Passport Confiscation Question

I have been offered a job at a big newspaper in Dubai (all good - money's great, allowances are superb etc), but there is one huge sticking point.

The company, who shall remain nameless, want to keep my UK Passport (although I live in the USA) until such time as "you need to travel."

Now, I have read that even the UAE's Minister of the Interior says that it's illegal to keep an expatriate's passport, so what are they playing at?

Is it an "unwritten rule" for companies to do this? Is any of this weird behaviour normal out there?

I have already told the HR person I'm dealing that they will not be getting my passport under any circumstances, so I'm waiting to hear back from them.
 
Thanks for any answers any of you may have.