Finance Minister Moshe Kahlon’s plan to bring Chinese construction workers to Israel to accelerate home building has hit a diplomatic snag as Beijing conditions signing a bilateral labor accord on its nationals not working in West Bank settlements.
China’s condition, which it says is due to safety concerns rather than politics, has snagged implementation of a year-old cabinet resolution authorizing an increase in the number of foreign construction workers initially to 8,000 and later to 15,000. The extra workers are part of a range of government efforts to build more homes and bring down prices, but without an accord with China, the 8,000 target hasn’t been reached.
The stalemate with China comes as Israel comes under pressure from Europe to distinguish between pre-1967 Israel and West Bank settlements. Last year it added clauses to a key scientific accord that barred European Union money from aiding West Bank institutions and it now moving forward with plans to require separate labelling for products made in the West Bank. Prime Minister Benjamin Netanyahu’s government is determined to fight such moves.
The negotiations with China are part of a series of bilateral accords Israel has sought to reach with governments to end abuses of foreign guest workers. Since 2011, Israel has signed bilateral agreements with Thailand and Sri Lanka regarding farm workers, and with Bulgaria, Moldova and Romania for construction workers. Negotiations with Nepal and Sri Lanka are under way for home healthcare workers.
Israel’s new policy came after the government received low score from the United States State Department on labor practices and was hit by a host of petitions with the Israeli High Court of Justice over abuse of foreign workers. That coaxed officials into revising policy four years ago so that foreign construction and farm workers would be employed through government-to-government agreements.
A long-standing arrangement under which private companies contracted directly with Chinese firms to supply the labor had resulted in allegations of serious labor law violations. Testimony collected before 2010 from Chinese construction workers in Israel by the Hotline for Refugees and Migrants, a nongovernmental organization, showed they were forced to pay commissions in violation of the law of up to $30,000 for a visa. Saddled with a debt even before they began working in Israel, the workers were effectively hostages to their employers.
The agreements signed so far cover about 12,000 workers, and the Israeli government has expressed satisfaction that the bilateral pacts are adequately protecting guest workers’ rights: They are no longer burdened by debt and have access to a hotline for complaints.
Israel initially delayed starting talks with Beijing because Chinese government agencies charge workers sent abroad commissions and because of concerns about corruption in local government.
More recently Beijing has cracked down on corruption and has shown greater interest in an agreement regulating the terms for Chinese workers in Israel. As a result, Israel renewed the talks with China about 18 months ago and the main points of a labor pact have reportedly been settled, including the contentious issue of commissions. Yet, despite great interest from Israeli builders in Chinese labor, the two sides have failed to sign an agreement.
Beijing has insisted that local governments continue collecting commissions equal to one month’s salary for each year spent working in Israel. Because Chinese workers generally come to Israel for five years and earn an average monthly salary of between 5,000 and 7,000 shekels (roughly $1,300 to $1,800), that works out to about $6,000 per worker.
Under Israeli law, commissions are prohibited, but Israel has relented on the condition that the commissions be paid by the Israeli contractor rather than the Chinese employee. The Israel Builders Association reportedly agreed, but in a statement the organization said it had not promised to pay the sum.
Meanwhile, China is demanding that its nationals not be employed beyond Israel’s pre-1967 borders, meaning primarily the West Bank. Last year home construction in settlements accounted for just 3% of all housing starts in Israel, according to the Central Bureau of Statistics, but putting settlement construction outside the accord would be politically unpalatable for the Netanyahu government. So far, it has refused to accede to the demand.
Although the Israeli government could set its own policy regarding Chinese workers in the absence of a bilateral agreement with China, such a move would put the government in a difficult situation with the High Court and the U.S. State Department. It could also arouse stiff opposition from officials in the finance, interior, economy and housing ministries, who are warning that a retreat from a policy of bilateral agreements would damage Israel’s reputation and harm efforts to encourage more Israelis to work in agriculture and construction. The Foreign Ministry said efforts to come to an agreement with the Chinese government are continuing.