In just over 30 years, Hong Kong has emerged as an international trade entrepôt in East Asia and one of the world's financial hubs. Hong Kong started off as an entrepôt, but with mainly Chinese capital. The territory steadily industrialized by focusing on light industry. After China adopted its open-door policy in the late 1970s, Hong Kong's economy expanded rapidly by becoming the major investor in China. As seen in other NIEs, labor-intensive industries in Hong Kong began relocating to coastal China, while high profit industries such as designing, marketing and financing increased dramatically within Hong Kong.
Migration is central to the history of Hong Kong. Hong Kong's major source of labor has been from the constant influx of mainland Chinese. The Chinese population in Hong Kong grew by leaps and bounds when mainland Chinese fled the political turmoil following the Communist victory in 1949 and the Cultural Revolution in the 1960s. Non-Chinese Asian migrant workers are a relatively recent phenomena. By the late 1980s, the labor cost in the manufacturing sector (metal processing, electronics, construction) and the service sector (restaurant and hotels) escalated. Hong Kong achieved near-full-employment (2%) which was described as a "serious labor shortage" by the business sector. In response, the government exerted efforts to fully mobilize the local female labor force. Because of inflation and the prohibitive cost of living, local women entered the labor market to increase household income.
Consequently, hiring of foreign domestic helpers (FDHs) became popular. Although the entry of FDHs began even earlier than the 1970s, their number rose dramatically. It has doubled since 1988. At the end of December 1997, there were 171,333 documented foreign domestic helpers in the territory. The majority (80%) are from the Philippines. The Immigration Department reported an increase in the Philippine community from 128,800 in December 1996 to 146,400 by the end of June 1997. It said that "this is the largest population of Philippine citizens recorded in Hong Kong, Philippine citizens are currently the largest foreign community in Hong Kong."
The immigration department has also reported an increase in the number of Indonesians and Indians entering Hong Kong. There are also quite a few workers originating from mainland China, from Sri Lanka, Pakistan, and Nepal.
Migrant workers in Hong Kong are primarily, but not exclusively domestic helpers. Hong Kong began its foreign workforce program in 1989. Some 3,000 technicians and craftsmen were initially recruited, and the following year, the government had to allow a further increase of imported labor by widening the range of labor importation and raising the quota. At the same time, due to massive construction plans associated with the new airport project, the government set up the Special Scheme for the New Airport Project that brought more laborers. As of January 1997, 3,317 migrant workers were building the new airport.
A company wanting to bring in migrant workers in the construction industry must get approval under the Special Labor Importation Scheme by the Immigration Department. Only a limited number of foreign workers can be brought in for specific tasks. These migrant workers are short-term; the workers will depart upon the completion of the airport in 1998. There are also a few thousand migrants toiling away in the manufacturing, entertainment, and service sectors.
Both FDHs and imported construction workers are covered by especially restrictive rules that apply exclusively to them. First, they do not have the right to remain in Hong Kong indefinitely, as their stay is completely dependent on their work. Second, they are brought in to work for a specific person or company and they can only work for those persons; they are not allowed to find or shift to any other kind of work. Third, they can never gain residency in Hong Kong or bring in their dependents.
They follow a standard contract issued by the Immigration Department. Conditions include provisions for proper accommodation, food, and medical treatment, if necessary. For foreign domestic helpers there is also a minimum salary (HK$3,860 as of 1997). Imported construction workers do not have a minimum wage. However the wage must be approved by the Immigration Department before the migrant is granted a visa to work in Hong Kong.
All migrant workers can access Hong Kong's legal system, e.g., for criminal, labor or any other cases. The migrant worker is also permitted to file labor claims against their employer (and vice versa) for contract violations.
In May 1990, the Hong Kong government announced the establishment of the Special Importation of Labour Scheme for the Airport Core Programs Projects (the ACP Scheme, or the Scheme) for the importation of construction workers to facilitate construction of the new airport and related projects. In order to ensure local employment opportunities, a quota ceiling of 2,000 was initially imposed at the start of the Scheme. The ceiling rose to 5,000 at the end of 1995 accounting for about 25% of the total work force of the ACP Scheme. At the end of 1996, there were 5,288 workers.
The exploitation of imported workers and unemployed local workers went hand-in-hand in Hong Kong from September to December 1995. More than 1,400 Chinese migrant workers organized labor petitions and strikes in 1995 at Hong Kong's new airport construction site. Workers complained of arrears of wages, unreasonable deductions of salary and poor accommodations.
As a result of the disputes, the Chinese government in June 1996, limited the operation of labor service companies to 21 authorized companies. Also, at the end of 1996, in an effort to improve the situation, the Chinese Foreign Trade Ministry in cooperation with the Hong Kong government, published guidelines on recruitment.
At the end of 1996, the Legislative Council of Hong Kong set up a series of fact-finding hearings on this issue in particular and the general issue of the importation of labor. In its inquiry report, the Council made several criticisms including:
1. Labor service companies or middlemen impose exorbitant fees on migrant workers in the name of providing services and management. For example, some require RMB 60,000 (US$7,500) as placement fee, and HK$800 (US$103) each month as management fee.
2. Migrant workers are asked to sign an employment contract with terms different from those contained in the standard contract presented to the Hong Kong authorities. Workers were then paid an amount lower than that reported to the Hong Kong authorities. This violates the regulations concerning the minimum wages of migrant workers, which should be set at the median wage for specific kinds of workers.
3. Contractors are allowed to "import workers with lower median wages to undertake jobs with higher median wages." Since imported workers have insufficient knowledge of their own rights and are afraid of being dismissed, most workers were unwilling to report the situation to the authorities. This sends contractors the wrong signal and leads contractors to make halfhearted efforts to recruit local workers.
4. Contractors who hold large quotas for the number of imported laborers can make additional
profits. Local service companies or "middlemen" will approach such contractors and offer them
very favorable terms for importing labor under their quota. The terms offered include much
lower wages for the imported workers, large sums of money to be paid to the contractors as
"deposits," and a wide range of services at literally no cost.
The Council recommended that:
1. Hong Kong is under the obligation to observe Convention 97 of the International Labor Organization, which is the migrant convention. The adoption of free-market wages for remunerating imported workers, which apparently will mean much lower wages for imported workers, may be contrary to the spirit of the convention, and will have a negative impact on the image of Hong Kong.
2. Restrict the activities of middlemen through legislation. The Chinese Foreign Trade Ministry states that "the number of authorized labor services companies would be reduced to only 21 and they would be required to first register in Hong Kong as 'employment agencies' under the Employment Ordinance, and a standard system of fees would be promulgated."
Despite the Legislative Council's recommendations, the conditions of workers remain unchanged up to date.
The SAR government announced the unlimited importation of migrant workers for housing construction projects from March 1998 to build 85,000 housing units a year. Angered local workers argued that this will increase Hong Kong's unemployment rate (during August and October, 4,000 local workers were laid off, and unemployment rate rose to 2.4% in December with about 79,000 unemployed). Second, introducing a new import scheme without reviewing and improving the current import scheme will worsen the situation.
In addition to the recommendations made by the Council, the Hong Kong Christian Industrial Committee and other local labor groups are also pressing for the following demands: to abolish the system of middlemen (recruitment/placement agencies); to create security funds for migrant workers to temporarily subsidize basic living and housing costs while they are recuperating from occupational injuries or are on labor dispute.
Lack of awareness of labor rights
While the migrant worker can seek redress under Hong Kong laws, many do not know this. They are ignorant of their rights and they do not know where to go for assistance. This makes them quite vulnerable to abuse.
Substandard conditions of work and lack of redress
There have been complaints by workers of under payment, refusal of the employers to give proper rest days and public holidays, substandard accommodation and food, and being told to do work other than that stated in their contracts.
When migrant workers seek to resolve grievances with their employer, they normally file a complaint at the Labour Department. The Labour Department is required to hear any dispute arising out of the work contract. When the migrant worker files a claim, a conciliation meeting is held with a Labour Department officer, the employer and the migrant worker to see if the dispute can be settled. If it is not settled, then the complaint will be referred to the Labour Tribunal or the Minor Complaints Adjudication Board (MECAB) whichever is appropriate. These channels are more formal, and are in a court room setting. If no settlement is reached, the presiding officer or the adjudicator will settle the matter.
The migrant worker can also seek assistance from government-funded organizations such as the Legal Aid Department.
Two-week rule
The most negative policy for FDHs is the "New Conditions of Stay" - better known as the "two-week rule." This authorizes the arbitrary termination of a contract, by either party; obviously, this is lopsided against the domestic helper and employers easily abuse this prerogative. The two-week rule stipulates that upon termination of contract, the FDHs must return to her country within two weeks.
Transition of sovereignty to China
In 1997, there was a pronounced concern that the handover of Hong Kong to China would result in foreign workers losing their jobs. In 1996, there were several dialogues at different levels, e.g. between the British Foreign Minister and Philippine Foreign Secretary, between the Chinese Premier and the President of the Philippines. Chinese and Hong Kong authorities repeatedly gave assurances that the status quo would be maintained for the employment of foreign domestic helpers. Despite these assurances, many migrants became very worried. Foremost in their minds was whether the SAR government would replace FDHs with mainland Chinese workers. The political transition has served to remind the migrants that they cannot stay forever in Hong Kong.
Migrant support groups reported that Hong Kong is not about to replace more than a hundred thousand FDHs with mainland Chinese workers, because this would be a financial and social disaster. FDHs cost the government very little as they are entitled only to minimal social services and have no residency rights, cannot bring in their family members, do not require school for their children, and housing. In contrast, mainland Chinese are nationals who should be entitled to such rights.
To date, there have been no significant changes to existing policies on FDHs. However, the Hong Kong government has been more strict about granting visas.
This report was compiled from the following sources and contributions to AMY 1998:
Curran, Helene (Domestic Helpers and Migrant Workers Programme), "Migrant Workers in Hong Kong," 1997.
Kwok, Tat Chiu (Hong Kong Christian Industrial Committee), paper submitted at the Conference on Chinese Migrant Worker, January 11-14, 1998, Macau.
Shek, Ping Kwan (Hong Kong Christian Industrial Committee), Export Labour in China, paper submitted at the Conference on Chinese Migrant Workers, January 11-14, 1998, Macau.