Bonded labour? Pacific 'guest worker' scheme

August 22, 2008

This month the federal Labor government announced a pilot seasonal worker scheme in the horticulture industry. Under the trial, up to 2500 visas will be available over three years for workers from Kiribati, Tonga, Vanuatu and Papua New Guinea to work in Australia for up to seven out of any 12 months. Swan Hill in Victoria and Griffith in NSW, among other horticultural districts, are being considered for the pilot.

The new program follows in the footsteps of the massive expansion of the 457 visa program begun in 2001, which has become notorious for ripoffs and abuse of migrant workers. Under the 457 program, the worker's right to work in Australia is based on their employer's sponsorship. A worker who is sacked has 28 days to find another sponsor or leave the country.

Charles Burke, vice-president of the National Farmers Federation (NFF), which spearheaded the push for the seasonal migrant worker program, claims it is needed for "overcoming the chronic nationwide shortfall of 22,000 seasonal workers in horticulture". His comments echo the horticulture industry's claim that up to $700 million worth of fresh produce is left to rot because of the lack of workers.

However, claims of a chronic labour shortage are disputed. In discussing "labour shortages", employers have studiously avoided the fact that workers in agriculture and fruit picking are notoriously low paid for physically demanding and repetitive work. The median weekly earnings for full-time employees in agriculture in 2003 was $575. This was around one-third lower than the median weekly income of all full-time employees in Australia ($769), making agriculture workers the lowest paid workers in the economy. Fruit pickers are among the lowest paid agricultural workers.

The seasonal work force in agriculture is currently made up of itinerant farm workers, family members, local casual workers, students, "grey nomads", backpackers on the Working Holiday Maker Scheme and undocumented workers, including refugees on bridging visas who do not have work rights.

There are indications that a large part of Victoria's fruit crop is picked by undocumented workers. A 2006 survey conducted by Swinburne University's Peter Mares in the Swan Hill/Mildura region revealed that one in four farmers admitted to using undocumented workers. The Australian Workers Union has reported cases of undocumented workers being paid as little as $3 per hour.

The fruit and vegetable industry's reputation of being rife with superannuation payment ripoffs, dodgy self-contractor arrangements and underpayment of wages is well deserved. The casualised, itinerant and largely un-unionised work force is highly vulnerable, allowing employers to keep wages and conditions well below those in comparable industries.

While unemployment rates are relatively low, large pockets of unemployment exist among young people, in regional areas and in Indigenous communities. The Illawarra has one of the highest youth unemployment rates in Australia - 22.2% in the 19-24 age group. The Australian Bureau of Statistics reported in February that 518,000 workers in jobs last September were underemployed, outnumbering the 465,500 people unemployed at the time. In this context, claims of an absolute shortage of labour are hard to sustain.

What does exist is a shortage of workers prepared to work for very low wages for only few months a year. This points to the obvious relationship between employers ability to attract workers and their willingness to pay competitive rates. Where employers do pay reasonable rates and provide adequate facilities, they are able to attract workers.

Speaking on SBS TV's Insight on June 17, immigration analyst Bob Kinnaird, said of the program: "... guest worker program, labour mobility - it strikes me as the very opposite of labour mobility. It's a labour captivity program. I think the name is very misleading and disguises what is really happening here, which is, an industry sector trying to get a program which provides them with a captive labour force."

If a genuine generalised labour shortage exists, an increase in permanent migration would solve the shortage. However, the reality - which the NFF is fully aware of - is that migrant workers with full work rights would seek the best wages and conditions available in the labour market. To attract workers, the industry would need to pay substantially more, facilitate continuity of work and provide access to facilities such as accommodation.

According to Construction, Forestry, Mining and Energy Union national secretary John Sutton, writing in the Sydney Morning Herald on April 30, "Those employers who use the constant refrain of 'We can't get Australians to do hard and dirty work' ought to stop leaving the last three words off their complaint. Those three words, 'at low pay', tell the real story."

The pilot program will allow migrant workers to work only in a specific region and industry for a single employer for seven months per year. If they seek alternative employment, or get the sack, they will be deported.

These restrictions on rights will allow employers to ignore the economic realities that apply to attract permanent-resident labour. The program will create a semi-indentured subservient class of workers, as has occurred under the 457 visa program.

The pilot program is being supported by a number of unions and NGOs, as well as the World Bank. Right-wing secretary of the Australian Workers Union, Paul Howes, supports the program on the grounds that seasonal migrant labour is needed to prop up an agricultural industry facing a labour shortage so that it can survive an end to the resources boom.

The Australian Council of Trade Unions and Oxfam Australia have expressed qualified support for the pilot, claiming benefits for ailing Pacific Island nations with high poverty levels through funds sent home by the migrant workers to their families.

Oxfam executive director Andrew Hewett said the scheme "could provide a release valve on pressure for employment for the rapidly growing youth population in the Pacific Islands".

There are big questions about the long-term social and economic impacts on nations that depend on remittances from overseas workers, but there are also doubts about the capacity of migrant workers to send money home.

A seasonal migrant worker program has been recently trialed in New Zealand. Jono Bushell from Vine Power, a company involved in the program, told the June 17 Insight program: "Because we've funded their travel and medical insurance, and in a lot of case[s] visas and clothing before they even arrive, they've got quite a substantial debt to us."

Examination of the NZ program has revealed widespread abuses of the workers' rights.

Citing the problems of abuse in NZ, employers, unions and NGOs in Australia have said they will only support a well-regulated program to ensure that exploitation is prevented.

However, the 457 visa program has provided ample evidence that a program in which workers have diminished rights cannot be fixed with regulation: well-regulated bonded labour is still bonded labour.

What NGOs and trade unions that support the program fail to explain is why it should be based on temporary migrant labour, rather that allowing workers from Pacific nations to migrate to Australia on a permanent basis with full work rights.

Such a program may not be acceptable to employers seeking captive labour, but it would result in a larger injection of remittance funds to the home country. There is strong evidence that permanent migrants are equally likely to send money to their families at home to provide some immediate poverty relief.

In reality, support for the pilot program based on arguments about Pacific Island development is allowing big business to get away with establishing a program that will result in more super-exploited migrant workers in Australia, while failing to address to the real causes of poverty in the Pacific.

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