R.A. 10022

Implications and Impact to

Migrant Workers & Recruitment Industry Stakeholders

“Let our advance worrying become advance thinking and

planning.”- Winston Churchill

Loreto B. Soriano

“There is an increasing awareness of the interrelatedness of things. We are becoming less prone

to accept an immediate solution without questioning its larger implications.”

- Arthur Erickson

If fully implemented - the Implications and Impacts• Only a few nations are likely to meet the required criteria under

Section 3. Most of those that will be certified as acceptable are highly developed countries, but even Singapore doesn’t appear to qualify.

• Diplomatic and market disarray may ensue due to:• lack of legal, diplomatic, and trade due diligence • lack of prior consultation with OFW host governments and the OFW

employers.

• Imposing labor standards on host countries that don’t even exist in Philippines e.g. for household workers, will incite lasting negative reactions from both foreign governments and their private sector employers.

• Banned countries will assert economic, social and political pressure on the government of the Philippines including retaliatory trade measures.

• Remittances will suffer steep declines. This will impact on

the Philippine economy, especially the service sector including real estate.

• New and current overseas jobs for OFWs will be in peril.

If fully implemented…..

If fully implemented…

• Section 3 of the law does not contemplate skill-sector or selective deployment bans like low skilled and house hold workers only. It refers to countries complying with the criteria of the law.

• Middle East, North African nations and some destinations in Asia that account for 70%+ of all Land Based deployments are unlikely to meet the criteria.

• OFWs losing their jobs will swell the domestic un-employment to a record high.

• Exponential rise in illegal recruiters, undocumented workers, and corruption at processing and departure stages.

• Difficulty of providing protection and promoting welfare to illegal, undocumented and trafficked OFWs.

• Foreign employers will seek alternatives to sourcing Filipinos workers.

• The law will cause the demise of the ethical and reputable recruitment agencies and the rise of illegal recruiters and mal-practicing recruitment agencies that are mostly owned by foreigners and foreign placement agencies in Land Based sector.

• IMMIGRANTS NOW COVERED: Substantial loss of fiscal revenues e.g. Doc Stamp Tax, Travel Tax, airport terminal fee.

Implications and Impacts…..

“ It is not wisdom but Authority that makes a law. “

Thomas Hobbes

• In 1995, the Flor Contemplacion tragedy and public outcry caused the passing of the Migrant Workers and Overseas Filipinos Act of 1995 - R.A. 8042

• It was ill conceived, reactionary and a cut-and- paste legislation formulated in haste.

• It was a law needing repeal, not amendments.

“The wise know that foolish legislation is a rope of sand, which perishes

in the twisting.” Ralf Waldo Emerson

R.A. 8042 is flawed, challenged and ruled unconstitutional for Sections 6 (Illegal recruitment), 7 (Penalties), 9 (Venue) and paragraph 2 of section 10 (Money Claims) (PASEI v’s Exec Secretary Manila RTC

Branch 32, Civil Case No. 95-75035). The case is currently pending appeal by the Government in the Supreme Court.

It survived due in part to the lack of:

•Government and Regulatory Oversight•Only partial implementation•Weak stakeholder’s support to challenge and replace it with reformist and forward looking legislation

“Laws are like sausages, it is better not to see them being made.”

Otto von Bismarck

• Public and stakeholders’ clamor in 2009 to provide more protection for OFWs brought forth House Bill 5649 and Senate Bill 3286

• Lack of congressional research, anecdotal evidence, plus conflicting stakeholder positions and motives and clear unequivocal policies, led to the conditions for the enactment of the amendatory law.

• Stakeholders and legislators’ indignation to the Dubai drivers saga, usury lending, GAMCA; mal-treatment, exploitation and fraudulent processing of OFWs including domestic workers bound to M.E., brought forth flurry of “new provisions” in the Bicameral Conference Committee that was tasked to harmonize the two bills.

“More law, less justice.” Marcus Tullius Cicero

• Many “un-original” provisions were inserted without public hearing and open and transparent deliberations during any plenary sessions.

• A mandatory Employers’ Practices Liability Insurance proposed by recruitment industry to cover their potential liability for “Money Claims” was granted and contained in both the House and Senate amendatory bills.

• However many additional forms of insurance coverage were inserted that are unwanted by stakeholders and may compromise existing benefits.

• Now the Insurance Commission ignores the law by stipulating contrary conditions to it in the IIR

“ What the insurance companies have doneis to reverse the business so that the public at large

insures the insurance companies.” Gerry Spence

• Section 7 Money Claims states the worker is entitled to the unexpired portion of his salary or a maximum of 3 months salary for every year of the unexpired term whichever is the less.

• IIR alters this and places a limit of US$1000 for 3 months or the unexpired term whichever is the less and leaving the agency liable for the balance of those OFWs earning in excess of $1000.

• It is not clear under numerous principles of insurance, commerce, the constitution and existing laws, whether agencies can be automatically liable, without any recourse and even be forced to pay the premium for coverage not compliant with either the intent or the actual law.

• Non-fee charging agencies, like others, who are dealing with higher paid OFWs are being made to shoulder the very liability they sort to insure.

“Insurance: An ingenious modern game of chance in which the player is permitted to enjoy the comfortable conviction

that he is beating the man who keeps the table.”Ambrose Bierce

• Mandatory insurance under House and Senate Bills was originally to provide cover for the contingent liabilities of recruitment agencies with the agency as the “insured” and the OFWs the “beneficiary.”

• However, Sec. 23 has made the OFW the insured and expanded this coverage to life assurance, personal accident, and a raft of travel insurance provisions.

• The agency does not control the liability portion of the policy.

• Foreign employers are refusing to shoulder the premium. In Asia it is a brokers driven market where OFWs including domestic workers pay the brokers’ and agency placement fees. Who will pay the premiums now??

• The expanded coverage may be in partially or wholly in conflict to employer programs, OWWA etc.

“Insurance is like marriage. You pay, pay, pay, and you never get anything back.”

Al Bundy

• The relevance of the new forms of insurance have raised questions as to the real motives behind the expanded insurance and the ability of “accredited” insurers to provide sustained cover.

• No approved policy wordings and qualified insurers names have been supplied with the publication of the IRR by the Insurance Commission.

• No assurance has been given as to “Excess Loss” capability of accredited insurers in the event for example “of major markets being banned by the Government under Section 3,” or there being a local or global crisis necessitating massive repatriation.

• How much is the reasonable premium and what portion is used for Money Claims liability?

• No commissions should be paid. The total premium must be applied against the various liabilities. Agencies having a no claims history should be granted lower premiums or a rebate.

• Will countries that do not have legislated minimum wages, regular working hours and a rest day be compliant?

• Will countries that do not regulate its recruitment/broker industry be compliant? e.g. Singapore, etc.

• Will countries that have no recruitment rules, or do not enforce them, but still allow the collection of exorbitant brokers fees from OFWs be allowed to be certified?

• How will countries that impose obligations to OFWs to shoulder the cost of their own recruitment, deployment, e.g. POEA - South Korea’s EPS?

WHICH COUNTRIES ARE COMPLIANT?

• How will the government now deal with non compliant countries that they have accepted for 40 years and all the employers of current OFWs?

• Can OFWS currently working in non-compliant countries renew their contract, come home for a vacation, and be allowed to return?

• How will OFWs be dealt with who are processed by their agencies and POEA for deployment after November 11 and December 11?

• Who will refund the expenses of the workers, the agencies and the employers?

• Who will answer to certain claims for damages and loses the employers will incur from the cancellation of their recruitment contracts in the Philippines?

SPECIFIC IMPACTS AND IMPLICATIONS TO OFWS(NON-COMPLIANT - BANNED HOST COUNTRIES)

• What happen to OFWs in certified or not-banned countries who will complain of exploitation, maltreatment, illegal dismissals? Can they or their families go to court, petition DFA to review its certification and demand for banning all future deployments to that country?

• What will happen to OFWs in countries that are certified, but the countries have conflicting labor laws, arbitration rules and dispute resolutions to that of the Philippines?

• Does a certificate of compliance from DFA have validity? How long before a review is taken again?

• AIR of UNCERTAINTY: What job security and business continuance can DFA and POEA offer to OFWs, host countries, foreign employers, and the recruitment industry?

SPECIFIC IMPACTS AND IMPLICATIONS TO OFWS(COMPLIANT COUNTRIES)

• Section 8: PROHIBITION of RA 8042 banning involvement by Government employees in the recruitment industry is not amended. However, RA 10022 increases the number of government offices and institutions that are tasked to implement the law.

• The new tasks under RA10022 demand necessary resources and will impose substantial costs to the following department and offices, but do they have sufficient flexibility in their budget to adequately and properly implement their mandated tasks?

Government participants: Congress (P25M for Oversight Committee).. POEA, IC, DOH, DFA, DOLE, OWWA, TESDA, NLRC, PAG-IBIG, PHILHEALTH, LGU, NCC.

IMPACT TO GOVERNMENT WORKERS:

• Has the government already informed the destination countries and their Manila embassies of RA10022? How about countries, jobsites and territories where we do not have a diplomatic post?

• Is there an information campaign in place about the new law, especially the implications of Section 3 to all OFWs and their families around the world?

• Has the recruitment industry and POEA informed its more than 18,000 registered foreign employers?

PREPARATION, IMPLEMENTATION

Source: POEA

Many of the individual figures and totals highlight discrepancies of POEA's published annual statistics, annual reports and media pronouncements. Rarely do they exceed of 5%.

Year Male FemaleMale

%Female

%         

2009 156,454 175,298 47% 53%

2008 174,928 163,338 52% 48%

2007 160,046 146,337 52% 48%

2006 123,688 184,454 40% 60%

2005 79,079 205,206 28% 72%

2004 72,355 209,457 26% 74%

2003 66,344 166,322 29% 71%

2002 88,732 199,423 31% 69%

2001 72,186 186,018 28% 72%

         Grand Total 993,812 1,635,853 38% 62%

DEPLOYED NEW HIRES- LAND BASED by Gender (2001 – 2009)

AVERAGE

Source: POEA

Many of the individual figures and totals highlight discrepancies of POEA's published annual statistics, annual reports and media pronouncements. Rarely do they exceed of 5%.

‘New Hire’ OFWs by Skills Category, 2001 - 2009

AVERAGE

Source: POEA

Many of the individual figures and totals highlight discrepancies of POEA's published annual statistics, annual reports and media pronouncements. Rarely do they exceed of 5%.

Deployed Nurses, 2000-2009YEAR ALL COUNTRIES USA KSA UK

OTHER COUNTRIES

2000 8,341 91 4,358 2,628 1,264

2001 13,822 304 5,275 5,388 2,855

2002 12,335 322 6,068 3,105 2,840

2003 9,270 197 5,996 1,544 1,533

2004 8,879 373 5,926 800 1,780

2005 7,768 229 4,886 546 2,107

2006 8,528 202 5,753 145 2,428

2007 9,004 229 6,633 38 2,104

2008 12,618 649 8,848 28 3,058

2009 13,465 242 9,965 165 3,093           

GRAND TOTAL 104,030 2,838 63,708 14,387 23,062

AVE. 10,403 284 6,371 1,439 2,306

ALL COUNTRIES

UK

SAUDI ARABIA

USA

OTHER COUNTRIES(Singapore, UAE, Kuwait, Canada, Libya, Qatar,Taiwan, Ireland, Trinidad and Tobago, Other destinations)

Professional Deployments to Total New Hires 2001-2009

These figures reflect the overall similar percentages published by NSO from 2009 annual survey of Overseas Filipinos.

This POEA category includes other occupations such as entertainers and the sudden drop in 2005 reflects the sensation of females to Japan.

Source: POEA

Temporary & Irregular Overseas Filipinos In M.E., N. Africa, Asia Countries, 2008

Source: CFO

World TotalTemporary 3,626,259

Irregular 653,609

World Total 4,279,868

Middle East, North Africa, AsiaCountries Temporary Irregular

Middle East

Bahrain 42,659 3,800

Iran 1,500 3050

Iraq 3,370 2800

Israel 31,000 7,000

Jordan 16,500 8,150

Kuwait 136,018 10,000

Lebanon 25,848 5,000

Oman 34,292 9,000

Qatar 224,027 5,600

Saudi Arabia 1,072,458 20,000

Syria 13,288 6,000

United Arab Emirates 541,666 32,000

Yemen 2,000 300

North Africa

Algeria 2,500 500

Egypt 2,314 2000

Lybia 16,268 570

Asia - East & South 581,330 256622Total 2,747,038 372,392

Middle East, North Africa, Asia Total 3,119,430

World TotalTemporary 3,626,259

Irregular 653,609

World Total 4,279,868

Middle EastTemporary Irregular

Bahrain 42,659 3,800

Iran 1,500 3050

Iraq 3,370 2800

Israel 31,000 7,000

Jordan 16,500 8,150

Kuwait 136,018 10,000

Lebanon 25,848 5,000

Oman 34,292 9,000

Qatar 224,027 5,600

Saudi Arabia 1,072,458 20,000

Syria 13,288 6,000

United Arab Emirates 541,666 32,000

Yemen 2,000 300

Total 2,144,626 112,700

Temporary & Irregular Overseas Filipinos In Middle East Countries, 2008

Source: CFO

2,257,326 OFWs2,257,326 OFWs

Number of New Hires & Rehires DeploymentMiddle East Countries, 2009

Source: POEA

N.B. The figure for the UAE includes “reprocessed” job orders that use especially Dubai and the transit point to other destination including banned countries in the Middle East and for different occupations e.g. clerk has clearance for position in Dubai is really a domestic helper going to Lebanon.

Banned Countries

Top 20 Places For Remittances, 2009

Source: BSP, POEA

COUNTRIESRemittance (in Billions)

USA 7,323,661

Canada 1,900,963

Saudi Arabia 1,470,571

United Kingdom 859,612

Japan 773,561

Singapore 649,943

UAE 644,822

Italy 521,297

Germany 433,488

Norway 352,957

Hong Kong 339,552

Greece 200,342

Qatar 184,574

Australia 181,437

Bahrain 166,222

Netherlands 146,503

Kuwait 104,634

Korea 97,035

Taiwan 91,779

Malaysia 86,030

TOTAL 16,528,983

Indicates the approx. value of US and Canadian remittances due to:

A.) US figure is distorted due to the high percentage of Middle East remittances being transferred through New York banks. The Philippine banking system only credits the country from which the transfer was received not the source country. This also applies to many other source country hosts. B.) The figure for Canada also is distorted as this is the hub for Western Union.

Importance of Middle East Remittances

Source: BSP, World Bank, Author’s Est.

“Nothing is more destructive of respect for the government and the law of the land than passing laws

which cannot be enforced.”Albert Einstein

• Former President Gloria M. Arroyo allowed RA10022 to lapse into law.

• This tends to confirm that she, like many of the stakeholders believe the law “will create the problems it seeks to eliminate or solve.”

• Stakeholders and especially the Government are not prepared nor ready for the Implementation.

• No stakeholder composite group is forecasting and planning to counter its implications and impacts!!

“The best way to get a bad law repealed

is to enforce it strictly.”

Abraham Lincoln