KUALA LUMPUR, Thurs. 02 November 2001 (Business Times) - The palm oilindustry, facing the prospects of sending back 28,300 foreign workers andsustaining a RM1.05 billion loss by the end of next year, wants theGovernment to reconsider the ruling limiting temporary work permits tothree years.

Malaysian Palm Oil Association chief executive M.R. Chandran said theindustry in Peninsular Malaysia, already shorthanded, would face its worstshortage of labour ever if the ruling remained. The industry would have torepatriate 11,300 foreign workers by the end of this year and another17,000 by the end of next year. Losses this year are estimated atRM380,000 this year and RM1.05 billion next year. MPOA, representing 96palm oil companies with over 1.6 million hectares of oil palm plantation,will be handing a memorandum to Deputy Prime Minister Datuk Seri AbdullahAhmad Badawi and three Ministers early next week, requesting at least ayear's grace to adhere to the abrupt changes in policy.

Chandran told the New Straits Times today that foreign workers should beallowed to work for at least five years (3+2) to enable them to repaytheir fees to recruiting agents (RM800 to RM1,000 each).

This would also allow employers to reduce costs of operations by spreadingthe high cost of recruiting (at least RM1,400 per worker) over a longerperiod.

As recruiting new workers take three to four months, and training themanother seven to eight months, workers only become productive and earnsatisfactory wages in their second year of employment, he added. Foreignworkers in oil palm plantations were not a social liability as they stayedwithin the plantation and were trained exclusively for the plantationsector, especially to harvest fresh fruit bunches (FFB).

MPOA members also have an understanding not to employ foreign workers whorun away from their original recruiting company, he said. Shortage ofworkers was a perennial problem for the industry as oil palm continuallyproduced FFB which should be harvested at least every 15 days to avoidover-ripe fruit and crop loss through loose fruit which fall to theground.

The shortage was even more acute now with the oil palm in its peakcropping period, lasting from October till December.

Despite regularly advertising for new workers and offering housing,medical and other facilities, the industry was still short of 10,000workers this year. He said with the new policy in place, the shortage wasexpected to increase to 15,000 workers next year.

"Most of the companies even offer three-bedroom semi-detached houses toattract workers," he said, adding that the recently retrenched workers ofother sectors did not apply for jobs in the plantation sector.

Currently, the palm oil industry in Peninsular Malaysia employed 108,000workers, of which about 40 per cent were foreign workers. Whilemechanisation had reduced the need for general maintenance workers,harvesting FFB still required intensive manual labour as the estates,mostly on undulating land, made manoeuvring machinery quite a difficult,if not an impossible task.

Chandran said the Malaysian Palm Oil Board, collaborating with Japaneseengineers, recently introduced a small technological breakthrough — agrabber/cutter, which could harvest five to six tonnes of FFB per day,compared to the average one-and-a-half tonne harvested manually.

However, the grabber/cutter only reached a height of 10m (oil palms cangrow up to 12m) and was estimated to cost a whopping RM200,000 each.