KL palmoil firms seek review of work permits

Malaysia's palmoil industry has urged the government to review a three-year cap on work permits for foreign labor, warning it could cause a massive labor shortage, a report said Friday.

The industry faces the prospect of sending back 28,300 foreign workers and suffering 1.05 billion ringgit (US$276 million) in losses by the end of 2002 under the new ruling, the New Straits Times said.

The government announced last week it has cut the permit period for foreign workers to three years from six or seven years to give job priority to locals amid an economic slowdown.

The new ruling took effect immediately for workers in all sectors, except for domestic helpers.

The Malaysian Palm Oil Association warned that the industry, already short staffed, would suffer its worst shortage of labor if the ruling remained.

Association chief M.R. Chandran told the New Straits Times that the industry would have to repatriate 11,300 foreign workers by the end of this year and another 17,000 by the end of 2002.

Chandran said the industry was still short of 10,000 workers this year and this would rise to 15,000 next year with the new policy in place.

Losses under the new ruling were this year estimated at 380,000 ringgit, with another 1.05 billion ringgit expected next year.

The association, which represents 96 palmoil companies, would hand a memorandum to Deputy Premier and Home Minister Abdullah Ahmad Badawi and three other ministers next week to seek at least a year's grace to adhere to the abrupt policy change, he said.

Chandran said foreign workers should be allowed to work for at least five years to enable them to repay recruiting agents fees of about 800-1,000 ringgit each.

This would also allow employers to reduce operation costs by spreading their recruitment fee of at least 1,400 ringgit per worker over a longer period, he added.

Malaysia is the world's largest palmoil producer. The industry in peninsula Malaysia employs some 108,000 workers, of which about 40 percent are foreign workers.

The country is home to some 700,000 registered foreign workers and hundreds of thousands of illegal immigrants, mainly from neighboring Indonesia. -- AFP