Global Workforce
Southeast Asian Workers Go Unpaid in Saudi Arabia
Thousands of South Asian construction workers are being laid off by local contractors
An Indian labor ministry official counsels stranded construction workers in Saudi Arabia.
Credit: India Ministry of External Affairs
Thousands of South Asian construction workers, as well as other employees, are being laid off by local contractors in Saudi Arabia, without pay issues resolved, as the country's oil-based economy reels under falling prices and halted or deferred projects, leaving the workers without documents to return home or even food to eat.
While the Saudi government and those of affected expatriates are moving to expedite relief and repatriation efforts, and other contractors are offering to hire stranded workers, pay disputes remain central.
More than 7,700 Indian workers laid off without being paid for months have been given shelter in 20 camps. The majority had worked for Saudi Oger, a construction company owned by the family of former Lebanese Prime Minister Sa’ad Hariri, said Vikas Swarup, a spokesman for the Indian Ministry of External Affairs.
Riyadh-based Saudi Oger laid off more than 30,000 staff without pay settlements in its Saudi branches in Riyadh, Jeddah, Makkah, Madinah, Jazan, Hail and the eastern province.
Affected Indian workers at Oger and two other Saudi contractors could "either take repatriation back to India or take a relocation," said Swarup at a press briefing in early August.
The Saudi government could soon acquire the company, which owes its employees some $800 million in salaries as well as payments to subcontractors and banks, according to media reports since last month. But Bloomberg reported last month that Deputy Crown Prince Mohammed bin Salman said in an interview that Oger’s problems were "unrelated to the Saudi economy."
Saudi Oger did not comment to Bloomberg or local media, which have also reported a potential bankruptcy or government takeover of the powerful Binladen construction company, also now in financial distress. The Saudi labor minister told Reuters that Binladen has promised to complete payments this month.
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Atul Jain, a director of Indian construction firm Punj Lloyd, which is active in Saudi Arabia and the Middle East, acknowledged to ENR that the oil sector slump "has impacted the projects and contractors in this space. However, this is applicable for new investments. Clients have honored the investments which were planned earlier and our current projects belong in the latter category."
Workers from Pakistan, Nepal, Bangladesh and the Philippines also are affected. While employers are required under Saudi labor law to pay the cost of repatriating non-Saudi nationals after termination of their employment, officials at the Bangladesh embassy in Riyadh told local press there was little chance that more than 1,500 Bangladeshi migrants working for Saudi Oger would get back pay anytime soon. “We are now visiting labor camps to prepare a database of Bangladesh workers," said Sarwar Alam, a labor counselor.
Pakistan’s Ministry of Foreign Affairs has confirmed that more than 8,500 Pakistani migrants working for Saudi Oger and the two other contractors are in eight camps and are also currently facing problems with pay.
Website ArabianBusiness.com says that 2,429 Filipino workers have already opted to continue to work at Saudi Oger while the Philippines' consulate negotiates unpaid wages.
Also, according to Middle East Construction News, up to 200 French engineers and managers on Saudi Oger projects in the kingdom have filed suit against the firm for nine months of back wages, after negotiations did not resolve issues.
Visits by Indian ministers to Saudi Arabia resulted in just 100 Indian workers returning home. The rest have refused to come back until pay issues are settled. Human rights organizations have long advocated to end the system of "kafala" in Gulf countries, which allows employers to hold expatriate passports.
While the Indian embassy has promised to provide passports and tickets to affected workers, the Saudi government must issue them exit visas, a time-consuming process. Officials have asked Indian workers who have lost their jobs to file their claims by Sept 25. “We will bring them back free of charge," said Swaraj. Added the Indian consulate in Jeddah: "There is no point in waiting there indefinitely.”
Swarup assured workers willing to be transferred to other contractors that they would not have to pay added fees or charges, and would not need consent of their current employers. “We believe that many companies, including some Indian construction firms [in Saudi Arabia], are interested in taking the services of the retrenched workers,” he said.
The situation has brought to light embedded issues in Saudi labor law and the status of immigrant labor, for whom arbitration has been almost impossible given the high legal costs. Recently, Saudi Minister of Labor and Social Development Mufrej Al-Haqbani was quoted in local media saying the workers would be provided with legal representation to present their claims in one of 37 labor courts.
Major contractors in Saudi Arabia with political and financial clout dominate the domestic construction market, taking advantage of the government’s preference to deal with local companies. Under the country's "Nitaqat" system, employment contracts for Saudi nationals can be open-ended, while those for expatriates are for fixed terms with a duration not to exceed what is specified in workers' residency visas and work permits.
“All companies operating in the Middle East need to comply with local labor laws. Each country specifies the percentage of local to expat labor," says Jain. "We are not facing any problem in getting our people mobilized for our projects."
