What Is the Kafala System?

Introduction

The kafala system is a legal framework that has for decades defined the relationship between migrant workers and their employers in Jordan, Lebanon, and all Arab Gulf states but Iraq. It was created to supply cheap, plentiful labor in an era of booming economic growth, and its defenders argue that it benefits local businesses and helps drive development.

But the system has become increasingly controversial, and there is growing recognition that it is rife with exploitation. The lack of regulations and protections for migrant workers’ rights often results in low wages, poor working conditions, and employee abuse. Racial discrimination and gender-based violence are endemic. Global anti-racism protests, the COVID-19 pandemic, and preparation for the 2022 FIFA World Cup in Qatar helped to expose the kafala system’s flaws, but the future of reform efforts remains unclear.

What is the kafala system?

The kafala, or sponsorship, system defines the relationship between foreign workers and their local sponsor, or kafeel, which is usually their employer. It has been used in Gulf Cooperation Council (GCC) countries—Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates—as well as Jordan and Lebanon. Both Bahrain and Qatar claim to have abolished the system, though critics say reforms are poorly enforced and don’t amount to abolition.

Under this system, the state gives local individuals or companies sponsorship permits to employ foreign laborers (except in Bahrain, where workers are sponsored by a government agency rather than individual employers). The sponsor covers travel expenses and provides housing, often in dorm-like accommodations or, in the case of domestic workers, the sponsor’s home. Rather than hiring an individual directly, sponsors sometimes use private recruitment agencies [PDF] in the countries of origin to find workers and facilitate their entry to the host country.

The system usually falls under the jurisdiction of interior ministries, rather than labor ministries, so workers often have no protection under the host country’s labor law. This leaves them vulnerable to exploitation and denies them such rights as the ability to enter a labor dispute process or join a union. Furthermore, because workers’ employment and residency visas are linked and only sponsors can renew or terminate them, the system endows private citizens—rather than the state—with control over workers’ legal statuses, creating a power imbalance that sponsors can exploit.

In most situations, workers need their sponsor’s permission to transfer jobs, end employment, and enter or exit the host country. Leaving the workplace without permission is an offense that results in the termination of the worker’s legal status and potentially imprisonment or deportation, even if the worker is fleeing abuse. Workers have little recourse in the face of exploitation, and many experts argue that the system facilitates modern slavery.

What are its origins?

The word kafala traces back to Islamic jurisprudence on legal guardianship and other matters. The modern system arose in the Gulf states to regulate the treatment of foreign workers in the pearl industry and other commercial trades beginning in the early twentieth century.

The system expanded in the 1950s, as newly oil-rich Gulf countries sought foreign laborers to work on large-scale infrastructure projects. Given their relatively small populations, they needed additional temporary workers who could come during periods of booming growth and return home when the economy weakened. Protecting local firms is a priority in Gulf countries, where expatriates sometimes form the majority of the population. But the system was also intended to offer workers much-needed protection.

“They would bring in workers from abroad that didn’t speak the language, that were not aware of the cultural sensitivities, that came without a social support network,” said Houtan Homayounpour, the former head of the Qatar office of the International Labor Organization (ILO), a UN agency. “The sponsor was supposed to take care of them, ensure their safety, ensure their well-being. And over time, because of various changes to legislation, this became a power imbalance between workers and employers, and eventually opened the workers to abuse.”

Initially, the system mostly favored Arab workers from nearby countries such as Egypt. But after the oil boom of the 1970s, preference turned to non-Arab workers, especially those from South Asia, due to a desire for cheaper labor and fears that Arab expats would spread a pan-Arab ideology that could undermine Gulf monarchies. They outnumbered Arab workers after the first Gulf War, when some two million Egyptians, Palestinians, and Yemenis were expelled from the region [PDF] over their governments’ support for Iraq’s invasion of Kuwait.

The system has produced massive demographic changes: the Gulf region’s population increased tenfold in fifty years, and foreigners now outnumber locals [PDF] in all GCC states but Saudi Arabia. The 2014 oil price crash and the resulting austerity measures in GCC states led governments to prioritize local workers, many of whom had lost their jobs and began to resent migrant laborers, said Robert Mogielnicki, a senior resident scholar at the Arab Gulf States Institute in Washington (AGSIW). Several host countries adopted policies to draw locals into the private sector and combat youth unemployment, such as hiring quotas and minimum wage increases. States have also begun to encourage foreign workers to return home—especially as employers have struggled to pay them amid the economic downturn caused by the COVID-19 pandemic—by paying travel fares and waiving fines for leaving.

Who are the workers?

The system applies to almost all foreigners working in a kafala host country, comprising all nationalities, economic classes, and professions. Today, most of these workers come from Africa and South Asia. They often take jobs that nationals find undesirable for financial or cultural reasons, such as construction, domestic work, or in service industries.

They also earn less than locals. In Jordan, for example, minimum wage for foreign workers is $350 monthly, while nationals earn at least $367. White-collar workers and those from Western countries generally receive better treatment. According to data from the UN Department of Economic and Social Affairs, there were thirty-six million international migrants across GCC countries, Jordan, and Lebanon in 2020, nearly half the combined total population of those countries.

What risks do workers face?

Critics have called the system “modern slavery,” saying mistreatment arises from the sponsor-worker power imbalance and sponsors’ legal impunity. Moreover, the Middle East lags behind other regions in ratifying international agreements that protect workers. For example, no host country has ratified the ILO’s Domestic Workers Convention, which commits signatories to setting a minimum wage, eliminating forced labor, and ensuring decent working conditions, among other protections. Even where laws do protect workers, they are often poorly enforced, said Ryszard Cholewinski, the ILO’s senior migration specialist for Arab states.

As a result, workers face numerous abuses under the kafala system. These include:

Restricted movement and communications. Employers regularly confiscate passports, visas, and phones, and confine domestic workers to their homes. Non-domestic workers often live in overcrowded dorms, which puts them at greater risk of contracting illnesses such as COVID-19. Many lack adequate health care.

Debt bondage. Although most host countries require employers to pay recruitment fees, these often get passed on to workers, who take out loans to pay them or become indebted to the recruiter. Employers sometimes reduce or withhold workers’ wages, ostensibly to pay off recruiters but sometimes as punishment.

Forced labor. Experts say deception or coercion by recruiters when enlisting workers can amount to forced labor. Contract substitution is a common tactic in which workers unwittingly accept poor wages and working conditions by signing multiple contracts, some in languages they don’t understand.

Visa trading. Sponsors sometimes illegally sell a worker’s visa to another employer while remaining the official sponsor. The new employer might not keep to the same terms as the original one, requiring different types of work or providing lower wages.

Irregular residency status. Workers depend on sponsors to remain in the country legally because sponsors can invalidate their status for any reason.

How do race and gender play into this?

Racism often magnifies the inhumane treatment of darker-skinned African and South Asian workers. A 2020 UN report [PDF] on racism in Qatar found that foreign workers of all income levels reported that their salaries depended on their countries of origin, and that “despite possessing professional degrees, some migrant workers reported being relegated to low-income jobs most commonly linked to and occupied by workers of their racial or ethnic group.”

Gender-based discrimination is also rampant. Domestic workers, usually women, face the most abuse, including sexual violence. But victims often choose not to report, afraid to upset their sponsors or even be charged with a crime themselves. Certain countries, such as Kuwait and Qatar, have imprisoned female workers for extramarital sex, even in cases of rape. The gendered abuses of the kafala system are especially worrisome given that in some countries, such as Lebanon, women compose the majority of kafala workers.

Who does the kafala system profit?

Despite the potential for exploitation, workers accept jobs in kafala host countries often because they offer higher pay than jobs in their home countries. Many workers then send remittances home, which the World Bank notes can help alleviate poverty in low- and middle-income countries. In 2019, Kuwait, Saudi Arabia, and the UAE were among the world’s top ten sources of remittances. Proponents say facilitating easy, legal entry to the region makes migrants less vulnerable to human smuggling [PDF]. Opponents say these legal pathways still need greater protections for workers.

Some experts call the system inefficient, saying it stunts host countries’ economic development. In 2014, World Bank economist Zahid Hussein wrote that “the combination of short contracts, flat wages, and lack of internal mobility kills the incentives for migrant workers to exercise higher effort levels in production and engage in activities that enhance their human capital.” Hussein argued that host countries should rely less on the system and instead seek to diversify their economies and shift to high-skills-based industries.

Do any other parts of the world use such a system?

Abuses such as withholding passports [PDF] and illegally forcing migrants to pay for employment persist in guest-worker programs worldwide, as do predatory recruitment agencies and practices such as binding workers to one employer. But even these programs do not rival the kafala system for the inordinate degree of power employers have over workers, Cholewinski said, nor do they rival it for excluding workers from integrating into local society.

How has the rest of the world responded?

Labor rights advocates have long called for the system to be reformed or abolished, demands that received greater attention in light of worldwide anti-racism protests in 2020. The 2022 FIFA World Cup has also thrown a spotlight on abuses by host country Qatar, where migrant workers labored in temperatures above 100°F (38°C) to construct roads, hotels, and stadiums for the tournament. The conditions reportedly contributed to the deaths of thousands of migrant workers over the past decade. A chorus of criticism led Doha to implement additional heat protections for workers, such as mandatory hydration breaks, and commit to dismantling the kafala system. 

Even countries that provide many kafala workers have criticized the system. Countries of origin such as Indonesia, Kenya, and Nepal have at times barred workers from emigrating to GCC states due to the mistreatment of foreign workers. But analysts worry that such efforts have the unintended effect of boosting human smuggling as desperate workers seek other ways to travel to the region. Additionally, these bans can disproportionately hurt women, especially in countries such as the Philippines, whose migrants to kafala countries are usually female domestic workers.

Multinational organizations including the European Union and the United Nations have also criticized the kafala system, though none has taken concrete measures against it. In 2014, the UN special rapporteur on the human rights of migrants called for Qatar to abolish the system and replace it with a regulated, open labor market that allows workers to freely change employers and leave the country.

What are the prospects for reform?

Given this international scrutiny, most host countries have begun implementing reforms, such as standardizing contracts, letting workers transfer jobs after a certain period, and easing restrictions on leaving the country. 

For example, in March 2021, Saudi Arabia began allowing migrant workers to leave the country without their sponsor’s permission, though they still need the government’s approval. The country previously introduced an expensive “golden visa,” which doesn’t limit workers as much as the kafala system does. The UAE, meanwhile, has “flexi-visas” for workers who have become undocumented. (Bahrain adopted such visas in 2017 but later reversed the reform.) Some experts argue that these options prove that host countries don’t need exploitative systems, though the visas can be prohibitively expensive. AGSIW’s Mogielnicki also noted the proliferation of “free zones”—areas that are exempt from the kafala system and where migrant workers sometimes find better treatment.

With international observers watching Qatar’s preparations for the World Cup, the country enacted reforms [PDF] that “did away with the most problematic aspects” of the kafala system, according to the ILO, which worked closely with Doha on the efforts. Qatar scrapped requirements for employers to consent to workers’ job changes, instituted a standard minimum wage for workers of all nationalities, and upped penalties for employers who withhold wages. It also implemented an online platform for submitting job-change notices and launched an awareness campaign to inform workers and employers of the reforms. 

Experts say Qatar had powerful backers of its reforms—including local nongovernment organizations (NGOs), the International Trade Union Confederation (ITUC), and top government officials—that other host countries lack. It has also been more willing than its peers to respond to international critics. Still, dissenting workers continue to face repression and rights advocates argue that Qatar’s reform efforts should be more extensive and better enforced.

Countries of origin can better support their nationals by seeking bilateral labor agreements with provisions on working conditions and a minimum wage, the ILO’s Homayounpour said. The Philippines stands out for helping its workers, who can submit complaints to its embassies and seek refuge at shelters it runs in host countries.

However, obstacles to change remain. Many observers and workers, including in the ITUC, advocate for the total abolition of the system, saying reform will never be enough. Workers have at times organized against the system and called for its abolition, especially in Lebanon, where injustices were a focus of mass protests in October 2019. But supporters say abandoning it would be too economically disruptive, and countries of origin have been wary of abolition because their economies rely on remittances. And even as reforms progress, there can be an enforcement gap, the ILO’s Cholewinski said. “This is a complex area and cannot be addressed in one piece of legislation overnight,” he said.