Nepali migrant workers are trapped in a vicious cycle of debt and exploitation due to a failure by authorities to crack down on recruitment firms that charge illegally high fees for jobs abroad, human rights group Amnesty International said on Monday.

Wages sent back by an estimated four million Nepalis – mainly employed working in construction or as domestic workers in the Middle East, Malaysia and South Korea – make up more than a quarter of the poor Himalayan nation’s gross domestic product.

Nepal permits recruitment agencies to charge 10,000 rupees ($100) from each migrant as a service charge for finding them work with foreign firms, who pay for workers’ travel and visa.

But a survey of over 400 Nepali migrants by Amnesty found workers are not only forced up to 12 times more the permitted amount to agencies, but also that most are forced to borrow the money from unscrupulous money lenders at high interest rates.

“Migrant workers all too often end up trapped in the soul-destroying situation of working abroad for years simply to pay off the huge, often illegal fees they were charged to take the job,” said Amnesty International’s James Lynch.

“The Nepali government’s weak enforcement of the law is playing straight into the hands of extortionists and loan sharks. Tackling this exploitative industry is a matter of urgency,” Lynch added in a statement.

The London-based human rights group said almost two-thirds of the migrant workers, who responded to a telephone survey conducted in Nepal and Malaysia, had paid excessive, illegal recruitment fees to hiring firms.

Workers’ calculations about how to repay these loans were often derailed by unpaid wages or other forms of labor exploitation overseas. More than half of respondents said they received lower monthly salaries than promised by the agencies.

Bhuban K.C., a senior official in Nepal’s labor ministry, said authorities had launched awareness programs for potential migrants to ensure they are not cheated by agencies, adding that compensation was being provided to victims.

Nepal was working with India, Bangladesh and Sri Lanka which also send migrant workers to the Middle East and Malaysia to ensure that the workers’ interests are protected, he added.

“We are raising our voice internationally to ensure that migrants are not cheated. What we are doing may not be adequate, but we are concerned about our workers welfare,” K.C. told the Thomson Reuters Foundation.

Amnesty said the Nepali government must do more to enforce laws penalizing exploitative recruitment agencies and urged overseas companies – who use the agencies to source workers – to check abuse within their supply chains.

“Companies who employ migrant workers in the Gulf and Malaysia directly or through their suppliers or subcontractors also have a responsibility,” said Lynch. “Until they take action, they are reinforcing the debt trap that is destroying so many lives in Nepal.”
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