Labour broking and the Immigration Act

5th February 2010 By: Chris Watters

Amidst all the public debate and rancour about labour broking, there is one aspect of this industry that appears to have escaped scrutiny. The de Doorns ‘incident' flagged it but it appears to have managed to keep itself below the radar screen. This is the issue of where Home Affairs is in all of this.

It is widely accepted that the underlying rationale of immigration law is that every state has the right [some say "duty"] to control who enters and who leaves that country - and how, when and where. Whilst globalization and the enforcement of human rights have ensured that there are exceptions to this basic principle, logic dictates that the very concept of what a country is, demands that a country has to be able (to some or other degree) to control its borders or it ceases to be a country. And in South Africa the buck ends with the Department of Home Affairs and its implementation, in this case, of the Immigration Act (principally).

That Act provides for what might politely be called ‘bulk foreign recruitment' - and how one gets permission to do so. Approval is obtained via a "corporate permit" that is issued by Home Affairs. Section 21 of the Immigration Act provides somewhat vaguely that a "corporate permit may be issued ... to a corporate applicant to employ foreigners who may conduct work for such corporate applicant." It is worth bearing in mind that the corporate permit was initially intended to address the requirements of the agricultural and mining sectors and their need for the extensive recruitment of labour in the neighbouring states.

In summary, the corporate permit works like this. Mining Company X decides that it needs to source 10 000 persons to work on its mine/s that it cannot find inside South Africa. After consultation with the Department of Trade and Industry (DTI) and the Department of Labour, Home Affairs may then give that company permission to recruit, hypothetically, 10 000 foreign workers. As and when the company finds suitable people, they are identified to Home Affairs which will then issue the necessary work permit [referred to as an "authorisation certificate"] to the foreign worker.

But, as they say, the devil is in the detail - or, in this case, the lack of it. The implementation of this section, section 21 of the Immigration Act, has ‘evolved' to the point where a company knowing that there is an acute shortage of, for example, coded welders, can go to Home Affairs and after meeting the requirement of showing that there is a need to employ the requested number of foreigners in that skills set in South Africa, then get permission to recruit these persons who can often be found in impoverished economies where remittances from expat workers are often the only income for the family and so these expats will jump at the chance of coming to South Africa.

Whilst no one has apparently (yet) been disciplined, charged and/or convicted, rumours persist of civil servants at Labour and Home Affairs, being ‘incentivised' to give such consents and permits.

A further problem is that such a "corporate applicant" - that is, whoever it is seeking permission from Home Affairs to recruit people offshore - could be entities run by a single person in a small office equipped with a laptop and a fax machine. Rumours circulate too of there being cases of corporate workers, in some instances, being kept in converted garages with their would-be employers holding their passports with all manner of other abuses occurring. There are also reports that at least two South African Embassies had actually raised with Home Affairs their concerns - or complaints they had received - that there may in fact be human smuggling going on in this context.

Whilst the Act says that Home Affairs is required to consult with the Department of Labour and the DTI about any application for a corporate permit, that is literally all the Act or regulations say about the consultative process. The Act does not stipulate what each Department is to be consulted about and what "consultation" means in this context.

It is far from clear, in terms of the Act, who decides - indeed, who has the capacity or the accurate data to decide - whether the need for all these expats really exists and if so, how big it is. And can Home Affairs overrule Labour's submission in any given application that Labour considers the need for expat workers is not big enough [or vice versa] or for any other legitimate reason?

Some observers consider that Home Affairs' wish to be able to defer to its sister Departments on the more technical aspects of corporate permit applications, has to be viewed in the light of the Immigration Act. Parliament has made its position clear on the subject: the Preamble to the Act sets out that one of the purposes of the Immigration Act is to ensure that "the contribution of foreigners in the labour market does not adversely impact upon existing labour standards and the rights and expectations of South African workers." It is not clear however, who ‘bells the cat' here and how, but Home Affairs can scarcely wash their hands and ignore contraventions of national immigration policy!

There is also a serious lack of capacity on the part of these Departments to be able to police their aspect of the permit, once it has been granted. Whilst there is some consensus that the one-man-show corporate permit holder is not contemplated by the current Immigration Act to be a corporate applicant, the matter is far from certain and the matter has not been judicially considered as yet.

There is also the question of whether or not this type of ‘expat-pool' recruitment isn't also anti-competitive.

Is there a solution outside of an outright ban on these practices? It must be noted here that the problem described here clearly does not impugn all labour brokers. But it does highlight the fact that the problem is a complex one where ejecting the proverbial baby with the bath water, may do more harm than good. And any outright ban will almost inevitably be met with a challenge under section 22 of the Constitution and the right of citizens to choose their trade, occupation or profession freely.

The better response should take its cue from the wording of the tail end of section 22 of the Bill of Rights, that "the practice of a trade, occupation or profession may be regulated by law." The relevant Departments need to be ‘empowered' to properly enable and control labour broking. And it goes without saying that the relevant Departments also need to be suitably capacitated to implement the new policy and statutory framework.