A/HRC/4/24/Add.2 page 7 The Employment Permit System (EPS) 16. After eight years of debate, the National Assembly passed the Employment Permit for Migrant Workers Bill in August 2003, establishing the Employment Permit System (EPS). Initially the EPS was meant to replace the ITS, however, confronted by objections from the employers unions, the authorities decided to operate both the ITS and the EPS. The EPS was introduced in July 2004 in the following sectors, manufacturing, construction, agriculture, fishing and service industries. 17. The EPS began to be implemented through bilateral Memoranda of Understanding (MOUs), signed between the Republic of Korea and sending countries setting out the rights and duties of Governments and the status and benefits for the workers. The procedure involves Labour Ministries of the two countries and excludes intervention of the private sector. By December 2006, nine countries had signed MOU with the Republic of Korea under the EPS including Cambodia, Indonesia, Mongolia, Pakistan, Philippines, Sri Lanka, Thailand, Uzbekistan and Viet Nam. 18. Overall the EPS offers better status to migrant workers than the ITS: the recruitment process is more transparent and statistics show that around 75 per cent of the EPS workers spent US$ 1,100 or less to come to the Republic of Korea. 19. It has also offered an opportunity for a number of irregular migrants to obtain a legal status. In 2003, the number of irregular migrant workers registered by the Ministry of Labour exceeded 227,000 and 80 per cent of them were afforded legal status under the Employment Permit System. 20. EPS workers receive benefits including industrial accident compensation insurance, employment insurance and national health insurance and the national pension based on reciprocity between the parties of the MOU. They are entitled the same legal status as native workers as stipulated in labour related laws and thus guaranteed a minimum wage, the rights to form trade unions, collective actions and collective bargaining. Nevertheless, the EPS fails to provide a judicial mechanism for holding accountable those who violate this provision. 21. The fact that the EPS requires migrant workers to annually renew employment contracts with their employers for a period not exceeding three years places them in a vulnerable situation. The annual extension of contracts depends upon their employers, therefore very few dare to lodge complaints if their working conditions are inadequate, fearing the non-extension of their contracts. Moreover, it also impedes their freedom of movement of work because they are bound to remain within their first employment company throughout the three-year period. Those workers who would like to extend their stay over the three-year period have to leave the country for at least a year before returning. 22. The sum required to join the programme is disproportionately high as most of these workers come from poor or lower middle class families from countries where this sum is about one to two years’ per capita income. It forces migrant workers to borrow money at very high rates of interest or by mortgaging their land or houses. This high indebtedness is an important and the fundamental reason many migrant workers stay on in the Republic of Korea beyond the three years’ limits as it takes most of the three years just paying up their debts.