Bahrain doesn’t often make the headlines. Sandwiched between Saudi Arabia and Iran, the tiny kingdom makes more headlines for the congestion on the King Fahd Causeway than for its economic might.

That all changed at the start of May, thanks to Decree 79 of 2009. The new law, announced by Bahrain’s Minister of Labour Majeed al-Alawai, is aimed at doing away with a sponsorship system for foreign workers that many have claimed is antiquated and open to abuse by the employer.

The sponsorship system common across the Gulf, known by its Arabic name, kafala, is the legal basis for residency and employment. Migrant workers receive an entry visa and a residence permit only if a GCC citizen or a GCC institution employs them. In turn, sponsors exercise full economic and legal responsibility for their employees. The sponsorship system, in use for over three decades, has long been subject to allegations of employee exploitation and abuse.

Bahrain’s new labor law, which will come into effect in August, will allow foreign workers to switch jobs without the consent of their employer. According to al-Alawai, the law will stop the practice of Bahrainis sponsoring several, sometimes hundreds of foreigners, and charging them a ‘

visa fee’ to work with another employer. In effect, the sponsorship system would no longer be open to abuse.

”The end of the sponsor system is the most important aspect of this law, because in my opinion that phenomena does not differ much from the system of slavery and it is not something suitable for a modern country like Bahrain,” said al-Alawai. “That system will be broken and eradicated under the new law, because it will end the absolute power which the employer had over the foreign worker.”

The reforms put Bahrain at the leading edge of reform. They will also help slow the flow of foreign workers into Bahrain and increase the percentage of Bahrainis working in the private sector, according to the country’s government.

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