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Indonesian Migrant Workers at Mercy of Loan Sharks

  • Sara Schonhardt

Indonesian migrant workers protest outside the Consulate General Indonesia in Hong KongCheck on May 6, 2007.

Indonesian migrant workers protest outside the Consulate General Indonesia in Hong KongCheck on May 6, 2007.

Domestic workers from Indonesia have long battled abuse and exploitation.

In Hong Kong, the government has responded with protective labor measures mandating one day off a week and a minimum wage. But even there, migrant workers are increasingly falling prey to predatory moneylenders who can end up taking most of their salaries.

Every Sunday, Hong Kong’s Victoria Park fills with thousands of domestic workers, mainly from Indonesia and the Philippines. During their one day off a week, they gather for picnics, make handicrafts and share stories.

Anni Hamidah, a helper from Surabaya, arrived in Hong Kong in 2010 expecting to work for one family but ended up working for three. Anni cared for seven people and a baby. She said although the job was not as advertised, she would have been terminated if she complained to her agency.

Agency loans

Although Anni’s story is not unusual, advocacy groups say the most common problem for overseas domestic workers is a predatory lending system that puts women in debt, even before they start working. Before leaving Indonesia, the women sign contracts with employment agencies that charge for training and placement. A loan agreement is almost always part of the contract, said Holly Allan, who manages the group Helpers for Domestic Helpers.

“Because most them, they don’t have the cash to pay, so 99 percent of them are referred to loan companies or they’re just made to sign loan agreements in the office of the agency," said Allan. "It’s the agency that facilitates everything and they just sign and sign without knowing what they’re signing.”

With monthly minimum wages set at less than $520, that leaves women with as little as $50 a month for food and living expenses. Out of fear, these women usually sign a receipt that says they have received their full salary.

Given such intimidation, it’s hard to provide evidence of these practices, especially when some of the expenses are legitimate.

Indonesia allows agencies to charge expenses and receive commissions for teaching prospective domestic workers how to clean, cook and speak Cantonese before they leave for Hong Kong.

The government recently capped those fees at around $1,900. The law also says agencies can only charge commissions of 10 percent of one month’s salary.

Vicious cycle

But moneylenders can and do charge interest rates as high as 60 percent on the loans women take out to pay back their debts. Allan said the typical loan for those coming from Indonesia is $2,700. Allan faults moneylenders for allowing employment agencies to get around laws meant to protect domestic workers.

The practice is so profitable employment agencies try to perpetuate their business by getting workers terminated after they’ve paid off their loans, Allan said.

“It’s just a vicious cycle, and we’ve had clients who work in Hong Kong for three years without making any money because each time she has paid the loan, she gets terminated and transferred to another employer and she pays again and then transferred to another, so they’re just fleecing them."

Marsini, who comes from East Java and works for a local family in Wanchai, said sometimes the agents pressure employers to seek new help, or employers do not pay the helpers their full salaries, knowing they have little recourse.

She said if she complains to her agency, she will be fired and will have to look for another employer. That means a whole new set of agency fees, said Marsini.

Despite a growing number of complaints about overcharging by employment agencies, few firms have been sanctioned. A recent report by Bloomberg news noted that of more than 80 complaints registered with Hong Kong’s Labor Department since 2011, only two employment agencies have been found in violation of the law.

Hong Kong is generally seen as a better country for domestic workers than Malaysia or Saudi Arabia because of laws meant to protect women. But Allan saod agencies know how to circumvent the law and there is no political will on the part of the Hong Kong government and the home country government to really crack down on them.

Michael Tene, a spokesman for the Foreign Ministry in Jakarta, said the government continuously monitors the way these agencies behave.

“Certainly, if we have information about behavior which is contrary to the spirit as well as the letter of their function, then certainly we will take the necessary measures to rectify that," he said.

Human trafficking?

Anni, the worker from Surabaya, said what is happening to the women in Hong Kong is like human trafficking. They work without pay and their employers hold their passports. That said, women continue to arrive drawn by the possibility of a better income.

Her eyes wet with fresh tears, Anni said if there were jobs in Indonesia, she would not be here.