Overseas workers are burdened with unique costs when migrating for work. According to international conventions, destination countries should extend social protection to migrant workers. In practice, they receive inadequate social protection, or none at all (Olivier, 2017). Some reasons for this barrier in access to social protection include requirements of nationality, residence, or an absence of social protection in the host country.
In addition, access to social protection by migrant workers may be hindered by a lack of or inadequate bilateral labour agreements, bilateral social security agreements, or multilateral social security agreements (Olivier, 2017). An alternative initiative sending countries can establish to mitigate such challenges for their citizens who are working abroad is an overseas worker welfare fund.
Overseas worker welfare funds
In recent years government measures of sending countries have been put in place to provide and guarantee access to social protection of their citizens while working overseas. This includes the establishment of overseas worker welfare funds (Olivier, 2017).
According to the International Labour Organisation (ILO), a migrant welfare fund is a ‘self-sustaining mechanism that enables the governments of countries of origin to provide additional welfare benefits and services to their migrant workers at the countries of destination, using a fund grown from the initial capital investments of foreign employers, recruitment agencies and/or migrant workers’ (2015, p.1-2).
These initiatives established by countries of origin may allow migrant workers to access (ILO, 2015):
- Social security
- Mediation and conciliation services (between migrant and employer)
- Compensation for illness, injuries, disability, and death
- Assistance in reintegration (for migrant returnees)
- Emergency and repatriation services
Examples of such funds include the Overseas Workers Welfare Administration (OWWA) in the Philippines, the Overseas Workers Welfare Fund (OWWF) in Sri Lanka, and the Overseas Pakistanis Foundation (OPF) in Pakistan (Agunias and Aghazarm 2012).
The Sri Lankan context
With the oil boom in the Middle East, and a corresponding growing demand for a migrant workforce, the Sri Lankan government saw an opportunity for their migrant workers to boost the economy through remittances. The contribution of migrant workers in the Middle East in 2002 via remittances, according to an ILO report, totalled 61.3% (Rosario, 2018). Another report estimated an increase in remittances in Sri Lanka from about USD 800 million in 1995 to USD 4500 million in 2011 (Fernando and Moonesinghe, 2012).
In harnessing the remittances opportunity, one of the first measures taken by the Sri Lankan government was to create the Sri Lanka Bureau of Foreign Employment (SLBFE), established by an Act of Parliament in 1985, and later amended in 1994. The SLBFE works under the Ministry of Employment Promotion and Welfare and has 24 branches around the country (Rosario, 2018).
The SLBFE’s objective is to manage the outward migration of Sri Lankan workers, through a registration system, which allows the SLBFE to have information on those workers who are abroad and administrate their social insurance. This registration is mandatory for all Sri Lankans who work overseas (Rosario, 2018).
Additionally, the SLBFE has put in place social protection programmes to protect workers while they are abroad (Rosario, 2018) and regulates recruitment agencies, managing complaints of migrant workers, as well as offering training and orientation programmes (Agunies and Aghazarm, 2012).
Moreover, the work of the SLBFE includes providing (Rosario, 2018):
- Pre-departure training
- Skills improvement
- Model contracts and contract enforcement
- Appointment of labour attachés and welfare officers
- The OWWF
The Overseas Workers Welfare Fund
The services offered by the OWWF scheme include (Mackenzie, 2005, Rosario, 2018):
- Insurance scheme:
This scheme covers all registered migrant workers, as well as their families, who receive insurance in case of death (about USD 10,000), disability (total disablement, at about USD 5,000, and partial disablement at about USD 1,000), and for health care, as well as about USD 2,500 for travel expenses.
Repatriation expenses are also covered by the insurance scheme. Registration is mandatory for all workers. Both the SLBFE and the OWWF obtain income from the registration fees paid by the overseas workers, an amount of USD 25. Of this, 70% goes to placement agents to offer their services to the migrant workers
- Scholarship scheme:
Children of overseas workers who have passed the Grade 5 examination, the General Certificate of Education Ordinary or O level, GCE advanced level, or are university and college students receive a yearly scholarship.
The grant depends on the level of studies of the child, the lowest level being R15,000 (USD 155) for Grade 5, to R20,000 (USD 207) for GCE level, and R25,000 (USD 259) for university and college. Until the year of the publication of the ILO report (Rosario, 2018), a total of 13,615 scholarships had been awarded to children of overseas workers.
- Loan schemes:
This scheme finances pre-departure costs, self-employment, and housing. With this loan scheme the OWWF seeks to protect migrant workers from loan sharks and to incentivise entrepreneurial investment among migrant returnees.
- Despite its coverage taking into effect immediately upon registration for a period of two years, migrant workers can only enjoy the benefits after their return to their home country.
- Many migrant workers exceed the two-year work period abroad. In such cases where workers extend their contract abroad, they no longer have fees to be paid to the SLBFE, which consequently leads them to lose coverage (Rosario, 2018).
- Upon the publication of the 2018 ILO report, pension schemes for migrant workers had not been included in the OWWF (Rosario, 2018).
The Sri Lankan OWWF has been reported by organisations such as the ILO as a case of good practice in providing social protection to migrant workers by a sending country (ILO, 2015, Rosario, 2018). However, it still faces challenges, which should be addressed to ensure the social protection of their national workers while abroad.
Agunias, Dovelyn Rannveig and Aghazarm, Christine (2012). Labour migration from colombo process countries: good practices, challenges and ways forward, Issue in Brief, N. 1, International Organization for Migration (IOM), 11p. Accessible: https://publications.iom.int/system/files/pdf/colomboprocessstudy_final.pdf
Fernando, Priyanthi and Moonesinghe, Sonali (2012). Livelihoods, basic services and social protection in Sri Lanka, Working paper 6, Secure Livelihoods Research Consortium (SLRC). 29p. Accessible: https://www.odi.org/sites/odi.org.uk/files/odi-assets/publications-opinion-files/7783.pdf
ILO (2015). Establishing migrant welfare funds in Cambodia, Lao PDR and Myanmar, Policy Brief, Issue N. 3, ILO Regional Office for Asia and the Pacific, 10p. Accessible: http://apmigration.ilo.org/resources/establishing-migrant-welfare-funds-in-cambodia-lao-pdr-and-myanmar
Mackenzie, Caroline (Ed.) (2005). Labour migration in Asia: protection of migrant workers, support services and enhancing development benefits, International Organization for Migration (IOM), 358p. Accessible: https://publications.iom.int/es/system/files/pdf/labour_migration_asia_2.pdf
Olivier, Marius (2017). ‘Social Protection for Migrant Workers Abroad: Addressing the Deficivia Country-of-origin Unilateral Measures?’, in McAuliffe, M. and M. Klein Solomon (Conveners) (2017). Ideas to Inform International Cooperation on Safe, Orderly and Regular Migration, IOM: Geneva, 12p. Accessible: https://publications.iom.int/system/files/pdf/social_protection.pdf
Rosario, Teresita del (2018). Best practice in social insurance for migrant workers: the case of Sri Lanka, Asian Regional Programme on Governance of Labour Migration, Working Paper No. 12, ILO Regional Office for Asia and the Pacific, 33p. Accessible: https://www.ilo.org/dyn/migpractice/docs/267/WWF.pdf