Nepal has halted the issuance of new labor permits for Malaysia, effective October 1, after Malaysia stopped biomedical health examinations for Nepali workers, preventing new visa issuances. The dispute stems from Malaysia’s ‘Foreign Worker Centralized Management System’ (FWCMS) listing only 25 Nepali recruitment agencies, a move Nepal’s Ministry of Youth, Labor and Employment argues violates Nepali law and a prior labor agreement between the two countries.The Ministry of Youth, Labor and Employment has objected to Malaysia’s selection of these 25 manpower companies and has issued arrest warrants against their operators. The Department of Foreign Employment, after obtaining permission from the Foreign Employment Tribunal, has initiated investigations and legal proceedings against the operators. The department recently issued a public notice, warning that if the operators do not report within 35 days, their bank accounts and travel permits will be frozen.Nepal has proposed two dates for a joint task force meeting with Malaysia: November 18-19 or December 2-3. The Nepali government has expressed flexibility regarding the meeting date to accommodate the Malaysian side. The proposed meeting is expected to discuss making the worker selection and recruitment process more systematic, transparent, and worker-friendly, as well as finalizing the draft for renewing the Memorandum of Understanding between Nepal and Malaysia.However, Malaysian Human Resources Minister Ramanan Ramakrishnan stated in an October 6 letter to his Nepali counterpart, Ramji Yadav, that the Malaysian government remains firm on its decision regarding the selection of manpower companies. Malaysia maintains that continuing the current recruitment structure, which involves a limited number of agencies, simplifies monitoring, auditing, and regulation. Malaysia argues that this system reduces administrative burdens, increases transparency, and prevents the use of forged documents in the digital management system for workers. It also claims that only companies with strong backgrounds and financial stability are entrusted with recruitment to ensure quality and ethical processes, facilitating quicker resolution of worker grievances or labor disputes.The Ministry of Youth, Labor and Employment has consistently expressed its objection to Malaysia’s selection of the 25 manpower companies. Nepal’s Foreign Employment Act, 2064, grants all licensed manpower companies the legal right to operate independently and competitively. Nepal argues that limiting work to only a few companies creates a market monopoly, which is against Nepali law. Over 1,100 manpower companies are registered and operating in Nepal.In the last fiscal year 2082/83, 132,000 Nepali workers went to Malaysia for employment. This number is significant, especially as recruitment of new Nepali workers in the Gulf region has shrunk by 52.12% since the outbreak of war between America-Israel and Iran on February 28. Malaysia contributes approximately 20% of Nepal’s total remittance inflow, and currently, about 400,000 Nepalis are employed there, primarily in the manufacturing sector.The Department of Foreign Employment does not have exact figures on how many operators with arrest warrants are still at large. The criteria used by Malaysia to select the 25 principal recruitment agencies and 250 auxiliary agencies are also not clear.
Background
- In 2018, new labor permits for Malaysia were halted for 16 months due to disagreements over labor agreements and worker welfare.
- In 2018, a labor agreement between Nepal and Malaysia stipulated that the worker recruitment process should be transparent, zero-cost, and competitive.
What happens next
Nepal has proposed a joint task force meeting with Malaysia on November 18-19 or December 2-3 to discuss worker selection, recruitment processes, and the renewal of the Memorandum of Understanding.
