Dileepa Fonseka is a political reporter based in Wellington who covers housing, infrastructure, immigration, transport, local government and the Provincial Growth Fund.

Politics

Migrant exploitation review: Govt “chasing its tail”

You can’t look at migrant exploitation without looking at what this country sells the exploited, an immigration lawyer says

Migrant advocates say the country looks set to keep continuing to sell migrants the “pipe-dream” that keeps them coming to New Zealand, despite a Government review.

The migrant exploitation review is one of the most tangible outcomes of a commitment in the Labour and New Zealand First coalition agreement - one of only two on immigration - to take “serious action” on migrant exploitation.

“There doesn’t seem to be any desire to investigate why we have this problem in New Zealand. And if there’s something fundamentally wrong in our immigration policies which creates vulnerability.”

There are ten proposals including: a new bridging visa; a new offence; new hurdles for would-be employers; and new penalties for migrant exploitation. Submissions on it close on November 27.

But immigration lawyer Alastair McClymont believes there’s a big gaping hole right in the middle of it all.

“The Government is always chasing its tail: they’ll come up with new punishments, exploiting employers will come up with new loopholes, they [the Government] then come up with more punishments and it just goes around and around in a circle.”

“There doesn’t seem to be any desire to investigate why we have this problem in New Zealand. And if there’s something fundamentally wrong in our immigration policies which creates vulnerability.”

That hole is what people like McClymont think is the root cause of these scams: migrants who are sold a residency dream that doesn’t exist - then get into debt chasing it.

The debt

Digging themselves out of debt is what keeps most exploited migrants in New Zealand.

How they ended up with that debt goes back to the time before they landed here.

“They’re sold this pipe-dream and then they arrive here and it’s very different.”

While land values in India have held up, or are increasing, many of the farms on these plots of land are struggling. A survey by Delhi’s Centre for the Study of Developing Societies (CSDS) found that 76 per cent of Indian farmers wanted to exit the industry.

It’s from these rural families that New Zealand draws many of its most vulnerable migrant workers - but equally desperate people in similar situations come in from places like China and the Philippines - according to Migrant Workers Association spokeswoman Anu Kaloti.

All are sold a “pipe dream” by offshore education agents who largely free to promote New Zealand as they see fit, including the idea that with a little bit of education and hard work young Indians can have access to permanent residency and a better life.

New Zealand issued 400,000 work visas in two years during a period it granted less than 50,000 residency applications a year. Photo: Lynn Grieveson

To buy into this dream Kaloti estimates the average student needs $30,000 a year for fees and living expenses, then $15,000 in a bank account to prove their ability to cover any other expenses the state might have to bill them for.

“They’re sold this pipe-dream and then they arrive here and it’s very different.”

Such families would never be able to pay this upfront from their savings, but they can sell land and borrow - sometimes from banks but more often from loan sharks who charge high interest rates.

But despite what they're sold offshore the dream they’re borrowing for is not something the New Zealand Government appears to want for them.

In the two years between 2016 and 2018 New Zealand granted over 400,000 work visas while it signalled its intention to grant less than 48,000 residency applications a year during that same period.

How a typical migrant exploitation scam works

To attain residency workers need to meet some minimum requirements: employees need to be paid a particular wage, often from a particular employer for a particular period of time.

On paper the employer pays exactly that into their bank account.

But hidden behind the scenes is a secret back-payment, often in cash withdrawals, where the employee pays most of their salary back, keeping an amount that is below minimum wage but enough for them to survive on.

Alastair McClymont believes NZ often promotes the "illusion" of plentiful residency opportunities. Photo: Lynn Grieveson

The employer will also typically charge an upfront fee - often equivalent to the difference between the “salary” the employee is supposed to be earning and what they’re actually being paid. This creates cash that the employer then cycles through the system.

After two or three years the theory is the employee will walk away with permanent residency having held down the right type of job.

McClymont believes the review has not done enough to dig into the disconnect that kicks this relationship off: the “illusion” students are sold before they come to New Zealand and the true reality of the pathways to residency open to them.

The Review

The human cost of the migrant worker exploitation problem has been immense, especially for those in the communities affected by it.

Kaloti was able to cite one suicide case in New Zealand connected to migrant worker exploitation and another where a migrant’s mental health deteriorated so much his worried family insisted he return home before his exploitation case was settled - despite the large amount of money on the line.

Mandeep Bela, a spokesman for the Union Network of Migrants, said depression was common amongst those caught up in these schemes.

There are lots of positive things in the review too, advocates say. Photo: Lynn Grieveson

But while the review doesn’t address the desire for residence that leaves many workers open to exploitation, several major positives in the review were highlighted by Kaloti and Bela.

They include a unit at MBIE dedicated to combating migrant worker exploitation and measures to help chase employers if they liquidate multiple companies to avoid liability.

But Bela said the continued linking of visas to employers suggested by the document - meaning migrants have to maintain a good relationship with a single employer in order to maintain their visa status - kept migrants in a position of vulnerability even if, as the review suggests, employers were accredited.

Other requirements, like upping the wages employers would have to pay workers on visas, might sound good in theory but could also be hard to enforce,

And how would authorities stop bigger loans being taken out by exploited migrants to pay for high “on the books” salaries, Bela asked.

“Employers will still use the same loophole.”