(File pix) The rule mandating that employers pay the levy for their foreign workers, effective Jan 1, does not apply in Sarawak. AFP Photo

KUCHING: The rule mandating that employers pay the levy for their foreign workers, effective Jan 1, does not apply in Sarawak.

Deputy Home Affairs Minister Masir Kujat confirmed in a press statement yesterday that Sarawak is exempted from the new Employment Mandatory Commitment (EMC) policy, which has met with strong protest in the peninsula.

Today, the Sarawak Oil Palm Plantation Owners Association (SOPPOA) expressed relief over the exemption.

“It is actually in the interest of Malaysia's economy that the levy is borne by the foreign workers. It is a shocking decision to force employers to pay the annual levy for foreign workers,” it said in a statement.

“This sudden announcement was made without prior consultation with or notification of relevant stakeholders, like our members,” it added.

SOPPOA said such a knee-jerk ruling is detrimental to the industry, as it will inevitably place additional burden on the oil palm industry, which is already the most heavily-taxed in Malaysia.

“The Employment Mandatory Commitment is unlikely to achieve the stated objective of improving the management of foreign workers in the industry,” it said.

The operational cost of managing oil palm estates has risen steeply over the years, mainly catalysed by several increments in the minimum wage.

SOPPOA went on to say that any further increase to palm oil production costs is bound to erode the competitive edge of Malaysia's oil palm industry.

Employers in Sarawak worry that more burdensome manpower recruitment costs will encourage foreign workers to repatriate more money out of Malaysia and hence weaken the nation’s currency.

SOPPOA strongly urges the government to consult with relevant industry members before implementing policies which affect the entire supply chain and exacerbate current labour woes in Sarawak.

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