Humanity Research Consultancy

Backing Down from the Zero-Payment Policy – Indonesian Government Introducing New Finance Plan for Migrant Workers

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July 26, 2021

Labour Rights

To prevent Indonesian workers from being employed abroad be debt-bonded, in the past few months, the Indonesian government had held formal conversations with the destination countries’ governments that are recruiting Indonesian workers as blue-collar migrant workers, such as Hong Kong and Taiwan.

Jakarta has introduced a zero-payment policy that requires foreign employers, instead of Indonesian workers, to pay for the placement fees. However, as many employers’ from the receiving countries have been opposing the plan enforcing them to bear the burden of excessive fees, the Indonesian government has yielded in and introduced a loan designed for migrant workers working outside of the country to cover their recruitment fees.

According to the Indonesia Migrant Workers Protection Board, workers have encountered difficulties in securing employment abroad, and the zero-payment policy has failed to be supported by the employers. Therefore, the government has decided to provide loans for migrant workers to finance their placement fees abroad.

To prevent migrant workers from mortgaging their properties to third-party sectors, the workers may apply for loans through Bank Negara Indonesia (BNI), an Indonesian state-owned bank. This plan is designed for workers being employed in Taiwan, South Korea, Japan, and Hong Kong.

How much loan the workers can request from this government-backed plan depends on their destination countries, the regions they originated from, and the industries they will be working in. Based on Indonesian workers who shared the information with us, the following chart presents the details of the finance plan:

Source: Indonesian migrant workers in Taiwan