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A Russian contractor stands over two North Korean labourers as they renovate the main post office in Vladivostok.MARK MacKINNON/The Globe and Mail

Babai, as his bosses call him, smiles often but nervously. Working in Russia is great, he says, because the pay is much better than what he would make at home in Pyongyang. But, he quickly adds, life in North Korea is "very good," too.

The truth is that Babai – a thin, wiry 48-year-old – doesn't see a ruble from the Russian firm that assigns him to spend upwards of 12 hours a day renovating the inside of an old bank building. Instead, his wages are collected by a political cadre from the Workers' Party of North Korea. The approximately $80 a day his labour earns is then sent back to the government in Pyongyang, providing the totalitarian regime of Kim Jong-un with needed cash.

Such arrangements are an open secret in Vladivostok, a city that underwent a $20-billion overhaul before hosting the Asia-Pacific Economic Co-operation summit last weekend. Twenty-three world leaders, including Prime Minister Stephen Harper, Chinese President Hu Jintao and U.S. Secretary of State Hillary Clinton descended on Vladivostok for 48 hours of talks about the global economy.

North Korea's Stalinist leadership has never been invited to an APEC summit, but the handiwork of Pyongyang's army of exported labourers is on display everywhere in this port city, from the rebuilt pedestrian shopping mall in the middle of Vladivostok to the restaurant-lined boardwalk along the city's Pacific Ocean shoreline.

Finding a North Korean work gang for a job the next day is "as easy as one phone call. Maybe two," said Denis Dotsenko, a contractor who has been using North Korean labourers for the past two years on interior renovation jobs around the city as Vladivostok raced to get ready for APEC.

You can also find them through advertisements on the Russian equivalents of Craigslist. "Korean team! Quality, speed, reasonable pricing! Any type of apartment refurbishment! Professionals! Industriousness [and] promptness guaranteed!" reads one of six such postings on the forum.

"I pay the captain 75,000 to 80,000 rubles ($2,315 to $2,470) a month" per worker, Mr. Dotsenko explained. Some of that money, he said, theoretically goes to the workers' families back in North Korea. "But ,of course, there's no guarantee it will get there."

Speaking in broken Russian he's learned in the two years he has been working in Vladivostok, Babai says he first arrived in the city from Pyongyang on a train full of other North Korean workers. He works 12 to15 hours a day, then he returns to an apartment he says he shares with "more than 100" others near the city centre in a Soviet-era building that, from afar, appears abandoned, with not even curtains in the windows.

Others live in an abandoned underground bomb shelter – lit only by a single, bare light bulb – that is dug into a hillside near the city's waterfront. At one construction site in the centre of Vladivostok, North Koreans took turns napping in the back of a military truck between shifts.

"Once a week they have a political meeting. The so-called captains come to the construction sites and collect the money earned by the workers," Mr. Dotsenko said, adding none of the political cadres did manual labour themselves. None of the North Koreans Mr. Dotsenko hired over the past two years had ever asked to be paid directly. "If they work for themselves, they might be killed, or something could happen to their family."

It's not clear whether North Korean labourers were used in the building of the new campus of the Far Eastern Federal University on Russkiy Island, which was used to host the weekend-long APEC summit. But local business people say they were told several weeks ago to stop using foreign labourers while the APEC leaders were in town, likely to avoid questions and criticism from the international media.

"After APEC is finished, they will come back," said Marina Lomakina, general manager of Nash Dom Primorye, one of the largest construction firms in Russia's Far East.

Even during the summit, North Korean labourers could still be found around the city, renovating the city's main post office, a project that wasn't finished in time for APEC, or working out of sight on interior projects. A pair of political cadres – sporting Kim Il-sung badges on their lapels – were also spotted shopping for groceries in Vladivostok last week. Russian contractors say only the cadres are allowed to go into the city on their own.

Ms. Lomakina said Vladivostok – which Vladimir Putin's Kremlin envisions as Russia's Pacific Coast capital – is preparing a casino and gaming zone to draw Asian tourists. "If we're going to have an international entertainment zone, we'll have a demand for workers. The cheapest workers are from North Korea, then China, Uzbekistan and Tajikistan."

"The North Koreans are seen as the best foreign workers... They work intensely from morning until night. They don't require high payment, or demand decent food or living conditions," said Aleksandr Latkin, professor of economics at Vladivostok State University. "It's a form of slavery."

North Korean work gangs have been sent to Russia since the Soviet era, when their labour – they often worked in Siberian logging camps – was used to reduce the growing debt the regime in Pyongyang owed to its Cold War patrons in Moscow. More recently, the North Korean regime has used work gangs to generate desperately needed cash, raising at least $7-million in 2009 from its share of the income from Siberian logging camps alone.

The late Kim Jong-il used one of his last foreign trips last summer to travel to Russia for a meeting with then-president Dmitry Medvedev. The leaders reportedly negotiated for more North Korean workers to be allowed to work in Siberia and the Russian Far East.

The practice of sending work gangs abroad to raise cash has continued and expanded under Kim Jong-il's son and heir, Kim Jong-un. South Korean and Chinese media have reported that a deal was struck earlier this year to send 20,000 North Korean labourers to factories in northeastern China.

Russian contractors say they like hiring the North Korean work gangs because – unlike many other migrant workers – they're in the country on legal work visas under the arrangement between Pyongyang and Moscow. Local economists put the number of North Koreans working in Russia's Far East at between 10,000 and 20,000, with at least 3,000 in Vladivostok alone.

"It's the exploitation of the North Korean people to try and perpetuate a regime that at its core is rights-abusing and illegitimate," said Phil Robertson, Asia researcher for New York-based Human Rights Watch. "These people – who I'm sure are working very long hours under very hard circumstances – are hostage to whatever situation they're presented with when they arrive in Vladivostok."

Babai doesn't complain. He doesn't dare. His arms are thin, but firm with muscle. He wears a green camouflage T-shirt at work and his face is tanned and unshaven. The only topic that draws him out of his nervous shell is a conversation about his two sons – one 15, the other f4 – at home in Pyongyang.

"Everything is good here," Babai says, looking around anxiously during a rare pause in his current job helping retouch the inside of a Vladivostok bank. But asked when he'll be allowed to go home to see the family he clearly longs to see, he has no answer to give.

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