02/07/2012 (The Star) - Malaysia, the world's second largest crude palm oil (CPO) producer after Indonesia, is now at a crossroads as it juggles between aggressive expansion in oil palm plantations and providing ample workforce to the growing number of estates nationwide.

Currently, upstream plantation operators in Malaysia are facing acute labour shortage of field workers, fresh fruit bunch (FFB) harvesters and collectors in estates.

Foreign workers represent over 70% of Malaysia's total 491,339 workforce in oil palm plantations last year a figure that reflects the alarming dependency on migrant labour mostly sourced from Indonesia, Bangladesh, the Philippines, Thailand and Myanmar.

 
Sabah and Sarawak are where most
of the labour workforce is needed,
says Daud.

The Incorporated Society of Planters Malaysia has pegged the current total labour requirement based on the country's five million hectares oil palm plantation at about 500,000 workers, while 275,000 are needed in the 1.1 million hectares of rubber plantations.

Its chairman Daud Amatzin points out that the oil palm plantation sector in Sabah and Sarawak are where most of the labour workforce is needed but “sadly, their wages are much lower when compared with their peers in the Peninsula.”

The minimum wage for field workers or fruit harvesters in the estates in Sabah and Sarawak start from RM800 per month, while those in Peninsular Malaysia can earn about RM900 per month.

While most big players can easily adhere to the Government's recent call for a minimum wage, Daud says the impact will be challenging for small- to mid-sized players, especially the newcomers in the plantation industry.

The critical sub-sector most affected by the minimum wage ruling will be the 180,000 independent smallholders, which also recruit foreigners as harvesters.

Job appeal
Daud says efforts must be taken to entice Malaysians to work in the estates.

“This can be done via continuous aggressive campaigns and training on skills enhancement as well as on occupational safety. In addition, improvement to the image of estate employees by providing free uniforms, boots, head gear, etc, and other forms of incentives and bonuses may attract unemployed young Malaysians to work in the estates.

 “A simple change of job title from oil palm harvesters to FFB extractor or specialist may reduce the stigma,” says Daud at a recent Palm Industry Labour Seminar organised by the Malaysian Palm Oil Board.

He concurs that jobs in the estates are not popular among the young locals because the plantation locations are often remote with demanding working environments, spartan living conditions and lack of entertainment facilities.

There is also intense competition from other economic activities such as the manufacturing and services industry which provides conducive working conditions, good incentives, clear career advancement and lucrative compensation packages.

Towards this, Daud suggests a review of plantation companies' policy for better salary via the successful pension scheme, profit sharing scheme, cooperatives involving employees, enhancement of house ownership, equity ownership scheme of the estate, employment opportunities for children of employees, better facilities and recreational amenities.

There should also be a minimum wage, and scholarship for children of employees, education allowances and better medical facilities.

 
Estate job in demand only during
economic downturn, says Ramesh.

Key challenges
Sarawak Oil Palm Plantation Owners Association (SOPPOA) chairman Datuk Abdul Hamed Sepawi says the key challenges facing the local plantation sector are:

● Labour supply shortage given the increasing Malaysian total planted areas over the last 15 years.

● Competition from the expanding Indonesian oil palm plantations which create jobs for their people thus rendering recruitment of Indonesian workers to Sarawak more difficult and costly.

● Getting our locals to work in Malaysian plantations.

According to Hamed, the oil palm industry in Sarawak is now short of 20% to 30% of its total labour requirement.

At one point, the acute labour shortage affected the oil palm sector in Sabah and Sarawak resulting in 15% losses amounting to RM3.6bil due to rotting palm fruits.

SOPPOA which represents about 75% of the plantation sector in Sarawak wants the Government to relax the rules on recruitment of foreign workers to ease the growing labour shortage in the state. It also wants the Government to allow human resource outsourcing and extend work permits for foreigners up to 10 years.

Sarawak which relies heavily on Indonesian workers is feeling the brunt of the labour shortage as “more and more plantations were developed in Indonesia while Sabah depends on foreign workers from the Philippines.”

While plantations in the Peninsula are also facing similar labour shortages, Hamed says the situation is not as intense as “they do not have to depend on a single country, but able to get workforce from a host of countries like Bangladesh, Myanmar and Sri Lanka.”

To counter the inconsistent supply of plantation labour workforce to Malaysia, he suggests that Malaysia further embark on R&D, a total mechanisation process to achieve a productivity target of five tonnes per worker, the Government policy on foreign workers must be relaxed, and all stakeholders recognise the importance of FFB harvesters' contribution to the plantation industry.

Management staff
Tradewinds Plantations Bhd group plantation advisor Ramesh Veloo says that to meet the increasing global demand for palm oil, the required land expansion by 2015 is 3.25million hectares, and by 2020, up to seven million hectares.

 This calls for an additional 1.19 million new workers, 14,200 supervisory personnel, 3,550 plantation managers, 7,110 assistant managers, and 3,550 cadet planters by 2020, he says at a recent MPOB labour seminar in Kuala Lumpur.

He says that a recent survey shows that 90% of top plantation executives (on a level higher than senior managers) in the five most prominent listed companies are aged above 52 years. This indicates that it is also difficult to attract the younger generation to take up a career as a professional planter.

An estate job is perceived to be “out of trend” and often the last option for a career. The job is usually in demand only during periods of economic downturn when most other industries suffer.

According to Ramesh, the traditional planter's job previously focused on field operations, with 70% to 80% of the time spent in the field.

Today, a planter is bogged down by affairs of the numerous government, non-government bodies and various departments at the company's headquarters, as well as “the nightmare of labour shortage and the nitty grities of Roundtable on Sustainable Palm Oil (RSPO) principles,” he says.

Planters should focus on four major issues palm nutrition, water management, crop recovery and cost management while those managing mature estates should focus on improving oil yield per hectare.

Meanwhile, a planter with a public-listed company blames the stringent requirements imposed by the RSPO for the voluntary certification of sustainable palm oil for causing many planters to lose focus on the real work in their plantations “as they now need to do more paperwork to get certified.”

He says the tedious certification process is “a sheer waste of time and money and to a certain extent does not bear positive outcomes since the certified sustainable palm oil (CSPO) offtakes from Western consumers are still slow and the premium CSPO pricing to the uncertified palm oil has narrowed down substantially.”

“Rather than focusing on the RSPO certification, why not put in more efforts to solve the dwindling labour issues while trying to lure more locals to become oil palm estate workers?” adds the planter