A ‘Happy Diwali’ for Indian Workers in Saudi: Nation Plans to Abolish ‘Kafala’ System

For several decades now, Indians have made Saudi their second home. The statement is true as nearly 2.6 million Indians live and work in Saudi, contributing to its already boosted economy. However, many low-wage and vulnerable workers experience exploitation at the hand of their employers with no opt-out option as Saudi follows the Kafala system to monitor its migrant laborers working in blue-collar jobs in construction and domestic environment. This system has been heavily criticized by various human rights for creating an environment where employers can easily exploit their migrant employees by confiscating their passport and abusing them with little to no changes of any legal repercussions. But all this is due to change for good the following year.

In a praiseworthy move, Saudi Arabia plans to ban the seven-decade-old foreign worker sponsorship system, Kafala, to introduce a fresh set of rules and contracts to help low-wage migrants. As per the local news of the Kingdom, the Ministry of Human Resources and Social Development is on its way to bring reforms for the foreign workers in the nation by announcing a new initiative that enhances the contractual relationship between the employers and expatriate workers. This fresh scheme is likely to come into full effect from March 2021.

What is the Kafala System?

The Kafala system governs the relationship between an employer and an employee in the Kingdom of Saudi Arabia. Under this scheme, the migrant employees, especially working as a low-wage laborer, are bound to their employer, who is the sole holder of their visa and legal status. Every unskilled and low-skilled migrant worker is expected to have an in-country sponsor to arrive in the Kingdom and start working there as a legal migrant. These emigrants cannot change jobs or work for others until the original employer transfers the sponsorship. The Kafala system also resulted in the flourishing of the black market of visas.

Since its first practice, the Kafala system has undergone several policy changes to benefit these vulnerable workers. However, none of these modifications have positively impacted the state of migrant laborers. But it has drastically affected the image of Saudi across the world, impacting its employment rate and international relations.

How Would it Benefit Indian Low-Paid Migrants?

The abrogation of the Kafala system is expected to limit the employer’s controlling role over the employee and provide necessary migrant rights to the foreign workers, including a large expatriate of Indians residing in the Kingdom of Saudi Arabia. The new reform defines both parties’ rights and duties, thereby expecting to bring a much-necessary reform in promoting economic growth and expanding commercial activities in the state.

The decision to abolish the old practice of sponsorship system is taken by the Crown Prince Mohammed bin Salman as part of his Vision 2030 initiative. The new policy will enable the expatriate workers’ freedom to secure exit and re-entry visas while receiving their final exit stamped independently. They are empowered to accept employment opportunities without any restriction or approval from their current or previous employer. The workers will have complete freedom of movement as per the clauses stipulated in the employment contract.

Related Case Study: Indians in the Kingdom of Saudi Arabia

An Engineer by education, and a writer by profession, Ritika lives her life in stories. Her never-ending love for narratives encouraged her to turn her passion into a profession. In more than 4 years of working as a content writer, she has contributed to building content for a reputed technology magazine and a few start-ups.

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