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Cablegate: Recruitment Companies and Trafficking

This record is a partial extract of the original cable. The full text of the original cable is not available.





E.O. 12958: N/A


1. (U) This message is Sensitive but Unclassified -- Please
handle accordingly.

2. (SBU) Summary: Recruiting Filipinos to work abroad is an
important national industry in the Philippines. The GRP
regulates and licenses recruitment companies through the
Philippine Overseas Employment Agency (POEA). Recruitment
companies often perform valuable services for Overseas
Filipino Workers (OFWs) and their families staying behind.
Some recruiters, both licensed and unlicensed, however,
operate outside of the law and are involved in trafficking in
persons (TIP). If POEA discovers a recruitment company
involved in trafficking or other illicit behavior, it may ban
it from business and has done so on numerous occasions. The
Arroyo administration has worked to crack down on TIP-related
illegal recruiting, but more progress is needed. Mission is
working to identify ways to assist the POEA and other GRP
bodies track and punish those recruiters that are engaged in
trafficking. End Summary.

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The Overseas Recruitment Industry

3. (U) An estimated 8.67 million Filipinos work abroad.
This figure for OFWs represents roughly 10 percent of the
population and 20 percent of the workforce, with OFW earnings
representing roughly 10 percent of the country's GDP. The
POEA, an agency of the Department of Labor and Employment, is
responsible for licensing recruitment companies trying to
attract OFW labor. According to the POEA, there are 1,036
licensed recruitment firms throughout the country, but the
field is dominated by a few large, well-connected agencies.
While licensing standards are uniform, most recruiters
specialize by destination country or field of work, e.g.,
health care, entertainment, household help, construction and
motor pool work, management, etc.

Licensing the Recruiters

4. (U) To enter the business legally, a recruitment company
must first register with the Department of Trade and
Industry, the Securities and Exchange Commission, and the
Bureau of Internal Revenue. Applicants must also demonstrate
a capitalization of at least 2 million pesos (USD 36,000) and
pass a criminal record check. POEA's policy is then to
review applications and deliver a refusal or a license within
15 days. The license is valid for three years and is
renewable. The POEA and other GRP bodies, including the
Presidential Anti-Illegal Recruiting Task Force (PAIRTF), try
to inspect the operations of licensed companies to ensure
that their activities are legal. These inspections are
sometimes made "sua sponte" (on the initiative of the GRP),
but more often are in response to a complaint. The POEA and
PAIRTF are also involved in cracking down on the many
unlicensed recruitment companies.

--------------------------------------------- --
Profile of Recruiters: The Good and the Banned
--------------------------------------------- --

5. (U) Many recruitment companies demonstrate remarkable
corporate citizenship. The larger agencies typically have
their own social welfare mechanisms, which include services
to counsel OFWs and their families before, during, and after
deployment. Many provide advice to their OFWs and dependents
on family finances, the challenges of living abroad, and
re-adjustment after return. Every two years, the POEA holds
a large ceremony in Manila at which the top-performing and
most respected companies receive awards for their treatment
of OFWs.

6. (U) Some licensed companies are involved in illegal
recruitment activities, however, including activities linked
with TIP. Some firms cheat their OFW clients by promising
services in exchange for cash payment, but then fail to
deliver. It was in response to this problem that the GRP
formed PAIRTF in July 2004. A much smaller subset of illegal
recruitment activities involves companies that are accused of
engaging in TIP.

7. (U) Upon investigation and administrative review, the
POEA has authority to ban at least temporarily further
recruitment activities by companies that have violated the
rules, and in 2004 banned 36 companies. In addition, the
POEA has a list of 38 companies that are &forever banned8
from recruitment; these are listed on POEA's website at The most common reasons for banning
companies include: cheating workers out of their funds and
collecting unauthorized fees; misrepresentation and false
advertising; deploying underage workers; and, doing harm to
&public health or morality or to the dignity of the Republic
of the Philippines8 (a catch-all phrase that covers TIP).
In 2004, there were 2,189 cases filed against licensed
recruiters on such grounds.

Recruiter Involvement in TIP

8. (SBU) The GRP and NGOs believe that some -- but very few
-- licensed companies are involved in trafficking. The
figure for unlicensed firms involved in TIP is higher,
notably trafficking Filipino women to Japan, South Korea,
Malaysia, Singapore, and some countries in the Middle East
and Europe. Profits from TIP-related recruiting typically
are shared throughout the transaction chain, with the lion's
share going to the recruitment companies, which often act as
fronts for criminal syndicates. For example, Japanese
brothel owners reportedly pay high fees to Philippine-based
recruitment companies for Filipino women brought to Japan
&to entertain8 clients. Headhunters, promoters,
consultants, travel agencies, and corrupt officials also
reportedly take a share.

9. (SBU) Despite the Arroyo administration's firm opposition
to TIP and efforts to combat it, circumstantial and hearsay
evidence indicate that recruiters involved in TIP sometimes
enjoy forms of political patronage, especially from
legislators and at the local level. For example, NGOs who
rescue TIP victims have received telephone calls from angry
mayors or members of the House. Moreover, when Japan
announced in late 2004 that it was planning to implement new
visa rules aimed at cutting down trafficking, there was a
chorus of opposition from individual members of Congress,
apparently instigated by recruitment companies (both legal
and illegal). These companies, acting in concert with more
legitimate recruiters who are worried about reduced OFW
access to a wealthy market like Japan, as well as many OFWs
and their associations, had enough influence to convince the
GRP to press the GoJ to review its planned rules and perhaps
cancel or re-write them. The GRP effort failed and the new
GoJ rules are due for implementation beginning March 15.


10. (SBU) The Arroyo administration, working through the
POEA, PAIRTF, and other bodies, has tried to crack down on
TIP-related recruiting, but more progress is needed. There
are too many licensed and unlicensed recruitment companies
with a connection to TIP that remain in operation. POEA and
PAIRTF officials, however well meaning, face severe resource
constraints that make monitoring the activities of the many
recruitment firms very difficult. In addition, in a slow,
inefficient judicial system that is sometimes subject to
corruption, recruiters charged with crimes often worry little
about convictions, despite a new drive for prosecutions and
convictions in the wake of the 2003 anti-TIP legislation (and
related laws). Moreover, those recruitment companies that
are banned are often quick to re-form into new entities,
which can be difficult for the POEA to detect. Mission is
working to identify ways to assist the POEA and other GRP
bodies track and punish those recruiters that are engaged in

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