1.

0 OBJECTIVE

A lot of studies had been conducted on foreign worker issues in Malaysia and they had been discussed in various dimensions, positive impact such as great contribution to Malaysia rapid growth of economy of 8% GDP from year 1990 to year 1997. Yet, negative impacts which come along such as social problem were committed by foreign workers. Spread of diseases, theft, cheating, robbery and even killing are some the serious social problems created. In this paper, we would like to examine foreign workers issues and challenges in the perspective of ethic and corporate social responsibilities.

2.0 INTRODUCTION

Why Malaysia need foreign workers to support the growth of economy? By the end of 80s, the booming of industrial revolution in Malaysia started. The countrys population could not catch up the surge forward by eager entrepreneurs. Sectors such as construction, plantation and manufacturing industries actually drained off all the local manpower resources. As a result, the country needed to import workforce due to several reason. Local people who were being trained were promoted to supervisor level or higher management level, thus more vacancies are available. Malaysias entrepreneurs overcome the manpower shortage problem by import workforce from other countries which had excess manpower at a reasonable cost. The foreign workers who being employed not only obtain the job opportunity where their own country shortage of, but also earn an income to improve their lives of his family. According to the information by employers to the Manpower Department as Fig.1, ("Selected social statistics" 2009) generally manufacturing industry contributed the highest vacancies followed by the agriculture and construction industries. In 2006, the percentage of vacancies in the manufacturing industry was 41.9 percent. This was followed by agriculture and construction industry with 22.3 percent and 15.6 per cent respectively. Also as shown in Fig. 2, ("Selected social statistics" 2009) the lowest number of foreign workers was reported in 2001 (850 thousands workers), however the number had increasing significantly more than 2 million workers in year 2007.

Figure 1 Vacancies in industrial sectors by Malaysia Standard Industrial Classification, Malaysia, 2006 2007

Figure 2 Number of foreign workers, Malaysia, 2001 - 2007

Fig 3 Present statuses of workers as per year 2008 In Figure 3, ("Managing foreign workers," 2008) shown that foreign workers in Malaysia mainly consist of Indonesian (65.3%) follow by Nepal and Myanmar (10%) and 7.2% respectively. This is due to Indonesia had a similar language as Malaysia do. Two nations speak similar language. Moreover, Indonesia had a closer border with Malaysia among the ASEAN countries while compare to others. While looking at the sector which most involved by foreign workers, it is consists of domestic maids, construction, manufacturing, services, plantation and agriculture. These sectors are labor intensive and low skilled workers based. From the above figure 1, 2 and 3, we found that number of foreign workers were increase triple on year 2006 compare to year 2001. This is due to great demand of workforce in manufacturing, agricultural and construction. And almost half of the foreign workers are come from Indonesia due to the geographically reason and culture similarity. 3.0 Why foreign workers were needed in manufacturing, agricultural and construction sector?

One of the main reasons is that Malaysians are achieving higher education level than it used to be. PMR or SPM no longer gain any education background advantages while looking for jobs. With the effort spent by the government, more chances are available for Malaysian to obtain their degree in Malaysias University. Under this circumstance, the young generations are

looking forward for higher pay, high technology based and comfortable working environment. The 3D works dirty, demeaning and dangerous job are then filled by foreign workers.

4.0 Issues of foreign workers

Firstly, issues faced by foreign workers is getting legal work permit and starting their new job will be discussed in the perspective of law, ethics and corporate social responsibility.

4.11

Deception or false promises made regarding terms and condition of employment

Most foreign workers are coming from ASEAN countries, Nepal and India. Very often, false promises were made by agent and they are forced to sign another contract where the salary and benefit is totally decreased upon arrival. The Chin Well Fastener Co Sdn Bhd case in year 2002 was clearly shown how the migrant workers from India being cheated by the India Agent, the middleman and Malaysia employer. In this case, 80 workers had pay Rupees 100,000 (about RM8, 000) to the foreign agent in India to secure the employment in Malaysia. Basic salary of RM600 per month and with overtime total of RM800 will be paid per month was being told. It was established in Court that the employer had signed a contract of employment and three documents as required by the India High Commission promising a basic salary of RM600 per month. When they arrived and worked in Malaysia, they were paid only RM350 instead of RM600. In addition, a levy of RM152 was deducted from the salary although it is not stated in the contract or any official documents. When these Indian foreign workers protest against the action being taken, the employer cut off the water and electricity supply to the hostel. Furthermore, the foreign workers are being forced to sign a new fresh contract for a pay of RM350 and to agree to the deduction of levy. The High Court rescued them from the helpless situation after they filed a police report. The court found that the local employer, the middleman and foreign agent had all conspired to defraud these innocent workers who had been cheated. (Leela, 2004)

4.12

Identity documents or passport being withheld or seized

Foreign worker advocates that it is common practice for employer to seize foreign workers passport upon arrival in Malaysia. Purpose of holding foreign workers passport is widely used as a way of control of employer over the workers which emphasizes their vulnerability and restricts their ability to move. But in reality it makes it so easy for employer to threaten the foreign workers with deportation, and to cow them into submission in anything employer wish to do to them, and to get the Immigration Department to cancel the work permits in the passports of these foreign workers who attempt to exercise their rights against the employer. In such event, the cancelled work permit holder will automatically become an illegal worker for failure to be in possession of a valid work document. Under Passport Act of 1955, withholding foreign workers passport by employer is illegal. The Malaysian Government has never formally sanctioned employer who seize and hold foreign workers passport (Philips, 2008). At year 2008, HUMAN Resources Minister Datuk Dr S. Subramaniam had questioned the need for employers to keep the passport of their foreign workers. He advised foreign workers not to hand over their passport to their employers. According to him, he came across a case a year back where a migrant worker who had just arrived in the country was arrested and detained by the authorities for about 3 months just because he could not show his original passport. Indeed, the passport of that migrant worker was taken by his employer to be submitted to Immigration Department for the necessary work permit (Kerja Sementara) to be endorse in his passport (Charles , 2008).

4.13

Wages are delay, withheld or unpaid

Wages of foreign workers were delayed, withheld or unpaid is another issue faced by foreign workers. Wages of foreign workers were being delayed by employer for a few months while the daily works still on going. Most of this incident would ended up with fighting against with the employer or foreign worker runaway to find another job, which turned himself became an illegal workers. A case was report on beginning of May 2009. Thirty nine Vietnamese and nineteen Indonesian workers were locked in the dormitory and barred from work. Despite managements threats and police intervention, they had for several days insisted on talking to the management

about increasing their wages. On 10 June, the management asked the Vietnamese workers to sign a statement of apologizing to the company and accepting its pay regime in order to return to work. Five accepted the terms. The rest, whose passports had been seized by management, fled to Kuala Lumpur and paid travel documents in order to go home ("International trade union," 2009). Another case which happened in Shah Alam, eight Indian workers who were legally worked in a factory in Shah Alam became illegal workers when they complained to the Industrial Court claiming they were underpaid. Their employer immediately cancelled their work permits and classified them as illegal workers (ANI, 2008). Broker or employer had the full control over foreign workers bank account and

4.14

incur unreasonable deposit fund

Foreign workers encounter issue whereby their bank account was fully controlled by their employer in the sense that no ATM card issued to them and the bank account passbook was under taking care by the employer. Wages are directly debit into their bank account. Whenever the foreign workers need to redraw money, foreign workers need to ask permission from the employer to redraw their own wages from bank under the employer inspection. Moreover, some foreign workers being forced to lodge financial deposits or security fees, such as runaway insurance. This is not stated in any initial document signed by the foreign workers upon arrival in Malaysia. Excessive or illegal deductions are made from workers salaries that results induced

4.15

indebtedness

Foreign workers felt disappointed in the wrongful deductions from their wages, which included deduction for hostel charges when the agreement was that the employer shall provide free accommodation. They also raised their disagreement with the deduction of RM50 for everyday that a worker does not come to work, when the daily rate of pay is only RM20. Other than that, they also needed to pay for medical leave which is really is already legal right in Malaysia. Allowance such as shift allowance is not entitled by foreign workers while local

workers in Malaysia got it. The shift allowance can be varying from RM2 per day or RM30 per month. This benefit should not be neglected to foreign workers. 4.16 Unsafe working condition

Foreign workers work in unsafe working condition is quite common happened in Malaysia especially in construction industry. Foreign workers were not clear about the working procedures and principles which introduced at the workplace. Employers were neglecting the aspect of safety at the work place and were reluctant to register with DOSH (Department of Occupation Safety and Health). Foreign workers were not aware of their human rights too. Personal protective equipment, devices or other means provided to ensure foreign worker safety and health while working were not provided. Foreign workers at construction industry suffered from bad burns caused on their forearms for lack of long-sleeved gloves. Scalding was caused on their feet by boiling water used to wash the floor at the end of the shift, yet no safety boots were provided too.

An accident case reported in year 2008 where 7 workers died during the former Jaya Supermarket demolition. Later, it was revealed that the said employer did not have the necessary approval of the DOSH. In year 2008, it had been revealed that there were 44,918 industrial accidents and 746 workers died (Charles, 2009). In Year 2011, another accident were report whereby a Bangladeshi kitchen hand and a Nepalese security guard died while two other foreign workers were hospitalized after inhaling dangerous fumes in a manhole behind Subang Parade Shopping complex in Kuala Lumpur, Malaysia. The foreign workers were sent to investigate if there was a gas leak in manhole without personal protection equipment (PPE), fainted from inhaling the fumes. Subsequently, others who went down the manhole had also succumbed to the fumes. Two foreign workers were killed in this incident while other two were under treatment at University Malaya Medical Centre. (Steven, 2011)

5.0 Foreign Worker : Challenges Although many issue been faced by employed foreign workers to work in Malaysia, but it is necessary to meet the vacancy left over in local which is consider low pay and 3D categories dirty, demeaning and dangerous. So it is important to look into details, find out the root cause thus suggest the alternative way or solution to solve it in short term (which need immediate action) and long term whereby Malaysia plan to move from labor intensive industrial to technology based country.

5.11

Recruitment Foreign worker process

At present situation, recruitment processes are highly exploitative in some countries. The local company actually appointed the agent to recruit workforce from oversea. In this way of working, the local company was not aware the agreements content signed between the agent and the foreign workers which may end up the foreign worker feel being cheated upon arrival at Malaysia while they received different employment condition.

One suggestion is that direct hiring by employer in source countries. Eliminate the middleman, thus reduce conflict or cheating by middleman. Local employer may encounter issue without the help of middleman which we need to take into consideration. With middleman Communication problem Able to communicate with source country people Employment policy Processing is faster. familiar with the source country employment policy Education background Direct employ Speak different language, might create misunderstanding Takes longer time to understood source country policy as it might be different from country to country

Understood the need of Malaysia Do not understand the education employer based on the education background of source country,

background.

might be employed people which is not suitable.

Way of working

Familiar way of working

Not familiar way of working in

especially in developing country, source country, following the bribery might involve. conventional way of working might not be able process the document needed successfully Document processing Time consuming, middleman can help to perform the task on behalf of employer May not have sufficient time, documentation processing maybe required the employer to go over the source country more than once. Source of foreign worker Middleman already has the source country contact person and communication network. Easier to look for suitable candidate Communication at source country is not well developed. Might have difficulty to look for suitable candidate as most of them stay in ruler area.

Table 1 shown the issues arise between direct employment and by using middleman approach

More discussion between manpower resource country and Malaysia are needed to ensure better recruitment and sending processes in source country. This could help to understand problem facing by each party and align with each other to solve the issue and this need to be done from time to time as the issue arises are dynamic.

5.12

Contract of employment

Current contract of employment were found not standardized. Different source countries, different agents might be having different type of contract term, clause or statement. Some might even contravene local labor law in some cases. Mandatory minimum standards for employment contracts which are consistent with Malaysian labor laws should be created as references.

Although we already have laws and regulation for legal workers such as Employment Act, 1955, Workers Minimum Standard Housing and Amenities Act 1990 been setup to protect the legal workers, we still need to strengthen enforcement of laws and regulation to make sure employers, agents and foreign workers work in the way it should be according to the laws. The authorities such as Ministry of Home affair (MOHA) and Ministry of Human Resources (MOHR) should keep track employers with a significant number of outstanding court cases to be blacklisted and barred from employing more foreign workers. So there is a need of close collaboration such as MOHA, MOHR, PDRM and MOM to achieve the target. 5.13 The withholding of foreign workers passport by employer or agent.

As mentioned in previous chapter, employers or agents are not allow to withheld foreign workers passport under Passport Act [Link] has never formally sanctioned any employer or agent who seize and hold foreign workers passport. Employer claimed that keeping the passports is mainly for housekeeping purpose and to avoid foreign workers lost their passport.

But in reality, it is commonly happened that foreign workers use the work permit as a stepping stone in Malaysia while looking for other jobs which offer higher pay. When they found the job, they would run away without any notice. Even though it is illegal in law, the foreign workers work permit no longer valid and become illegal workers in Malaysia, but their ultimate goal is to gain money as much as possible. Therefore, a lot of extra financial deposit is imposed on the foreign workers such as runaway insurance to reduce the escape rate of foreign workers.

And if foreign workers was giving right to keep their own identity documents or passports, higher chances and more opportunity for the foreign workers to run away from their current job and even escape to neighbor country such as Singapore.

Someone may ask, why these foreign workers willing to become illegal workers? Because at origin workplace, they may not able to earn more money due to less overtime, then they started

to compare the earning between the legal workers and illegal workers. Illegal workers often get the chance to earn more money due to overtime were not control, lower accommodation cost and lack of safety equipment. But on the other hand, these illegal workers were worked in an unsafe working environment such as construction site which do not comply with the safety rules and regulations. The accommodation condition was not hygiene, no clean drinking water, no electricity supply and their hostel is the construction site.

The employer also willing to take the risk to employ these illegal workers as they only required low wages, willing to work at unsafe condition and extra overtime which against the limit of labor law. Therefore in some cases, employers themselves become protectors of illegal foreign workers by not reporting their presence to the authorities. Their actions encourage the foreigners to look at Malaysia as their future place to live because of the hospitality shown by the employers themselves.

These illegal workers may create safety issue such as robbery, thief and even killing. The country criminal rate increase due to these illegal workers and it is hard to control as there are almost 2 million foreign workers or 10% of Malaysia population. Thus it is still an arguing issue whether ethically should the employer withhold the foreign worker passport or not.

5.14

The poor quality of works due to inexperience workers

The main objective of employer is to complete the works in hand according to schedule and without any delay. In construction sector, there are many external factors which may causing delay to the work which is out of their control such as supply material not arrived on time, raining season causing certain outdoor work cant perform or takes longer time than it should be or accident happened on the site required long time for recovery job. The easier way to catch up the schedule is to increase manpower or applying overtime. This is where the foreign workers are needed and come into the industry. Because their wages is low and they are flexible, willing to work overtime, so foreign workers become employer first choice to solve the delay schedule work issues. Although to perform construction work may not need high level of education, but it needs some basic skill and experience too. Here is the main issue arise. These foreign workers

are just fresh and dont have any experience in construction. They just worked as per instructed by the contractor and assisted by other experienced workers. Their workmanship is poor and quality of work is not meeting the standard. As many of us also found that quality of the houses in nowadays is degrading such as cracks on the wall are observed after several year, the final touching of the wall is bad, water leakage at the roof and etc. While all these problems were seldom at 70s to 80s. This is mainly because the quality of workers and of course also the materials used are much better. The construction worker used to be from local people, skillful and experienced. These local workers are migrated to foreign country such as Singapore due to higher pay was offered. And the younger generation wouldnt prefer to work at the construction site at due to low wages, poor image and dangerous. So, is this the mistake of contractor nowadays for employing foreign workers in low wages jobs? Do they have other better choice?

5.15

Foreign workers add to social problem.

While there are close 2 millions of foreign workers in Malaysia, a lot of social issue had been arise and concern from the local society. Of course, most foreign workers come to Malaysia to earn the living and to raise their family at the home country. They are not here to create criminal issues but maybe small amount of them abuse the right to work in Malaysia.

At Klang district, most subsidized housing flats are being widespread by brawls, fighting and break-ins. This had resulted in slew complaints that urgently need the authorities to rethink the social and security problems in the areas concerned.

Over the past three years, the concentration of foreign workers living at the flats meant for the lower income group has exacerbated a wide range of social problems. Gangster armed with knives involved in fights, widespread break-ins and drug pushing have become a common sight at such flat (Edward, 2007).

There is a dramatically increase of foreign workers taking up residence in the subsidized housing flats. The foreign workers made the locals feel uneasy to the current situation. The subsidized flats are actually meant for Selangor residents who at one time were squatters, low

income local group to ensure them to have a place to stay with water and electricity supply. But the problems arose after most of them improved economically and rent their flats to foreign workers. There is a need to draft a new law to prevent the owners of subsidized flats from renting their properties and to give the authorities the power to confiscate the unit should this occur. Other than this, there is a need for Police Department to raid the area and weed out bad hats especially those involved in the numerous break-ins. There is a joke going around: When Vietnamese people come, cats and dogs disappear; when Bangladesh people come, girls disappear; and when Chinese woman come, husbands disappear.

Another issue arose is the Chinese woman from China who obtained the foreign workers permit involved in prostitution activity illegally. There are 2 million foreign workers in the country. If half of them sought the services of prostitutes, it would be 1.6 million. In addition to foreign workers, there are also demands from local people (Lim, 2012).

Whenever there is a demand, there will always be a corresponding supply. Prostitution involving foreigners has been operated for quite a long time and rooted in the country. It is not easy to eradicate. Even if the police and local governments are willing to spend a lot of manpower and resources to raid and send foreign prostitutes back to their original countries, the syndicates would immediately bring them back through the back door. Bribery among the authorities and syndicates maybe is another reason where the prostitution issue remained unsolved. Foreign prostitute destroy families and tempt young people. Prostitution also helps to widespread the sexual transmitted disease. There is really an urge need for the authorities take necessary action to stop these illegal activities from getting worst.

6.0 CONCLUSION As Malaysia economy continue to grow, we need foreign workers as the fundamental for the low wages job in construction sector, manufacturing sector, agricultural sector and etc. Their contributions are recognized especially during 80s and 90s where Malaysias economy was in rapid growth. To ensure the foreign workers work accordingly, policies had been developed as a guideline to the employers, middleman and foreign workers. Institution such as Cabinet Committee, Ministry of home affair (MOHA) and Ministry of Human Resources (MOHR) had been involved for enforcement of the policy. There are issues arose during recruitment process, income and social protection which against the foreign workers human right being discussed in this paper. But there are more needed to be done especially when there is a law but lack of effective enforcement. Bribery is another issue where we need to be resolved. And also we observed that there are a lot of differences in welfare and benefit between local workers and foreign workers whereby I think they should be treated equally. Employer should not take the advantages of foreign workers because they have very little capacity to enforce their right in the contract. Foreign workers encountered problems such as language barrier, the cost of lawyer, inability to remain in the country to fight the case. It is also hard for them to even know how to scout around for a volunteer lawyer. On the other hand, social problem which created by foreign workers should be addressed accordingly. We could refer to other countries such as Singapore how they managed the foreign worker to reduce the social problem. While Malaysia is moving forwarded from a labor intensive industry to technology intensive industry, the number of foreign workers at low wages may decrease and we required more skillful foreign workers. So, the effort to resolve the foreign workers issues are continuous and amended from time to time to align with dynamical change.

REFERENCES: 1) Ministry of Human Resources, Immigrations Department of Malaysia. (2009). Selected social statistics, series 10. Retrieved from website: [Link] 2) Managing workforce in malaysia. (2008) Retrieved from [Link] 3) Leela, C. (2004, March). Perspective of foreign workers and their rights and employment in malaysia. Retrieved from [Link] ir_rights_and_employment_in_malaysia.html 4) Philips, S. R. (2008, October). Migrant workers in malaysia issues, concerns. Retrieved from [Link] 5) CHARLES , H. (2008, October 26). Illegal for employers to hold migrant worker's passports. Retrieved from [Link] 6) Steven, D. (2011, Feb 11). Two foreigners killed after inhaling dangerous fumes. Retrieved from [Link] 7) Edward, R. (2007, June 20). Foreign workers add to social problems. Retrieved from [Link] 8) Lim, S. G. (2012, Feb 16). Disgraceful label . Retrieved from [Link] 9) International trade union confederation. (2009). Retrieved from [Link] 10) ANI, D. (2008, July 17). Errant malaysian employer makes eight indian workers illegal. Retrieved from [Link]