With football’s Fifa 2022 World Cup congress in late May drawing nearer, Qatar is facing more intense scrutiny of one of the most vulnerable points in its credentials to stage the event in seven years’ time: its treatment of migrant labourers.

Strident criticism of its labour system, which affects the hundreds of thousands of foreign workers who have flocked to the country to help build infrastructure and stadiums, has forced the Gulf state to take much more seriously allegations of abuses associated with the kafala (sponsorship) system.

Independent commission

Two recent events have galvanised closer interest in Qatar’s treatment of migrant labour. Firstly, the harshest Fifa critic of the World Cup bid, executive committee member Theo Zwanziger, explicitly tied Doha’s action on labour reforms to its bid to stage the event. Zwanziger said in December that Qatar should establish by 10 March an independent commission to monitor its labour reforms - as recommended by the review undertaken by UK law firm DLA Piper and published in May 2014 - in order to avoid the risk of losing its rights to the event.

The second is the recent decision by the GCC to scrap a proposal to adopt a unified contract for domestic workers, which would have partly absolved Doha from making its own moves. With the Gulf leaders rejecting a joint approach to this issue, Qatar is under fresh pressure to undertake its own efforts to improve the welfare of workers.

The criticism of Qatar’s labour record is nothing new. But the increasingly urgent need to absorb large numbers of workers into key sectors servicing the massive construction effort associated with the 2022 World Cup means the country can no longer afford to act as if the overt criticism of its kafala system does not matter. The existence of a foreign labour force upwards of 1.5 million and rising fast suggests it does.

Qatar National Bank (QNB) estimates the overall labour force reached 1.7 million by the end of 2014, with expatriates accounting for 94.1 per cent. Already, the expatriate population makes up 86.5 per cent of the total population; most come from Nepal, India, Sri Lanka and Bangladesh.

Additional workers

The number of foreign labourers is set to rise exponentially, despite the country’s poor reputation regarding the treatment of workers. Credible estimates suggest Qatar may need to increase its migrant work force by at least 1 million in the run-up to 2022.

Almost 40 per cent of the expatriate labour force in Qatar works in the building sector, according to QNB. The low-skill nature of most construction jobs means the country is a magnet for immigration from Asian nations. In contrast, most manufacturing in Qatar is capital-intensive, so the share of the expatriate labor force (8.2 per cent) is lower than its contribution to GDP. Similarly, the oil and gas sector only employs about 6 per cent of the expatriate labour force, says QNB. But being low-skilled makes migrant labourers more vulnerable to abuse, compared with workers in value-added sectors such as hydrocarbons and manufacturing.

Those abuses are said to be legion by a growing band of critics. A report issued by Amnesty International in 2013 found that 90 per cent of workers in Qatar had their passports retained by employers, and more than half did not possess a state health card that provides access to public health services.

The criticism goes deeper than the poor track record of local companies in their treatment of foreign workers. The pervasive exploitation of construction workers is seen as being facilitated by a flawed system of laws and regulations that tilt the balance heavily in favour of the employer. The kafala system is regarded as the root of the problem, granting sponsors unlimited powers to stop their employees from moving jobs or exiting the country.

Serious punishment

It is not that Qatar has nothing on its statute books to deal with labour rights. Law 14 of 2004 regulating private sector labour limits workers’ hours and stipulates that they receive paid annual leave, besides setting standards for health and safety. Rather, the problem is one of enforcement. Widespread flouting of these laws does not trigger serious punishment for transgressors.

“It’s one thing to come up with legislation, and quite another thing to implement it,” says Dovelyn Rannveig Agunias, senior policy analyst at the Migration Policy Institute, a Washington-based think-tank.

Setting standards

In a bid to stem the tide of criticism, the authorities launched a bid last year to do more to prevent abuse of the system. In February 2014, the World Cup organising committee, the Supreme Committee for Delivery & Legacy, released a report setting out minimum living and working standards for labourers hired by firms constructing World Cup facilities. Contractors and sub-contractors are mandated to provide good living conditions, timely and regular payment of salaries, equal treatment of workers regardless of background, and adequate health and safety measures, as well as ending forced labour and human trafficking.

The previous year, Qatar Foundation announced a code of conduct relating to workers’ conditions that contractors and sub-contractors involved in its projects are required to respect.
US campaign group Human Rights Watch acknowledges that such codes, if properly enforced, can improve life for workers. But it says these are not a viable long-term substitute for enforced state-led regulation and they will not alleviate conditions for most of the country’s low-paid migrant workers, since many of these projects constitute only a fraction of those ongoing in Qatar.

For example, the 2022 committee’s new rules would only cover those labourers working on World Cup facilities, while excluding foreign workers involved in the construction of hotels, highways and other infrastructure being built to prepare for the tournament.

Selective relief

Further reforms arrived in May last year, when the Labour Ministry announced changes to the kafala system that would boost the inspections regime and make it easier for workers to report abuses. It would replace the sponsorship system with one based on employment contracts.

Crucially, the entry/exit permit was to be replaced by a system under which permission is granted automatically after a three-day grace period. The migrant labourers would also be able to switch jobs at the end of a contact without the need for a no-objection certificate from their previous employer.

Again, these moves have not won unanimous support from campaigners, with objections that the efforts only amount to tinkering with the system, rather than genuine reform. The change in the entry/exit permit regime is open to abuse, according to Amnesty International. Furthermore, the group says the government has not implemented other promised measures such as more transparent electronic bank transfers to labourers. As one campaigner tells MEED, the problem in Qatar is that state regulation has not been fit for purpose. “A code of conduct is only going to be as strong as the regulation in which it is set. And in Qatar, that is very weak.”

More restrictive

There are variations in the implementation of kafala between the Gulf states. But Qatar’s system is one of the more restrictive versions, says Giyas Gokkent, a senior economist at the Washington-based Institute of International Finance. “The UAE has, for example, loosened some of the restrictions, and Kuwait has made progress too,” he says.

The economic aspect of migrant labour is often overlooked in the debate over Qatar’s record, but it is pivotal. “Many firms look at this from a cost perspective first and foremost,” says Gokkent. “From their view point, anything that adds to their costs would not be welcome.”

Issues of commercial security are paramount for many local companies. They suggest it is all well and good for Western governments to criticise Qatar for its treatment of foreign workers, but with more than 80 per cent of its population made up of foreigners, its economy is more vulnerable - particularly if employee misconduct results in serious financial losses. Defenders of the status quo argue that controlling employees’ mobility provides a means of stopping them engaging in fraud and then fleeing the country. The control of the passport is an effective, if blunt, tool in achieving this aim.

Wage protection

One reform route that Qatar might seek to follow is the UAE’s wage protection system, as a means of improving payments to workers. In the emirates, an electronic salary transfer system allows institutions to pay workers’ wages via banks, bureaux de change and other financial institutions approved and authorised to provide the service. The system, developed by the Central Bank of the UAE, allows the Labour Ministry to create a database that records wage payments in the private sector to guarantee the timely and full payment of agreed-upon salaries.

“There is a role for the authorities to play here,” says Gokkent. “If they are quickly made aware of a problem, that could be a solution that would fit larger companies in Qatar, although not domestic workers.”

Cost rises

Some large multinationals are implementing due diligence programmes to ensure their suppliers and contractors are not hiring forced labour. But the problem in Qatar is that multinational corporations do not do most of the hiring, says Agunias. It is the small-to-medium-sized enteprises (SMEs) where most of the abuse is concentrated. “[Multinationals] make pronouncements on following best practice, but, ultimately, change has to come from the main sector that hires foreign workers, which is smaller local firms,” she says.

SMEs in Qatar fear real labour reforms would inevitably lead to their costs increasing. But others point out the economic case for persisting with the outmoded kafala system is tenuous.

“Things like the wage protection system can make a real difference,” says Gokkent. “But the important thing is to not look at this issue from the narrow perspective of wage increases and sudden cost spikes. From the point of view of economic growth, the reality is that [reform of the kafala system] is not going to make that big a difference. The cheap supply of labour serves the Gulf very well and the additional cost is just something that will have to be borne.”