(Bloomberg) -- Japan should consider abolishing a foreign “technical intern” system that’s often used as a back door for cheap labor from overseas and replace it with a more realistic framework, a panel of government advisers said. 

The aging and shrinking country needs a program aimed at securing foreign workers, not just supporting developing nations by providing training, the panel said in the report released Monday. Participants in the program should have more freedom to switch jobs while in Japan and be given additional help to develop language skills, they said.

With more than 29% of Japan’s population already 65 or older, Prime Minister Fumio Kishida has expressed concern about the country sustaining its ability to function. He has vowed to double spending on children and families to bolster the birthrate, but said little about immigration. 

Japan may face a shortage of more than 11 million workers by 2040, according to a study by independent think tank Recruit Works Institute published in March. It is also facing increasingly harsh competition from other aging developed countries that need labor. 

The number of foreign workers in Japan reached a record of 1.82 million in October last year, according to the Ministry of Health, Labor and Welfare, with the largest group being from Vietnam. About 18% of the total were participants in the intern program.

The system has been criticized in the US Trafficking in Persons Report, which cited cases of coercion, including some where workers were saddled with unmanageable debts to brokers in their home countries. Thousands of interns have gone missing over the years, often because of poor working conditions. The panel recommended that stronger measures be taken to tackle the problem. 

Most participants in the program work for small organizations, often in construction, food manufacturing or metalworking, according to documents presented to the panel. The advisers will continue to debate programs for foreign workers and are expected to present a final report in the autumn, according to the Ministry of Justice website. 

 

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