This record is a partial extract of the original cable. The full text of the original cable is not available.

UNCLAS SECTION 01 OF 02 MANILA 001061 
 
SIPDIS 
 
SENSITIVE 
 
DEPARTMENT FOR EAP/PMBS, G/TIP - LNORIN, EAP/RSP, DRL, 
INR/EAP 
LABOR FOR ILAB 
 
E.O. 12958: N/A 
TAGS: PGOV KWMN PHUM KCRM KCOR ELAB ECON RP
SUBJECT: RECRUITMENT COMPANIES AND TRAFFICKING 
 
REF: A. MANILA 971 
     ¶B. MANILA 645 
     ¶C. MANILA 436 
 
¶1.  (U) This message is Sensitive but Unclassified -- Please 
handle accordingly. 
 
¶2.  (SBU) Summary:  Recruiting Filipinos to work abroad is an 
important national industry in the Philippines.  The GRP 
regulates and licenses recruitment companies through the 
Philippine Overseas Employment Agency (POEA).  Recruitment 
companies often perform valuable services for Overseas 
Filipino Workers (OFWs) and their families staying behind. 
Some recruiters, both licensed and unlicensed, however, 
operate outside of the law and are involved in trafficking in 
persons (TIP).  If POEA discovers a recruitment company 
involved in trafficking or other illicit behavior, it may ban 
it from business and has done so on numerous occasions.  The 
Arroyo administration has worked to crack down on TIP-related 
illegal recruiting, but more progress is needed.  Mission is 
working to identify ways to assist the POEA and other GRP 
bodies track and punish those recruiters that are engaged in 
trafficking.  End Summary. 
 
--------------------------------- 
The Overseas Recruitment Industry 
--------------------------------- 
 
¶3.  (U) An estimated 8.67 million Filipinos work abroad. 
This figure for OFWs represents roughly 10 percent of the 
population and 20 percent of the workforce, with OFW earnings 
representing roughly 10 percent of the country's GDP.  The 
POEA, an agency of the Department of Labor and Employment, is 
responsible for licensing recruitment companies trying to 
attract OFW labor.  According to the POEA, there are 1,036 
licensed recruitment firms throughout the country, but the 
field is dominated by a few large, well-connected agencies. 
While licensing standards are uniform, most recruiters 
specialize by destination country or field of work, e.g., 
health care, entertainment, household help, construction and 
motor pool work, management, etc. 
 
------------------------ 
Licensing the Recruiters 
------------------------ 
 
¶4.  (U) To enter the business legally, a recruitment company 
must first register with the Department of Trade and 
Industry, the Securities and Exchange Commission, and the 
Bureau of Internal Revenue.  Applicants must also demonstrate 
a capitalization of at least 2 million pesos (USD 36,000) and 
pass a criminal record check.  POEA's policy is then to 
review applications and deliver a refusal or a license within 
15 days.  The license is valid for three years and is 
renewable.  The POEA and other GRP bodies, including the 
Presidential Anti-Illegal Recruiting Task Force (PAIRTF), try 
to inspect the operations of licensed companies to ensure 
that their activities are legal.  These inspections are 
sometimes made "sua sponte" (on the initiative of the GRP), 
but more often are in response to a complaint.  The POEA and 
PAIRTF are also involved in cracking down on the many 
unlicensed recruitment companies. 
 
--------------------------------------------- -- 
Profile of Recruiters:  The Good and the Banned 
--------------------------------------------- -- 
 
¶5.  (U) Many recruitment companies demonstrate remarkable 
corporate citizenship.  The larger agencies typically have 
their own social welfare mechanisms, which include services 
to counsel OFWs and their families before, during, and after 
deployment.  Many provide advice to their OFWs and dependents 
on family finances, the challenges of living abroad, and 
re-adjustment after return.  Every two years, the POEA holds 
a large ceremony in Manila at which the top-performing and 
most respected companies receive awards for their treatment 
of OFWs. 
 
¶6.  (U) Some licensed companies are involved in illegal 
recruitment activities, however, including activities linked 
with TIP.  Some firms cheat their OFW clients by promising 
services in exchange for cash payment, but then fail to 
deliver.  It was in response to this problem that the GRP 
formed PAIRTF in July 2004.  A much smaller subset of illegal 
recruitment activities involves companies that are accused of 
engaging in TIP. 
 
¶7.  (U) Upon investigation and administrative review, the 
POEA has authority to ban at least temporarily further 
recruitment activities by companies that have violated the 
rules, and in 2004 banned 36 companies.  In addition, the 
POEA has a list of 38 companies that are &forever banned8 
from recruitment; these are listed on POEA's website at 
http://www.poea.gov.ph.  The most common reasons for banning 
companies include:  cheating workers out of their funds and 
collecting unauthorized fees; misrepresentation and false 
advertising; deploying underage workers; and, doing harm to 
&public health or morality or to the dignity of the Republic 
of the Philippines8 (a catch-all phrase that covers TIP). 
In 2004, there were 2,189 cases filed against licensed 
recruiters on such grounds. 
 
---------------------------- 
Recruiter Involvement in TIP 
---------------------------- 
 
¶8.  (SBU) The GRP and NGOs believe that some -- but very few 
-- licensed companies are involved in trafficking.  The 
figure for unlicensed firms involved in TIP is higher, 
notably trafficking Filipino women to Japan, South Korea, 
Malaysia, Singapore, and some countries in the Middle East 
and Europe.  Profits from TIP-related recruiting typically 
are shared throughout the transaction chain, with the lion's 
share going to the recruitment companies, which often act as 
fronts for criminal syndicates.  For example, Japanese 
brothel owners reportedly pay high fees to Philippine-based 
recruitment companies for Filipino women brought to Japan 
&to entertain8 clients.  Headhunters, promoters, 
consultants, travel agencies, and corrupt officials also 
reportedly take a share. 
 
¶9.  (SBU) Despite the Arroyo administration's firm opposition 
to TIP and efforts to combat it, circumstantial and hearsay 
evidence indicate that recruiters involved in TIP sometimes 
enjoy forms of political patronage, especially from 
legislators and at the local level.  For example, NGOs who 
rescue TIP victims have received telephone calls from angry 
mayors or members of the House.  Moreover, when Japan 
announced in late 2004 that it was planning to implement new 
visa rules aimed at cutting down trafficking, there was a 
chorus of opposition from individual members of Congress, 
apparently instigated by recruitment companies (both legal 
and illegal).  These companies, acting in concert with more 
legitimate recruiters who are worried about reduced OFW 
access to a wealthy market like Japan, as well as many OFWs 
and their associations, had enough influence to convince the 
GRP to press the GoJ to review its planned rules and perhaps 
cancel or re-write them.  The GRP effort failed and the new 
GoJ rules are due for implementation beginning March 15. 
 
 
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Comment 
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¶10.  (SBU) The Arroyo administration, working through the 
POEA, PAIRTF, and other bodies, has tried to crack down on 
TIP-related recruiting, but more progress is needed.  There 
are too many licensed and unlicensed recruitment companies 
with a connection to TIP that remain in operation.  POEA and 
PAIRTF officials, however well meaning, face severe resource 
constraints that make monitoring the activities of the many 
recruitment firms very difficult.  In addition, in a slow, 
inefficient judicial system that is sometimes subject to 
corruption, recruiters charged with crimes often worry little 
about convictions, despite a new drive for prosecutions and 
convictions in the wake of the 2003 anti-TIP legislation (and 
related laws).  Moreover, those recruitment companies that 
are banned are often quick to re-form into new entities, 
which can be difficult for the POEA to detect.  Mission is 
working to identify ways to assist the POEA and other GRP 
bodies track and punish those recruiters that are engaged in 
trafficking. 
Ricciardone