Saudi Arabia is considering plans to cancel the much derided foreign worker sponsorship system, known as kafala and replace it with a new form of contract between employers and employees.
More than ten million foreign workers are said to be living in Saudi Arabia under the decade old kafala system, which rights groups say leaves workers vulnerable to exploitation. Kafala requires them to be sponsored by a Saudi employer and be issued an exit/re-entry visa whenever they want to leave the country.
The move would be the latest in a series of economic reforms as the country turns away from its dependence on oil revenues under the Kingdom's Vision 2030. The abolition of the sponsorship system would give expatriate workers freedom to secure exit and entry visas, receive the final passport exit stamp without a sponsor, and gain employment without approval from a sponsor.
"The Ministry of Human Resources and Social Development intends next week to announce a new initiative that improves the contractual relationship between employers and expatriate workers," said Reuters citing unnamed sources. The initiative will be implemented in the first half of 2021.
Reports of the kingdom abolishing the system promoted Saudi Arabia's Ministry of Human Resources and Social Development to release a statement. It said that Riyadh was working on "many initiatives" to develop the labour market and that decisions will be announced when they are ready.
"In reference to what has been circulated about changes in the framework of the labor contractual relationship in the Kingdom, the Ministry of Human Resources and Social Development clarifies that it is working on many initiatives to organize and develop the labor market, and it will be announced as soon as it is ready. The Ministry calls upon everyone to obtain information from its official sources," the ministry said in a statement today.
The kafala system has been described as modern day slavery, as it creates a vast power imbalance between the worker and the employer, which facilitates abuse.
Plans to abolish the system were first announced in February but there had been little progress towards that goal.