Palm Oil Association Wants Migrant Workers Recruitment Freeze Lifted

---

 



As the country moves towards national recovery after two years of the Covid-19 pandemic, the Malaysian Palm Oil Association (MPOA) has urged the government to lift a ban on migrant workers recruitment.
MPOA chief executive officer Mohamad Nageeb Wahab said this was as the industry has over the years became reliant on migrant workers, representing about 84 percent of its total workforce, mostly doing harvesting work.
"We plead to the government to unfreeze the recruitment of guest workers to enable the industry to optimise production at profits and share its wealth with the nation in this recovery plan," said Nageeb during a panel discussion at the virtual National Recovery Summit today.
"We have shown that we have been able to contain the pandemic since the beginning.
"There have been very low numbers (of Covid-19 infections) in our sectors, and we shall continue to do so as a responsible corporate citizen," added Nageeb, who represents 121 MPOA member companies operating in approximately 40 percent of palm plantations by area.
Over the years, he said it remains difficult for the companies to hire local workers due to low interest, including to replace migrant workers who returned home during the start of the pandemic last year.
"The fallacy of foreign workers being cheaper is not at all true.
"In fact, it is costlier to employ guest workers by virtue of the high cost involved in the recruitment and training," he added.




MPOA chief executive officer Mohamad Nageeb Wahab
Nageeb estimated a shortage of some 75,000 workers which translates to an estimated 20 percent to 30 percent shortfall of potential production.
"In 2020, we concluded, as a result of this shortfall, the industry’s loss in revenue is estimated to be about RM10 billion to RM12 billion on the back of the average CPO price of around RM 2,600 per metric tonne.
"And that big reduction in revenue resulted in the reduced contribution in taxes of about RM1 billion to the government," he said.

The Home Ministry through its ongoing rehiring exercise is allowing undocumented migrants who wish to remain in Malaysia to be legalised under eligible employers, including in the plantation sector.
As of Aug 20, Immigration Department statistics recorded 174,068 migrants registered under the Labour Recalibration Programme, available for rehiring until Dec 21 or until an ongoing vaccination drive for migrants is over.
Immigration Department deputy director-general Makhzan Mahyuddin previously said the cost of hiring for the agriculture and plantation sectors is RM2,535 per worker, while for the construction, manufacturing and services sectors is at RM3,745 per worker.


Aside from reduced profits, Nageeb said some 500,000 smallholders' livelihoods solely depend on oil palm, with an additional 3 million dependents.
On the ground, he said the shortage of harvesters had led to losses and wastage, resulting in higher costs for plantation companies.
"The oil palm sector is at a breaking point.
"That 20 to 30 percent reduction in revenue will fast escalate to much higher numbers if left unchecked. 
"We may not be able to compete with our neighbours by virtue of our higher cost of sale and wastage," added Nageeb.

In June, Bloomberg reported that Indonesia is set to churn out a record crop this year as favourable rains boost yields, according to PT Astra Agro Lestari, the country’s biggest-listed planter.

It was reported that production in Indonesia may climb by 2 million tonnes to reach 53.6 million tonnes this year, with an output of fresh fruit bunches rising gradually to a peak from this month through November. - Mkini

---