Why is Taiwan considered a high risk of forced labor?

Taiwan’s path to prosperity began with labor-intensive industries in the 1960s, laying the foundation for its later emergence as a leading figure in the manufacturing of information technology (IT) products. Today, the manufacturing sector remains a cornerstone of Taiwan’s economy, where the industry relies on a stable and adequately sized workforce to sustain its operations. In response to a demand for labor, Taiwan started to implement policies in the late 1980s in recruiting migrant workers from Southeast Asia.

Currently, the number of migrant workers in Taiwan has surpassed 800,000, with over half employed in the manufacturing sector. A large proportion of these workers are concentrated in the production of electronics components, devices and equipment. Many technology manufacturers in Taiwan that supply products to global brands are expected to adhere to international standards by their customers or partners. In recent years, growing attention has been directed toward the human rights impacts within supply chains, where the scrutiny is particularly concentrated on the migrant workers in Taiwan.

Migrant workers are more exposed to vulnerable situations because of a variety of reasons, many of which are often linked to the prevalence of [unfair recruitment practices and weak governance](https://www.ilo.org/publications/major-publications/global-estimates-modern-slavery-forced-labour-and-forced-marriage.) throughout the migration process. To start, most Southeast Asian migrants seeking work in Taiwan are burdened with high recruitment fees. As a general principle, any illegal benefits extracted from workers during the recruitment process are prohibited, a stance that is also stated in the Taiwanese Labor Standards Act. Nevertheless, serving a three-year employment contract, migrant workers may need to pay approximately US$2,000 (NT$60,000) for the monthly service fee to cover translation, health checkups, and residency applications. Although the regulation does not specify that the service fee is mandatory, many migrant workers remain unaware that this fee is optional. This leads to the situation where many migrants find themselves signing contracts with agencies upon their arrival without fully understanding their rights.

In addition to the fees collected in Taiwan, the majority of migrant workers are also burdened with substantial recruitment fees even before arriving in the destination country. A recent report indicates that these fees can reach up to US$6,000. To cover the costs, many workers take up a loan, often at exorbitant interest rates—sometimes exceeding 40%. The overcharged recruitment fee and its loan interest become the main financial burden for migrants coming to Taiwan, often compelling them to work in order to pay back the debt that is not reasonably assessed. This situation corresponds to the international definition of debt bondage under forced labor indicators, which places them in an unfavorable circumstance that is difficult to escape.

Taiwan inconsistent with international standards

Examining the existing practices, the current approach in Taiwan is inconsistent with international standards. According to International Labour Organization (ILO)’s guidance, any payment made by a worker to secure employment or placement is prohibited, whether a one-time charge or a recurring fee. Despite being labeled as a monthly service fee in Taiwan, the practice contradicts the definition of such charges. As for the recruitment fee charged before the start of the employment contract, either within or across national borders, the fee profoundly violates the fairness in the recruitment process.

Even today, the recruitment fee is not explicitly identified in Taiwan’s regulations. The Ministry of Labor acknowledges the existence of such fees and the associated debts; However, since these charges occur outside of Taiwan’s jurisdiction, the government notes that effective regulation is challenging. In response, Taiwan has promoted cooperation with countries of origin to enhance oversight along the recruitment corridor. Despite these efforts, the regulations in place remain limited in addressing practices on the ground, where enforcement gaps often undermine formal protections.

Amid the gap between international regulations and domestic law, Taiwan’s absence from the multilateral systems like the United Nation has also left room for policy ambiguities and inconsistencies to persist. The current legal framework reveals a significant gap with international best practices. Regulation not only addresses recruitment fees but also other fundamental rights, including health and safety, prevention of discrimination, freedom of association, and the right to transfer employment, among others.

In 2020, Taiwan introduced the “National Action Plan on Business and Human Rights”, based on the UN Guiding Principles on Business and Human Rights. The plan outlines key future directions and measures for human rights protection in corporate operations. While a second edition is expected to be released this year, the current framework still falls short in providing systematic structures that encourage companies to carry out human rights due diligence and evaluate their impacts.

Regulation on human rights due diligence has created unprecedented awareness levels. Traditionally, the company’s risk management has focused primarily on operational impacts on business such as financial loss. Increasingly, the growing recognition is to understand risk in relation to its effects on people, especially those in the supply chain. This shift reflects a broader movement toward human rights due diligence. Taiwanese manufacturers are deeply integrated into the global IT supply chain, frequently partnering with brand companies headquartered in Europe and the United States. Due to external drivers, such as regulatory requirements and reputational risks, these international brands begin to identify and address human rights impacts in the production process. Taiwanese suppliers are therefore expected to meet the same standards. Although existing practices in Taiwan may align with domestic legal requirements, there is more pressure arising from brand companies who are obligated to maintain a responsible supply chain.

Advancing workers’ rights in global supply chains presents challenges, but Taiwan’s role as a crucial sourcing country presents a valuable opportunity for better mitigating risks and improving practices. Given that harm to individuals and violations of human rights are universally condemned, Taiwan’s alignment with international standards offers a clear path to meeting rising global expectations. Upholding these values reinforces Taiwan’s standing as a trusted and responsible partner, both within the IT sector and across other industries, while paving the way for long-term and sustainable development.

(Featured photo by Abhishek Kirloskar on Pixabay)