According to the Malaysian Palm Oil Association, the palm oil sector is in need of about 80,000 workers as of the end of last year.
Analyst Sathia Varqa of Palm Oil Analytics said plantations would be struggling with their harvesting as they had been expecting Indonesian workers to arrive before the peak season.
However, he said the industry was “not surprised” by the latest development considering the flip-flopping on the issue that had been going on for some time.
“There’s no clear coordinated institutional arrangements that the two countries can agree on. With four ministers in the space of four years, how can they prioritise policy issues or negotiate with their counterparts?” he said.
Sathia said Malaysia lacked a long-term roadmap to enable industries to reduce dependence on foreign labour, such as through the mechanisation of industries.
“The government should create an ecosystem to ensure that startups are involved in targeting the persistent problems of labour shortage in various industries,” he said.
“There are resources and people in Malaysia to do so. You just have to utilise them.”
Malaysian Palm Oil Board director-general Ahmad Parveez Ghulam Kadir said hopes of the industry recovering after two years had been crushed once again.
“We expected the workers to finally be able to come after so long, but there have just been issues after issues. The situation has to be rectified by the ministries involved, or Malaysia is going to suffer a great loss.”
He agreed with Sathia that the industry’s dependence on foreign labour could be solved through mechanisation, saying there would then be workers who could be freed for harvesting.
Palm oil industry analyst Khor Yu Leng said the onus was on Malaysia to meet Indonesia’s regulatory requirements since Indonesia had made it clear that its citizens needed to go through its employment system.
Khor contrasted Indonesia’s firmness with Malaysia’s “constant policy flip-flops”.
She said some developing countries were now paying attention to labour standards and Malaysia needed to face the fact or deal with the ramifications.
“Malaysia has been worrying about western labour standards, but the reality is that countries like Indonesia and Bangladesh are moving forward on labour standards.
“But Malaysia is still stuck with its own preferred approach, which clearly raises the risks of trafficking and forced labour,” she said.
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