In 2023, more than 220,000 Nepalis went to Malaysia, the most popular destination for workers seeking income. Although Malaysia is an ‘attractive’ destination for Nepali citizens, most suffer gross exploitation in reality when migrating to and working in the country. High recruitment costs and related debt bondage, false terms of employment, and dangerous, dirty and demeaning jobs. Fake employers acting as outsourcing agents treat workers like cattle or leave them at risk of arrest, extortion and deportation.

Nepalis in Malaysia also experience ineffective grievance mechanisms and dire consular assistance from the Nepali Embassy, in addition to passport confiscation, limited freedom of movement, violence and even death. Security guards, a job assigned exclusively to Nepali foreign workers, face some of the worst exploitation, ranging from excessive, compulsory overtime, no day off, irregular salary payment and deductions, poor housing, to lack of access to healthcare.

Most recently, from 2022 to 2024, the Bangladesh–Malaysia migration corridor was completely controlled by a syndicate that led to the trafficking of Bangladeshi workers for forced labour in the country. The UN condemned this abuse in multiple statements, as workers shouldered debts of $5,000 and destitution once they arrived in Malaysia at non-existent jobs. Recruitment, travel, visa and medical check agencies were all selected to be part of the exclusive syndicate, which saw most business actors shut out.

Similarly, some syndicates have allegedly existed in Nepal’s migration processes to Malaysia for medical, visa, or security. However, migration costs from Nepal to Malaysia are lower than those from Bangladesh, and the entire recruitment system has never been syndicated. The number of agencies processing workers for migration to Malaysia was never restricted. However, similar efforts to impose a total syndicate from Nepal to Malaysia, like those in Bangladesh, have recently sparked accusations and denials.

The Malaysian migration system is rotten. It is plagued by systemic corruption, impunity and a lack of the rule of law. There is also an absence of a long-term migration policy that equally prioritises national, economic and human security. But the recently exposed Bhutanese refugee scam and the fake visit visa scandal have revealed widespread abuse of power in Nepal, too. Nepalis are trafficked into debt and forced labour across the world, and the ministers seem increasingly complicit in this.

Malaysia is a relatively developed country reliant on migrant labour-intensive global supply chains. It exports products made using foreign labour, such as palm oil, garments, electronics and furniture. Malaysia is obliged, at least on paper, to adhere to international Environmental, Social & Governance (ESG) frameworks. Any form of syndicate when recruiting workers into its global supply chains that increases recruitment costs, forced labour and debt bondage risks, and dilutes transparency and fair competition raises questions about its commitment to ESG principles.

Migrant debt bondage due to exorbitant recruitment costs resulted in the US Customs and Border Protection placing a forced labour import ban on several prominent Malaysian companies from 2020 onwards. These companies paid millions to workers, with the highest amount to those from Bangladesh, as reimbursement for recruitment costs to victims of abuse to clear their names.

If a total syndicate is implemented to tightly control who can process workers for migration within the Nepal-Malaysia migration corridor, it will lead to cronyism, processing delays and higher costs. Political coalitions in the country could also disintegrate over corruption controversies. This would not only affect the Nepali government and its workers, but also responsible Malaysian employers.

Despite significant implementation weaknesses, Nepal’s lower-cost recruitment policies attracted responsible Malaysian companies to hire Nepalis rather than Bangladeshis until May 2024, when all recruitment was suspended due to systemic irregularities and abuse. However, if a syndicate is implemented for Nepal, decent companies in Malaysia will shun recruiting Nepalis for alternatives where syndicates are not active.

This would leave Nepalis migrating to Malaysia only for jobs in sectors that do not prioritise worker welfare and are not linked to global supply chains, such as security, cleaning, local restaurants, construction and local manufacturing. The syndicate will burden Nepalis financially, ensuring higher recruitment costs whilst profiting corrupt actors. Illegal transactions of laundered cash to pay the demanded illicit commission in Malaysia would rise, affecting the national economy and raising questions about commitments to financial governance.

International efforts to develop a responsible recruitment framework focused on Malaysia’s migration corridor were most successful in Nepal. If a recruitment syndicate is implemented, these achievements will be lost, and Nepalis will face a sad situation similar to that of Bangladeshis.

Discussions are underway about only letting a few manpower agencies participate in a syndicate. This means others will be excluded from Malaysia’s labour market, forced to lay off staff or close. This would violate Nepal’s Constitution and the Competition Promotion and Market Protection Act of 2007, guaranteeing citizens the right to sell goods and services fairly and competitively. Any syndicate could and would be challenged in the Supreme Court.

However, it is necessary to end unhealthy competition and corrupt practices of most manpower agencies in Nepal, such as paying higher commissions to secure manpower demands over competitors at any cost to workers or Malaysian agents or employers.

The 2018 MoU signed between Nepal and Malaysia concerning recruitment, employment and repatriation of Nepali workers helped slightly to promote dignified labour migration. However, both governments’ lack of concern in reviewing the agreement, which expired last year, raises doubts about their commitment to worker welfare.

Despite the necessity of discussions on improving the welfare of workers migrating from countries like Nepal and Bangladesh to Malaysia, we are forced to focus on preventing monopolistic practices that threaten workers’ most basic rights.

Any non-transparent monopoly in Nepal’s migrant worker recruitment processes will harm the country’s remittance-dependent economy. If everyone remains silent as recruitment syndicates develop, the exploitation of Nepalese will deepen.

Nepal’s recruitment industry should engage the government to develop more responsible recruitment systems for Malaysian and other key destination countries for Nepali workers. The government of Nepal should also ensure its cabinet ministers do not sign unfair agreements and instead take the lead in building collective efforts with other migrant source countries, like Bangladesh, to stand against the bullying tactics of corrupt groups—both in Malaysia and Nepal—that may be seeking to expand a recruitment syndicate.

Nepal should strengthen ethical recruitment processes to impose upon destination countries that are desperate for loyal and hard-working Nepali nationals. Similarly, Malaysia, in coordination with countries like Nepal, must reform its rotten migration management systems and prioritise on worker welfare, ensuring transparency, and fulfil its obligations as a developed nation to stop the spread of exploitation, impunity and a lack of rule of law into recruitment experiences of the region’s most vulnerable migrant workers.