Human Resource Ministry owed more than MVR 350 million in unpaid work permit fees, student loan repayments

The Ministry of Human Resources, Youth and Sports failed to collect MVR 168.4 million (US$10.9 million) in expatriate work permit fees for the past three years and MVR 191 million (US$12.3 million) in repayments for student loans, the ministry’s audit report for 2011 has revealed.

The audit report (Dhivehi) made public on Monday stated that information from the past three years on expatriate work visas showed that the year-on-year increase in foreign workers arriving in the Maldives was “alarming.”

“Records from the Department of Immigration and Emigration show that from July 1, 2009 to June 30, 2011 the state did not receive MVR 168,414,000 (US$10.9 million) owed as work permit fees,” the audit report revealed.

Records showed that the number of foreign workers living in the Maldives without paying work permit fees in 2009 was 16,934.

The figure increased to 27,793 in 2010 and 39,756 in 2011.

While the expatriate workforce in the Maldives as of December 2009 was 57,968 registered workers, the figure had risen to 99,369 by September 2011.

Of the total number of foreign workers, 55 percent or 54,653 expatriates were from Bangladesh and “69 percent of these, or 37,710 people, are working in the country illegally.”

Of the remaining 44,716 from other nations, 18 percent or 8,048 were illegal workers.

“Therefore, records show that the total number of foreigners working in the Maldives illegally is 45,758 (46 percent of foreign workers),” the report revealed.

Student loan repayments

The student loan repayments were meanwhile owed for two loan schemes launched respectively in 2000 and 2005.

As of December 31, 2011, the report found that the ministry failed to collect 154.6 million (US$10 million) as repayments for a long-term student loan programme launched in 2005 from a national higher education fund.

Of MVR 155.6 million (US$10 million) released between 2005 and 2011, the audit discovered that only MVR 904,872.28 (US$58,681) was repaid.

“Students who went for higher education under the scheme have not been repaying the loans because the department of higher education had not sent repayment schedules with details of the total amounts owed,” the report found.

If “adequate efforts” had been undertaken to collect payments, the Auditor General’s Office noted that “a revolving fund could have been established to provide higher education opportunities without additional expenditure from the state budget.”

Meanwhile in 2000, the report explained, the ministry launched a programme with World Bank loan assistance titled the “third education project” and issued MVR 250 million (US$16.2 million) under the scheme, with a specified portion to be paid back to the ministry.

“While it was determined that 15 percent from government employees participating in the scheme and 50 percent from participants from private companies would be collected, we note that repayments have not been sought from anyone,” the report stated.

“And as a result of the ministry not properly maintaining records of how the money was spent on students under the scheme, we note that details of how funds were released for individual students are not available and no one was sent repayment schedules.”

The report observed that MVR 37.5 million (US$2.4 million) estimated as repayments owed under the scheme has not been collected due to the “carelessness, incompetence and negligence of those in charge of the ministry’s relevant department”.

In February 2012, the report noted, the department of higher education and its staff at the Human Resource Ministry were transferred under the Ministry of Education.

Violations of Public Finance Act

The Auditor General’s Office stated that it did not believe expenditure out of the ministry’s budget was “mainly” in accordance with the Public Finance Act and “to the extent specified in the budget, on matters determined in the budget and in ways that would achieve the objectives of the ministry’s budget for 2011.”

In addition to the ministry failing to collect student loan repayments and unpaid work permit fees, the audit report noted a number of instances that were ostensibly in violation of the Public Finance Act and regulations under the law.

The audit discovered that seven political appointees were paid salaries and allowances in 2010 with no records of attendance.

The responsibilities of the seven senior officials who did not sign attendance sheets were unclear, the report noted.

Moreover, the audit found that a state minister was paid MVR 165,897.93 (US$10,758) as salary from February 13, 2012 to May 2012 despite not attending the office during the period.

While the state minister had submitted a written request for a holiday on February 13 before flying abroad, the report noted that the ministry had not made official arrangements for the leave of absence.

On February 7, 2012, former President Mohamed Nasheed resigned under controversial circumstances following a police mutiny at the Republic Square.

“[The state minister] was removed from the post by the President’s Office on July 22, 2012,” the report noted.

In another case, the audit discovered that MVR 865,500.70 (US$56,128) was deposited for seven students studying in Malaysia under the office’s staff development scheme, in excess of the official approved stipend.

In place of RM11,760 (Malaysian Ringgits) as six month’s stipend for each student, a sheet sent to the bank from the ministry mistakenly stated US$11,760, the report found.

While the ministry’s staff studying in Malaysia received an additional MVR 123,642.96 (US$8,018) each, the report noted that no attempt had been made to recover the excess amounts.

The audit report blamed the “failure of the employees to carry out their responsibilities” in preparing, checking and authorising the sheet sent to the bank.

The ministry meanwhile incurred MVR 133,938 (US$8,686) as fines for late payment of water and electricity bills in 2011, but no employees were held responsible and the loss to the state was not recovered.

The report also found that a total of MVR 420,000 (US$27,237) was paid as allowances in 2011 – at a rate of MVR 2,500 (US$162) a month – for 15 members of the National Sports Council under the ministry, without official approval from the government.

The report noted that the council held only seven meetings in 2011, each lasting for about an hour and with half the council’s membership in attendance.

Meanwhile, as a result of failing to properly maintain stock inventories, equipment purchased by the ministry was not registered and five laptops and 15 printers were lost.

The audit also discovered that the ministry provided MVR 200,000 (US$12,970) to the Shaviyani Milandhoo island council in June 2011 to set up a net around the island’s football stadium.

The funds were not approved in the 2011 budget but were released based on a pledge by the President to the islanders, the report stated, noting that such expenditure was “in breach of budgetary rules.”

Cancelled beach games

The audit report revealed that the ministry spent MVR 1.28 million (US$84,306) for “a first-ever beach and water sports tournament in South Asia” that never took place.

In February 2011, event organisers told Minivan News that the “Maldives Beach Games 2011” would bring hundreds of athletes from around the world to compete in 10 sporting events.

The international games were launched in February with a laser show and an appearance from renowned Sri Lankan cricketer Sanath Jayasuriya at a ceremony in Male’s Kulhivaru Ekuveni Indoor Hall.

The audit report meanwhile noted that the reasons for the eventual cancellation could not be discerned from the official documents.

The expenditure – made through the Maldives Olympic Committee – included over MVR 542,000 (US$35,149) on advertising and MVR 103,450 (US$6,708) on “a mascot and theme song for launching the beach games.”

Equipment, furniture and other items purchased for the cancelled games cost MVR139,545 (US$9,050).

Of the ultimately wasteful expenditure, the report noted that MVR 843,571 (US$54,706) was spent in violation of the Public Finance Act and regulations as estimates were only sought from one party.

A member of the sports council created by the ministry was meanwhile paid MVR50,000 (US$3,242) – without a public bidding process – to transfer sand from a soccer pitch made for the games to the artificial beach, the report found.

The Olympic Committee spent MVR 117,000 (US$7,588) to prepare the soccer pitch in the vacant plot in front of Villa College.

Moreover, a deputy minister and the sports council member travelled to Bangalore at a cost of MVR57,825 (US$3,750) purportedly in relation to the games, but the purpose of the trip was unclear as an official report was not prepared.


Industry seeks “grace period” for overhauling employee living conditions

Business organisations and labour rights groups have called on the government for more time to address proposed amendments to the Employment Act that will drastically shake up living standards for foreign and local workers employed within the Maldives.

The Ministry of Human Resources, Youth and Sports has today invited comments on the new proposals requiring all employers within the country to ensure that specific standards of living quarters are being provided to staff such as those living on resorts or construction sites.

The proposed amendments to the Employment Act outline new requirements for staff accommodation that include providing a clear separation of work and private space, sufficient artificial or natural light, purpose built kitchen areas and specific health and safety standards.

From the perspective of employers, Mohamed Ali Janah, President of the Maldives Association of Construction Industry (MACI), said that despite certain negative perceptions of the industry over treatment of its workers, beyond a few bad examples, there was a willingness to improve treatment of staff.

“Any improvement [to worker’s living conditions] we would welcome. Yet, with any improvements there is a cost attached to this,” he said.

Speaking to Minivan News, Janah said that he believed that the proposed amendments to workers’ living conditions would impact on the cost of construction work in the Maldives.  He said implementing such living standard changes would therefore require a grace period of around one year to allow businesses and their customers to adapt to the changes.

The MACI president claimed that in an already highly competitive marketplace,  society, rather than the construction industry alone, would have to accept some of the financial burden to offset the higher costs of accommodating workers to the standard proposed by the Human Resources Ministry.

“This will definitely have an impact on proposed costs in the industry. Right now, in what is currently a competitive market. We are just managing to get through the economic situation,” he said.

Alongside the Employment Act regulations, Janah said that he believed that additional legislation relating to occupational health and safety was needed to be addressed both in terms of private and government contracts – an issue he claimed was not always the case in negotiations for a construction project.

“The Maldives building code and health and safety requirements also need to be addressed along with these amendments,” he added.

Taking the example of what he believed were differences between the present and previous governments, the MACI president claimed that the implementation of a more structured national budget had meant that state building contracts were no longer a sure thing for building groups. These changes within the construction market were therefore seen as putting further pressure on building firms to try and cut costs while providing new residences for staff.

“[The accommodation proposals] are a good move, but there needs to be time for the industry to adapt,” Janah claimed. “There is awareness of the new requirements that needs to be created. I don’t believe penalizing companies would be the best practice and that a grace period of around a year would be a good time frame to address [the changes].”

Tourism workers

From a tourism industry perspective, worker’s organisations like the Tourism Employees Association of Maldives (TEAM) have criticised the decision to give just 15 days to provide feedback to the regulations proposed by the Human Resources Ministry.

TEAM President Ahmed Shihaam said that the association would be discussing its responses to the changes in accommodation within the next 24 hours, though had hoped the group would also have time to consult with tourism industry employers as well.

Shihaam claimed that a 15 day time-frame to respond to the regulations made it difficult to consult with important stakeholders like resort employers on the long-term implications of the proposals.

“Rather than days, we may need a month or so to address these issues properly, both with our members and the employers [the resorts themselves],” he said. “This is new to us all and the intention is not to make enemies.”

The Maldives Association of Tourism Industry (MATI), which represents a number of resort businesses operating in the country was unavailable for comment when contacted by Minivan News at the time of going to press.

In addressing the proposals for the Employment Act, Human Resources Minister Hassan Latheef said that the proposed new accommodation standards had been adapted from recommendations outlined by the International Labour Ogranisation (ILO), specifically in terms of sanitation conditions and room size.

Latheef claimed that the proposals would address many of the complaints and concerns received by the country’s Labour Relations Authority from Maldivian Workers concerning the conditions of their accomadation, particularly at resort level.
“Maldivians, rarely complain on the pursuit of [unpaid] salaries, most of the time, they complain about the conditions at work or their living conditions. Most of the complaints I should say come from resort workers,” he said. “Their complaints come from not being paid a service charge they are entitled to, to conditions of their accommodation and alleged discrimination from senior management.”

By comparison, Latheef claimed that about 95 percent of complaints received by the Labour Relations Authority from expatriate workers related to the alleged failure of an employer to pay their wages rather than living conditions.

Accommodation amendments

The proposals opened up to public consultation by the Ministry of Human Resources, Youth and Sports are scheduled to come into force four months after being published in the government gazette.

These requirements include:

  • Lodging should provide shelter from the natural elements, and be constructed using suitable materials
  • If a lodging is based at a work site, there should be a fence separating these two area at a distance of 1.5 metres
  • At entrance of lodging, a service provider’s name and contact number should be displayed along with the maximum number of people that can be accommodated
  • Lodgings should have enough daylight or artificial light as well as a means of letting air pass through
  • A single worker’s accommodation should equate to 6 square metres of living space at a height of 2.4 metres and an all round width of 1.8 metres
  • For 2 people sharing accommodation, there should 9 square metres of space that is 2.4 metres in height and 2.1 metres in width – each extra person after that should be supplied with 4.5 square metres of living space, 2.4 metres in height with a width of 2.1 metres
  • Rooms should be for separated by gender, unless workers are married
  • Lodgers should also have a means of locking away valuables
  • A toilet should be provided for every 10 people staying at a lodging
  • A sewerage system should be in place and constructed with permission from the relevant authorities
  • A kitchen should be supplied that is appropriate for the surroundings, while it’s forbidden to cook inside lodgings at construction sites
  • Employers or the service provider will be fined up to Rf5,000 for each failure of regulation that is recorded

More information on the measures can be found on the Ministry of Human Resources, Youth and Sports’ website.


Work permit deposits for expats to be made to Finance Ministry

Deposits made by foreign nationals wishing to work in the Maldives must now be paid to the Ministry of Finance and not the Department of Immigration and Emigration.

Controller of Immigration Ilyas Hussain Ibrahim, said there was no act regarding deposits before, and they were simply kept by the Ministry of Human Resources.

He noted the transfer to the Finance Ministry was “to make administration easier.”

The deposits are required by the government from all foreign nationals applying for a work permit in the Maldives and must be secured before entering the country, an issue that has caused consternation among employers seeking to employ foreign workers.

Chief at the work visa section of the immigration department, Hassan Khaleel, said the amounts were decided by taking into consideration expenses in case the worker needs to be repatriated.

These expenses include the cost of air-fair back to the worker’s home country, accommodation for a few days in custody, food and transport, and medication if needed.

Minister of Human Resources Youth and Sports, Hassan Lateef, said the transfer of the deposits to the Finance Ministry had been a “cabinet decision,” but noted nothing else has changed in the laws and regulations concerning the deposits.

He said the employer must pay the deposit to the ministry and can also claim it back once the worker has gone back to his or her respective country.

Lateef said the money will be used “in case the employer, or the government, wants to send the employee back to their country, or if he or she is admitted into hospital.”

He said the money would not gain any interest and if it is not collected or used, it will “sit in the Finance Ministry” and be “kept safely.”

Indian nationals pay the least, with deposits of Rf 3,500 (US$272). Sri Lankans must pay Rf 4,000 (US$311) and Bangladeshis Rf 8,000 (US$623). The highest deposit required is for Ecuadorian nationals who must pay Rf 49,000 (US$3,813).

A full list of the deposits for each country can be downloaded here.


Maldives to restrict expatriate travel

The movement of foreigners throughout the Maldives will be restricted, according to new rules implemented by the ministry of human resources, youth and sport.

All foreigners wishing to travel between islands from 1 February 2010 must present appropriate documents to the captain or person in charge of the vessel, the ministry revealed.

Speaking to Minivan News, Minister of Human Resources Hassan Latheef said the travel restrictions were being implemented to reduce the number of illegal expatriate workers travelling between islands.

“The problem of illegal workers in this country is huge, we have been getting many complaints from islands,” he said.

“An example is in Laamu atoll: illegal workers have become involved in agricultural business and are driving local farmers out of business.”

He acknowledged that “while we can’t deport everyone, I believe that stopping them from moving around is the first step towards solving this issue.”

Proper documentation

From February all foreigners must carry one of three documents to be able to travel around the country: either a valid work permit, proper visa documents for visitors, or a special letter from the ministry allowing travel.

Any captain or vessel owner which transports foreigners without these documents will face legal action, the ministry said.


Asked how the community might react to such measures, Latheef said “There won’t be much difficulty in implementing these measures, because even now ships have to keep a log of all the passengers it carries. There will be no inconvenience at all, as most crews will be able to check documents very fast and efficiently.”

Asked about the impact on non-working foreigners in the country, Latheef said “All they have to do is provide a visa or document showing their purpose in the country.”

Tourists “may find this alarming,” admitted  Ahmed Solih, permanent secretary of the tourism ministry.

“But if the situation is explained, they will understand,” he said.

One expatriate currently working in the country wasn’t so sure.

“As someone who travels on a daily basis does this mean I have to carry my documents with me in case they are checked? Having to carry around papers all the time feels very restrictive,” he said.

“It feels like there is a currently a bit of a witch-hunt against expatriates, with the retraction of the liquor licences and the difficulty getting work permits – is the government trying to drive out skill sets the country doesn’t have?”

Solih said the problem of illegal workers was a national issue, particularly for a relatively small community like the Maldives.

“These measures may seem dramatic but this decision has only been made after many other alternatives have failed. I am sure there will be measures in the rules to account for the tourism industry.”