How did a 2016 bilateral agreement facilitate alleged exploitation?

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Bilateral Agreement Facilitated Alleged Exploitation Through Restricted Recruitment and Exorbitant Fees

A bilateral agreement signed in 2016, allegedly facilitated by a Bangladeshi businessman with political connections to Malaysia's Home Ministry, is accused of enabling the exploitation of Bangladeshi workers. This agreement restricted worker recruitment to only 10 designated firms, thereby sidelining over 1,500 existing agents. Consequently, each worker recruited under this system was reportedly compelled to pay RM20,000 in fees to local agents, with a significant portion of this amount allegedly being distributed among syndicate members.
Restricted Access to Recruitment Channels

The 2016 bilateral agreement is central to the alleged exploitation, as it was designed to limit the number of firms authorised to recruit workers from Bangladesh to a mere 10. This move effectively bypassed the established network of over 1,500 agents who were previously involved in the recruitment process. Sources suggest that some of these 10 appointed firms were merely shell companies, indicating a potential for a non-transparent and controlled system.
Exorbitant Fees and Significant Markups

Under the terms of the alleged scheme, each Bangladeshi worker recruited faced a fee of RM20,000. This substantial amount was reportedly split, with half allocated to syndicate members. This fee structure stands in stark contrast to the actual costs associated with documentation and transportation, which were estimated to be around RM2,000 per person. This significant disparity points to a substantial markup, suggesting that the fees were not reflective of genuine operational costs.
Large-Scale Worker Influx and Alleged Kickbacks

Since the implementation of this system in late 2016, over 100,000 Bangladeshi workers are reported to have entered Malaysia, with an additional 100,000 awaiting recruitment. The businessman at the centre of these allegations is also reported to have channelled profits back to politicians and government officials in both Malaysia and Bangladesh. Furthermore, he is linked to the establishment of online registration systems for foreign workers, such as the Sistem Perkhidmatan Pekerja Asing (SPPA) and the Foreign Workers Centralised Management System (FWCMS), which levied fees on each successfully recruited foreign worker.

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How did a 2016 bilateral agreement facilitate alleged exploitation?

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