Migrant workers exploited en route to Arab Gulf: Study

South Asian migrants working in the multi-billion dollar construction industry in Arab Gulf countries are shouldering the costs of their own recruitment fees while companies and their clients are reaping the benefits from inexpensive labour, according to a study released on Wednesday.

The research by New York University's Stern Centre for Business and Human Rights found that workers spend an average of 10 to 18 months' worth of salary paying off the fees that help facilitate their migration.

A slide in oil prices has slowed down the pace of construction in the Gulf and affected governments' abilities to pay for major infrastructure costs, but there is still strong demand for millions of low-wage construction workers.

Qatar is investing heavily in the construction of stadiums for the 2022 World Cup. Dubai is building up a vast desert area that will be the site of the 2020 World Expo.

In order to reduce the cost of labour on mega projects, a weakly controlled system for recruitment is passing on the costs to the workers themselves, says the study.

Workers from Bangladesh are paying the highest fees in the world. Bangladeshis earning just a few hundred dollars a month in the Gulf are paying recruitment fees ranging from around $1,700 to $5,200. Indian migrants are paying an average of between $1,000 and $3,000.

The study describes it as a "perverse business model." Rather than providing an opportunity for decent pay and a better livelihood, construction industry practices across the Gulf are pushing workers into extreme debt and exacerbating abuses, such as an inability to change jobs or move to another country due to indebtedness. "Companies should strive to be in compliance with local law in areas where they are operating," said David Segall, one of the authors of the report.

"As we've seen in other industries, the dam holding back reputational damage tends to break suddenly and without warning and irreversibly so I think it would be to construction companies' benefit to come ahead of the curve on this one." Segall and his co-author Sarah Labowitz say construction firms and their Gulf-based clients can help "end the cycle of abuse" by paying for the recruitment costs of construction workers who are needed to build the region's skyscrapers, stadiums, hotels, theme parks and sprawling malls. The report, titled "Migrant Workers Pay: Recruitment of the Migrant Labour Force in the Gulf Construction Industry," details how workers are exploited through a complex system of agents and subagents who gross hundreds of dollars in profit per worker.

Workers are paying several times more than the real cost of recruitment, which is closer to $400 to $650, excluding the cost of airfare.