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 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 moneylenders at high-interest rates. Workers' calculations about how to repay these loans were often derailed by unpaid wages or other forms of labour exploitation overseas. More than half of respondents said they received lower monthly salaries than promised by the agencies.
"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.
Amnesty said the Nepali government must do more to enforce laws penalising 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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