanisms
Clarity on conditions for market access
Scope for flexibility, customization, periodic review
Defined scope for entry/relaxed conditions
Coordination between sending and receiving countries for managing flows
Clarity on definitions, categories, criteria for applying conditions
Larger context in which temporary labour flows seen
Specificity, clarity, detail on
Scope of work
Categories of workers
Temporariness (including renewal and extensions)
Sectoral and occupational focus
Conditions on employers and workers
Numbers admitted via quotas
Administrative mechanisms and institutional frameworks for recruitment and entry
Preferences for local workers
Economic needs tests and labour market tests
Wages and working conditions
Obligations on source and host countries under bilateral arrangements
Flexibility in design and implementation to suit local requirements
Mix of incentives and disincentives
Incentives for return through prospects of re-hiring, forced savings, development schemes in host country
Penalties for violations
Broad based stakeholder participation
public, private, civil society, international, trade unions
Interdepartmental and interagency coordination within and across countries
Regulation of intermediaries to encourage formal channels of entry
Longer term stable relationships encouraged for orderly migration and circular flows, subcontracting discouraged
Holistic approach to mode 4 beyond movement to cover capacity building, development in source country, remittances
Encouraging financial flows through formal channels to increase source country benefits
Ensure coherence with other policies
Some gaps exist howeverLabour market certification procedures not always
transparentCoverage under local labour laws for informal sector workersSocial security and other contributions without access to
benefitsPossible undermining of bilateral schemes by immigration
policiesFailure to address subcontracting, intermediaries in some
schemes
Lessons for the GATS Mode 4 Negotiations and Other Agreements
Need specificity, clarity, transparency in defining worker categories, sectoral coverage, employment terms and conditions, institutional framework, along with flexibilities for review and customization Customization of commitments to suit sectoral requirements Customization of commitments to suit business cycle, labour
market conditions
Commitments for low skilled would only be feasible with conditions Numerical ceilings with scope to suit local market conditions Wage parity requirement Specified period of stay and clear upper ceiling on total stay Limits on transferability across employers/jobs Economic needs or labour market test requirements Clearly demarcated visas
Need to ensure that quota adjustments, needs tests, and certification processes transparent and objective
Schemes suggest possible ways to expand the scope of mode 4 categories to cover low skilled
Use CSS category to make commitments on low skilled workers moving under contractual arrangements with overseas employers or recruitment/placement agencies
Can broaden scope of CSS category by Relaxing minimum eligibility requirements under CSS category
to include persons occupied in low skilled occupations, who are technically competent, with prior work experience, but without academic qualifications
Providing some form of juridical affiliation for low skilled workers in home country Institutional backing and certification could be provided by
source country authorities, authorized agencies, occupational guilds who could provide affiliation, take responsibility for screening, recruitment, return, reintegration
Contractual Service Suppliers-2 (CSS-2) would include those:
whose services are solicited temporarily by clients in the host country and contracted via government or government authorized agencies in the source country, without affiliate presence in the host country
screened and deployed overseas by manpower/authorized recruiting agencies/concerned government departments/guilds in the sending country
persons without formal academic qualifications but with on-the-job or other training and experience, who go to the host country for short periods of stay of up to 6-9 months and not exceeding one year at any one time (unless otherwise indicated in the commitments) to:
perform a service pursuant to a contract between their deploying government or authorized agency/establishment/occupational guild and a client located in the host country
fulfill qualification and competence test requirements in the form of local aptitude tests, apprenticeships, and learning period, where presence in the host country is required for this purpose
Committing countries could protect sensitive sectors or groups of workers by excluding certain sectors/occupations under horizontal commitments
Could ensure better use of GATS transparency provisions via enquiry points
Could impose obligations on source countries for screening, certification, placement, insist on institutional structures to formalize mode 4 processes
Explicit MFN exemptions for source countries lacking such institutional capacity not desirable as would create uneven playing field among source countries
Conclusion
Several features of unilateral, bilateral, regional approaches could be incorporated under existing GATS mode 4 framework
Given security, trade union, cultural, economic concerns in receiving countries, mode 4 commitments will have to be subject to conditions, but these could mimic conditions applied in alternate approaches
Conditions could be more stringent for less skilled categories
Some coordination between host and source countries required for managing mode 4, some onus should be placed on source countries
Capacity building and institutional development to manage mode 4 required in source countries
Flexibility in design and implementation should be present for host countries but objectivity and transparency required
Will these alternate approaches help or hurt multilateral efforts to liberalize mode 4
Could advance multilateral discussions by:
Serving as a learning experience
Enabling regulatory and institutional capacity building
Enabling investment in technology and data
Helping develop common positions on cross cutting issues under GATS
Instilling confidence to make more liberal multilateral commitments
Providing opportunity to test impact and validity of apprehensions regarding mode 4
Enabling domestic stock taking of factors affecting labour mobility
Could hinder multilateral discussions by:
Diverting attention from multilateral process
Buying out of key demandeur countries and groups
Creating inconsistencies between what is agreed at regional/bilateral level by developing countries and what is requested at the multilateral level
Regardless of approach, important to invest in capacity and institution building to manage labour mobility
GATS mode 4 negotiations have to be conceived beyond a one-way commitment process
Will require some onus on source and host countries through coordinated efforts and institutional mechanisms to ensure temporariness if progress is to be realized
Thank you