The government has said that it will take at least two more years to resume issuing licences to new recruiting agencies. No permits have been issued since October 2011 when the government called a halt citing irregularities in the process and an inefficient mechanism to regulate them.

Officials at the Ministry of Labour and Employment (MoLE) said they would need two years to be able to issue new permits due to the huge challenges in regulating and monitoring the existing companies.

“There is no point in registering new manpower companies as proper inspection and regulation of the existing companies have emerged as a new challenge. We plan to regulate the sector before issuing new licences,” said Buddhi Bahadur Khadka, head of the foreign employment division at the ministry.

However, sources at the MoLE said its decision to put a moratorium on new licences was largely influenced by the Nepal Association of Foreign Employment Agencies (NAFEA). This umbrella organization of recruiting agencies has been putting pressure on the ministry against issuing new licences.

NAFEA has argued that there is no need to issue licences to new recruiting agencies as the existing companies are capable of handling the current market.

“The government must learn from past mistakes. The problems we are having today in the foreign employment sector have their roots in random issuance of licences to unrelated people,” said NAFEA Secretary Kamal Tamang. He added that the government should come up with a better regulatory mechanism and a new guideline before allowing the number of manpower companies to increase.

However, prospective recruiting agencies said the ministry’s unwillingness to resume registration was a ploy to impose a monopoly of the existing agencies by preventing competition.  

They have asked the government to instead strengthen its inspection mechanism and endorse the planned guideline for recruiting agencies.

“This is a syndicate implemented by some powerful entrepreneurs and government officials. There should be other measures to tackle the anomalies in the foreign employment sector,” said Santosh Upreti from Bara.

A total of 51 recruiting agencies were on the way to getting registered when the government stopped issuing new licences.

Officials at the Department of Foreign Employment (DoFE) said there was a need to “flush out” fraudulent agencies before allowing others to enter the field. The department said that there was no need for new companies as  the existing ones were having a hard time surviving amid the fierce competition, with the result that many of them have fallen into the hands of unscrupulous operators.

The DoFE has shut down nearly 300 recruiting agencies after their owners did not renew their licences to “evade penalty on past charges of fraudulent activities”. Some 750 recruiting agencies and 350 authorised agents currently ply their trade here. The concerned bodies said that more and more companies were resorting to dishonest practices taking advantage of the poor inspection and regulatory mechanism.

In the last month alone, the DoFE cancelled the registration of eight recruiting agencies while 34 others faced departmental action. DoFE officials said the registration process should resume only after fraudulent companies had been purged and new regulations were enforced.

“Our current priority is combating the fraud regime operated by some manpower agencies. The government should mobilize its entire resources as we lack the capability to regulate the existing companies,” said DoFE Spokesperson Badri Karki.

 Published on: 13 March 2014 | The Kathmandu Post