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Arrests Expose Scam Involving Migrant Workers Compensation

The mechanism for paying financial assistance to the workers and their families needs to be made easier, said experts.According to the Foreign Employment Board, Rs410.18 million has been provided to the families of 789 deceased migrant workers andRs59.31 million to 166 workers who have sustained injuries or become ill in the current fiscal year. 

Pawan Pandey
The Kathmandu Post
10 April 2023

After the police arrested several persons for defrauding families of dead migrant workers of their compensation, concerns have been raised over systemic issues in the compensation system.

The Kathmandu Valley Crime Investigation Office, Minbhawan has taken eight individuals into custody in the last four days, among them a government official and insurance employees. Six of them were caught red-handed at Gongabu on Thursday.

Various documents, including passports, citizenship, birth, marriage and death certificates, recommendation letters from ward offices and letterheads of insurance companies were also seized, the police said in a statement issued on Friday.

A computer operator at the Foreign Employment Board, a government agency responsible for the welfare of migrant workers, was arrested in Kathmandu on Friday. A junior official at Surya Jyoti Life Insurance Company was caught in Bhaktapur on Saturday, according to the police.

Superintendent of Police Rabindra Regmi at the Kathmandu Valley Crime Investigation Office told the Post that the arrested individuals were handed over to the District Police Range, Teku.

“We have launched a formal investigation,” Regmi said. “There might be a bigger network.”

Regmi said the issue came to light after a woman from Dhanusha complained that she received only Rs500,000 in insurance pay-out after the death of her husband. Her migrant worker husband died in Nepal three months after returning from Saudi Arabia.

Migrant workers’ families are entitled to receive as much as Rs1.4 million in insurance money in case of death.

Workers pay Rs3,708 to Rs9,463 depending on their age as insurance premium before leaving for foreign destinations. According to the Department of Foreign Employment, the insurance premium is Rs3,708 for workers aged 18 to 35 years, Rs4,931 for those aged 36 to 50 and Rs9,463 for those aged 51-60 years.

“During our investigation, we found that the defrauders became close with the workers’ families by promising help to get the insurance money,” said SP Regmi. “They help the victim’s families with the paperwork, and swindle them out of the money when it is released.”

Rajan Paudel, information officer at the Foreign Employment Board, told the Post that the alleged involvement of a board employee in the fraud case was very unfortunate. There is a mechanism to deposit the insurance money and other compensation directly in the bank accounts of the family members.

“The payment should be made within a week after verifying the documents,” said Paudel. “The recent arrests have uncovered loopholes in the existing system.”

Umesh Prasad Mainali, information officer at Surya Jyoti, did not elaborate on the issue. “The case is under investigation. We will review the internal mechanism to eliminate such flaws in the future.”

The families of deceased migrant workers are also entitled to a one-time financial assistance of Rs700,000 from the Migrant

Workers Welfare Fund in case of death within a year after the end of their labour approval. They get only Rs25,000 after the one-year period.

The families of migrant workers who fall critically ill or become injured while working abroad are provided up to Rs700,000 depending on the seriousness of the illness.

The fund is managed by the Foreign Employment Board. Every worker has to deposit Rs1,500 into the fund when going for foreign work with a two-year labour approval.

Migrant workers used to be given a two-year labour approval. But last month, the government removed the fixed term labour approval and decided to issue approvals valid for the duration of the work contract.

According to the Foreign Employment Board, Rs410.18 million has been provided to the families of 789 deceased migrant workers and Rs59.31 million to 166 workers who have sustained injuries or become ill in the current fiscal year.

Beside these, some destination countries also provide financial assistance to the families of deceased workers.

Though the mechanism for paying financial assistance to the workers and their families in case of injury, illness or death has been reformed in recent years, the process still needs to be made easier, labour migration researchers said.

The families need to apply to the board for the financial benefits, but most of the time they are either unaware of it or are discouraged by the complex process and lack of assistance.

Jeevan Baniya, assistant director at the Centre for Study of Labour and Mobility, Social Science Baha, a research institution, said incidents of fraud happen in several cases.

“One of such cases is insurance companies involving the family members of the deceased workers in an insurance scheme with the money they are entitled to receive instead of providing it to them, in most cases without their consent,” said Baniya.

“Another way the workers’ families, especially those unaware of the process of receiving the benefit, get deceived is through agents mobilised by the concerned institutions.”

Paudel from the Foreign Employment Board said that efforts have been made to raise awareness among people about the financial support schemes.

“One of such examples is volunteers from the Safer Migration (SaMi) Programme assisting the families of migrant workers, including in the Tarai region, with the paperwork to get their rightful benefits,” said Paudel.

“The number of families claiming the compensation amount has increased considerably in recent years because of the programme.”

The Safer Migration Programme is a bilateral initiative between the governments of Nepal and Switzerland. The overall goal of the project is that migrants and their families are better protected by the concerned Nepali institutions and benefit from decent work conditions abroad.


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