Asean single market and the free movement of skilled labour


In a recent blogpost, Kenneth Jeyaretnam highlighted the imminent implementation of the Asean Agreement on the Movement of Natural Persons (MNP). He wrote:

While permanent rights to work in other member countries are excluded the fact that free movement is extended to Contractual Service Suppliers and Intra-Corporate Transferees means that the bar to stop businesses bringing in cheaper PMETs from other ASEAN countries is set very low.

The main text of this Agreement is not hard to find from the Asean website (but a key annex is missing). In its preamble, it gives a nod to “the mandate of the Asean Economic Community Blueprint” dating from 20 November 2007 wherein the “free flow of skilled labour is one of the core elements of an Asean single market and production base.”

Beyond that reference, the text of the MNP sounds rather innocuous, brushing away concerns about employment competition.

For example, Article 2(2) says:

This Agreement shall not apply to measures affecting natural persons seeking access to the employment market of another Member State, nor shall it apply to measures regarding citizenship, resident or employment on a permanent basis.

The text also uses the term “temporary” at several places. But “temporary” is not robustly defined. For instance, Article 3 Definitions (a) says:

Business Visitor means a natural person seeking to enter or stay in the territory of another Member State temporarily, whose remuneration and financial support for the duration of the visit is derived from outside of that other Member State

and then helpfully mentions that “Business Visitor” includes sales representatives, staff coming for purposes of business development,  negotiations, or meetings. That sounds perfectly ordinary, nothing to be alarmed about.

Article 3 Definitions (b) clarifies that:

Contractual Service Supplier means a natural person who is an employee of a juridical person established in the territory of a Member State which has no commercial presence in the territory of the other Member State where the services will be provided,

and who comes here, for example, to “supply a service temporarily pursuant to a contract”. This too isn’t unusual. Sometimes, a foreign supplier needs to send technical personnel to provide installation or after-sales services.

A little further down is where Intra-Corporate Transferees are mentioned. Article 3 Definitions (e) says:

Intra-Corporate Transferee (ICT) means a natural person who is an employee of a juridical person established in the territory of a Member State, who is transferred temporarily for the supply of a service through commercial presence (either through a representative office, branch, subsidiary or affiliate) in the territory of another Member State, and who has been an employee of the juridical person for a period as may be specified in the Schedule of Commitments, and who is…

and then it goes on to explain that it encompasses “Executive”, “Manager” and “Specialist”.

You might have noticed that this section too uses the words “transferred temporarily”.

The closest it comes to defining “temporary” is in Article 3 Definitions (g):

Temporary Entry or Temporary Stay means entry into or stay by a natural person covered by this Agreement, without the intent to establish permanent residence.

Saying no more than that, it made me think: It means anything short of “permanent resident”, and as we know, all Employment Pass, S-Pass and Work Permit holders are not permanent residents either. They are, in officialese, temporary stayers.

The main text of the Agreement suggests that more details can be found in Annex 1. Article 4(1) says:

Each Member State shall, in accordance with that Member State’s Schedule of Commitments in ANNEX 1, grant temporary entry or temporary stay in accordance with this Agreement to natural persons of another Member State…

So of course we look for Annex 1. But it is not attached! No details of Singapore’s commitment can be seen.

Two years initial length of stay

I searched harder. First, I found an academic paper put out by the Jakarta-based Economic Research Institute for Asean and East Asia. Page 8 of that analysis says that the “national commitment” made by Singapore to this Agreement is that Inter-Corporate Transferees shall be allowed an “initial length of stay” of two years.

This seems consistent with mentions on pages 36 and 37. On the former, there is a table showing that Singapore has extended an initial 2-year stay period to Intra-Corporate Transferees under the Asean-Australia-New Zealand Free Trade Agreement. On the latter, a similar 2-year initial stay period is offered by Singapore under the Eighth Package of the Asean Framework Agreement on Services.

As with all such texts, they get mind-numbingly complex after the third paragraph and I didn’t have the patience to keep slashing through the thicket. Each Agreement kept referring to schedules or annexures, which in turn required more clicks. I managed however to locate Singapore’s 8th Package of Commitments as a set of pdf files.

pic_201505_19One of them (click thumbnail at left), contains within its 52 pages commitments to free market access (subject to a few rules) for other Asean companies in a whole range of service sectors from accounting to information technology, to job recruitment agencies to architecture/interior design, to even duplicating services (photocopy shops?) and selling motorbikes.

pic_201505_20The other (next thumbnail) is shorter. One page 3 of its four pages is this statement:

Entry for these intra-corporate transferees is limited to a two year period that may be extended for up to three additional years each time for a total term not exceeding eight years.

Mutual recognition of qualifications

Kenneth Jeyaretnam mentioned something about mutual recognition of qualifications in his blogpost.

Article 13(1) of the Asean Agreement on the Movement of Natural Persons says:

A Member State, by agreement or arrangement with another Member State, may recognise the education or experience obtained, requirements met, licenses or certifications granted in the other Member State ….

This sounds innocuous enough, though it is bolstered by a subsequent non-discrimination clause, which largely says that if we recognise the qualifications of one other Asean State, then all other Asean States able to demonstrate the same standards should qualify too.

But it has to be read in conjunction with another set of Asean agreements. The “Mutual Recognition Arrangements (MRAs) are framework arrangements established in support of liberalising and facilitating trade in services.  MRAs aim to facilitate mobility of professionals/ skilled labor in ASEAN.” It goes on to list mutual recognition arrangements in eight fields: accountancy, architecture, dental, engineering, medical, nursing, surveying, and tourism.

As an example, I decided to look a little closer at the arrangements for nursing. A nurse from an Asean country (“origin country”) is eligible to work in another Asean country (“host country”) if he or she:

From origin country: has a nursing qualification; a professional registration or licence; practical experience of at least three years; compliance with “satisfactory continuing professional development” if there’s any such policy; no violation of professional/ethical standards;

From host country: complies with requirements of host country, e.g. personal medical examination, induction programme or competency assessment.

There doesn’t seem to be any limit to numbers allowed in so long as these conditions are met, or to the duration of stay.

Parallel entry route?

How do these dovetail, if at all, with the government’s criteria for issuing Employment Passes or S-Passes? Work Permits are for unskilled labour, so are outside this discussion. For example, if a business is operating in Singapore and another Asean country and wants to increase its staff strength here, does it have to go through the Ministry of Manpower’s Fair Consideration Framework or can it short-circuit the process? Can it transfer extra PMET staff from that other Asean base into Singapore?

The answer: Yes it can. In the above-mentioned Fair Consideration Framework webpage, it says clearly that one of the exemptions is when “the job is to be filled by an intra-corporate transferee”.  MOM goes further to assure readers that “ICTs refer to those holding senior positions in the organisation or have an advanced level of expertise”, which suggests that only the top few ranks would be within its ambit, yet nowhere is this apparent from the actual text of the agreements we have committed to.

Moreover, the definition of “intra-corporate” doesn’t only mean the same company or between head office and subsidiaries. It includes the very loose term “affiliates” as those of you who are sharp-eyed might have noticed when I first mentioned the definition above.

One saving grace is that the transferee cannot be a fresh hire in the origin country. Somewhere among the documents, I saw a rule that he or she must have worked for at least one year in the subsidiary or affiliate before being considered for transfer to Singapore. This should be a safeguard of sorts against abuse of the system. Then again, it’s not particularly onerous to have a career path mapped out where a new employee  — termed a “specialist” in order to qualify — has to serve an apprenticeship  and complete some training courses (e.g. English lessons) in the origin country for one year, and then be transferred here.

Economic integration is a good thing

Frankly, I am not against the idea of an Asean-wide economic community. If soundly managed, it will give every country, including Singapore, a greater opportunity to develop and prosper. Moreover, no economic community and single market can have meaning without a significant degree of labour mobility. Consider also that Singaporeans want to be able to work in fellow Asean countries, so easier access benefits us too.

What I find troubling is that there has been a democratic deficit in the process of reaching these agreements. This tangle of agreements has been reached in backroom deals among Asean politicians. Locally, there has been little more than the occasional announcement in the mainstream media, dutifully trumpetting the government’s spin, with virtually no searching questions asked. The lack of enough opposition in parliament means another opportunity for scrutiny missed.

I don’t think I am the only one who has to do a couple of hours of websearch to understand just the brief details I have presented here. Most Singaporeans, I’d reckon, have little idea that these treaty instruments have been signed and are on their way to implementation. Their effects however, will not always be hidden. When people start noticing, they are likely to be controversial. As the paper by the Economic Research Institute for Asean and East Asia noted, “some countries have started to become concerned over the ‘free flow of skilled labour’.” To be lurching from one crisis to another is not “good governance”, a boast our government tries to own.

Isn’t it better to have an honest public discussion and convince the public ahead of signing the agreements than to scramble, hide and backtrack on policies (causing much business uncertainty) when controversy erupts? Difficult choices are never politically cost-free, but making them stealthily only to blow up later serves to multiply the cost.

3 Responses to “Asean single market and the free movement of skilled labour”

  1. 1 dotseng 26 May 2015 at 11:54

    If what you write proves true. I am truly shocked. I didn’t know about this submarine treaty thank you for highlighting it and bringing it up.

    Darkness 2015

  2. 2 Sebastian 26 May 2015 at 13:39

    i think that Annex 1 for Singapore can be found here:

    Click to access ASEAN%20MNP%20Schedule%20-%20Singapore.pdf

    a mere 3 pages, compare that to the Philippine’s 42:

    Click to access ASEAN%20MNP%20Schedule%20-%20Philippines.pdf

    and Indonesian’s 5 pages:

    Click to access ASEAN%20MNP%20Schedule%20-%20Indonesia.pdf

  3. 3 usherer 28 May 2015 at 17:38

    Hi, I’ve been concerned about the agreement, and have never been able to make sense of it. What I can say is, based on my experience travelling to Thailand over the last 2-3 years, the Thais have been promoting awareness of the agreement vigorously. Since at least 3 yrs ago, the teaching of ASEAN languages has been embedded in the school curriculum, and the Thais are routinely blasted for their poor command of English, and told to buckle up for the ASEAN integration. Even their 7-11s have promotional campaigns with cute ASEAN mascots. ASEAN flags fly along their roads in their second-largest city Chiang Mai.

    I’m very concerned that there is a black hole of awareness in Singapore. because i wasn’t in the country over the last few years, I couldn’t comment much on it, but always had a niggling suspicion that the government has severely shortchanged us, by leaving us out in the dark, and not prepping us for what they had committed to or even to prep us to optimise these dark deals. Not to mention our already backward policies and laws on labour exploitation, discrimination in the workplace etc

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