Tel Aviv’s Central Bus Station is a huge building with a grungy, slightly menacing air. Drunk, half-dressed men stagger across shadowy corridors. But on a Saturday evening in January, the structure’s main halls bustle with Asian foreign workers, shopping, eating from ethnic food stalls and sending money back home.
One by one, I approach groups of workers.
“Do you speak English? Hebrew? I am a reporter for The Times of Israel. I’d like to ask you about brokers’ fees. Did you have to pay money to come to Israel?”
Most turn quickly away. Others say “I know nothing about this.” But eventually, several people agree to speak as long as I keep their identity under wraps.
A group of four female caretakers from the Philippines tell me they each paid about $8,000 in order to come to Israel. One woman says it took her a year just to pay off the loan she had to take to cover that fee.
Two other women from the Philippines give similar accounts.
“Is there anyone from the Philippines who didn’t have to pay a fee to come here?” I ask.
“No,” they chorus, shaking their heads.
A group of Thai men refuse to talk to me when asked about broker’s fees, but two Indian women shopping for sweaters tell me that in their country it costs $12,000 to get a caretaking job in Israel. For a man from India, a third worker tells me, the cost is closer to $17,000.
“Do you pay the money there or in Israel?”
“Half and half,” answers one.
“It is dangerous to talk about,” an Indian worker explains. “If you don’t pay, people in India can hurt your family, even kill someone. And if you give information to the media, the companies in India could go after you.”
Very few of the 55,000 Israelis who employ foreign caretakers for their elderly or disabled loved ones are aware of the debt and threats hanging over the heads of the carers they welcome into their homes.
“One hundred percent of foreign caretakers pay brokers’ fees,” says Idit Lebovitch, coordinator for migrant caregivers at Kav LaOved, an Israeli NGO that advocates for foreign workers.
These workers usually earn an Israeli minimum wage of NIS 4,650 a month ($1,198). The brokers’ fees they are required to pay are several multiples of their monthly salary. Most of these charges are illegal in Israel. Nonetheless, they are the norm.
Until recently, an Israeli manpower company was legally permitted to charge a foreign worker a total of NIS 3,400 in placement fees. Today, they are permitted to charge employers only NIS 2,000 upon hiring, and an additional NIS 70 per month. Much of the rest of their earnings, thousands of dollars per worker, allegedly reaches these manpower companies by illegal means, hand-delivered in envelopes or sent through wire transfers into offshore bank accounts.
Critics charge that this is a tale of extortion of people who, desperate to earn money for their families, leave those families, often for years at a time, to provide a vital service in Israel and are being preyed upon without government protection. A spokeswoman for Israel Police, contacted about allegations of an entire corrupt sphere being allowed to function, refused to respond to the general concern, saying she could only react if presented with specific cases.
Where does the money go?
“We believe that seventy to eighty percent of these fees go to the Israeli company,” says Lebovitch (with most of the rest to agents in the workers’ countries of origin). “But it’s hard to prove. Most workers pay abroad and not here. They transfer the money in cash through Israelis who come to their country, through bank accounts under fake names or through straw companies with addresses abroad.”
Lebovitch says there’s no way the Israeli manpower companies could survive on the fees they are allowed, by law, to charge. The government doesn’t raise these fees because it knows they’re getting additional, illegal fees, she charges.
Yotam Polizer, Asia director for IsraAID, a humanitarian relief NGO, says that when he worked at the Israeli Embassy in Nepal seven years ago, he interviewed local agents who told him that 80 percent of the broker’s fees were transferred to Israeli manpower companies.
“Part of my job was to interview migrant workers coming to Israel. I found out that they were paying $8,000-$12,000 to companies in Nepal and Israel. There were 150 manpower companies in Israel for caregivers alone. I estimate they were earning one billion shekels a year in illegal fees.”
As a result of Polizer’s findings, Israel stopped accepting foreign workers from Nepal in 2009. But manpower companies began bringing more workers from India and Sri Lanka, where the fees are also high. Polizer notes there have been several lawsuits in Israel over brokers’ fees, causing some manpower companies to lose their licenses, but says these same companies soon reopened under a different name.
Rivka Makover, director of the planning department at the Economy Ministry, told a special Knesset committee on foreign workers in 2010, “How much money are foreign workers charged for the right to come to Israel? Between $8,000 and $10,000. There is evidence that foreign workers are paying very high sums of money; it’s an indisputable fact. At least half of this is divided between the company abroad and the company in Israel. These are companies I am acquainted with that underwent regulatory vetting.”
According to Kav LaOved, foreign workers often take loans in their home country to pay the illegal fees. It takes a worker one to two years on average in Israel to pay back this loan. During this time, caregivers will do whatever it takes to hold on to their jobs, even submitting to a violation of their rights.
For instance, Lebovitch describes the case of a Filipina caregiver whose elderly ward, a man with dementia, would masturbate every time she helped him into the shower and ask her to caress him. “The man had dementia — probably half the time he had no idea what he was doing. Nevertheless, it’s still sexual harassment. The woman kept working there until she was close to paying back her loan, then she quit.”
Lebovitch says she has seen everything, from employers who forced caretakers to work seven days a week to those who failed to pay salaries in full to cases of sexual or physical abuse. In many instances, employees only got up the nerve to quit after their initial 1-2 years in the country, when they had managed to pay off their debt from brokers’ fees.
In 2010, the US State Department’s “Trafficking in Persons Report” ranked Israel in its second-best of four tiers for its human trafficking record. Most Western countries are in tier 1, while tier 2 countries include Afghanistan, Angola and Madagascar. The report stated that “low-skilled workers from Thailand, China, Nepal, the Philippines, India, Sri Lanka, and, to a lesser extent, Romania and Turkey, migrate voluntarily and legally to Israel for contract labor in construction, agriculture, and home health care provision. Some, however, subsequently face conditions of forced labor, including through such practices as the unlawful withholding of passports, restrictions on movement, inability to change or otherwise choose one’s employer, non-payment of wages, threats, and physical intimidation.
“Many labor recruitment agencies in source countries and in Israel require workers to pay recruitment fees typically ranging from $1,000 to $10,000,” the report went on, “although Chinese workers often paid more than $20,000 – a practice making workers highly vulnerable to trafficking or debt bondage once in Israel. Traffickers are usually the migrant workers’ legal employers and the recruitment agents in both Israel and in the migrants’ home countries.”
Five years after that report, the US State Department has upgraded Israel’s ranking to Tier 1, the highest ranking, after the country made efforts to curb some of these practices, especially for workers in the construction and agriculture industries. The State Department’s 2015 report reads: “the government of Israel fully complies with the minimum standards for the elimination of trafficking. The government sustained law enforcement actions against sex and labor trafficking, although courts continued to give convicted offenders prison terms not commensurate with the severity of the crime.”
Despite government efforts, however, the practice of charging broker’s fees is rampant, with many manpower companies continuing to profit at workers’ expense.
“It goes without saying,” reads a 2013 report by Kav LaOved, “that the money from broker’s fees is not reported to the tax authorities and is undeclared income. It appears that manpower companies in both Israel and the countries of origin employ powerful lobbies, and this is what prevents government from making other arrangements for bringing foreign workers or enforcing the law that prohibits charging broker’s fees.”
Evidence of such pressure can be found in the 2008 conviction of Shas MK Shlomo Benizri for taking bribes from Moshe Sela, the owner of a manpower company, in exchange for increasing the quota of foreign workers Sela’s company could bring to Israel.
Are most of the Israeli manpower companies corrupt?” I ask Kav LaOved’s Lebovitch. She is adamant that this is the case.
The Times of Israel contacted the Association of Israeli Manpower Companies for a response. A lawyer for the organization said she had no knowledge of the issue of brokers’ fees.
The wheels of justice
Sabine Hadad, a spokeswoman for Israel’s Ministry of Immigrant Absorption, says it is well-known that Israeli manpower companies are charging illegal brokers’ fees.
“You are not telling us anything new,” she says when this reporter describes her conversations with workers.
“Then why not just arrest the heads of the companies?” I ask.
“Because you have to prove it. If you have a detective agency, be my guest. It’s not as simple as you think.”
Hadad says her ministry has been working overtime on this issue for the last five years. Rather than prove that individual manpower companies are laundering money and depositing it in offshore bank accounts, the government has found a way to circumvent the companies. In 2011, the government decided that foreign workers in Israel will only be employed through bilateral agreements between Israel and their country of origin. Under these agreements, workers are recruited under the oversight of governments as well as the International Organization for Migration. Manpower companies can advise in the process but are not responsible for direct placement of workers.
So far, Israel has signed bilateral agreements with Thailand for agricultural workers as well as with Romania, Bulgaria and Moldova in the construction sector. As a result of these agreements, Thai workers currently pay $2,200 in fees as opposed to $9,000 prior to the agreement, according to a report by the Center for International Migration and Integration (CIMI), an NGO founded by the JDC-Israel. Bulgarians pay only $500 for travel, medical exams and document translations. These fees are legal, says, Lebovitch, and overseen by the IOM. Lebovitch says these bilateral agreements have decimated employment agents — reducing the number of manpower companies in agriculture by 75 percent.
But caregivers, who make up the bulk of Israel’s foreign workers, have seen no bilateral agreements yet, which is why they are still being charged illegal brokers’ fees. Hadad says the government is about to launch a pilot program with Nepal, and if successful, it could be the beginning of the end of brokers’ fees for foreign workers.
“Bilateral agreements take time to negotiate,” says Hadad, explaining why workers continue to be charged. “Sometimes it’s the other side that drags its feet,” she says, citing China as an example.
Kav LaOved’s Lebovitch says that Israel approached China to negotiate a bilateral agreement but the Chinese are hesitant, in part because manpower companies in China are also reluctant to give up their cut of brokers’ fees.
‘Tilting at windmills’
About 4,500 foreign caregivers enter Israel each year, according to a 2013 report by the Knesset Research and Information Center. In 2007-8, the numbers were closer to 9,000, but in response to criticism the government has changed its policy and now allows foreign workers to stay longer. All or nearly all of these caregivers, the majority of whom come from the Philippines, India and Sri Lanka, are paying illegal brokers’ fees that constitute astronomical sums in their countries of origin. Why isn’t the Israeli government cracking down with greater urgency?
Lebovitch of Kav LaOved sighs wearily.
“The questions you ask are questions I asked seven years ago when I started working on this. I said, ‘How can everyone know about this and do nothing?’”
“The government says two things. First, that there is no way to locate the money. Second, as soon as it’s an international crime that doesn’t happen within the borders of Israel, then the Israeli government doesn’t have the authority to deal with it.”
“We’ve tried,” she added. “We approached the Israel Money Laundering and Terror Financing Prohibition Authority, we approached the tax authorities, the police; we filed a petition with the High Court of Justice. There are some bodies that are more willing than others, but most give up pretty quickly. They look for testimony from caregivers but most caregivers are unwilling to file a complaint, they’re afraid. If there is no complainant, it’s as if no crime were committed.”
Lebovich says Kav LaOved has fought and is still fighting the problem of brokers’ fees. “But it’s a little like tilting at windmills.”
Why are Chinese workers so desirable?
Back in September, a dramatic government meeting took place, as reported in the Israeli press. Avigdor Yitzhaki, housing chief for the Finance Ministry, requested that the government urgently approve the entry of 20,000 Chinese construction workers so that Israel could meet Finance Minister Moshe Kahlon’s quota of 60,000 new housing units per year.
Representatives from the Immigration Ministry, the attorney general’s office, the Economy Ministry and the Interior Ministry all objected to the proposal, as it flew in the face of Israel’s 2011 commitment to only bring in construction workers through bilateral agreements. Israel and China have not yet signed such an agreement.
“We are worried about the return of brokers’ fees [to the construction industry],” deputy attorney general Orit Koren reportedly told Yitzhaki.
According to Israel’s Calcalist financial daily, Yitzhaki stood up and stormed out of the room, shouting, “You lawyers are intentionally torpedoing the government’s effort to lower the cost of housing!”
Several days later, the cabinet approved Yitzhaki’s request, with Interior Minister Silvan Shalom and Economy Minister Aryeh Deri voting nay. Prime Minister Benjamin Netanyahu voted in favor.
Asked why the government needs to import 20,000 Chinese construction workers, as opposed to workers from Bulgaria or Romania, who don’t pay brokers’ fees, Immigration Ministry spokeswoman Sabine Hadad says, “We don’t know why. We are asking that question ourselves.”
Although a spokesman for the Prime Minister’s Office did return a call to The Times of Israel when contacted, he did not respond to the question.
Meretz MK Michal Rozin, who used to chair the now-defunct Knesset Committee on Foreign Workers, said that there is a widespread perception in the construction industry that Chinese workers are the most industrious.
“There were some problems with Romanian and Bulgarian workers drinking alcohol. Building contractors came along and said that for high-rise buildings, the experts are the Chinese. They build faster than everyone else.”
Craig James, a renovator, told The Times of Israel he has personally witnessed Chinese workers put in 36-hour shifts.
“I think where they come from the competition is so intense they are used to working extremely hard.”
Rozin also believes that the contractors’ expressed preference is sincere, as some Chinese construction workers earn upwards of NIS 20,000 a month and Israeli contractors still prefer them despite these salaries. Nevertheless, is it a coincidence that Chinese workers also pay among the highest brokers’ fees on the market, over $20,000?
“I asked the finance minister and the housing minister the same question,” says Rozin.
Rozin says that now that the government has approved the entry of more Chinese workers, there is a fight in the Knesset over whether they will come with a bilateral agreement or without one.
“It’s important that workers have power and rights. I originally asked not to bring Chinese workers here because their debts are too high. We don’t want to hire slaves, we want to hire workers,” she says.
In the meantime, the Chinese government has yet to agree to send workers to Israel without a bilateral agreement. In January, Netanyahu even sent a letter to his Chinese counterpart encouraging him to expedite the process.
“The Chinese don’t like it when another country like Israel tells them how to conduct their affairs,” remarks Rozin.
In what may be a change of strategy, on Sunday February 7, Israel’s security cabinet approved permits for 30,000 more Palestinian workers to work in Israel, many in construction.
What’s a family to do?
Meanwhile, in the caregiving arena, what is an Israeli family to do if it seeks to employ a foreign worker but doesn’t want to participate in a system that enriches manpower companies while turning migrants into debt slaves?
Yotam Polizer of IsraAID says the best one can do in the current circumstances is to employ a worker who has already been in the country several years. “That way, they have already paid off their debt, and it’s also better for the elderly person, because this worker speaks Hebrew and knows their way around.”
Michal Rozin says it’s also a good idea for employers to actually talk to their caregivers about these things. “Ask them, ‘Do you like working here? Do you want to work somewhere else? Are you in debt? Take an interest in their welfare.’”
As one Filipina worker told this reporter. “It’s not an easy job. Many nights I don’t sleep. But this is our situation.”
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