Saudi Gazette report

RIYADH — The much-anticipated decision to abolish the sponsorship (kafala) system is very imminent, according to sources. Maal online economic newspaper reported, quoting sources, that the abrogation of the law would lead to limiting the relationship between the employer and the expatriate worker to the employment contract that defines the rights and duties of the both the parties.

This historic move comes in light of a series of economic reforms that the country is witnessing after the launch of the Kingdom’s Vision 2030. Under the plan, the abolition of the sponsorship system will give expatriate workers freedom to secure their exit and reentry visas while also getting their final exit stamped on their own as well as taking up employment without any restriction or approval of the employer.

The expatriates will have complete freedom of movement according to what is stipulated in the employment contract.

The final abolition of the sponsorship system in the Kingdom comes as the next step after the introduction of the Premier Residency since last May following the necessary approval by the Shoura Council and the Council of Ministers.

This also is aimed at providing further push to the wheel of the robust economic growth and expanding commercial activities as the new residency system gives expatriates freedom of movement, rights for the issuance of residence visas and visit visas for their relatives and thus attracting more capitals into the Kingdom.

The sponsorship system, which has been in force in the Kingdom for seven decades, since 1371, governs the relationship between the expatriate worker and the employer. Under the system, the worker, upon his arrival in the Kingdom, becomes obligated to work for his sponsor in accordance with the terms of the contract, and he is not entitled to work with others without transferring his sponsorship.

The sponsorship system went through several changes that aimed to protect the human rights, as well as behavioral and financial rights of both the parties. However, a sizable number of employers misused many provisions of the system, which led to calls from international organizations to abolish the system.

The sponsorship system carries much negativity that adversely impacted on unemployment rates as well as on the image of the Kingdom externally due to its misuse by some sponsors for individual gains at the expense of the country’s interest. One of the disadvantages of the sponsorship system is that it opened the way for flourishing black market for visa trade.

On the other hand, the abolition of the sponsorship system is expected to bring about many advantages to the Saudi labor market while supporting the competitiveness of citizens to that of expatriate workers. Another advantage is would be to attract highly competent and specialized expatriates from different countries, as well as to improve the work environment for talented workforce.