All the Indian migrant workers interviewed by Finnwatch had entered the country through the same recruitment company. The recruitment company has an office in Mumbai, but the recruiter used by the company recruits workers from all over India.
Almost all workers interviewed for this report said they had paid recruitment fees at the recruitment company’s premises. The recruitment fee charged to the workers is 45,000 Indian rupees, or about 500 euro. The amount is equivalent to a two month salary in Malaysia. Two of the interviewees had paid the recruitment fee twice as they were working for IOI for the second time. The interviewed workers have collected money for the recruitment fee from relatives or other acquaintances from their home village. “45,000 rupees is a huge amount of money for me,” confirms one of the workers interviewed.
A relative of the complainant to Finnwatch and his friends had paid only 28,000 rupees for the recruitment by a bank transfer as they had known that the Indian authorities allowed workers to be charged a maximum of 30 000 rupees.13
However, the recruitment company should not charge any fees from IOI workers, as IOI has already paid for the recruitment of the workers and has forbidden charging of recruitment fees. However, workers were not aware of this or did not understand the IOI's ban on recruitment fees at the time. They only found out about IOI's policy after Finnwatch told them of it.
Recruitment fees are paid in cash at the office of the recruitment company. No receipt is given. The interviewed workers told Finnwatch the names of the two people who received the money from them. Some of the interviewees say that they have signed a document in India, which they have been told states that they have not paid recruitment fees. The document was in English, and they did not understand exactly what it said, and they also do not have copies of the said document. On the other hand, other workers have been asked to confirm in a separately filmed video that they have not paid recruitment fees. One of the interviewees said he asked why he had to lie on the video, but the only response he was given was an angry reminder to mind his own business.
IOI refers to various documents and video evidence in an attempt to discredit the workers’ complaint about recruitment fees. According to the company, workers sign a separate English language declaration document to prove that they have not paid recruitment fees. The recruitment company in India has arranged a Court Officer to interpret and explain the Declaration document in Hindi to the workers. Document states that no recruitment fees have been paid, and then a Government Officer/Notary attests to the said Declaration. This document is executed on stamp paper to endorse its authenticity, and to ensure that the Declaration is legitimate and legally enforceable. IOI stresses that the workers have committed an offence if they have made a false declaration in the presence of the Court Officer and Government Officer. Furthermore, the estate conducts an induction training for workers upon arrival. During this session, the estate again asks if they paid any recruitment fees. The workers will also be read their declaration and if the workers agree with the declaration, they will tick on the ’yes’ column but if they do not agree, they will tick on the ’no’ column.
Finnwatch is not convinced about this process with a complex set of legal documents and different tick-box exercises. Workers in a vulnerable position will most likely not speak against the recruitment company nor the estate management who are gatekeepers to the jobs the workers have been promised in Malaysia. In addition workers don’t understand technical terminology, do not know how to read complex legal documents and many times don’t know English language. The process appears to have been designed to silence workers and make filing grievances difficult instead of controlling the recruitment channels and finding out whether or not workers have paid recruitment fees.
From the interviews with the workers it can be concluded that recruitment fees have been charged at least between 2015 and 2019. With the coronavirus pandemic, the recruitment of migrant workers from India to Malaysia has been suspended. The recruitment agency in question is IOI's long-term partner in recruitment. It also recruits migrant workers for numerous other big palm oil companies in Malaysia.
Workers’ training videos have been uploaded to a public YouTube channel maintained by an employee of the recruitment agency. The YouTube channel features the faces and names of hundreds of workers, as well as the numbers of their passports. IOI is aware of the channel and sent links to the videos on the channel to Finnwatch during the dialogue. IOI explained that according to the company process, the appointed recruitment company will brief the workers on their job requirements, the contents of their employment contracts in their language, IOI’s No Recruitment Fee policy, and the declaration, and show the company video to the workers. These briefings are recorded on video and uploaded on YouTube. According to the company, these recordings can be “viewed from YouTube from all over the world by keying-in the workers’ passport number”. Finnwatch considers sharing passport numbers as a possible violation of workers’ privacy and will not refer to the YouTube channel in this report.
As stated above, according to IOI's policy on prohibition of recruitment fees, IOI is responsible for workers recruitment fees, and it has prohibited recruitment agencies from charging workers. IOI’s policy also states that if recruitment fees are nonetheless charged from the workers, recruitment agencies are required to reimburse workers for the fees. IOI also requires recruitment agencies to oversee the conduct of their own subcontractors who may be involved in the recruitment process in the sending countries.14
IOI argued that Finnwatch could not prove to whom the workers had paid recruitment fees. According to IOI, because the recruitment agency in question denies that its employees had charged the fees from workers, the issue is for the workers and the Indian authorities to solve. IOI has told Finnwatch that it does not intend to reimburse workers for the recruitment fees that have been charged to them. IOI has suspended recruitment from India.
Finnwatch considers the workers' reports to be consistent and the evidence of the connection between the persons who collected the recruitment fees and the recruitment agency strong. Regardless of who collected the fees, the IOI Group has to conduct human rights due diligence in order to ensure that its recruitment processes are appropriate. According to the International Labour Organization (ILO), recruitment fees should not be charged from workers. The ILO also emphasises the need for companies to exercise due diligence in the recruitment of workers and to address the adverse human rights implications to which they are party.15 The collection of recruitment fees, leading to debt, is one indicator of forced labour.16 Finnwatch considers the IOI Group to be responsible for reimbursing recruitment fees to its workers who are in a position of vulnerability. Breach of the agreement between IOI and the recruitment agency is a separate issue that IOI may seek to resolve through courts and other official channels.
After the previous round of dialogue between Finnwatch and IOI in 2017, IOI issued a recruitment fee policy (see above) in June 2017. In the policy, IOI committed to making ex-gratia payments to workers who had been charged recruitment fees before the no-recruitment fee policy was introduced. During the dialogue process conducted for this report it became clear that IOI had not enforced the 2017 policy and the ex-gratia payments had not been paid to all eligible workers. IOI continued making these payments in 2021. IOI explained to Finnwatch that although the recruitment guidelines and policy commitments were introduced in 2017, implementation had to be carried out in stages and that the company also has to identify which workers would be eligible for the ex-gratia which according to IOI is a rather complicated process. Finnwatch does not find this explanation credible. It has taken IOI four years to reimburse workers despite making a commitment to do so in 2017.