Scamming the system – under the noses of MOM

By Andrew Loh

When Workers’ Party (WP) Member of Parliament for Aljunied GRC, Low Thia Khiang, asked in Parliament in January about foreigners working illegally in Singapore, he was raising a problem which has evidently been going on for a while here.

For example, he said that “there are Malaysians who hold construction workers’ permits, but are doing other jobs which are not related to construction.”

Mr Low, who is also the secretary general of the WP, also gave other examples of foreigners working here against the law, such as Malaysians who come across to Singapore to be karang guni (rag and bone) men, or who work as deliverymen.

“Are these jobs legal or illegal?” Mr Low asked the Manpower Minister, Tan Chuan Jin.

“[If] they do not have a valid work pass, they cannot work in Singapore,” Mr Tan replied. He added that his ministry carries out “random checks in various areas”, and “pick[s] up people who are working here illegally.”

“It also very much depends on complaints, information and so on from the public, and we would then act accordingly and the relevant actions will take place,” the minister said.

While there is nothing wrong with asking the public to whistle blow on such illegal practices, it does not address the systemic shortcomings which give rise to such problems in the first place. And the problem cannot be solved by the ministry waiting for the public to provide it with information, and for it to react to it.

The ministry will then always be chasing shadows.

But before we even speak of solutions, we must first know how businesses and foreigners scam the system – and do so right under the noses of the Ministry of Manpower (MOM).

Construction workers in advertising and design firms?

Here is one recent example which was brought to our attention. Have a look at all these photos of the Work Permits of some Malaysians, including a permanent resident here.

malaysian construction workers

You see that one of them is from a sign-making firm, while the rest are from “advertising” agencies.

However, all of their Work Permits list them down as “construction workers”.

So, what kinds of jobs do they do when they come to work in Singapore, carrying these Work Permits?

They do sticker-pasting jobs which has nothing to do with construction work.

According to our source who informed us of this particular case, these Malaysians are engaged in pasting stickers on SBS’ and SMRT’s buses and trains. They carry out their jobs at the various depots and interchanges in the day and evening.

Yet, under MOM’s Work Permit conditions, the employer must ensure that the foreign “worker does not engage in any form of employment other than that stated in the Work Permit”.

So, what has pasting stickers got to do with construction work? Are the employer of these men and the men themselves breaking the law?

It is unclear if the MOM has investigated this particular case or if any actions have been taken against the company and/or workers. [We have been told that the MOM was informed of this case.]

Now, why do these businesses apply for Work Permits in the Construction sector? Perhaps it is because of the higher chances of obtaining the permits. There is a belief among businesses and companies that Work Permits in the Construction sector is easier to apply for, especially for Malaysians.

This is because the construction industry has been seeing a boom in recent years, and going forward, it will continue to be so, especially with numerous major projects lined up.

In his Budget speech in February, Deputy Prime Minister and Finance Minister, Tharman Shanmugaratnam, highlighted that the construction sector is “the only sector bucking the trend of slowing foreign workforce growth.”

This was confirmed on 14 March by the MOM which said, “The bulk of foreign manpower growth came from the Construction sector (31,600), due to infrastructure projects such as the Downtown and Thomson MRT lines.”

Under the MOM’s “Work Pass Conditions & Requirements for Construction Sector”, it says:

“An employer in the construction sector is allowed to hire seven Work Permit holders for every full-time local employee.”

The problem, as highlighted in the case above, is that not all who apply for Work Permit in the construction sector actually engage in construction work.

The daily-rated social visit worker

As Mr Low mentioned, there have been anecdotal evidence in recent years of foreigners doing jobs such as karang guni men, deliverymen, plumbers, air-conditioner servicemen, electricians.

“They are self-employed and they are offering such services in Singapore,” MP for Tampines GRC, Mr Baey Yam Keng, said in Parliament in January. “What these people are doing, is it legal and acceptable in Singapore, because they do not pay foreign worker levy? Because of that, they are definitely able to offer lower fees compared to local tradesmen.”

To give an example of how the scam works, imagine a shop selling lighting products for households. You purchase these and the shop arranges for the installation. They give you a number to contact – this is the sub-contractor. But the sub-contractor does not even have a company name. All you have is a name of the person in charge and a phone number, and the lighting shop’s instruction to call them.

When the installation team arrives at your home, you notice that they speak a strange dialect. Later you realise that they are Malaysians. They could number anywhere from 7 to 10 men or more – all working on a simple job of installing the lights in your flat.

Once they’re done, you sign on the invoice given by the shop, pay the balance in cash and off they go.

Teams of foreigners such as this one are common. They cross the causeway into Singapore on social visit passes, work in the day time and return to Malaysia in the evening. We assume that they are paid in cash by their main contractors or businesses.

This scam saves the lighting shops costs as these Malaysians offer their services at a cheaper rate than a Singaporean contractor would or could. And such activities, according to our source, are also being carried out by foreign – especially Malaysian – salespeople who tout their services to businesses near the border. These services include printing of brochures, letterheads, pamphlets, etc or anything which they can offer.

Besides undercutting our own legitimate businesses, especially the small and medium enterprises (SMEs), these illegal foreign touts and sub-contractors also take away jobs from Singaporeans, for Singaporeans would not be able to take up such jobs at the lower salaries which the Malaysians accept.

Scamming the E-Pass and S-Pass system

If you think scamming the Work Permit system is the only thing businesses do, you would need to think again.

On 19 February, the news reported that 22 Indian nationals were charged by the MOM “for providing false salary information to obtain work passes.”

The men were employees of 4 franchisees of convenience chain store, 7-11. These four companies are Vina Trading, Manthra Enterprises, Magnaton Ventures and Nalla Traders.

It is believed that there are more employees involved in this particular scam than the 22 charged so far.

So, how does it work?

When the employment agents in India recruit these men, they (the men) are told that they will be working in “retail”, doing “cashiering work” for a salary of between S$1,300 to S$1,400.

The men said that it was only after they had arrived here that their employers asked them to sign on forms which declared their salaries to be higher than what they were actually getting.

Their employers had applied for Employment Pass (EP) and S Pass (S) for them.

EP applicants will need to earn at least $3,300 and “possess acceptable qualifications”, according to the MOM website.

The S Pass is for mid-level skilled foreigners earning a salary of at least S$2,200.

But the men are not paid these amounts in actual fact.

Having paid their agents S$6,000 in order to come to work here, the men said they complied with what their employer demanded – to declare a higher salary than what they were actually being paid. Otherwise, they would be sent home with a burden of debts. Also, the men said they were told that this is a “normal thing” in Singapore. And so they thought nothing of it.

The forms they signed declared their salaries to be between $2,400 to $4,550 – well within the respective salary requirement for the two different types of passes.

So, for example, on pay day the employer would credit a worker’s declared salary (say, S$3,800) into the worker’s bank account. The next day, the worker will withdraw the difference between this declared amount (S$3,800) and his actual salary (S$1,400) and return this difference (S$2,400) to his employer – in cash.

In the electronic record, it all looks legitimate – the employer has paid the worker exactly what was declared to the authorities, and well within the rules for the different work passes.

In a nutshell, this is what it looks like:

work permit scam

In reality, however, it is a scam which businesses and companies engage in to circumvent the tightening of the quota for work permit passes.

The only people who really get away with this are the agents and the employers.

Of the four franchisees which MOM was investigating for hiring these workers, none has been charged so far.

MOM under siege

Despite all the claims made by the divisional director of MOM at the Committee of Inquiry hearing last week that the workers know their rights, the truth is that there are many types of scams taking place in Singapore in our employment landscape which these foreign workers are at the mercy of.

Scams involving work passes are but only one area of concern.

Vice president of TWC2 and activist, Alex Au, has written a detailed report of what some of these other problems are. [Read it here: "Manpower director makes incredible claims about how well migrant workers are treated by ministry.”]

TWC2 and HOME conducted a study in 2010 and released a report with recommendations to the MOM on the issues and problems faced by migrant workers. [R[Read it here: "Justice Delayed, Justice Denied”]/p>

Unless we have a more robust set of laws to protect vulnerable migrant workers, and more importantly, enforce these laws, it is only reasonable to expect that the abuse of the system by businesses and employers, and the exploitation of migrant workers, will continue.

Ultimately, it will affect not only Singaporean workers but also Singaporean businesses as well.

Thus, instead of waiting for or asking the public to provide the ministry information of such incidents or cases of abuse or illegal activities, the MOM should really get its act together and get to the root of the problems.

Surely, MOM knows about these scams? What is it doing about them? Or is MOM, as Mr Low said he was told, “turning a closed eye” to these things?

“[The[There]a strong tendency in this government to confuse theory with practice. There is unwarranted faith in policy papers penned in cloisters. Either there is naive ignorance of the shameful reality out there, or a resistance to unearth empirical facts, or both. That dark reality — often dimmed further by half-hearted or non-existent enforcement — stands in stark contrast to the sunny scenario as painted by stated policy. Yet more (tax-payer-funded) effort is expended by civil servants in protecting an almost self-deluding faith in the theory of how things ought to be (while throwing stones at critics) than in uncovering how things actually are. Remedying the failures in policy seems quite far down the list of priorities.” – Alex Au.