Saudi Arabia has introduced massive labour reforms aimed at millions of expats working in the country.

A slew of reforms, which came into effect from Sunday, will benefit over 10 million expatriates living in the kingdom, including Nepali migrant workers.

With the new rules, migrant workers can switch their jobs and will also have the freedom to leave the country without seeking employers’ consent.

The highlight of the new reform has been the reformation of the abusive and discriminatory ‘kafala system’ that restricts foreign workers’ rights and job mobility. The changes to the 70-year old sponsorship system mean that migrant workers can enjoy improved job mobility, and be able to switch jobs and leave the country without employers’ permission.

Saudi media and regional media have praised the kingdom’s initiatives, which were announced last November, saying these reforms will have far-reaching positive effects on the Saudi employment market.

“Reforms in the Kafala system is a welcoming and legally progressive initiative,” said Jeevan Baniya, a labour migration expert. “Nepali workers living in the kingdom can take advantage of the new reforms.”

There are 400,000 Nepalis living and working in Saudi Arabia.

Saudi Arabia has followed the footsteps of Qatar, its neighbouring country and another major labour market for Nepali workers, in introducing labour reforms.

In what was defined as a historic move for the gas-rich nation, Qatar scrapped the ‘kafala’ sponsorship system and adopted a non-discriminatory minimum wage in August last year.

The International Labour Organisation (ILO) hailed the reform as the beginning of a new era for the Qatari labour market as the Gulf state also fixed a minimum wage of 1,000 Qatari riyals.

“The adoption of labour reforms is part of the growing awareness among countries in the region. When one country introduces such progressive measures, it sets a precedent and builds pressure on the other countries to follow suit,” said Baniya. “The realisation must have come from the lesson learnt due to the Covid-19 pandemic as there are not sufficient prospects of hiring new workers easily. With these existing challenges, if the host countries do not make the process flexible, it can disturb the whole supply chain.”

The Saudi government, through the Kingdom’s Labor Reform Initiative (LRI), has intended to foster “a competitive and fair working environment.”

The ILO had also welcomed Saudi Arabia’s Ministry of Human Resources and Social Development declaration of new reforms. In November last year, the UN organisation had said these reforms would directly reduce the vulnerability of foreign workers to exploitation and abuse as well as enhance their living and working conditions.

Equidem, a charity dedicated to promoting the human rights of the most marginalised globally, has cautiously welcomed the initiative taken by the Saudi government.

It warned that new labour laws taking effect in Saudi Arabia do not adequately protect or improve conditions for migrant workers.

“Passage of laws alone will not improve conditions for migrant workers,” Mustafa Qadri, founder and executive director of Equidem, said in a press release.

Saudi Arabia hosts the third-largest migrant population in the world after the United Arab of Emirates and Germany. Foreign workers account for about a third of Saudi Arabia’s 30 million population and more than 80 percent of the kingdom’s private-sector workforce.

According to Equidem, these workers are prone to exploitation and abuse, and those harms have been exacerbated by the Covid-19 pandemic.

The new laws do not address the systematic discrimination, weak enforcement, and prohibition on migrant workers joining or forming a union that currently leaves millions at risk of modern slavery, the charity pointed out.

“Saudi Arabia has historically allowed conditions to flourish that lead to the abuse, exploitation, and dehumanisation of migrant workers. The pandemic has rapidly worsened conditions for workers, but these new laws simply do not address the root of the problem,” said Qadri. “We have heard from workers about what they’re experiencing, and we know what needs to be done to enact real change. Our hope is that Saudi Arabia chooses to put some action behind its rhetoric and show the world it’s serious about improving conditions for migrant workers.”

Last year Equidem released the report, ‘The Cost of Contagion’, highlighting the experiences of both women and men migrant workers in the Saudi Arabia. They shared their experience of the financial ruin, destitution and psychological impact of unpaid wages, poor accommodation, and inadequate access to medical care while Covid-19 infection rates raged across the country.

Rameshwar Nepal, executive director with the Equidem Research Nepal, also said that the labour reforms come with limitations and would not be adequate to address the challenges faced by millions of foreign workers in Saudi Arabia.

“Provisions of a job change or employer change and country exit is all good, but new reforms still have several issues that are concerning. The new reforms do not cover domestic sector workers,” said Nepal. “Although all migrants are more or less subjected to some kinds of exploitations, domestic sector workers are comparatively more vulnerable to such challenges. Excluding the domestic sector, which is a bigger constituency, shows the new rules will not benefit all equally and means nothing to them.”

The newly enforced rules appear to eliminate the previous mobility restrictions only for migrant workers employed in the private sector in specific jobs like construction, hospitality, oil and gas, and infrastructure works.

The rules fail to offer reprieve to nearly four million women and men working as domestic workers, farmers, gardeners, drivers, and security guards, as well as those on short-term visas.

According to Nepal, workers involved in these sectors are at a heightened risk of modern slavery and other labour exploitation and abuses.

Such exclusion means Nepali migrants who have been working as domestic help in the country will not be covered under the new labour reforms.

According to a report prepared by the Nepal embassy in Saudi Arabia nearly eight years ago, the kingdom hosted about 70,000 Nepali women migrants who had entered the country through informal channels and nearly 80,000 undocumented workers.

Besides, migrant workers in Saudi Arabia will still need to seek permission from the Ministry of Human Resources and Social Development to leave or enter the country. Likewise, these workers can only transfer to another job after a year of employment or at the end of their contract.

“These provisions of the new labour reforms show that these are not complete but conditional scrapping of the Kafala system. Taking permission from the ministry or the employer means the restriction has not been entirely lifted but only shifted,” said Nepal. “Also, it is still considered a crime if a migrant worker leaves his or her employer. In such a case, the employer can easily report the individuals as an abscondee. Why would a migrant worker run away from his/her job, especially when they have paid a huge amount for the job? A few might do so, but we can not generalise them. At times, workers escape from the employer due to multiple reasons like non-payment or other forms of physical and mental abuses.”

Once declared an abscondee (locally known as a ‘huroob’), the concerned worker’s visa is invalidated, leaving him or her outside the protection of the labour law.

How the new reforms will be implemented in the future and benefit Nepali workers fully is yet to be seen.

“We need to see how the standards of contracts will be maintained and their rights will be ensured after changing the employer. Nepal cannot monitor whether these issues benefit Nepali migrants,” said Baniya. “We need to wait for how the minimum standards and workers rights will be reflected after the change of the job as new contracts could be coercive because workers may not have an understanding of local language. There must be due implementation, regular monitoring and review for helping migrant workers.”

Even though a slump was witnessed in Nepali labour migration to Saudi Arabia in recent years, a surge has been seen with the resumption of foreign employment after the Covid-19 pandemic, giving hope that thousands of Nepali workers will get opportunities in the kingdom.

“What is welcoming about these labour reforms is the realisation among host countries that they must protect the workers. Qatar and Saudi Arabia’s direction, which has come from political leadership, will encourage other countries in the region as well,” said Nepal. “If the existing gaps in the new reforms can be addressed, then only these new changes can broadly benefit all.”