The 1980s. was a period of phenomenal economic growth for Taiwan, making it one of the most developed countries in Asia. Real GDP growth averaged 9% annually in the past three decades. Export growth has been even faster and has provided the impetus for industrialization. Inflation and unemployment are low. Agriculture contributes about 4% to GDP, down from 35% in 1952. Taiwan has a dynamic capitalist economy with considerable government guidance of investment and foreign trade and partial government ownership of some large banks and industrial firms.
Taiwan currently ranks as the 13th largest trading country in the world. Traditional labor-intensive industries are steadily being replaced by more capital- and technology-intensive industries. Taiwan has become a major investor in China, Thailand, Indonesia, the Philippines, Malaysia, and Vietnam. The tightening of labor markets has led to an influx of foreign workers, both legal and undocumented.
Taiwan, like many other receiving countries, adopted a gradual policy of "limited industries, limited number" in terms of importing foreign labor. This translates into the importation of foreign workers to address temporary labor shortages in some industries. Prior to the Employment Service Act (ESA) of 1995, there were no clear policies or laws guaranteeing the rights of migrant workers. But even with ESA, provisions on migrant workers' rights remain ambiguous or restrictive. ESA stipulates that employers who use foreign workers must pay a "work stabilization fee"; a portion of this is earmarked for an unemployment fund. However, many employers pass the expenses on to the foreign workers, or underreport the number of foreign workers to evade payment. In short, the provisions of the ESA fail to ease the problems faced by migrant workers.
Management-labor relations is another area of contention. Majority of the labor contracts signed by foreign workers do not go through a process of negotiation (between management and labor); they are mostly drafted by the employers and brokers. This creates great instability in management-labor relations.
In addition, most employers adopt a passive management style and offer little protection to the workers. Barely a year after Taiwan opened its doors to foreign workers (in 1991), the incidence of foreign workers running away from their jobs was already high. In May 1993, application for import of foreign workers was halted. By the end of 1993, the number of imported workers who ran away from their jobs reached 1,354, representing 1% of the total. The reasons why foreign workers run away are rather complicated. One basic reason is they do not have a say on their work contracts. Therefore, they cannot complain. Communication is also a big problem. Foreign workers cannot organize unions; and they face the animosity of local workers if they join local unions.
The situation is particularly serious in the case of family caretakers (domestic helpers/maids). They have very little legal protection and they oftentimes become victims of sexual harassment, rape, physical abuse and confinement. An example in 1996 was a 36 year-old Filipina domestic helper who was raped eight times by her male employer. She endured the assaults for six months. In early 1997, she finally mustered enough courage to seek help. But at the time she reported the abuse, the rape could not be proven because three days had passed since the last assault. Worse, her employer's wife beat her and took her to the police station claiming that she had wrecked the marriage. In another case, a domestic helper was made to clean three homes, was denied her days off and given only rice, salt and chicken heads for food.
Exorbitant brokerage fees leave the majority of migrant workers indebted even before they start their new jobs. Therefore, they are left with no choice but to continue to work even if they are aware that their rights are violated. In the case of factory workers, a number of accidents, illnesses and even deaths have been reported. But the Taiwanese government and concerned countries have done little to address these issues.
Sending countries, such as Thailand and the Philippines, have failed to implement protective measures for their workers because of the constant threat from the Taiwanese government. For example, in March 1992, following the numerous problems related to working conditions and wages, the Thai government proposed a minimum wage for Thai workers in Taiwan. After the Taiwanese government threatened to ban Thai workers, the Thai government withdrew its own request. The same was true when the Manila Economic and Cultural Office issued a "Worker Protection Notice" to Taiwanese brokers. The Worker Protection Notice required brokers to provide insurance for Filipino maids and other provisions aimed at improving working conditions and recruitment processes. As expected, the Philippine government recanted its demand when Taiwan threatened to freeze the import of foreign workers on the ground that the demands amounted to internal interference.
Six years ago, Taiwan-based middlemen charged US$550 per placement. Today, the fee is US$1,100 for domestic helpers and US$1,800 for a factory or construction worker. On top of this, foreign brokers (in sending countries) extract anything from US$2,100 to US$3,500 (or more) from their job-seeking compatriots. Such excessive fees are illegal in Taiwan as well as in Thailand and the Philippines, but the brokers flaunt these laws. The inability of the Council of Labor Affairs (CLA) to stop the system is rooted in the fact that brokers have powerful patrons such as legislators and high-ranking government officials. Corruption and greed are two factors contributing to the rotten system. The result of the escalating brokerage fee is that foreign workers become heavily indebted even before they set foot in Taiwan. Pressure to pay off debts cause the workers not only to keep quiet in the face of blatant exploitation, but also to continue working even if injured or sick.
Incidents of runaway workers are on the rise. According to statistics compiled by the Department of Police Administration, there were 6,656 cases of ESA violations (involving 6,656 employers, 212 brokers, and 14,182 undocumented foreign workers) as of April 1994. This increased to 20,642 by the end of August. As of April 1995, runaway legal foreign workers totaled 10,050, representing one out of every 22 imported workers. By the end of September 1995, the cumulative number of runaways was 16,670 (a 7% runaway rate, or one out of every 14 imported workers). Statistics of the Department of Health indicate that 24,966 foreign workers ran away from their jobs as of mid-November 1996, representing a 10% runaway rate. Among the runaways that were found, 3,000 were imported to engage in prostitution. As of February 1997, total runaways reached 26,808 (3 out of every 10). Preliminary investigation showed that major reasons included, poor working conditions, over-stringent or abusive employers or plant rules, misinformation provided by broker, exorbitant brokerage fee, contract term for two years, not allowed to return after contract expires or the lure of other higher-paying jobs.
Many management-labor disputes arise from the fact that only the employer has a say in the labor contract. Complaints by foreign workers center around labor contracts and wages. Contracts are usually signed by foreign workers in their home countries. However, many workers later discover that the situation, employer, workplace or nature of work are different from what they had agreed in the contract. Some are forced to sign the labor contract and are then made to perform a different type of work and given a different (usually lower) pay. Oftentimes there are no provisions that compensate for lost wages. Some workers were forced to extend their contracts, or repatriated without due cause. Some are made to pay for room and board (even though contract says free); others are paid "by piece" after they started working.
Problems concerning salary payment is another cause of discontent. Some workers reported that employers failed to adjust the basic wage as required by the government, failed to pay on time, made undue deductions, or owed workers salaries. Disputes also arise in the area of reporting income tax and tax refunds. Some are not given severance pay when employers arbitrarily terminate the contract, or do not receive adequate compensation for special or unused leaves. Work hours, leaves, overtime and work rules are often also the subjects of complaints by foreign workers.
Of the 85,000 foreign workers imported in 1994, only 20 were involved in cases of civil and criminal code violations (seven involving theft, two on snatching, one each on robbery, homicide, personal injury and intimidation). On December 13, the CLA published crime statistics for foreign workers (for the period January- September 1996). It showed that compared to the previous year, the number of offenders grew by 160% for undocumented foreign workers, and 15% for legal foreign workers. The most common offense committed (by either) was theft, followed by homicide. Forgery ranked high among undocumented workers. In terms of nationality of offenders, Thais topped the list, followed by Filipinos, Malaysians, Indonesians. The total number of people involved in these crimes was 271, representing a crime rate of 0.08%. These statistics clearly prove that there is no basis to the claim made by the government, academics and private groups that foreign workers seriously affect the security and order of Taiwanese society.
As of end of July 1996, there were 229,000 legal foreign workers, 20% of whom worked in the construction industry. Taiwan's unemployment rate, meanwhile, has exhibited a rising trend since the latter half of 1996. This was mainly due to the international economic situation and national policies. In October, the media started to link the importation of foreign workers with the unemployment problem. Foreign workers were blamed for squeezing out the aborigines in terms of employment. There are a total of 360,000 aborigines in Taiwan, of whom 180,000 are employable. Prior to the importation of workers, the majority of the aborigines worked in the more filthy and dangerous jobs. The imported workers took some of these jobs in the construction sector, but they are not the direct cause of the sad plight of the aborigines. The problems of the aborigines are the consequence of the changes in the employment and economic policies of the government.
The government has attempted to expand the sources of foreign workers. For many years Taiwan
has enjoyed pretty steady sources of foreign workers. However, facing the increasing demands
from exporting countries to enhance the working conditions of foreign workers, the Ministry of
Economic Affairs and the CLA convened a joint meeting on February 12, 1997, consenting to
expand the sources of foreign workers from countries such as Vietnam, Cambodia and Fiji. It
anticipates importing 5,000 Vietnamese workers without affecting the total quota. Since the
import of foreign workers in 1989, there have been no official labor agreements entered between
Taiwan and labor exporting countries. If Taiwan and Vietnam can forge a country-to-country
agreement, the Taiwan government claims that it can help avoid the exploitation of employer and
employee by middlemen and embodies certain diplomatic significance. The CLA reckons that
opening the import of Vietnamese workers can alleviate the reliance on Thai and Filipino
workers and may prompt their governments to better regulate brokers.
The new direction of foreign labor policy: President Lee Teng-hui indicated in March 1997 that "social problems created by foreign workers have far exceeded the economic benefits it brings." This is not right. We should review the policy. Based on that instruction, the CLA and CEPD started to give overall consideration to enhance the economic benefits of imported workers. In June 1997, the CLA announced that it will extend the contract term for foreign workers to three years. But after this, it froze the quota of 20,000 workers that are expected to come soon.
The CLA claims that foreign workers' problems (e.g. running away, working illegally, committing crimes) stem mostly from excessive fees charged by brokers. So the CLA is considering allowing importation of foreign workers directly by businesses, or through a nonprofit organization such as the National Federation of Industry. In line with the government's commerce and trade policy, the CLA will allow the importation of workers from more countries including North Korea, Vietnam, Fiji, Cambodia, Panama, Guatemala, Honduras, El Salvador and Costa Rica. It costs a Filipino worker NT$80,000 (US$2,290) and a Thai worker NT$100,000 (US$2,860) to come and work in Taiwan. These far exceed the limits set by the governments of the Philippines (NT$26,000) and Thailand (NT$56,000). Also, the CLA, in response to the request of the National Federation of Industry, has agreed to open the previously frozen quota of 38,000 foreign workers for nonrestricted industries.
As of June 30, 1997, the number of foreign workers approved by the CLA totaled 315,933; of these, 244,500 are still working in Taiwan. The quota of 38,000 soon to be opened comes from three sources:
1) automatic forfeiture (27,477);
2) employment permit becoming invalid six month after issue without action being taken (7,841); and
3) permit revoked due to violation (2,920).
The changes in Taiwan's foreign labor policy is nothing but a titillating opening-and-closing of the entry by foreign workers. The changes (especially in 1997) were made for the sake of enhancing economic benefits; but they failed to alleviate the suffering of foreign workers who are doubly exploited by the brokers and employers.
By expanding the source of imported labor, the policy will only intensify the competition among brokers without effectively mitigating the existing problems. For a long time, the government, employers and labor groups have only focused their attention on limiting the number of imported laborers; they have conveniently neglected the issues of foreign workers' rights and the principle of "equal-work, equal-pay and equal rights." The result is a greater schism between local and foreign workers, and a deteriorating situation in which local and foreign workers are more severely exploited by employers and brokers.
This report was written by the Information Center for Labour Education (ICLE) for the East Asia Exchange Programme organized by the Asia Pacific Workers' Solidarity Links, September 21-27, 1997, Hong Kong.