18 November 2001 (Business Times) - IN a move intended to reducedependence on foreign labour and increase employment opportunities forlocals, the Government has shortened the validity period of work permitsto three years.It also announced that foreign workers who have been here for three yearsor more are to be sent home. To avoid causing a disruption in production,employers are given a grace period of three months to make the necessarypreparations to send them home.Some employers, though, say the policy change will seriously affect theirhuman resource planning."It is difficult to plan human resource needs when the policy on foreignlabour keeps changing," says Malaysian Employers Federation executivedirector Shamsuddin Bardan.Only 10 to 15 per cent of the workforce of the manufacturing sectorconsists of foreigners, so it is not as badly affected as some othersectors. Nonetheless, there will be problems for many companies, saysFederation of Malaysian Manufacturers vice-president Datuk Paul Low."Normally, foreign workers are employed at the same time. If all have togo home at the same time, there will be interruption in production. Weshould stick to six or seven years. When work permits are coming up forrenewal, the Government should look at it caseby-case on the basis ofneed." Employers also say it is not cost effective to send foreign workershome after just three years because of the heavy expenses in therecruitment process. They feel they should be given the option to keepforeign workers who have a proven capacity for work beyond the threeyearlimit."A lot of cost is involved in medical examinations, transportation andlevies. It is better to send home those that are not so good and retainthe good ones. After three years, we know the good ones," says Shamsuddin.Malaysian Palm Oil Association chief executive M.R. Chandran says oil palmplantation owners need a longer period to spread out the costs as theyhave to fork out at least RM1,400 for the recruitment of each foreignworker.The recruitment process also takes three to four months while on-the-jobtraining is another seven to eight months. So, foreign workers only beginto contribute to the company in their eighth or ninth month of employment.He says the palm oil industry will have to send 28,300 foreign workershome by the end of next year and sustain a total loss of RM1.05 billion.The MPOA, which represents 96 palm oil companies, is appealing to theGovernment for a year's grace before the new policy is enforced.Housing Developers' Association Malaysia president Datuk Eddy Chen LokLoi, meanwhile, says the industry will become very shorthanded whenforeign workers are sent back as locals are not entering the industry.Foreign workers make up more than 70 per cent of the country's 500,000on-site construction workforce.Chen is also concerned about deterioration in the already poor quality ofworkmanship because foreign workers who have had three years' experiencewill be replaced by those without experience."We are essentially getting farmers to do bricklaying, carpentry, wiringand even plumbing. Quality of workmanship cannot be improved if we replaceexperienced workers with farmers." He says the Government should considerSingapore's example and set up training institutes so that foreign workerscan learn construction techniques in their home country before they areallowed to enter the country."It is cheaper to set up training institutes over there to train them thanto have them learn from scratch on the job when they get here. Now, anyonecan come over. Only people with training or experience should be allowedin." He also feels the Government should be strict about repatriatingforeign workers who are not needed because they are taking jobs away fromMalaysians."Foreign workers are taking over work from locals. They are even goinginto sub-contracting work, where there is a lot of money to be made.That's why they can build big houses and take over Malay reserve land,"Chen adds.Employers also contend that the policy will not benefit unemployed localsas they are generally not interested in the jobs currently held byforeigners. Most of the 700,000 foreign workers perform low-end jobs inthe agricultural, construction, service, furniture, manufacturing and foodsectors."Let's be realistic. Malaysians prefer easier jobs. Foreign workers aremainly in the lower end, heavier kind of jobs. In the plantation industry,for instance, very few locals want to work in the industry," saysShamsuddin.Unionists, however, contend that locals shun employment opportunities incertain sectors because wages are deliberately kept low. They also notethat working conditions in these sectors are very poor."Some companies are deliberately keeping salaries low to encourage a highturnover of locals and convince the authorities to allow foreign workers."Half the workforce of a metal fabricating firm in Bangi is foreign.Locals usually leave after one or two weeks because the starting salary isonly RM400."On the other hand, two neighbouring companies in the same business do nothave any foreign workers. They have no problems getting locals becausethey pay better," says Malaysian Trades Union Congress secretary-generalG. Rajasekaran.National Union of Plantation Workers national executive secretary A.Navamukundan says employers have to face the realities of the job marketand offer competitive terms if they want to recruit locals.He says plantation owners, in particular, cannot run away from the factthat a stable workforce is vital because the work, especially harvesting,is recurrent. Foreigners and contract workers, he notes, are not going tohelp bring the stability that the industry requires.In the peninsula, foreign workers make up some 45 per cent of theplantation workforce. In Sabah and Sarawak, it is as high as 90 per cent."For too long, the industry has been living by the philosophy ofexploitation of labour for profit. This mindset has got to go. You arelosing your labour to other sectors of the economy," says Navamukundan.He says the Government has a big role to play in improving the welfare ofplantation workers as it is an important sector of the economy and a majornet foreign exchange earner."The industry is an important taxpayer. A little bit of the tax ploughedback into the industry will go a long way towards arresting this rapidout-migration of plantation workers. The Government has held discussionswith NUPW and Mapa but the resources allocated to address the problems andthe political will to deliver it within a specific time frame is somewhatdisappointing."While there have been statements about programmes to improve the qualityof life of plantation workers, especially with regard to home ownership,schools, childcare centres, pre-school education, healthcare services andpublic utilities, very little is actually being done about it," addsNavamukundan.While unionists welcome steps to make available more job opportunities forlocals during the economic downturn, they do not think the move to shortenthe tenure of foreign workers will be of much of help.This is because the Government has also announced that employers whocannot find local replacements can recruit foreign workers from Cambodia,Indonesia, Myanmar, Nepal and Thailand, on a one-toone ratio based on thenumber of workers who are sent back after Jan 1, 2000.A total of 635,251 work permits were issued to foreign workers, includinghousemaids, last year. Of these, 212,763 were fresh applicants. Up to Sept30 this year, another 513,823 were issued. A total of 183,968 were to newapplicants."If you continue issuing fresh working permits for an equal number ofworkers that you are sending back, there is no difference," saysNavamukundan.Non-Metallic Mineral Products Manufacturing Employees' Union presidentAbdullah Abu Bakar says the Human Resources Ministry should take over thefunction of issuing work permits from the Immigration Department.He says the ministry should monitor the situation closely and ensure thatonly employers who have really tried to recruit locals but failed areallowed to hire foreigners.Abdullah says the Industrial Relations Department should also be given thepower to stop companies from retrenching permanent employees while keepingforeign and contract workers.He adds that the Human Resources Ministry must ensure that foreign andcontract workers are terminated before permanent staff can be retrenched.Unionists and employers also feel that the move to shorten the validity ofworking permits is unfair to foreign workers who are already here.They say foreign workers only start making money after working forone-and-a-half years because it takes them that long to recoup the moneythat they had spent to come to Malaysia."The reason they come here is to make money. They sell their land andborrow from relatives to raise money to pay recruitment agents. They maynot find Malaysia a good place to work if they are sent back after threeyears," adds Shamsuddin.Rajasekaran says: "We are against the presence of foreign workers, butonce you have brought them here, you have to be fair to them and theemployers." The Government has been saying for some time now thatlabour-intensive industries should turn to modern technology to reducetheir dependence on foreign labour. Employers, however, emphasise thatsuch a massive and expensive undertaking cannot be done overnight.Low says FMM member companies have been trying to reduce their dependenceon foreign labour over the past five years. Some have been trying tomechanise their production processes while others have shiftedlabour-intensive operations out of the country. Still others have closedthem down completely.Employers also note that workers have to be retrained to handle newtechnologies and that too is an expensive proposition. And, they simplycannot afford to do so during the current economic slowdown.