In-depth | Serbia

The exploitation of global workers

By - 13.02.2020

A precarious life for foreign workers in Serbia.

Thousands of kilometres away from home, without any money, passports or language proficiency, they were at the mercy of their employer in Surčin, somewhere on the outskirts of Belgrade.

The three of us were there — two activists and a journalist. All stiff and chilled to the bone, we sat in a car parked in thick fog and waited for them.

“We don’t get paid although we work ten hours a day. This has been going on month after month and we’ve had enough: We want what we have earned and we want to go home,” Kannan explained, leading the way through thick mud. The 26-year-old is one of about 70 temporary workers from India who went on strike because their Serbian employer left them unpaid.

Having come across advertisements for job opportunities in Serbia last February, they were recruited by the Serbian firm Nikolić d.o.o.;  a subcontractor for Chinese and Russian companies carrying out the largest national road construction projects.

However, it turns out that the Indian workers have been working under extremely unfavorable contracts. The contracts are illegal in Serbia but were signed with an American intermediary company. Some of them have no work permits, the workers claim that their passports had been taken away as well, which is why they turned to the Serbian police. 

After the police intervened in mid-January, they got their passports back.The police were contacted for a response to the allegations but they failed to respond.

“We thought everything would be sorted out at some point. But, because the situation has remained the same for months now, we’ve decided to stand up for our rights and our pay,” Kannan says while showing us the workers’ camp set up by their employer, where they have been living for a month.

Kannan, a 26-year-old worker from India left Serbia angry and disappointed. Photo: Saša Dragojlo / K2.0.

Each of the ten square meter rooms is occupied by four people — they sleep, eat and dry their laundry there. Having complained about poor heating, some bought small fan heaters.

There are only four toilets in the entire prefabricated complex. Without any showers available either, the workers resort to a rubber water hose at the back of one bathroom. Even though their living and working conditions are far from adequate, they are more concerned that the money they have flown over half a continent for has not been transferred to their accounts.

The number of foreign workers is rising each year owing to the exodus of Serbian workers to the financially more generous European countries.

“They owe me some 900 euros. It’s hard to find a job in our country; meanwhile in Serbia, the pay is three times higher,” Kannan says, explaining his motivation for coming here.

According to their contracts, the salary is 320 euros, three times the average Indian salary. With overtime rates included, it can reach 400–500 euros. However, all the money they earn is transferred to their accounts in India, so their monthly allowance in Serbia amounts to a mere 50 euros that was deducted from their pay by their employer.

Serbia is giving up jurisdiction within its own borders

The case — already covered by Istinomer — is just one example of foreign worker exploitation in Serbia. The number of foreign workers is rising each year owing to the exodus of Serbian workers to the financially more generous European countries.

“Unfortunately, this is a classic example of worker exploitation because the employer fraudulently recruited workers in India and arranged for them to be transported to Serbia, playing on their precarious position,” Srnja Ignjatović says. Working with the non-governmental organisation ASTRA, the activist has been following the fates of the Indian workers for months.

“The workers have spent eight months here living and working in a group. They have been facing dreadful and downright inhumane conditions, either being denied access to their pay or not being paid at all,” she explains, adding that they have been unable to terminate their employment voluntarily since their identity documents have been confiscated, they have been intimidated and threatened by the police, and are financially (and in every other way) dependent on their employer.

Ignjatović adds that her organizations tried to get answers from a number of institutions in Serbia, but none, including the Labor Inspectorate, replied. 

We also tried to obtain additional information about the claims from the workers, but neither the Labor Inspectorate, the police or the embassies — Indian or the U.S. — replied to us. 

Bojan Urdarević, a professor at the Law Faculty in Kragujevac, having looked at the contracts, believes that the Miami-based firm is merely a front for outsourcing Indian citizens to Serbia.

“The company in the U.S. is registered only pro forma, to justify the existence of an employment relationship. It is a dead letter on paper, and then those same workers are pushed through the “branch” of the firm in Krajlevo,” says Urdarević, who notes that the state also waived the payroll taxes that Indian workers should receive.

The workers’ living quarters provide only the basics. It is a room shared by four people, with poor heating and now finally with showers. Photo: Saša Dragojlo / K2.0.

Apart from the worker exploitation itself, this case is also significant considering how the Indian workers in Serbia ended up becoming legally invisible with no money at hand.

What lies at the heart of the issue is the dangerous global mechanism of worker “outsourcing,” that is bound to give way to numerous forms of abuse if not ended.

It emerged that the Indian workers — though employed by Nikolić d.o.o. — have not entered into an employment contract with the Serbian firm, but instead with an American company called IDEA Capital LLC. The latter is said to have transferred them to Nikolić d.o.o. as part of a business and technical cooperation agreement. The connections between these two companies is Nina Nikolić, the owner of the company in Serbia and the legal representative of the U.S. company in Serbia. 

However, these contracts —  which we have seen  —  with the Miami-based company are contrary to the Serbian Labor Law, do not have a seal and also include fines for the workers ranging from 50 to 500 dollars. Moreover, the documents contain a provision that allows the employer to terminate the contract without any notice or formal reason. 

Mario Reljenović, from the Institute for Comparative Law, confirms that the contracts are not in line with Serbian legislation. Penalties for misdemeanors are, for example, directly against Serbian law.

In spite of this, the Serbian Labor Inspectorate declined jurisdiction over these matters, thus shifting the responsibility to its American counterpart. With this decision, the Inspectorate has paradoxically violated the Law on Labor, which stipulates that every person who works within the territory of Serbia is subject to local laws, notwithstanding whether they are employed by a local or foreign company, or whether they hold Serbian or the citizenship of another country.

Some experts from the Labor Inspectorate warn that Serbia has given up its sovereignty on its own territory.

For the past few years, more and more foreign workers have been arriving in Serbia, primarily to work on construction sites.

Furthermore, the experts’ opinion is that Pandora’s Box is now open, bearing in mind that other employers may now rely on the very same mechanism of registering dummy companies in the United States or elsewhere and subsequently fraudulently hiring foreign workers. Serbia in turn refrains from protecting their rights that they are often unaware of themselves amid their struggle to survive.

“We’d never even been to America — we came straight to Serbia. We found out that our contracts were illegal only when we talked to the girls from ASTRA,” Kannan says.

Exploitation under the auspices of state affairs

For the past few years, more and more foreign workers have been arriving in Serbia, primarily to work on construction sites. According to Goran Rodić from Serbia’s Chamber of Construction Industry, Serbian construction workers are migrating to richer European countries only for their places to be taken by their Turkish, Chinese, Albanian and Azerbaijani peers, and now Indians. 

Kennan, as well as many other people, came to Serbia after they saw the notice advertising jobs in this faraway country. Photo: Saša Dragojlo / K2.0.

The exact number of foreign workers cannot be easily determined since most of them work illegally. Nevertheless, looking at field reports drawn up by trade unions, Rodić estimates that there are about 3,500 workers from abroad, adding that their living and working conditions are inhumane.

“The workers are often living in cramped rooms, they cannot take a shower and they have nowhere to rest after gruelling work, and in most cases working overtime, all the while being paid negligible amounts of money for the jobs they do,” he explains.

“It is too cold for them during the winter and too hot during the summer. As most workers lack suitable clothes for their workplace and are not registered, every injury might prove fatal, many of them never coming to light.”

Another extreme example of foreign worker exploitation that came to public attention is the case of 80 Turkish nationals construction workers at the “Belgrade Waterfront,” a luxury residential and business complex. This joint Serbian-Emirati venture — despite objections coming from opposition parties and experts — has been declared a project of national significance by the government of Serbia.

In mid-2018, the Turkish workers went on strike because they had not been paid for two months, having had no access to food or accommodation unlike their Indian peers. According to the statements they made at a meeting that was held at the construction site, a large number of them were injured and worked illegally in deep water and mud without getting paid.

Serbian institutions have remained deafeningly silent, failing to respond to reports of foreign workers being exploited. The Turkish Embassy paid for their citizens’ tickets back home only after coming under enormous pressure from the media. Still, the workers were not paid.

Rodić believes that foreign worker exploitation is set to continue alongside institutional silence, as the issue at hand pertains to state projects and the interests of powerful companies and their respective countries of origin.

“These are all projects involving foreign countries where shady capital originates from, so there is reason to believe that there is money laundering going on there, taking into account the lack of transparency,” he says.

Multiple reports by investigative journalists and anti-corruption watchdogs have unearthed evidence of suspected money laundering, including around flagship construction projects such as “Belgrade Waterfront.” However, prosecutions are rare, with the Organized Crime and Corruption Reporting Project pointing to a “remarkable disinterest in taking action” shown by Serbia’s prosecutors.”

The largest infrastructure projects related to road construction are implemented by the Serbian government in line with bilateral agreements eliminating public procurement procedures, the public being almost entirely excluded from the process.

Besides Chinese and Russian enterprises, Turkish and Azerbaijani companies build Serbian roads under a veil of mystery. Last year, they were joined by Bechtel, a US construction company.

In addition to this, the projects are often carried out through loans given by the countries in charge of these projects. Accordingly, in case of the Corridor 11 [construction] project that employs the Indian workers — the main contractor is the Chinese company “CCCC.” The project itself is financed by a loan from the Chinese-based “Exim Bank.”

As for the construction of the Čortanovci viaduct on the high-speed railway line Belgrade-Budapest, the main contractor is the Russian state-owned company “RŽD International.”  The project is partly financed by a Russian loan. The Indian workers have worked on this project as well.

Besides Chinese and Russian enterprises, Turkish and Azerbaijani companies build Serbian roads under a veil of mystery. Last year, they were joined by Bechtel, a US construction company that was also hired without any public procurement procedure. Apart from its ties to the Republican Party, Bechtel is known for rebuilding what American bombs destroyed after the 2003 invasion of Iraq by the United States.

“When it comes to such ventures, it is not clear what is in it for Serbia,” Rodić says. “The projects are much more expensive than they ought to be, they are mostly implemented by foreign companies that bring foriegn workers in and they are hidden from the public eye. On top of that, we see that boundaries are pushed in terms of workforce exploitation.”

The consumables and expendables come home

Serbia has long since become a meeting point of American, Chinese and Russian interests, but also a new node for uncompromising worker exploitation in a larger, hyper-globalized capitalist economy.

It is by virtue of these developments that state institutions have virtually abdicated control over illegal — and slavelike — contracts that the Indians, among other workers, entered into with their American-Serbian boss.

On the other hand, the Indian Embassy has essentially given up on protecting their nationals.  Evidently guided by the interests of their own country whose strategic priorities are the export of poverty and the consequential remittance inflow.

“No one helped us at the Embassy. We were only told to bite the bullet and finish up our contract,” Kannan wrote in a WhatsApp message on Friday, January 30 while taking a break from packing his bags and getting ready to return home.

Nina Nikolić, owner of Nikolić d.o.o. and the director of the Florida-based IDEA Capital LLC, agreed to buy airplane tickets for the most intransigent strikers, Kannan being one of them. Hence, she effectively deported discontent, although she will soon have another contingent of Indian workers.

After strikes, negotiation and a number of complaints, some of the workers went back home hoping to have better luck in another country. Photo: Saša Dragojlo / K2.0.

In the end, the strikers say they were never paid and were only handed 70 euros each for travel and food expenses. This would cover their trip from the New Delhi airport to Chennai, capital of the southernmost Indian state of Tamil Nadu — where Kannan and most of his colleagues are from.

Nikolić told us that the workers who left are those who were troublemakers, while the others did not want to leave. She also claims that five of them mistreated their colleagues, forcing them to go on strike. Additionally, she claims the workers were eventually paid. However, Nikolić acknowledges that payment was delayed.

She did not answer our question as to why the workers are employed by the U.S. company. 

They ended their business trip to Serbia as expendables, or rather expired consumables. Burned out and bitterly disappointed, the workers are looking forward to reuniting with their families. Their cries for help have been heard by few in Serbia. In due time though, they are going to try their luck in some other country in desperate need for a cheap and disenfranchised workforce.

“I’m angry and disappointed. I worked in Oman for three years and I never had problems there like I did here in Serbia,” Kannan wrote on WhatsApp. 

He says that he hopes to have better luck in the future in countries like the United Arab Emirates, Saudi Arabia and Oman.

Kannan is left to wander about the global dog-eat-dog labor market, selling the only thing he owns — himself. It seems that luck for him, and others in the same position, is their last resort.K

Feature Image: Saša Dragojlo / K2.0.

Editors’ Note: This piece has been edited after publishing to clarify certain facts and assertions.