This article first appeared in The Edge Financial Daily on October 10, 2018

KUALA LUMPUR: The government should be more flexible concerning the hiring of foreign workers in the plantation sector, said IOI Corp Bhd group chief executive officer Datuk Lee Yeow Chor.

Lee proposed that workers in the plantation sector be given a longer-term work visa. Currently, new workers are given a two-year tenure as a start, followed by annual renewal.

He said the visa renewal is tedious, resulting in some experienced workers not keen to renew their visas, thus contributing to a regular outflow of skilled workers in the industry. Lee said as experienced workers leave, they are often replaced by greenhorns.

“Yield in the plantation sector has stayed flat over the last 10, 15 years. One of the reasons [for this] is the [policy of] foreign workers.

“If their contracts need to be renewed every two years, that could lead to a 50% turnover rate. Even if it is three years, that is still 33%,” he told the audience at the “Malaysia: A New Dawn” investors’ conference yesterday.

Contrary to common belief, workers in plantations are not low-skilled, according to Lee, citing experienced plantation workers could, in fact, climb up the corporate ladder in the industry.

Lee also said Malaysia’s upstream oil palm industry is already “quite mechanised” compared with other markets. FGV Holdings Bhd chairman Datuk Wira Azhar Abdul Hamid concurred.

“Companies invest time and money to develop workers’ skills, and we send them back and get another greenhorn as replacement every two years, so [the companies] lose [out],” Azhar said on the sidelines of the conference. “Maybe the government can be a bit more flexible in the duration [of the visa].”

As at September 2017, foreign workers made up 77% of the labour force in all oil palm plantations nationwide, according to Malaysian Palm Oil Board data.

Under the Economic Transformation Programme, Malaysia has set an ambitious target for the oil palm plantation sector to contribute a gross national income contribution target of RM178 billion per annum by 2020. That contribution is currently at about RM80 billion.