The AEC and Labour – will you be able to find those elusive employees?
It is well known that the ASEAN Economic Community (AEC) is due to commence full operations at the end of 2015. What is not so well known is a number of the details of what the AEC implementation actually means for company owners, employees and normal citizens in Thailand. There are high hopes for general improvements, but along with this expectation there is a lack of knowledge and much confusion about how the AEC will operate. This is due to many inaccuracies reported in the media, often stemming from information provided by various politicians and ministry employees in speeches and presentations, who themselves are not well informed or whose departments have not yet made the final One the key areas that causes most concern is the area of labour – or more technically correct “Free movement of Skilled Labour”. The use of the word Skilled is very important, and it should not be mistaken for free movement of people, which is a more correct description of the situation in Europe where borders have mostly been removed, purchasing of land permitted for citizens of any country in any country, and even social security payments can be provided to citizens of other countries that base themselves in a host country. Within the AEC agreements, and despite news articles and some speeches to the contrary, there is no intention to do away with borders within ASEAN, or to allow general widespread movement of individuals, and there is no agreement for one government to make payments to citizens of other countries for such things as health care, unemployment or retirement benefits. Thais should not fear an invasion of foreigners from the neighbouring countries, or needing to support any such workers – any more than they should today. The Skilled concept within the AEC is really aimed at supporting trade, and specifically the Free movement of Services concept covered under the AFAS agreement. Where ASEAN services providers wish to operate or provide their services in another ASEAN country, they need to use one of the four modes of operation. These are shown below in the table and are accepted by the WTO and within the ASEAN context: For Mode 3 and Mode 4 services the table shows that an individual or company may need to be located in the host country to be able to deliver the service. An example of this would be hairdressing which needs to be delivered in-person, whereas a call centre operator could provide a service from a home country via a telecommunications link.
Thais should not fear an invasion of foreigners from the neighbouring countries.
The Free Movement of Skilled Labour is therefore aimed at allowing service providers to move individuals with the needed skills from one country to another as needed for their customers, and to allow individuals to provide their skills in locations where they are needed for the highest price they can obtain.
It is currently not intended as a solution to the needs of factory and white collar employers struggling to fill many vacancies.
Within the AEC Concept the Free Movement of Skilled Labour takes the forms of Mutual Recognition Agreements (MRA’s). Currently there are 8 MRA’s covering Accountants, Engineers, Surveyors, Architects, Doctors, Dentists, Nurses and a Tourism MRA that actually covers more than 30 types of work within the Tourism sector. It is important to understand that the MRA’s are all different, and all also allow host countries to apply their own rules and limitations. It is also only applies to citizens of ASEAN countries working with other ASEAN countries. Within the MRA’s are also a series of tools by which countries can limit or control the skills or individuals, and which can clearly be used to protect such things as home employment and national security. The MRA’s also allow each host country to enforce any visa and work permit rules, and may still use tools such as the Thai system of limiting the number of “farang” workers per local employee. Critically the MRA’s also allow for each country to apply their own internal tests, and this means that a host country may choose to administer such a test in their own language. There are other limitations or controls also, such as the requirements to have been a registered member of a home country’s industry body for a period of time before applying to move under the MRA’s. The effect of the systems established in the MRA’ is that, in reality, there will be very few changes from the number of foreign Engineers employed in a country like Thailand, so the fear that many Thais have today about Thailand being inundated by foreigners is completely unfounded. Equally, the limitations mean that employers or individuals looking to benefit from this concept are likely to be disappointed given the current implementation described. The Joint Foreign Chambers is trying to obtain further information from the Thai government in relation to the implementation details (i.e. how will an employer in Thailand actually goes about bringing in an ASEAN Engineer, and how will an ASEAN citizen complete paperwork for their work permits and visas). The JFCCT is also looking to hear from members of the chambers in relation to what other skills our members are looking for. We would like to highlight or request additions to the current list of eight MRA’s be made as soon as possible. Please let the Thai-Norwegian Chamber of Commerce know what skills you are looking for and how other ASEAN nations might fill these gaps. We are also making recommendations suggesting that work permits be not required for these individuals, or that these individuals are counted as “Thai” for the 4-to-1 rule and capitalisation figures which remain problems for many of our member companies. We will keep you informed as we find out more details.