Malaysia to expedite foreign labour recruitment with Indonesia

• Malaysia intends to expedite the memorandum of understanding (MOU) signing process with Indonesia in relation to the recruitment of foreign workers for the construction sector, said Senior Works Minister Fadillah Yusof.
• He said this matter had been discussed with the Home Ministry and Human Resources Ministry during the cabinet meeting on 12 Jan 22. “Both ministers will go to Indonesia to settle several outstanding issues,” he told reporters.
• Fadillah said among the biggest challenges in the entry of foreign workers were compliance to the standard operating procedures and also the Employees’ Minimum Standards of Housing, Accommodations and Amenities Act 1990 (Act 446) whereby construction companies should provide housing and accommodation.
• Fadillah said the MOU signing with Indonesia has been scheduled for Feb 22, adding that an MOU for the same purpose with Myanmar had been finalised. An announcement on the entry of foreign workers will be made by the Human Resources Ministry soon, he added.
• Separate;y, Sime Darby Plantation Bhd warned that labour shortages at palm oil plantations in Malaysia because of coronavirus border closures will worsen in early 2022 compared to the last six months until workers are allowed to return.
• Mohamad Helmy Othman Basha, managing director at Sime Darby Plantation, also told a conference that there was a shortage of more than 75,000 workers resulting in a potential 20% to 30% hit to production.
• Sime Darby Plantation is the world’s biggest palm oil planter by land size and said in 2021 that foreign workers made up 75% of its employees. Mohamad Helmy urged the industry to advance automation and mechanisation efforts, as well as search for “out of the box ideas” to hire more locals.
• Malaysia’s border remains closed in a bid to curb the spread of Covid-19 and restrictions on the hiring of foreign labour have been in place since the pandemic started. In 2022, Malaysia approved the entry of 32,000 plantation workers to ease the acute labour shortage.
• Plantation Industries and Commodities Minister Zuraida Kamaruddin told reporters on the sidelines of the conference that talks were still ongoing between Indonesia and Malaysia, with Indonesian migrant workers only expected to enter around mid-Feb 22.
• “They want to sign a memorandum of understanding which covers employment in the industry and once we ratify that then they will allow their people to come to Malaysia,” she said.
• Zuraida explained that there are also other factors being discussed with Indonesia, namely on the living quarters of the workers and their social welfare here.
• “On salary, we are not worried, because the minimum wage is MYR1,200 and on average the palm oil workers are earning MYR2,200 per month,” she said.
• Asked if Indonesia requested a higher minimum wage, Zuraida said the ministry will engage with the plantation companies and will negotiate back with the government to find a more amicable solution.
• Meanwhile, the minister wants to ensure that the plantation industry continues to have a supply of labour to avoid the loss of fresh fruit bunches and have consistent palm oil production.
• However, she stressed that this is only a short-term strategy, as, in the next five years’ time, the country would be reducing its dependency on foreign labour and replace it with robust automation and mechanisation.
• Malaysia is also discussing labour supply agreements with India, Bangladesh and Thailand to provide workers for the plantation sector, she said.

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