At long last, the system of employers’ sponsorship for foreign workers – a major cause of exploitation in the Arab Gulf states – seems to be coming to an end.

Sponsorship, in effect, ties foreign workers (and their continued residence in the country) to a single employer, often with dire consequences for the workers. It also leads to trafficking in residence and work permits, and has also been heavily criticised by human rights organisations worldwide.

On August 1, Bahrain became the first Gulf state to reform its rules. Expatriate workers will no longer be sponsored by a specific employer but directly by the government-backed Labour Market Regulatory Authority. This means they will be able to change jobs without the need for a “no objection” certificate from their current employer. 

Explaining the move, Bahrain’s labour minister, Majeed al-Alawi, 
told Construction Week: “It will end the black market for illegal visas and will raise salaries, because workers will have an option to go to employers who will treat and pay them better.”

He added: “All ministers of labour in the Gulf believe in what I am saying … In the next five years, most of them will do exactly what we are doing now. Kuwait, Qatar and the UAE will be the first to jump.”

In fact, it took Kuwait only a few days to announce plans of its own which go further than the changes in Bahrain: foreigners who have a “record of good behaviour” will be allowed to sponsor themselves after two or three years in the country.

"I am serious about finding a solution to the issue, particularly [as] it affects the reputation of Kuwait and has highly significant humanitarian dimensions,” Kuwait’s labour minister, Mohammad al-Affassi was reported as saying.

These changes will bring Gulf states more into line with international labour standards – an area where they have been seriously lagging behind – but not without fierce resistance from some employers.

The objections of Abdul Hadi al-Shahwani, a prominent businessman and industrialist, are typical of the entrenched attitudes. He told The Peninsula newspaper in Qatar: “It’s a ploy to placate the international community. They are playing to the gallery by implementing an impractical and populist policy.”

A businessman hires a worker from overseas, houses and trains him and suddenly he leaves, Shahwani complained.

“I come to my office one fine morning and find my manager missing. I then hear he has joined another company. That’s what is going to happen in a sponsorship-free job market.”

Of course, that’s the whole point. Sponsorship is protectionism. It shields employers from competition by providing them with a captive workforce. Remove it, and the workers can shop around for better pay and conditions.

Posted by Brian Whitaker, 8 August 2009