One year since launch: Has Bahrain’s Flexi-Permit lived up to its hype?

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Aug 20 2018

On July 23 2017, Bahrain’s Labor Market Regulatory Authority (LMRA) launched the Flexi-Permit, an initiative that allows irregular migrants to regularise their status by sponsoring themselves and working legally for multiple employers. The UN’s Global Compact on Migration forum highlighted the initiative as a “ground-breaking alternative to traditional labour market management systems.” The 2018 US Department of State Trafficking in Persons (TIP) Report hailed the Flexi-Permit as “a concrete step to reform the sponsorship system,” and a key reason for upgrading Bahrain to Tier 1 status. Bahrain is now the first Arab country to reach the Tier 1 status, and the LMRA’s CEO Ausamah Al Absi became the first GCC government official to receive the “TiP Hero” award.  Other GCC countries are reviewing the initiative and may emulate the model.

A year after its launch, has the Flexi-Permit lived up to the praise and expectations?

Expectations Versus Results so far

The initiative targeted 48,000 applicants over the two-year pilot period. Bahrain is yet to release official figures on the current number of Flexi-Permit holders. Statistics reported by different officials in the media often contradict one another, however they all far short of the targeted rate. In January 2018,  Al Absi told the Gulf Daily News that “to date, we have issued Flexi Work Permits to 2,063 workers since the scheme was launched last July.” One month later, the Labour and Social Development Minister and LMRA chairman Jameel Humaidan said that 1,517 migrants benefitted from Flexi-Permit, earning the government BD 609,763 in revenues. In August 2018 the Gulf Daily News, without providing exact figures, reported that the “latest statistics indicate that fewer than 5,000 applicants have applied for the scheme”.  

Background to the Flexi-Permit

After Bahrain’s general amnesty in 2015, the LMRA announced it was considering the Flexi-Permit scheme to deal with irregular migrants as well as  promote “economic flexibility.” In an interview with Al-Ayam newspaper, Al Absi said “…the government has tried to address the issue of irregular migrants by taking all kinds of measures, these measures include inspections, detentions and deportations and chasing [rogue] sponsors and middle-men, and announcing amnesty periods. All of these measures had limited success in addressing the issue of irregular migrants as their numbers returned to what it was.”

The Flexi-Permit followed a 2016 joint study titled the “Free Visa Study” by the Committee for Small and Medium-sized Enterprises in cooperation with Derasat (the Bahrain Center for Strategic, International and Energy Studies). The study recommended that “policymakers and stakeholders should agree on a system that allows sponsors to legally hire migrant workers on an hourly/daily/weekly/monthly basis” to tackle the problem of Free Visa and provide the government with an additional source of income through visa fees.

Reiterating the policy recommendations of the “Free Visa Study,” Al Absi told Al-Ayam that “irregular migrants exist because businessmen and locals want to have temporary workers the small contractor who wants to build an annex or paint a house hires irregular workers to lower his costs and obligations, and the restaurant that wants an employee to deliver food for three hours cannot hire a full-time employee to work for three hours only. Therefore they seek to hire irregular workers. As for the individual who wants to hire a plumber to fix a simple water leak in his house, of course, he is not able to hire a contractor to repair it as the costs are high and waiting times are long,  therefore, he resorts to hiring irregular workers who come quickly to fix the situation and charge a price that the local citizen could afford.”

Among the primary rationales of the Flexi-Permit is reduction of hiring costs for businesses (not unlike the global trend of the “Gig Economy”) and to divert money from the free visa black market – which a 2012 LMRA study estimated to be a valued at BD70 million (approximately USD 185 million) – into government coffers. The government expected to earn BD56 million in revenues through the Flexi-Permit scheme.

The language around Flexi-Permit is sometimes dressed in humanitarian garb and promoted as an initiative to protect workers from unethical employers. For example, the Labour and Social Development Minister and LMRA chairman Jameel Humaidan told the Gulf Daily News that “the new permit will help workers – who have faced abuse in the past – to work legally in Bahrain with a number of employers.”  However, these statements contradict current practice: Migrant workers with “runaway” cases lodged against them are not eligible to apply for the Flexi-Permit, and consequently the scheme excludes a large segment of the workers who are irregular because they have escaped abusive employers.

But not all members of the Bahraini government portray the Flexi-Permit in a positive light; some oppose the system entirely, believing that it is increasing the irregular migrant population and giving legal cover to the free visa.  Some officials, at times using xenophobic language, demand the scheme be scrapped. For example, during a parliamentary session on March 10 2018,  MP Ahmed Qarrata argued that the scheme encourages crime and prostitution. “They are in massive numbers in Bangali Gali, in Manama, and Exhibition Avenue in Hoora…They operate massive business rackets there, besides other underground operations whether serious crimes or prostitution…Those expatriates spread illnesses and sickness in what they offer or sell and should be stopped…They have their passports in their own hands and can do whatever they want even fleeing the country.”

In another heated parliamentary session on June 20 2018, MP Shaikh Majid Al Majid accused the LMRA of profiting from issuing “illegal work visas” to migrants with criminal backgrounds. “The LMRA legalises the stay of expatriates illegally through the Flexi-Permit as it racketeers the free visa market in Bahrain alongside other unlawful practices that see companies pay double to push ahead with visas,” he added.

...not all members of the Bahraini government portray the Flexi-Permit in a positive light; [...] believing that it is increasing the irregular migrant population and giving legal cover to the free visa."

Features and limitations

The Flexi-Permit is part of a string of reforms implemented to Bahrain’s labour migration system in recent years. These reforms include standardised tripartite labour contracts for domestic workers and the 2011 mobility law (Law No.15 for 2011) that allows migrant workers to change employers without the consent of the current employer, provided that the worker has spent at least one year in their current employment. These reforms were significantly limited in practice, as Migrant-Rights.org and Human Rights Watch have previously reported.  Similarly, the Flexi-Permit’s impact is less dramatic than it appears on paper.

The two-year renewable permit allows eligible irregular migrants to live and work for multiple employers. The LMRA offers two types of Flexi-Permits:

  1. Flexi Permit – This permit enables the holder to work in any non-specialised job. The permit holder is not allowed to work in restaurants, salons or hotels.
  2. Flexi Hospitality Permit – This permit enables the holder to work in any non-specialised job and in restaurants, salons and hotels. This type of permit requires the worker to undertake additional medical tests.

Workers in Medical, Engineering, and Teaching professions, which require special permits, and are not eligible to apply for the Flexi-Permit.

Eligibility Criteria and Exclusions

Only migrants that became irregular because of the following reasons can apply for  a Flexi-Permit:

1) Their work permit has been terminated

2) Their employer failed to renew their now-expired work permit

3) Their employer’s Commercial Registration (CR) has been cancelled

Irregular migrants who want to apply for the Flexi-Permit need to have a valid passport for at least six months, even if the passport is not in their possession (Irregular migrants initially needed to have their passports in their possession when applying for Flexi-Permit, but since September 2017, applicants have not needed to have their passports with them. If the applicant receives the Flexi-Permit, they must submit their passport within six months.)

Initially, only irregular migrants under the age of 60 and those who were undocumented before 20 September 2016 were eligible to apply. The age restriction has since been dropped completely, and those who became undocumented before 30 April 2018 are now eligible to apply. If a migrant worker has become irregular due to the cancellation of their employer’s Commercial Registration,  no date restrictions apply.

Strict eligibility criteria are one of the primary factors limiting the positive impact of the Flexi-Permit. Those not eligible include:

  • Domestic workers
  • Irregular migrants who entered Bahrain on a visit visa
  • Irregular migrants with “runaway” complaints against them and those with travel bans or court cases
  • Irregular migrants with expired passports or with passports that are valid for less than six months.

As mentioned above, these eligibility criteria exclude many migrants who are forced into irregularity after “running away” from abusive employers or who were cheated by fake recruitment agencies into working on visit visas or those who have been irregular for a long time and most likely to have expired passports.

Furthermore, only irregular workers are eligible for the Flexi-Permit. Regular migrants who are employed cannot leave their employer and apply for the scheme.  In this sense, the Flexi-Permit in its present form is difficult to reconcile as “a concrete step to reform the sponsorship system” as described in the US 2018 TIP report.  Additionally, the limited scope of the Flexi-Permit obstructs the government’s key objective of undercutting the free visa scheme, since free visa migrants are registered in the LMRA’s system as having a valid work visa and technically classified as regular workers.

Cost

The high cost of the Flexi-Permit is another factor that renders the scheme unattractive or inaccessible to many irregular migrants. Permit holders must pay an initial BD449 to the LMRA, a BD90 deposit for a return ticket (refunded when the Fexi-permit is cancelled and the migrant leaves the country) and a monthly BD30 fee.

Permit holders who fail to pay the monthly BD30 fee must pay an additional BD5 penalty each month. The Flexi-Permit is cancelled if the holder fails to pay the monthly fee for three months.

The total cost of the Flexi-Permit for two years is BD1,169 (hospitality Flex-Permit workers may an additional BD 20 for a medical test, and BD 10 for the permit itself).  These costs are impractical for many regular migrants, let alone irregular migrants who are often the most exploited and low paid. The total number of registered migrant workers reached 604,697 in 2017, of whom 376,777 made less than BD200.

Financing the Flexi-Permit on top of Bahrain’s rising living costs is extremely difficult. As Flexi-Permit holders are self-sponsored, the cost of accommodation, health care and utilities are likely borne by the Flexi-Permit holder and not the employer. The business community responded enthusiastically to the Flexi-Permit largely because it reduces their costs.

Furthermore, in a harsh private sector environment with no minimum wage, the scheme can lend to as much exploitation as the free visa.  Such fears were reiterated by Jaafar Khalil, Secretary General of the General Federation of Bahrain Trade Unions (GFBTU), who warned that the Flexi-Permit may be used to exploit migrant workers; employing migrants for only hours or days and then dismissing them may result in the "loss of the rights of the foreign worker" because they are vulnerable to unfair terms if they are unable to find a stable job to pay LMRA fees, as well as the recruitment debts that most new migrant workers owe.

Bangladesh’s Ambassador Major General K M Mominur Rahman highlighted the cost issue in an interview with Gulf Daily News:  “This scheme is basically going to help those who are competent and capable of earning money in Bahrain, but the bulk of illegal workers cannot afford the high fees.” He added that irregular workers earn between BD80 and 100 every month and that “the worker will have to pay a BD30 monthly fee as part of the scheme and BD20 as a minimum living cost in Bahrain…He has no money left to send back home.”

Breakdown of costs:

 

Flexi Permit Fees Health Care Fees* Residence Extension Return Ticket Refundable Deposit Total initial payment Recurring monthly fee for two years Total fees for 2 years
Every 2 years Every 2 years One time One time- Refundable Every month
BD200 BD 144 BD 15 BD 90 BD449 BD 30 BD 1,169

* Though healthcare fees are included in the Flexi-Permit costs, the Flexi-Permit holder must still pay BD 7 for every visit to the public health centre (all non-citizens pay this fee)   

Other limitations:

Under the Flexi-Permit, the labour contract regulates the labour relationship between parties. Unlike the free visa, the Flexi-Permit holder enjoys legal protection. However, a contract between the employer and employee is not mandatory. Workers are likely to accept work without requesting a contract, especially for very short-term work. Working without a contract makes it even more difficult for workers to dispute wages or other issues with their temporary employer.  One Sri Lankan Hospitality Flexi-Permit holder Migrant-Rights.org spoke to worked part-time in a hotel with a contract, but also in another restaurant without one.

Additionally, Flexi-Permit holders are not able to obtain family visas, even if they earn the minimum BD 400 monthly salary that is typically required to sponsor families.  

As it stands

Any move towards delinking migrant workers from the control of a single sponsor is to be welcomed, but these policies need to be made in good faith and in the interest of protecting migrant workers. The Flexi-Permit appears to be designed primarily to lower the cost of hiring migrant workers and to boost government coffers, rather than to genuinely reform the structural deficiencies of the sponsorship system that render workers vulnerable to exploitation and pushes them into irregularity.

There is limited data available to fully evaluate the Flexi-Permit, but the low number of Flexi-Permit holders suggests that the scheme is neither measuring up to Bahrain’s own expectations nor meaningfully improving mobility for migrant workers as a whole.

The Flexi-Permit is not intended as a standalone solution to either the free visa or worker exploitation, but it nonetheless requires significant revision to effectively address these issues.  Bahrain should consider reducing fees, relax the eligibility criteria to enable more migrants to apply, require standardised contracts for all work, and allow Flexi-Permit holders to sponsor their families.

The Flexi-Permit should not only be revised (as a step towards full sponsorship reform) but implemented alongside other improvements to labour migration policies.  To address the free visa system, Bahrain should provide legal protections to free visa workers to enable them to redress labour disputes. Free visa workers are vulnerable to exploitation because employers know they are unable to report them for unpaid wages or poor working conditions, and this protection gap is also what makes the free visa appealing to employers. Additionally, implementing a private sector minimum wage would reduce the ‘race to the bottom’ competition that currently exists.

While Bahrain is the only GCC country that provides a pathway for migrants to legally work without a sponsor, the Flexi-Permit as it stands is far from a “ground-breaking” step to reform the Kafala system. It is a move in the right direction, but observers should be cautious with their praise.

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