The government can, alternatively, gazette new regulation permitting association‑led recruitment of direct migrant worker! (Part 2)
Commentary And Analysis . . . The media has reported that the government intends “cutting out agents” through a Government‑to‑Government (G2G) model involving employers’ associations, with no private agents for migrant worker recruitment. In Part 1, we saw that subject matter experts were in consensus that there can be no law against direct migrant worker employment by employers and workers.
That policy, if implemented, requires several legal changes.
Direct Migrant Worker
The Immigration Regulations 1963 must be amended for direct migrant worker recruitment, thereby allowing direct Calling Visa applications by employers, without routing through FWCMS.
The existing MoUs with source countries must be terminated or renegotiated; for example, the Malaysia–Indonesia Memorandum of Understanding that mandates the One Channel System would need replacement.
The FWCMS contract held by Bestinet must be terminated or expire – the contract currently runs runs 2028 or 2031; breaking it requires negotiation or compensation, which has fiscal implications.
The Private Employment Agencies Act 1981 does not mandate agents, but the administrative policies that treat agents as the sole channel must be rescinded.
Until these steps are completed, direct hiring for PLKS categories remains illegal. An employer who reads the consensus in the earlier part and acts on it immediately would be committing an offence under section 55B of the Immigration Act.
Consensus Correct
The consensus was correct as a matter of policy but incomplete as a matter of law.
If the government amends the regulations and allows association‑led recruitment, that model would be lawful.
However, the involvement of associations still requires a legal framework: does the employer contract directly with the worker?
Does the association perform the vetting and referral functions of the former agent?
Is the association licensed under any statute?
In Germany’s Triple Win project, a dedicated implementing agency (GIZ) coordinates the process.
Exemption
Malaysia would need issuing a specific exemption under the Private Employment Agencies Act or gazette a new regulation permitting association‑led recruitment.
There should be no law against direct employment by employers and workers.
However, under current Malaysian law – specifically Immigration Regulations 1963 Regulation 11, the mandatory FWCMS system operated by Bestinet, and existing bilateral MoUs with source countries – direct hiring of general foreign workers was effectively illegal and may result in criminal penalties under section 55B of the Immigration Act 1959/63.
Again, for direct hiring, the government must amend the Immigration Regulations, terminate or renegotiate the relevant MoUs, and replace the FWCMS monopoly with a G2G or association‑led system.
Foreign workers must not enter on tourist passes to seek employment; that remains an offence under section 39(b).
A lawful alternative was a G2G system where employers apply directly for Calling Visas, with vetting by employers’ associations and trade unions in both countries.
This model was permitted under ILO Convention 97 and the Trade Unions Act 1959, but would require new regulations for authorising association‑led recruitment without licensed private agents.
Questions
When analysing any consensus on migration or labour law, we must ask:
Does the consensus describe what those involved wishes the law to be, or what the law actually was?
Is there subsidiary legislation, administrative policy, or an international agreement operating beneath the primary statute?
Is source‑country law a limiting factor that cannot be waived by Malaysia alone?
By distinguishing between moral claims (what should be) and positive law (what is), the consensus will be both principled and useful for policymakers and practitioners.
Good law reform advocacy insists on accurate diagnosis before prescription.
The present foreign worker system was nothing but corruption. The workers lose out.
Others Benefit
The consensus was essentially correct as a description of how the system functions in practice.
However, for complete subject matter expert analysis, three important nuances must be added: who the “others” are, what the evidence shows, and how the system became this way.
The consensus was not hyperbole.
The Public Accounts Committee (PAC) found that the Home Ministry issued Bestinet a letter of acceptance before finalising procurement terms, forcing the government to negotiate a fee increase from RM100 to RM215 per worker – a 115 per cent hike.
Bestinet now receives RM537 million per year or RM3.2 billion over six years.
The system operated for six years without a signed contract.
Meanwhile, the Malaysian Anti‑Corruption Commission (MACC) exposed a “counter setting” scam where a senior Immigration officer controlled approximately 50 officers and agents, with corrupt officers grossing millions annually. MACC seized RM800,000 from just two junior immigration officers’ homes.
The consensus was correct but incomplete.
Others
Bestinet: Founded by a Bangladeshi national granted Malaysian permanent residency, who, according to Bloomberg, selected the 10 Bangladeshi agencies from over 1,000, while political handlers managed the politics.
Bangladeshi agents: At least one worker paid US$4,400; UN experts report fees exceeding official rates by over five times; workers pay up to RM25,000 through debt, often for jobs that do not exist.
Cartel partners: A UN experts report notes “a small number of recruitment agencies operate as a closed syndicate sustained by corruption”.
Rogue employers: Issued quotas for non‑existent jobs, leaving stranded workers “jobless, unpaid, homeless, and at constant risk of arrest”.
Documentation
How “workers lose out” was documented.
Over 100,646 PLKS holders in construction alone became “untraceable” after a legalisation programme.
Eight Bangladeshis were coerced into forced labour in Gua Musang for up to seven months.
One worker, Shofiqul Islam, borrowed $4,400 for a construction job, his employer vanished, and he later died in a derelict building outside Kuala Lumpur.
Global Slavery
The Global Slavery Index ranks Malaysia 12th highest in the Asia‑Pacific for modern slavery, with 6.3 affected per 1,000 people – up from 4.2 in 2016.
The US State Department’s Trafficking in Persons Report maintains Malaysia at Tier 2, acknowledging that root causes “such as exploitative recruitment systems, debt bondage, and weak monitoring” remain unaddressed.
The present foreign worker system was structured for extracting maximum value from workers through systemic corruption that enriches a cartel of politically connected vendors, recruitment agents, and complicit officials at every level – while workers enter deeper into debt bondage, face widespread exploitation, and have no meaningful recourse.
The UN experts summarise it well: “We are deeply troubled that fraudulent recruitment and the exploitation of migrants remain widespread and systematic in Malaysia.”
The National Action Plan on Forced Labour nears its end with limited progress; “by some measures, the problem has worsened”.
The consensus was not an exaggeration. It is a concise description of a system that has been formally documented as broken. — NMH
Longtime Borneo watcher Joe Fernandez has been writing for many years on both sides of the Southeast Asia Sea. He should not be mistaken for a namesake formerly with the Daily Express in Kota Kinabalu. JF keeps a Blog under FernzTheGreat on the nature of human relationships.
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