AMENDED MIGRANT WORKERS ACT – DETRIMENTAL TO OFWs

By: Capt. Alvils

The Migrant Workers Act of 1995, or RA 8042, was recently amended incorporating, among others, the new regulations on compulsory insurance coverage for all Overseas Filipino Workers (OFWs). The proponents of Amended Migrant Workers Act, or AMWA RA 10022, said it aims to intensify protection of OFWs.

The compulsory insurance for agency-hired workers shall cover accidental death, natural death, permanent total disablement, repatriation costs, subsistence allowance benefit, money claims, compassionate visit, medical evaluation, and medical repatriation. This new rule is stipulated in the Philippine Overseas Employment Administration (POEA) Memorandum Circular no. 09, which took effect on 08 November 2010. Thus, in order to be issued an Overseas Employment Certificate, all OFWs (both land and sea-based) to be hired or deployed on or after this date must secure an insurance policy issued by either foreign entities providing indemnity cover to the vessel or from local insurance companies duly licensed and certified/ authorized by the Philippine Insurance Commission to underwrite insurance policies for overseas Filipino workers.

A prerequisite for this rule is the issuance of Certificate of Cover (COC) from either international or local insurance companies. Among the local insurance firms already accredited by the commission are: Paramount Life & General Insurance Corporation, Philippine Charter Insurance Corporation and United Coconut Planters’ Life Assurance Corporation. Premiums are US$56.50 for six months and US$100.00 for one year. Aware of the huge market to be covered, insurance companies still not certified by the commission are now in a mad scramble to meet all requirements for accreditation. Everyone seems in a hurry to partake a portion of the cake. The common joke in the recruitment industry is that perhaps the law makers, particularly the proponents of AMWA, are involved in the insurance business. Otherwise, they wouldn’t be so eager to ratify laws increasing the revenue of these local underwriters.

Compared to the land-based sector where insurance coverage for OFWs is required prior to processing of POEA contracts, the manning industry appears to enjoy a relaxation of the rule considering POEA only requires foreign principals to present a COC detailing the Protection and Indemnity (P&I) coverage for each enrolled vessel. P&I Club (or the Club) is a non-profit organization covering third party liabilities and expenses arising from ship owning and ship managing as principal. However, although the POEA has indicated that the COCs are an acceptable means of evidencing compliance with the compulsory insurance provisions, the Club cautioned its members not to commit themselves too much to the COCs as the Club does not extend to all of the “minimum” compulsory insurance requirements of the AMWA nor does it provide cover directly to seafarers.

For instance, while the club covers both accidental and natural deaths, permanent disabilities and medical evacuations/repatriations, it either partially or does not cover at all normal repatriation costs (especially those terminated for cause), subsistence allowance benefits (limited to medical cases), money claims and compassionate visit. In these cases, it is up to the ship owner to pay the seafarers. Ship owners are now in a quandary about how to meet the requirements of AMWA without entailing additional costs. They need the Filipino seafarers but could not compel the Club to increase its insurance coverage. Eventually, they (ship owners) may be forced to suspend all wage increases or perhaps cut down on seniority and other bonuses just to cover the extra expense for insurance.

While DFA insist that the Amended Migrant Workers Act will benefit all OFWs, it will actually do the opposite and create an added burden for them. Who do they think will shoulder the premium for the additional insurance? Of course it is the workers themselves, not their employer nor the agency that deploys them.

The POEA has maintained that employers are mandated by law to pay for the insurance coverage of workers they hire. Meaning, it should be at no cost to the overseas worker. POEA administrator, Jennifer Jardin-Manalili, even warned recruiters they will face appropriate penalties if they pass on the insurance coverage fee to the workers they recruit, directly or indirectly.

However, most people remain skeptical about the would be effect of AMWA to the manning and recruitment industry. An expert in land-based recruitment business opined that if a Philippine recruiter, already collecting the legal one-month salary placement fee and remitting fees to foreign brokers for recruitment processing and overhead costs of US$ 300 plus, is made to pay the additional US$ 150-200 insurance, its recruitment business would collapse. Therefore, they will only be forced to circumvent the requirement and indirectly collect the insurance costs by jacking up placement and service fees collected from the recruits in order to survive. They cannot force employers to shoulder the additional insurance coverage either. Remember, the foreign employers are the ones providing jobs and the OFWs are their workers. When you're desperate for a job, you don't make demands to your employer. Otherwise, they will simply tell you to go and find employment elsewhere.

Of late, a group of Taiwanese employers are now threatening to stop hiring Filipino workers to protest the Philippine government's mandatory insurance regulation. They warned that if our government will insist on double insurance coverage for Filipino workers, they would cancel the 50,000 job orders for Filipino workers in 2011 and commence hiring Vietnamese and Indonesian workers. They said every contract workers in Taiwan is already covered by personal and group insurance with a total coverage equivalent to Php 1.2 million. This is definitely more superior to the US$ 15,000 coverage under the law for accidental death and US$ 10,000 for accidental death.

Employers and Filipino workers in Hongkong also expressed their opposition to the mandatory insurance coverage. The workers are worried that instead of protection they might even find themselves out of jobs.

The irony of it all is that if these Taiwanese and other foreign employers would indeed stop hiring Filipino OFWs, what can the Philippine government do? Can it provide alternative means of livelihood for hundreds of thousands of unemployed Filipino workers when the very reason why they're leaving their land of domicile is because they couldn't find work in this country? In fact, majority of OFWs, especially those with families living in extreme poverty, would sacrifice their own lives just to alleviate their deplorable conditions. One OFW commented: "Even if there's a travel ban to Iraq, I would find a way to enter that country through the back door and take the risk. I would die of hunger if I stay in this country anyway".

No way Jose! There is nothing this government can do except to plead to these foreign employers to reconsider their decision banning Filipino workers. Let's face it, our country and its working force is at the mercy of these foreign employers, not the other way around. In principle, we need them but they don't need us. We cannot even say that we're better than other foreign workers because there is NO monopoly of skilled laborers in this world. Perhaps, our only advantage with other nationals is our knowledge of the English language. But it doesn't matter much for a foreign employer. Given no choice, they will opt to hire foreign nationals other than Filipinos.

The association of recruiters and some NGOs concerned with the flight OFWs are urging our lawmakers, particularly the proponents of RA 10022, to revise, if not repel, AMWA before it creates havoc to the country's recruitment industry. Perhaps, they (lawmakers) forgot that our recruiters only act as agent for the employers. Hence, they shouldn't pass laws that cannot be implemented abroad, cause worldwide uproar or intimidate foreign principals.

On the other hand, do we really need to pass the burden of additional insurance to local recruiters and foreign employers? Can OWWA, which has raked in millions of pesos in OFW contributions and whose disbursement of funds has always been questionable, not shoulder these extra insurance premiums? The manning sector has been questioning the lack of transparency of OWWA when it comes to spending of its funds. While seafarers are required to pay contributions every time they depart, much of the OWWA funds are either misused by government officials, unwisely invested, finance projects unbeneficial to OFWs or aid distressed, stranded or molested OFWs who entered foreign countries illegally and didn't even contribute a single centavo to the OWWA fund.

But why is our government so deeply involved with the affairs of OFWs in the first place? Is there really a genuine concern for their welfare or they're just after the income generated from their contributions and processing fees? While most countries try to persuade their skilled and professional workers to help build their nation's economy, we encourage ours to leave the country and work overseas oftentimes creating a "brain drain". Correct me if I am wrong, but I think we are the only nation in this world whose government has institutionalized a labor export program and is doing everything within its power, even adopting new laws, just to streamline the system of labor exportation.

Ironically, our Banko Sentral ng Pilipinas (BSP) even boasts of the expected increase in dollar remittances by our OFWs this month of December. Why are they so proud of this? Are they not bothered by the DSWD's findings that cases of incest, infidelity and broken families have increased because most mothers and fathers are leaving their households to work abroad? i.e. wives leaving their young daughters to their sexually-starved husbands and husband leaving their forlorn wives exposed human temptations. Infidelity is not only confine to those left behind. Some OFWs, after serving several years abroad, took in live-in partners to sustain the long period of sexual deprivation and the lengthy feeling of loneliness. Sad to say, the worst effect of working abroad is the losing of Filipino moral values.

But my goodness! Is exporting human labor really our major means of earning dollars? Our government should change its mindset in increasing the country's Gross National Product (GNP). It is wrong to consider exportation of labor and our working force as "product". Regulating the affairs of OFWs is not the answer to our ailing economy. The Philippines is one of the richest nations in Asia in terms of national resources. Unless we are able to harness, develop and make use of these natural resources, this country will never prosper and our people will continue to be exploited and forever be the slaves of our neighboring countries.

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