It seems that the pronouncements about "abolishing" the sponsorship (kafala) system in Bahrain were premature. At best, the changing of Bahrain's labor laws can be described as a easing of the rules.
The changes to Bahrain's Labour Market Regulatory Law, which were made in April 2009 (Decision No (79) for 2009 Regarding the mobility of foreign employee from one employer to another) and implemented starting August 1 never aimed at abolishing kafala altogether, despite what Bahraini officials sometimes claim. There is a government agency (the Labour Market Regulation Authority, LMRA) which is now officially the sponsor of migrant workers. This is a mostly a symbolic change, because even before the change in the law, the sponsors didn't actually issue the two-year work visas, the government did. Workers still require an individual or a company to be in charge of them to stay legally in the country. This is basically the same old system.
There was, however, a significant change in the law that is very much welcomed. Allowing workers to switch from one employer to another without the employer's consent, makes workers less dependent on one person. This, in theory, allows workers to leave abusive employers, and increases the pressure on employers to compensate their migrant workers better.
There have been cases of abuse even in this system. According to the change in the law, a worker can leave his employer even if the latter objects, three months after notifying the employer about his intention to leave (a bill to extend this period to a year was recently defeated in the Shura Council). Some vengeful employers punished their workers for wanting to leave by canceling their visas before the workers had a chance to switch to the other sponsor, others have filed factitious complaints to the police, which almost always believes the employer.
The kafala system is based on the idea of guardianship, but this doesn't translate to the reality on the ground. Just like the sponsor-employers of the past, the government does very little to help migrant workers in need. The government doesn't even enforce its own laws to protect workers, let alone extend any kind of "guardianship". Passport confiscation and withholding wages in Bahrain is illegal, and yet widespread. As a recent Human Rights Watch report indicated, the government does nothing to stop these illegal practices. The process of arbitration, in which a worker can raise his complaint against his employer clearly favors the employer.
The overall change in the system is still a welcomed development. But the reality on the ground is very difficult, despite these changes. The government needs to make further changes in its labor laws, and enforce the existing laws.