ISSN 2330-717X

Australia Opens Gate For ASEAN Agriculture Workers – Analysis

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Historic agreement ends decades of closed doors to ASEAN laborers

To the surprise of many, the Australian government has announced it intends to soon create a seasonal farm work visa for ASEAN workers  in an attempt to stem chronic agricultural labor shortages. 

The Minister for Agriculture David Littleproud said the new visa was the result of negotiations with the UK, which agreed UK backpackers would no longer be required to work part of their time in Australia doing agricultural work in order to obtain second- and third-year Australian visas. The new visa, Littleproud said, is the result of Prime Minister Scott Morrison agreeing in exchange for National Party support for the Australia-UK Free Trade Agreement (FTA). 

Even though the national unemployment rate stands at 5.5 percent, with youth unemployment at 10.5 percent and with the Reserve Bank of Australia warning unemployment is likely to worsen, few locals are willing to fill rural Australia’s 200,000 job vacancies. There is a visa quota for up to 25,000 Pacific Island workers under the Pacific Labor Scheme (PLS), but only 12,000 places have been taken up. The absence of the British backpackers, who must work a minimum of 88 days in exchange for extended visas, means the loss of another 10,000 workers, a problem exacerbated  by the March 2020 closing of the Australian border because of the Covid-19 pandemic. 

This is a historic announcement given the decades-long reluctance of successive government administrations to open the sector to Asian workers. Arguments that Asian workers will take Australian jobs, have fallen away to the chronic rural labor shortage. 

If implemented correctly, the new visa scheme, which supplements the Pacific Labor Scheme, will not just assist rural Australia, but have a positive impact in the workers’ source countries. Many workers within the ASEAN bloc have been retrenched, or are grossly under-employed, with dependents. The incidence of poverty is growing within the region, with for example up to two million tourism industry workers originating from rural areas having lost their jobs when Thailand closed its borders last year. Although the new Australian scheme’s quota may only be for up to 20,000 workers, this will provide some assistance to a scattering of rural villages across the region.

In principle, the new visa will allow workers to be employed for up to nine months of the year and return home for three months over three or four years. 

Although the new visa has been applauded by ASEAN stakeholders, the scheme is not without its critics. National Farmers Federation president Fiona Simson is skeptical the program will roll out quickly enough and notes that the cabinet still has many details to work out. Governing coalition MPs are split and there is some doubt whether Littleproud has adequate caucus support or support for final approval by cabinet. Some Pacific Island officials are wary that the ASEAN scheme may undermine their scheme with another 12,000 Pacific workers still wanting to come. Finally, some farmers claim that the scheme might actually force the rise of fruit and vegetable prices. 

If the government gives the go-ahead, with more than 100,000 Australian citizens still waiting to come back home because of Covid restrictions, the arrival of ASEAN workers while some are finding it difficult, could very easily lead to a political backlash. 

Workers within the region have long traveled to other countries for work. This is a major foreign exchange earner for the Philippines. There are an estimated two million foreign workers in Malaysia from most ASEAN countries plus South Asian nations. Over the last 15 years Thailand, as well as exporting workers, has become a popular destination for workers from neighboring countries. 

A large industry of manpower agencies, agents, and work supervisors profit from this industry, which is poorly regulated and not standardized as to recruitment practices, procedures, or fee structures. The industry is full of exploitation by agencies and employers. 

According to the Global Slavery Index 2018 annual report, most foreign workers are burdened with ‘debt bondage’ within the domestic, retail, construction, manufacturing, and primary sectors. Commonly, workers from Nepal, Thailand, Myanmar, and other countries are forced to borrow upward of US$2,000 at interest rates of 48 percent plus, taking years to pay back. Workers were reported as working 10 hours per day without overtime, being paid below the legal pay rates. Workers’ passports were held by employers and their salaries withheld during the last three months of their contract, to “settle any outstanding matters.”

It isn’t just the debt burden. Foreign workers are often forced to work in sub-standard, dangerous conditions, with temperatures soaring into the 40s Centigrade. Their living conditions are often cramped and overcrowded, with employers deducting around 20 percent of wages to pay for food and accommodation. They are often not paid what was agreed in their home countries.

According to a media investigation, companies such as Samsung and Panasonic are facing allegations that they exploited and underpaid their foreign workers. The US government just lifted sanctions that it imposed last year on two Malaysian glove manufacturers, WRP and Top Glove, suspected of forced labor and overtime, debt bondage, withholding wages, and holding workers’ passports.

In addition, the multinational grocer Tesco in an investigation of its contracted workers found that suppliers had withheld the passports of 68 Indonesian and 171 Nepali workers in Malaysia, while 15 passports and up to 30 work permits were withheld by a supplier in Thailand.

Foreign worker plight may be increased further, according to a press statement by the anti-slavery NGO Freedom United. A government proposal is being contemplated to deduct 20 percent of workers’ salaries in a scheme to prevent them from fleeing from their employers, and restrict their movement.

The situation in Australia is sometimes not much better. Asia Sentinel reported extensive exploitation in abattoirs, where migrant slaughtermen have agreed wages regularly cut for dubious reasons, not given required pay allowances, and not provided with medical assistance, when injured on the job. 

Asia Sentinel has found that a large number of Australian migration agents (AMAs), and manpower companies in based Thailand and Vietnam are preparing to engage this new opportunity, opening up with the ASEAN agriculture worker scheme. Fees and charges could be potentially worth AUD 60 million per annum, to the handful of companies that successfully recruit, process, and place workers in jobs. 

If Australian Home Affairs is not careful, this new scheme could potentially become and source of corruption and human exploitation. 

Robert Chelliah, the CEO of Australian Migration Agents Pty Ltd, an Australian expatriate who also runs an organic crops farm, Lexmin Pty. Ltd., in Cambodia, told Asia Sentinel that there must be due care in selecting the right candidates for the right jobs in Australia, and look after their interests after they have traveled to work. 

Done correctly with proper support facilities, this would prevent the horror stories of exploitation along the whole labor supply chain. Chelliah holds the view that if framed under the Australian Aid program it will further promote a win-win relationship between Australia and the respective ASEAN Countries.

Chelliah plans an innovative labor support system that trains and nurtures workers, processes their visa applications as a Registered Migration Agent as well as an experienced farm operator and provides a culturally friendly environment once they arrive in Australia. Chelliah is attempting to connect the Cambodian Agricultural ministry with Ausaid to support and partially fund the concept. 

There are also issues about how quarantine would be handled upon arriving in Australia. Hotel quarantine costs, for instance, would erode worker incomes. It remains to be seen whether federal and state authorities would allow and alternative quarantine system in dormitories for the ASEAN workers. 

Competition among  RMAs and manpower agencies is rife, with workers from each country having different strengths and weaknesses each group want to strategize upon to obtain as much of the quota they can, as possible. Indonesian, and Philippine workers will have a much better command of English than Thais, Laotians, Cambodians and Vietnamese. Malaysian workers are already well known to Australian farmers, with many having management capability. The work ethic of each grouping is different, suitable in different modes of work. RMAs and Manpower Agents are developing these issues into sales spiels and already talking to potential employers across rural Australia, trying to do deals. 

The new ASEAN visa scheme will lead to many benefits for all sides. Australian farmers and agriproduct processors are generally positive, should everything come through in a workable way. Similar schemes have worked well in the United States. The Pacific Island Scheme could be streamlined along with the new ASEAN scheme to also bring out more island workers. 

The government has to manage this project well and partner with the facilitators to make it work, otherwise it could damage both rural Australia and the home countries of the workers. This is a positive step from the Keating doctrine that Australia should play an active role, and be part of Asia. It just took thirty years. 

Originally published in the Asia Sentinel

Murray Hunter’s blog can be accessed here. 

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Murray Hunter

Murray Hunter has been involved in Asia-Pacific business for the last 30 years as an entrepreneur, consultant, academic, and researcher. As an entrepreneur he was involved in numerous start-ups, developing a lot of patented technology, where one of his enterprises was listed in 1992 as the 5th fastest going company on the BRW/Price Waterhouse Fast100 list in Australia. Murray is now an associate professor at the University Malaysia Perlis, spending a lot of time consulting to Asian governments on community development and village biotechnology, both at the strategic level and “on the ground”. He is also a visiting professor at a number of universities and regular speaker at conferences and workshops in the region. Murray is the author of a number of books, numerous research and conceptual papers in referred journals, and commentator on the issues of entrepreneurship, development, and politics in a number of magazines and online news sites around the world. Murray takes a trans-disciplinary view of issues and events, trying to relate this to the enrichment and empowerment of people in the region.

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