Corruption crackdown in Bangladesh sends tremors through Malaysia’s migrant labour ecosystem

KUALA LUMPUR: A sweeping corruption crackdown in Bangladesh following the deadly riots and protests that led to overthrow of the Sheikh Hasina government is sending shockwaves to faraway Malaysia with the spotlight directed on a controversial multi-billion-dollar migrant labour supply network operated by politically connected elites in both countries.
In recent weeks, the Bangladesh Anti-Corruption Commission (ACC) has begun investigations into the involvement of four former elected representatives of the now-suspended parliament with direct links to an unidentified network of Malaysian companies recruiting low-skilled workers primarily for the plantation and construction sectors over allegations of overcharging, extortion and money laundering. 
Bangladesh media reports also stated that the anti-graft agency had established that government officials in both Bangladesh and Malaysia were complicit in the scheme. 
The reports quoted ACC spokesperson Md Aktarul Islam as saying that the interim government was also investigating allegations that the elected representatives, including former finance minister AHM Mustafa Kamal, had been involved in the embezzlement of over RM8 billion (US$1.84 billion) under the pretext of sending workers to Malaysia. 
Dhaka-based Financial Express, which quoted the ACC spokesperson, named several other elected representatives involved in the migrant labour recruitment sector being investigated by the authorities.
Prothom Alo, a Bengali-language daily, had also reported extensively on the ACC crackdown and named other elected representatives.
The graft crackdown on the so-called syndicates operating in the export of labour – which is part of a sweeping and ambitious campaign initiated by the new interim government led by Nobel laureate and microfinance pioneer Mohammad Yunus to clean up the bureaucracy and reform institutions, such as the judiciary and police – has serious ramifications for Malaysia, say labour activists and political analysts.
The country is host to more than 400,000 documented Bangladesh workers and several thousands more who enter the country illegally, and they make up for the one of the largest proportions of foreign workers, which collectively account for roughly 30 per cent of the national workforce that is estimated at 17 million people.
Bangladesh journalists covering the corruption crackdown and executives in Dhaka-based recruitment agencies told CNA that the central aim of the crackdown by the ACC is to dismantle a network comprising Bangladesh and Malaysian businesses that has a stranglehold over the recruitment of foreign labour.
A major Malaysian player is Kuala Lumpur-based company Bestinet Sdn Bhd. 
“The main objective of the crackdown is to move away from dealing with Bestinet and its network of agencies and others in the syndicate that work outside the law,” Mr Md Rezaul Karim, the managing director of Dhaka-based recruitment agency Hope Human Resources, told CNA in a telephone interview over the weekend.
He added that the crackdown in Bangladesh has led to recruitment agencies and labour brokers involved in the sourcing of workers for the Malaysian market to shutter their offices.  
“The ACC move is very effective, and the winds of change are blowing in the Bangladesh labour market,” he said.
The developments in Bangladesh are roiling the waters in Malaysia. 
Home Minister Saifuddin Nasution Ismail, who is leading a separate campaign to reform the country’s controversial foreign worker recruitment sector, has ordered agencies under his ministry to investigate allegations of corruption raised by the Bangladesh authorities and their possible links to Malaysian government officials and companies involved in the recruitment of labour.
Mr Saifuddin and Bestinet did not respond to CNA’s requests for comment.
Malaysian government officials closely tracking developments in Bangladesh noted that the anti-graft crackdown there could present complications for Kuala Lumpur with regards to Bestinet’s pivotal role in the country’s migration labour recruitment programme.
Bestinet’s proprietary information technology system, known as the Foreign Workers Centralised Management System (FWCMS), is the sole platform used by the country’s Immigration Department for visa applications from 15 countries exporting labour to Malaysia since 2013.
But the platform has long been a magnet for controversy over allegations of rampant abuse, corruption and exploitation of impoverished overseas recruits.
For example, the official cost together with recruitment agent fees for a single Bangladeshi recruit is estimated at roughly RM6,000. 
But in reality, a budding migrant labour enlistee pays over RM20,000 to a cast of players and the hefty fee involved is often settled through loans provided by other agents that shackle the borrower in long-term debt because they are lured by fake employment opportunities.
As previously reported by CNA, efforts by Prime Minister Anwar Ibrahim’s administration to replace the 11-year Bestinet concession with a new IT portal that has been under development for the past year came under heavy pushback from vested interest groups among the country’s political elite and segments of Malaysia’s monarchy.
That, in turn, led the Malaysian government to grant Bestinet a three-year extension after the original concession expired at the end of May for the use of its FWCMS platform. 
The extension for the Bestinet concession was on the back of the company’s close ties to the former Sheikh Hasina’s government led by the dominant Awami League party. 
Bestinet’s controlling shareholder is Mr Mohamed Amin Abdul Nor, a Bangladeshi national who is now a Malaysian citizen, who has long played a big role in the migrant labour pipeline to Malaysia from Bangladesh because of his political ties in both countries.
All of that changed after two weeks of violence and deadly protests that culminated in the fall of the Sheikh Hasina government in mid-August. 
Since then Bangladesh has been in a state of flux.
The interim government led by Mr Yunus, who is renowned internationally for pioneering the microfinance financial outfit Grameen Bank, has moved to bring about reforms by dismantling economic structures and upending politically cosy business arrangements in the economy that are deeply entwined with the previous government.
According to executives from Dhaka-based recruitment agencies, the political power vacuum in the country has led to an intense behind-the-scenes jostling for power at the Bangladesh Association for International Recruiting Agencies (BAIRA), the industry’s main private sector trade organisation that deals with the government.
Bestinet’s Mr Mohamed Amin is closely tied with several former top BAIRA officials, including Mr Ruhul Amin, an influential businessman and a power broker aligned to the previous government who recruitment agencies executives said could be a person of interest to the ACC, the Bangladesh anti-grant commission.
Mr Md Rezaul of Hope Human Resources, which is also a BAIRA-registered affiliate, said Mr Ruhul is believed to have left the country.
Labour activists are sceptical about any fresh reforms coming out from the ongoing upheaval in Bangladesh. 
Mr Andy Hall, a Nepal-based labour activist who has done extensive research on the migrant situation in Asia, noted that “there is too much money involved and what we will see is a new bunch of actors”.
The chaos in Bangladesh represents a major setback for Bestinet, which is grappling with a separate set of troubles in Malaysia.
While the company has received a three-year extension to its FWCMS platform for the exclusive rights over the intake of foreign workers, an formal agreement with the government is yet to be finalised due to the company’s reluctance to surrender control of the payment systems to the government.
The proposed contract extension calls for Bestinet to hand over to the government its so-called Swift code, alphanumeric ciphers used by banks globally for the international transfer of funds, and other protocols in the payment system that the company employs in the processing of migrant workers into Malaysia.