Debt bondage behind Hong Kong sex trade

A female entertainer accosts a pedestrian outside a bar in Hong Kong's Wan Chai bar and club district
Ed Jones | AFP | Getty Images
A female entertainer accosts a pedestrian outside a bar in Hong Kong's Wan Chai bar and club district

The brutal murders of two Indonesian women in Hong Kong at the start of November made sensational headlines, but less noticed are the sometimes brutal debt burdens that chain migrant workers to low-paying and sometimes dangerous jobs, including sex work.

Both murder victims, Sumarti Ningsih and Seneng Mujiasih, first came to Hong Kong as domestic helpers, but later may have turned to sex work, according to media reports.

Each appears to have left willingly with Rurik Jutting, a British citizen and former Bank of America Merrill Lynch employee charged in the grisly murders. After Jutting called the police to his luxury apartment, Mujiasih was found with her neck slashed, while Ningsih's decomposing body was discovered in a suitcase on the balcony.

While it's not entirely clear what pushed these two women into a high-risk lifestyle, one major cause could be the hefty fees charged by recruitment agencies for the domestic jobs that initially brought them to the former British colony.

After losing her job as a domestic helper, Mujiasih is believed to have overstayed her work visa, partly because she hadn't paid off her agency fees, according to media reports. These recruitment fees are sometimes cited as a reason for pushing workers toward the sex industry. Prostitution is not illegal in Hong Kong, although solicitation is.

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"[They're] embroiled in debt even before they leave the country," paying fees, sometimes called agency fees, which can include charges for placement and training, said Rey Asis, program officer for Hong Kong-based non-governmental organization (NGO) Asia Pacific Mission for Migrants (APMM).

Salaries swallowed whole

The placement fees for domestic helpers in Hong Kong range from around 31,000 to 37,000 Hong Kong dollars ($4,000-$4,700) in total, compared with the city's minimum monthly wage of 4,110 Hong Kong dollars ($530), said Asis. By comparison, in the Philippines, the median salary for a housekeeper is around 129,000 pesos, or less than $3,000, a year, according to PayScale, a compensation data provider.

Around 50 percent of Hong Kong's more than 330,000 foreign domestic helpers are from the Philippines, while around 45 percent are from Indonesia, according to data from Hong Kong's immigration department.

"Sometimes they have to pay their whole salary for [monthly payments] and they are left with nothing. They have to borrow more," Asis said. "It creates a vicious cycle of debt. "

If the workers can't pay, they receive court orders in Chinese and sometimes face illegal collection methods, including death threats, a situation worsened when contracts end before the full two-year term, as is often the case, he said.

"The amount [domestic helpers are paid] can't even afford basic living," said Ann Lee, a spokesperson for Zi Teng, a Hong Kong NGO focused on helping sex workers. In addition, "sometimes the contract will suddenly end and they have nowhere to go."

If a worker gets sent home, the chances of ever shaking free become remote. "The agency will come after her for the debt. Also, [her] family is often angry. They may be pursued by the original recruiter or agency in the home country," said John Gee, chair of the research subcommittee at Transient Workers Count Too (TWC2), a Singapore NGO. In closely knit rural areas, coming back without money can also be seen as an embarrassment, he noted.

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It's unclear just how much recruitment-related debt is out there across Asia. The Monetary Authority of Singapore said it doesn't include it when calculating consumer debt. The Philippines' central bank said its figures come from banks and other financial companies, suggesting fees owed to a recruitment agency likely wouldn't be included. Indonesia's central bank didn't return an emailed request for comment. The Hong Kong Monetary Authority said it didn't collect data on this debt.

In Hong Kong, the placement fee is supposed to be set at 10 percent of the first month's salary, but the government there has little way to police fees charged in workers' home countries.

Differences between HK, Singapore

In Singapore, employers cover the around 2,000-3,000 Singapore dollars ($1,600-$2,400) that agencies charge domestic helpers. The employer then typically deducts the amount from salaries in monthly installments, leaving workers with around 20 Singapore dollars ($16) a month for personal expenses for the first 6-9 months, Gee said.

During this period, many employers won't allow a domestic helper to take time off for fear she will run away without paying, he said.

It isn't clear how often workers return to their home countries saddled with debt, he said. "It's common enough that domestic workers talk about it. They know somebody who did," with workers often citing debt as a reason for suffering through abuse, Gee said.

Within Hong Kong, contract terms can vary widely. At Victoria Park on a recent Sunday, where many Indonesian helpers enjoy their day off with a picnic, one worker, giving her name only as Santi, said she paid 2,600 Hong Kong dollars out of her 4,010 Hong Kong dollar monthly salary for five to seven months to cover the debt.

Another, calling herself Ana, said she and the two friends with her only paid one full month's salary before their debt was cleared. Ana said she'd returned to Indonesia to see her husband and children only once in her two years in Hong Kong. She said she hoped to return once she'd "earned enough," but didn't elaborate.

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Ana said she chose Hong Kong over Singapore in part because Singapore employers aren't required to provide days off, although since 2013, the city-state has required extra compensation for the seven-day workweeks.

Crossing paths with bankers and violence

It's little wonder the banker, Jutting, crossed paths with the two women he is accused of killing – the Wan Chai neighborhood's elevated walkways leading from the subway to the office towers of many large banks pass over the bars catering to the sex trade. Young women in skimpy clothes cluster outside the bars, usually watched over by an older woman, as they try to entice passersby.

But murder in Hong Kong is relatively rare, and sex workers are confronted by other violence more frequently.

The most common is being forced to have sex without a condom, said Kendy Yim, executive director at Action for Reach Out (AFRO), a Hong Kong NGO for sex workers. Around 31 percent experienced this within the previous six months, with 51 percent saying a client removed the condom during sex, according to AFRO's 2012 survey of 200 Hong Kong sex workers. Around 10 percent said a client had been violent, the survey found.

Yim noted not all of the bars admit her NGO to talk with the women, but she believes those arriving on an entertainment visa generally understand the job, although she recalled a woman several years ago who hadn't.

"She knew that she was supposed to dance and to accompany the clients to have a drink, but she didn't expect that she would be asked to go out with the customer," Yim said. While she wasn't forced to go, she was "uncomfortable" and considered terminating her contract, but she was afraid of being forced to pay, Yim said.

Borrowing to come to Hong Kong is the norm, she said. "If they couldn't afford the air tickets at the beginning, they may have to borrow money from the agent or from other friends," Yim said.

Leslie Shaffer | Writer for CNBC.com

In contrast with Hong Kong, TWC2's Gee said it appears to be "very rare" for a sex worker in Singapore to arrive as a domestic helper, partly because a tourist visa is easier and cheaper.

Despite many employer complaints that their helpers are "prostituting themselves," generally they simply have a regular boyfriend, usually another migrant worker, he said.

Help hard to come by

Helping women in Hong Kong's sex industry can be difficult, noted Zi Teng's Lee, citing both language barriers and some migrant-worker groups' resistance to helping sex workers. Cultural differences over distinguishing dating from sex work can also stymie NGOs' efforts.

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"Not all of them see themselves working in the sex industry," she said . "Some of them tell us they want to develop [a relationship] with a guy, but in return the guy sees them as sex workers [and] they feel disappointed."

In addition, these workers often lack even the tenuous support network of those who came on an entertainment visa to work for a particular bar, where they often have a manager or bartender tracking their whereabouts, Lee noted.

Without that support, many will hide abuse rather than report it to the police. "If they work with an employer as a domestic helper, if you are in this kind of trouble, then you lose your job. You have to go back. So you don't say," Lee said. Many also fear the police as "moonlighting" by both migrant workers and those on tourist visas isn't legal, she noted.

—By CNBC.Com's Leslie Shaffer; Follow her on Twitter @LeslieShaffer1