Saudi ministry issues clarification after report on pending decision to abolish kafala system

Saudi Arabia has said it is working on initiatives to develop their labour market following reports that the Kingdom was working to abolish the kafala system, a foreign worker sponsorship system.

Saudi Arabia has said it is working on initiatives to develop their labour market following reports that the Kingdom was working to abolish the kafala system, a foreign worker sponsorship system. Saudi Arabia's Ministry of Human Resources and Social Development said a decision on the same will be announced when it is 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 organise and develop the labour 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, as quoted by the Al Arabiya newspaper. The Al Arabiya on Tuesday -- quoting unnamed sources - had reported that Saudi Arabia "is set to announce the replacement of the kafala and planned on announcing a decision sometime next week, and that would come into effect during the first half of 2021, aimed at reforming contracts between workers and their employees.

"It is expected that more than 10 million expatriates will benefit from the new system. This initiative is part of other initiatives targeting the quality of life for expatriates, including one for housing and another for entertainment," Maaal newspaper's report read as quoted by Al Arabiya.It further reported that abolishing sponsorship system was first raised earlier this year in February Saudi Gazette. The kafala system ties "workers to their employers, or sponsors, who are responsible for the employees' visa and legal status." Al Arabiya reported that the new law would limit the relationship between employers and expatriate workers under the system, who primarily work in construction and domestic work.

This move would be the latest in a series of economic reforms as the country turns away from 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.

Kafala systems emerged in the 1950s when countries in the Arabian Gulf began hiring migrant workers to accelerate development following the discovery of oil, Al Arabiya reported. 

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