한국법제연구원 KLRI

Ⅰ. Background and Purpose

1. Background
Within 4.5 decades, South Korean’s economic growth has shown an impressive growth which puts the country as the big eleven of economic power in the world with its market value US $ 728 billion in the year 2007. This growth has impacted in the growth of the big industrial sectors in the country. It is noted that South Korea is remarkable in the industry on shipping construction, semiconductor, digital electronic ware, l, petro chemist, textile, and motorbike. This impressive economic development affects on the demand of the workers which cannot be supplied by the people of South Korea in which the government of the country tries to find the solution for this problem.
Prior to 2004, South Korean government implemented an ‘Industrial Trainee System’system for the migrant worker recruitment mechanism. Under this Industrial Trainee System, the Korean government directly appoints private migrant worker recruitment agencies in various countries, including Indonesia. These agencies are responsible in preparing and sending the migrant workers to South Korea. However, a recent evaluation by the South Korean government reveals that this system raises the problems for instant the increasing number of illegal migrant workers. To find solution towards this problem government of South Korea increase their role in regulating and supervising the sending of the migrant workers by changing the system of Industrial Trainee System onto Employment Permit System (EPS) on 1 January 2007.
Employment Permit System is a placement program of Indonesian migrant workers to South Korea which shall be under both governments (G to G). The enactment of the EPS on August 2004 has put South Korea as the first country in Asia who admits the rights of the migrant workers. Under EPS the migrant workers who are coming to the country shall be under the regulation in the MOU of G to G between South Korea and the migrant worker sending country. EPS is formally used as the basic regulation in sending migrant worker in 2007, in 2008 the South Korea government signed MOU with 15 (fifteen) countries with 334,688 migrant workers in South Korea. The countries which had signed the MOU on EPS are Indonesia, Vietnam, Thailand, the Philippines, Sri Lanka, Bangladesh, China, Cambodia, Mongolia, Uzbekistan, and Pakistan.

2. Purpose
The demand of the migrant workers via EPS obviously opens good opportunity for the Indonesian workers. Therefore Indonesian government has duly responded the opportunity to send migrant workers to the Republic of South Korea by signing a Memorandum of Understanding under the Employment Permit System on 9 October 2006 signed by the Indonesian Minister of Manpower and Transmigration Erman Soeparnoand the Korean Minister of Manpower Lee Sang-soo. By the signing of this MOU, South Korea commits to open job vacancy for 5,000 Indonesian skilled migrant workers under the condition that the workers are directly sent by the government.
Contrary to the condition in South Korea, by year to year the population growth in Indonesia increases significantly which affects on the increasing of the workers up to 68.34% from the total population. This increasing has effect on the demand on the job opportunities. One of the solutions done by the Indonesian government is by placing the workers to other countries. This program not only gives solution on unemployment workers but also brings a potential asset in increasing the economic sector for Indonesia. Nevertheless the sending of the Indonesian worker to other countries also brings problem such as salary problem, prosecution, sexual abuse, employer problem, job agreement problem, agency problem, document problem, and many more.
The EPS with its two conditions which only accepts the migrant worker from formal sector and the process shall be under government (G to G) not private sector, bring a new hope for the migrant workers from Indonesia. This system is believed to be able to give protection and legal surety for the migrant workers. Meanwhile, South Korea government sees this system as a new hope also to have qualified migrant workers in answering the workers demand. Based on the above condition it is necessary to study the empirical practice of EPS between the Republic Indonesian Government and Republic of South Korea government, which become the basic regulation in placing and sending the Indonesian migrant workers to South Korea nowadays, whether this collaboration concept which has been implemented for 6 years is the problems solution for both countries. Besides that, it is also necessary to know the chance for the Indonesian migrant workers in South Korea in mapping the potential sectors for the migrant workers including the minimum skill identification required in the each sector.
The research is designed as a qualitative study. Data collection and analysis in this study is done through these following methods:
1. Literature Study, this is collecting all literatures which supporting this study, especially those which are relevant to laws and theories on sending migrant workers and EPS.
2. Collecting Data and Information through discussion with the relevant parties in order to obtain valid data and to avoid wrong interpretation.
3.Deive Analysis towards the implementation in placing and sending Indonesian migrant workers to South Korea through the EPS.
4.Formulating of alternative solution based on the data analysis in the collected information.

Ⅱ. Main Contents
Based on the series of the research process that has been done, it is found the following problems:
1.The implementation of EPS began in August 2004. This system constitutes as a core migrant worker policy replacing the muchcriticised Industrial Training System. In principle, the EPS positions migrant workers as the complement to Korean native workers. EPS workers are guaranteed of legal protection equal to those accorded to native Koreans. We identify two main features that become the advantage of EPS system: that it is executed upon a g-to-g scheme and that it covers specific formal job sectors rather than informal ones. Statistics show that the number of EPS test-takers is increasing through years, testifying the popularity of EPS among low-skilled jobseekers in Asia.There have been several amendments to EPS MOU between Korea and Indonesia. We do not see significant correlation between amendments and fluctuation of employment of Indonesian migrants in Korea. Nevertheless, we find that there are certain weaknesses in the implementation of the EPS. These weaknesses deserve further review in subsequent research.
2.In the second section of our discussion, we found that Korea’s labour market system is fully demand-driven by Korean MoEL. Because the EPS system seeks to match Korean employers with thousands of low-skilled migrant workers, Indonesia’s supply of migrant workers must have competitive edge in order to seize the most from whatever portion that the MoEL allocates annually. We do not see any chance to turn the system into a supply-driven one. In principle, Korea’s labour market itself offers a lucrative chance for Indonesian migrant workers. There are sizeable numbers of Indonesian workforces who seek jobs in the secondary labour market because they have low educational attainment. On the other side, Korea’s labour market is in a shortage of low-skilled workers because their own native Koreans have shunned and refused to take the 3D jobs.
3.There are external and internal challenges that might hinder Indonesian government’s effort in preparing qualified migrants. External challenges include the incapability of the Korean government to protect migrant workers’labour rights. There is a cornucopia of evidence showing that a number of migrant workers in Korea being denied of their rights. In addition, EPS as the system that matches the jobseekers with employers fails to provide a reliable job-matching system. At the moment, there is a condition of asymmetric information where both employers and jobseekers remain ignorant of each other.Internal challenges include the awkward position of the Indonesian government who is unable to contribute to the betterment of EPS system, owing to Korea’s heavily demand-driven labour market. Another challenge is how to prepare migrant workers for the competitive EPS environment. Qualified migrants are those who can answer the demand from Korea. There are indications that Korean employers overlook jobseekers’ educational attainment and directly judge jobseekers based on their language proficiency and certain nationality-based preconceived opinion. There are some unfavourable traits or attitudes that Korean employers find in Indonesian migrant workers, for example tardiness. This is particularly a big challenge because engineering society’s behaviour is not an easy task to accomplish.
4.Measures the Indonesia government should take to prepare qualified migrant workers in face of the Korean market opportunities under the Employment Permit Systems are seen from the different perspectives below:
a. Government-to-government approach
b. Government approach to jobseekers
c. Government approach to Korean employers
With the observations conducted in this research, we conclude to give recommendations as follow:
1.A single registration system needs to be pursued, additionally the minimum skills required in the job offered for labour migrants also needs to be announced. This recommendation is considered seeing that the double registration system that has been implemented is inefficient as besides it takes a copious amount of time, it does not give a legal certainty for migrant worker applicants in the process of application. This system does not only affect the workers alone, but the employers are also not guaranteed to gain quality workers with the double registration system.
2.It is also necessary to analyse the policy regarding the fluency in Korean language and how its standards should be the same in all sectors as learning the Korean language is not an easy task to pursue for people that are not capable of speaking Korean in the first place. It is important to note that the pupils targeted in EPS is a secondary market where its applicants commonly are not people with tertiary education. Thus in suit of this, standards for fluency in language should be the same even though the skills for the job , in principal, requires them to be fluent.
3.There also needs to be a two-way discussion between the recipient and sender country on the demand of workers from recipient country and the supply of human resources from the sender country so as to optimise the use of workers. The placement of employment in EPS, up until now, is determined unilaterally by prospective employers and offered to public. This is becoming less efficient because many sectors end up not fulfilled.

Ⅲ. Expected Effect
The findings of this study are important input for both countries. For Indonesia it helps the identification of challenges faced by the government in preparing qualified migrant workers and efforts to respond labour market opportunities in South Korea. On the other hand, for South Korea, by understanding of recruitment system of the migrant workers sending country, it can help the country in simplifying the recruitment system, as a guarantee to get qualified migrant workers.

CHAPTER Ⅰ. INTRODUCTION 15

CHAPTER Ⅱ. ECONOMIC AND LEGAL ANALYSIS 27

CHAPTER Ⅲ. CHALLENGES TO WELL REGULATED LABOUR MARKET 159

Chapter Ⅳ. CONCLUSION  & RECOMMENDATIONS 247