Foreign employment agencies and Labour Minister in bitter battle

• Agencies dispute minister’s claims on foreign exchange inflows
• Say would cooperate in forensic or technical audit
• Seek President and PM’s assistance to revive foreign employment industry 

By Nishel Fernando 
While expressing willingness to cooperate in a forensic or technical audit on cross-border transactions, Sri Lanka’s licensed foreign employment agencies this week accused Labour Minister Nimal Siripala de Silva of conspiring to jeopardise the country’s largest foreign exchange earner, the foreign employment industry. 

On the second of this month, de Silva requested the Central Bank (CB) officials to conduct a forensic or technical audit into the cross-border payments of the country’s licensed foreign employment agencies, in order to look into whether the initial payments made to these agencies have come into the country through formal banking channels. 

“All the payments that we receive from our clients in foreign countries are recorded with the Sri Lanka Bureau of Foreign Employment (SLBFE) and 100 percent of these payments come through formal banking channels.

Therefore, we are ready to cooperate in such a technical audit into our payment history,” Association of Licensed Foreign Employment Agencies (ALFEA) Secretary M.F.M. Arshad told reporters in Colombo, on Monday. 

On an annual basis, the employers and recruitment agencies in host countries remit estimated US $ 3 billion to Sri Lanka’s employment agencies, for their services.

The association noted that the SLBFE earns Rs.100,000 through each new foreign employment contract as various fees and taxes, in addition to the fees charged on training. 

Arshad claimed that the actions and comments of de Silva were a blow to the already struggling industry and could jeopardise the government’s goal to earn US $ 8 billion in worker remittances this year.

Further, he noted that the minister’s remarks that the foreign employment agencies receive Rs.1 million as initial fees per an employment contract has undermined the confidence in licensed foreign employment agencies among people who seek foreign employment opportunities. 

Responding to the allegations levelled by the foreign employment agencies, a top official at the Labour Ministry said that the minister called for a technical audit on the suspicions that these foreign exchange inflows were not coming into the country through formal channels and were channelled into funding certain illegal activities. 

According to the ALFEA, only 23,000 Sri Lankans left for overseas employment through their agencies since the outbreak of the COVID-19 pandemic in the country. Approximately 200,000 Sri Lankans leave the country for overseas employment per annum.

Therefore, the association stressed that the current uptick in worker remittances is likely to end within this year, if measures aren’t taken to support the struggling industry.

Meanwhile, Arshad said the Labour Ministry has dismissed the proposals submitted by the ALFEA to revive the industry and consequently, around 300 foreign employment agencies have gone into bankruptcy.  

The ALFEA expects the President and Prime Minister to provide clarity on the government’s stance on foreign employment agencies and to implement the proposed measures to revive the industry.