Download - Penting Foreign Problem
-
8/14/2019 Penting Foreign Problem
1/21
CHAPTER 2
LITERATURE REVIEW
2.1 Introduction
To date, a number of studies have been conducted on foreign workers issues
and they have covered diversified aspects of it in various ways. Although an issues
in the past, it has remained contemporary. Accordingly there are some studies
which focused more specifically on the issue. In this chapter, it shall review some
of the important studies to provide a very brief idea about the issue of foreign
workers in construction industry.
2.2 Why Foreign Labour in Contruction Indutry
In the earlier days, most construction workers in the country were locals who
were recruited through the apprenticeship system (ong, !""#$. In this system, a
foreman, usually skilled, will recruit workers within his community, as the need
arises. %e is responsible to train the workers, including arranging the worksite,
material and se&uence. These workers were usually paid daily, through the foreman
who gets paid for the piecemeal work done or makes fee over each worker under
him.
'
-
8/14/2019 Penting Foreign Problem
2/21
In the seventies and early eighties, nearly " percent of the foreign workers
were concentrated in the construction sector because the country was e)periencing a
construction boom (*hosh, +''$. -uring this construction boom, there was a great
influ) of foreign workers, predominantly from Indonesia and later, workers from
yanmar, /angladesh and Thailand. ost of these workers came in either illegally
or overstayed their visit pass. A0ian (!""1$ also stated that our local workmen are
no longer able to sustain the demand and needs of the industry. The industry in
order to maintain the rapid e)pansion has to opt for foreign worker.
According to another source, the alaysian construction industry has relied
on foreign work force since early +'"s (Ahmad, +''2$. 3oreign labour started withthe plantation sector. 4wner argued that they no longer could find local workers
willing to work in their estates because of the better salaries and working condition
in the manufacturing sector. 5oon, the construction sector followed the suit. ith
this influ) of the foreign workers, local apprentices shield away from this trade as
they found working alongside these illegal workers not conducive. 3urther the trade
was branded as #-6s 7ob that are -irty, -angerous and -emeaning.
At about the same time, local skilled foreman and workers were lured
overseas to countries such as 5ingapore, Taiwan and 8apan where they were paid a
much more higher salary for their skills. This is why the 9onstruction Industry was
left with such a high proportion of foreign workers.
2.! "aic #ata on Foreign Labour
Today, it is obvious that the foreign workers are part of alaysian society.
The number of foreign workers in the country can only be estimated. alaysia in
recent years has absorbs large numbers of foreign workers to work in low:paying,
low skilled fields.
+"
-
8/14/2019 Penting Foreign Problem
3/21
According to an ;conomic of
the total labour force (+",?+1,'""$ in !""#. 3oreign labour has become an integral
part of the alaysian labour forces, particularly in the construction industry. There
are many estimates of foreign workers in alaysia but the data on the number of
foreign workers have to be interpreted with caution because there is no foolproof
study or survey giving e)act number.
A. @avamukundan (!""!$ indicated that as at 8uly +''', the total number of
registered foreign workers according to the government was +?,+1? of whom #>
were Indonesians, +'> /angladeshis, #> 3ilipinos and the remainder from other
nations such as India, yanmar, akistan and 5ri Banka. %owever, all thealaysians are aware that the actual number of foreign labour far e)ceeds this
number. It is estimated that appro)imately +.? million foreign labour (both legal
and illegal$ work in alaysia.
It is also estimated by (Ames, !""+$ that there were over !#",""" foreign
workers entered the country in !""", mostly from Indonesia and the hilippines and
others source include 9hina, /angladesh, yanmar and Thailand. These workers
are normally employed in 7obs critics6 label the # -6s:dirty, dangerous, and
demeaning. In general, low:skilled foreign workers are employed in positions that
most alaysian simply refuse to do.
The %ome Affair inistry, -atuk A0mi Chalid noted that alaysia had +.!
million legal foreign workers but estimated that there was one illegal foreign worker
for every legal worker (The 5tar, " ay !""1$. /esides, %uman
-
8/14/2019 Penting Foreign Problem
4/21
may land at over seventy ("$ places in alaysia. There were an estimated +.!
million illegal workers in the country.
According to The 5tar ("? August !""1$, it is estimated that the number of
foreign workers could rise to as high as five million by !"+" if employers continued
to depend on them. As long as there is an unlimited supply of foreign labour,
employer will continue to use them to their advantage.
2.$ Caue In%&uencing the In%&o' o% Foreign Labour
hy foreign labour find alaysian attractive to work inD *enerally,
alaysia has a tolerably pleasant moderate climate and the people are friendly, co:
operative and helpful. olitico:economic stability is another very tempting factor
influencing the inflow of foreign labour. The country always presents an open and
liberated atmosphere. The permissive and free society of alaysia is a heaven for
foreign workers.
In addition, alaysia is attractive because of its relatively better economic
performance and prospects for foreign labour. -ue to greater industriali0ation and
urbanisation in the economy there has been a massive rural:urban migration drift,
which in turn has led to an acute shortage of workers.
As a fast developing and progressive nation, alaysian holds a better
prospect for the prospective immigrants. The demand for labour has been increasing
continuously in tandem with economic progress. A. @amukundam (!""!$ also
indicated that the accelerated economic development programmes and the sustained
high economic growth rates in alaysia caused the influ) of foreign workers to
meet the increasing demand in the alaysian labour market.
+!
-
8/14/2019 Penting Foreign Problem
5/21
2.$.1 In%&o' o% Foreign Labour in Contruction Indutry
any causes have been responsible for the inflow of foreign workers in
alaysian construction industry. Among the causes of the inflow of foreign
workers in construction industry are as followE:
a( Contruction )ob *oor i+age, *oor 'or-ing condition and &oca& *re%er
eaier )ob
Bet6s be realistic, alaysian prefer easier 7ob, foreign labour are mainly in
the lower end, heavier kind of 7ob. In construction industry, for instance very few
local want to work in the industry. They prefer to take employment in a comfortable
environment like air:conditioned factories and office which offer white:collar 7obs.
3urthermore, the working condition in construction sector is very poor. The
poor image of construction industry such as absence of 7ob security, poor
management, insufficient promotion, and lack of opportunity for career
advancement make locals decline to 7oin this sector.
b( Contruction )ob -no'n a ! # )ob
Another reason why the alaysian construction industry felt the need for
importing workers from abroad is due to foreign labour do what has come to be
known as # -6s works :dirty, dangerous, and demeaning in alaysian that local
alaysian shy away from this type of 7ob. They are generally not interested in the
7obs currently held by foreigners.
3urthermore, 7ob in the construction industry are becoming unpopular among
the working population in newly industrial countries as they are more risk:prone
than others 7obs. The accident rate at construction work place is much higher as
compared to other industry
+#
-
8/14/2019 Penting Foreign Problem
6/21
c( Lo' 'age tructure %or contruction )ob
The locals shun employment in construction sectors also due to the wages
are deliberately kept low and low wages for high risk 7obs. 5ome companies are
deliberately keeping salaries low to encourage a high turnover of locals and
convince the authorities to allow foreign labour.
According to Fehadul et al. (+'''$, the uncontrolled presence of foreign
labour plays a significant role in maintaining the low wages levels in construction
industry, for instances very few local labour want to work in construction industry.
d( Higher education &e/e&
;&ually important is the fact that with higher education levels, nowadays, it
is too common for local young generation to study until enilaian enengah
-
8/14/2019 Penting Foreign Problem
7/21
and only choose workers who are not only ine)pensive but also have the necessary
skills and comply with strict discipline and hard work.
Therefore, the preference will be for foreign labour who will accept both
lower wages and worse terms and conditions of employment, as their primary
ob7ective is to earn as much money as possible within a short span of time. ichael
(!""+$ also stated that newly arrived labour willing to accept lower wages and less
attractive conditions. The foreign labour paid less than local citi0ens even if they
perform the same 7obs.
TG9 president Fainal
-
8/14/2019 Penting Foreign Problem
8/21
again on centre stage. The following are the various impacts of foreign labour in
construction industryE
a( Cu&tura& Po&&ution
ost foreign workers are peaceful. They want to earn money to send home.
In most cases, concern over foreign labour is linked to an)ieties over what some
have characteri0ed as cultural pollution and over foreignisation (einer, +''"$.
They may change the cultural and social orders of the normal practice of the locals
in construction industry.
b( ocia& Prob&e+
Begal and illegal foreign labour also pose many social problems and make
impacts on the locals. They create many social problems like spread of diseases,
theft, robbery, cheating, rape, killings, illegal settlements and so on. They form
syndicates. If there are no syndicates, legal and illegal immigrants cannot arrive in
alaysia.
According to Tey (+''$, as shown by unpublished police records at the
police head&uarters in /ukit Aman, between +'? and +''+, foreign labour
accounted for between +1.> and +.!> of all murders committed in the country.
The figure for gang robbery was between #!.> and 1.!>.
c( Po&itica& tabi&ity
The inflow of legal and illegal workers poses many implications on political
issues. The local population is fearful for the country6s harmony, security, social,
economic and political stability. The locals are fearful of becoming a minority
group unable to e)press views, influence or control the country politically if the
influ) of foreign workers on such large scale.
+2
-
8/14/2019 Penting Foreign Problem
9/21
-
8/14/2019 Penting Foreign Problem
10/21
3oreign workers are taking over work from locals. In construction industry,
the foreign worker going into sub:contracting work, where there is a lot of money to
be made. That is why they can build big houses and take over alay reserve land.
/esides, the presence of the illegals create problems also since illegals are not
constrained by rules and regulations and are free to infiltrate into any 7obs so long as
the employers are willing to accept them.
They also make inroads into 7obs not designated for them, thus putting them
into direct competition with locals. The *overnment should be strict about
repatriating foreign workers who are not needed because they are taking 7obs away
from alaysians.
%( Foreign &abour caued 'or- de&ay
9onstruction industry is labour intensive industry, it depends on large
number of foreign labour. According to ;conomic
-
8/14/2019 Penting Foreign Problem
11/21
g( Lo' *roducti/ity and ua&ity due to ti+e conu+ing to train ne' 'or-er
The reduction of the duration of temporary work permits for foreign workers
from si) or seven years to only three years had caused deterioration in the poor
&uality of workmanship and low productivity. 3oreign labours that have had three
years6 e)perience may be replaced by those do not have prior construction
e)perience, thus resulting in low productivity and poor &uality of work. 5ome of
them were not able to cope with new e)perience of working on large:scale pro7ects.
A0lan (!""1$ also mentioned that the lack of &uality foreign labour that have been
hired is one of the main problems in construction industry.
The companies that lose workers will need to hire new ones, who are likely
to be unskilled and ine)perienced. That means the employers have to spend time
and resources to train these new workers. As indicated in aster /uilder (Cok,
!""#$, upon commencement, the foreign labour would re&uire another ! to # months
to go through an orientation or learning curve period before they become productive.
3urthermore, on:the:7ob training will take around seven to eight months then
only the foreign workers will begin to contribute to company. To some e)tent, the
training was difficult, as most foreign labour were paid daily wages and were
reluctant to undergo training due to loss of pay.
h( Hea/y e3*ene in the recruit+ent *roce and &ong *er+it *roceing ti+e
alaysia introduced harsh new immigration laws in August !""!, the
construction industry is suffering from an acute shortage of foreign workers
throughout the nation. As a result, this has caused construction activities to be
delayed albeit contractors trying to the best of their endeavours to recruit new
workforce. The central problem now appears to be the long processing time taken
by the authorities to grant the foreign work permit (Bim, !""#$. 9ontractors
securing new 7obs have problems mobili0ing new workers on time, due to this long
work permit or recruitment process.
+'
-
8/14/2019 Penting Foreign Problem
12/21
As indicated by Tey (+''$, the legal importation of foreign labour was and
still time consuming and costly. Cok (!""#$ also summarised that based on current
e)perience, it takes about !:# months on a best case scenario to go through the entire
administrative process, commencing from obtaining a work permit from the ministry
of %ome Affairs to the foreign workers gaining physical entry into alaysia to
work.
Therefore, it is not cost effective to send foreign workers home after 7ust
three years because of the heavy e)penses in the recruitment process. eanwhile,
the process to bring in foreign workers is tedious and time consuming. 3urthermore,
a lot of cost is involved in medical e)aminations, transportation and levies. Thus,there is pressure in the system for employers to employ illegal foreign labour and to
dodge the levies and charges which are incurred on the employment of legal foreign
labour.
i( Acco++odation *rob&e+ %or %oreign &abour
Accommodation for foreign labour was problematic, if contractors do not
have any more new 7obs after completion of their e)isting work. It is now apparent
that due to the uncertainty of pro7ects and the short:term nature of most construction
pro7ects, contractors find it difficult to maintain long:term employment for their
workforce once they are imported into country.
As mentioned by A0lan (!""1$, there was a burden for the construction
companies to maintain foreign construction labour both financially and
administratively when pro7ects are completed, and=or during the period where they
have no new pro7ects.
2.0.1 o+e Poiti/e I+*act o% Foreign Labour in Contruction Indutry
!"
-
8/14/2019 Penting Foreign Problem
13/21
In recent years, there has been a huge cry that the foreign workers have
created enormous socio:economic problems in alaysia. %owever, it is not to deny
the positive impacts of foreign labour on economic issues. Assuming that there are
many problems the evidences (9han H oha, +''$ indicated that there are also
direct and positive impacts of the foreign workers.
The foreign workers have benefited in the income development. 3oreign
workers were immensely beneficial to the economy. This shows the positive
&uantitative contribution of foreign workers to alaysian6s economic growth. The
implications of foreign workers on the alaysian economy have been immense
especially since the late +'"6s (Fehadul et al., +'''$.
age structure is one of the significant e)amples. The uncontrolled
presence of foreign workers plays a significant role in maintaining lower wage
levels. This also indicated by 5idney (+''2$, foreign labour offer an unending
stream of cheap labour that can keep wages low and growth high.
*enerally speaking, foreign workers contribute to the economy by supplying
a cheaper labour force. As a matter of fact, foreign workers usually receive a lower
salary than local workers and the difference can help to maintain the decrease in
production cost. 4leg (!""!$ stated that the attracting cheap workforce means
cutting production costs, hence the production cost for construction development is
kept low which is an advantage in the foreign workers
alaysia, which have tremendous shortages of manpower in construction
industry, the importation of foreign workers could initially fill up the vacancies or
at least minimi0e the e)tent of manpower shortage. The supply of this additional
labour force fulfilled the urgent demand for labour which could not be met so
&uickly and at a cheaper rate6.
ore importantly the foreign workers accepted those 7obs which are not
often welcome by the local workers especially the construction 7obs that known as
!+
-
8/14/2019 Penting Foreign Problem
14/21
#-6s 7ob. oreover, if we assume that the foreign workers are e&ually productive as
the local workers, one can safely say that foreign workers make net positive
contributions.
It has already been brought to our notice that the value added of dollar spent
on labour in alaysia is around five times in the manufacturing sector (*hosh,
+''$. If this is true, then there are sufficient positive value:added effects of foreign
workers in the alaysian economy.
2.4 Way to 5ini+ie the 6egati/e I+*act o% E+*&oying Foreign Labour
In all probability, it is belief that the demand for foreign labour is going to
escalate in near future in construction industry. 5o what should be the government
policies and strategiesD The strategy behind the policies is to stop the inflow of new
migrant labour into the country, as well as to reduce the number of migrants already
in the country. %ow can this be doneD
-ue to the above situation, the authority governing the industry with the
assistance of construction associations has formulated several proposals to overcome
the problems faced by local contractors when dealing with foreign labour in
construction industry.
a( trengthening nationa& ecurity to reduce cri+e rate
The government is concerned about the influ) of illegal immigrants, which it
says has contributed to the crime rate. The influ) of illegal immigrants had created
various problems and was a threat to national security. The
-
8/14/2019 Penting Foreign Problem
15/21
/esides, the authorities also plan to issue guidelines to employers to separate
foreign workersJ &uarters according to their clans and nationalities to avoid
bloodshed when tempers flare. The construction companies would be advised not to
put more than ?" workers in one kongsi or temporary village for construction
workers (@ew 5traits Times, +" 8une !""1$. This is to avoid the cases from
happening such as the armed clash involving some ?" men from two groups of
Indonesians in a 5elangor village.
b( 7o/ern+ent to tighten hiring ru&e o% %oreign 'or-er
The country is bringing in more foreign workers than needed by industries
and the *overnment has to plug loopholes that cause the oversupply. Therefore, the
government has adopted drastic measures recently to repatriate immigrant workers,
especially the illegal immigrants. An amnesty was given to all illegal immigrants
who voluntarily returned to their country by the end of 8uly !""!.
The foreign workers were needed to fill the gap left by local and not as a
long:term measure to enable employers to cut cost. Therefore, the *overnment had
identified several measures to make it harder for agencies to bring in foreign
workers and to reduce country6s dependency on foreign workers.
Among them areE
+$ 5topping the system of supplying foreign labour through contractorsK!$
-
8/14/2019 Penting Foreign Problem
16/21
c( Cut %oreign &abour /ia +ini+u+ 'age yte+
-
8/14/2019 Penting Foreign Problem
17/21
Immigration -epartment ;lectronic Application 5ystem (I-;A5$, employers can
sign up and be linked to the department for easy and hassle:free application.
ith this, individual employers and representatives of agencies need not
travel to the various departments to submit their applications, hence cutting cost,
saving time and preventing loss of documents, but, employers are re&uired to
register themselves with the department first before getting user I- and assword
for access to the online service.
Gnder the current manual submission procedure where much bureaucracy is
involved, it takes up to three months for approvals which will possibly causing delay
in mobili0ing new workers on time.
%( Loca& %irt *o&icy
According to alaysia ;mployment Act, the employer is prohibited to
terminate the contract of service of a local employee for the purpose of employing a
foreign employee. here an employer needs to reduce his workforce due to
redundancy, he shall not terminate the services of local employees unless he has first
terminated the services of all foreign employees in a capacity similar to that of the
local employee (
-
8/14/2019 Penting Foreign Problem
18/21
construction site personnel. They should put in further efforts and improvement on
skilled status to upgrade the professionalism and image of the building sector to
make it more competitive.
9I-/ chief e)ecutive -atuk Abdul
-
8/14/2019 Penting Foreign Problem
19/21
According to /A (!""1$, 9BA/ basically has the following functionsE
Absorption of surplus legal workers in the construction industryK lacement of absorbed workers with &ualified contractorsK
rovision of enhancement workers with &ualified contractorsK and
5upplementary recruitment of foreign workers to meet the needs of industry.
i( Indutria&ied "ui&ding yte+ :I"(
The government encouragement to all the employers to mechanise and move
into less labour intensive processes has not achieved the desired result. 4n the
contrary, the demand for the foreign labour is increasing by the day (Ahmad, +''2$.
The ma7ority of foreign labour brought into the construction industry were
wet trade labour involved in concrete, brick, and wood works. To reduce
construction industry dependence on such foreign labour, we must change the way
we work by reducing wet trade in the construction process. This could be achieved
through implementation of the Industrialised /uilding 5ystems (I/5$
-
8/14/2019 Penting Foreign Problem
20/21
reduced and construction works focused on the use of the mechanisation and
prefabrication.
/esides, the construction world is now beginning to recogni0e the
advantages to be gained by integrating fabricated steel and precast concrete with site
cast concrete, much less labour is re&uired on building sites. This result in the
hidden cost of moving labor around tall or large buildings being reduced and other
collollaty costs such as catering, health and security being lower (eter, !""1$.
The government even stopped offering incentives to labour:intensive firms,
turning its attention instead to the development of strategic high technology
industries (
-
8/14/2019 Penting Foreign Problem
21/21
improve the available training systems to cater for current and future needs. /esides,
special incentives must be given to employers and worker for retraining of workers,
so that they can ac&uire new skills, which will respond to changes in demand for
skills in the labour market as a result of changes in technology and organi0ation and
methods of work (I-A, !""1$.
2.; u++ary
The construction industry6s dependence on foreign workers cannot be
reduced in the short:term. %owever, a clear plan for gradual phasing out of foreign
workers over a realistic time frame should be put in place to allow industry players
to make the necessary ad7ustment gradually.
In the longer term, all players involved in the construction sector need to
seriously e)plore avenues to attract local youths to enter the construction industry by
improving the image and working environment and this implies offering competitive
wages and benefits, improved work:safely procedures, and instilling a sense of pride
in construction work.
9oncerted efforts need to be put in place to promote higher buildability in
the industry through the promotion of new technology such as buildable designs that
allow the use of prefabricated materials to enhance productivity and efficiency.
alaysia must take cogni0ance of the e)perience in 5outh Corea where
despite its success in rapid economic growth and industrialisation, 5outh Corea has
never resorted to foreign labour (Ahmad, +''2$. 5imilarly 5ingapore6s dependence
on foreign labour has come in so easily, our dependence on them has become more
acute.
!'