Construction associations urge PM to intervene in prolonged foreign labour shortage

Construction associations urge PM to intervene in prolonged foreign labour shortage
-A +A

KUALA LUMPUR (Sept 29): Contractors said the continued foreign labour shortage has stifled the recovery of the construction industry, noting that they are facing higher interest rates. 

Master Builders Association Malaysia (MBAM), on behalf of a group of construction associations, wrote in a joint statement that contractors’ cash flows are getting tight due to slow progress at sites, stemming from labour shortage. 

Additionally, MBAM said the “living nightmares” the construction industry players are enduring include material price hikes due to unfavourable exchange rates, potential imposition of Liquidated Ascertained Damages (LAD) and tarnished reputations. 

It said the industry also fears facing legal challenges after the Temporary Measures for Reducing the Impact of Coronavirus Diseases 2019 (Covid-19) Act (Act 829) that ends on Oct 22. The Act protects certain industries from legal actions for failure to meet contractual obligations.

“Contractors across the country are eagerly waiting for their supply of foreign labour to help recover the industry…The reality is that the time the industry has waited for foreign workers is already far too long,” MBAM said. 

“Queuing in person at the Ministry of Human Resources (MOHR) to get quota applications for foreign workers should be a thing of the past. The lack of action to really solve this problem is appalling. Contractors are now ‘pushed to the edge of the cliff’ and must service higher interest rates.” 

MBAM urged Prime Minister Datuk Seri Ismail Sabri Yaakob to intervene in reverting the foreign worker entry process to the Construction Labour Exchange Centre Bhd (CLAB) to simplify the entry of foreign workers immediately. 

“CLAB should be allowed to handle foreign workers’ issues without the participation of the MOHR, as this was already the original plan for the construction industry. The government will still get the required revenue and this can be a win-win strategy for all stakeholders,” it said. 

CLAB is an organisation established in July 2002 by the Construction Industry Development Board (CIDB) to bring in and redistribute foreign workers for companies and organisations in Malaysia.

MBAM said the contractors are against current complicated processes to accommodate the many outsourced entities “that have been created to perform each of the individual recruitment steps”.

“In addition, although it may be argued that the fees imposed by the outsourced entities are paid by the foreign construction workers, these fees add an unnecessary burden to the would-be construction workers. 

“Such fees will ultimately be passed on to employers and eventually to consumers,” MBAM said. 

The other associations are Persatuan Kontraktor Bumiputera Malaysia (PKBM), Persatuan Kontraktor Melayu Malaysia (PKMM), Gabungan Kontraktor Bumiputera Wibawa Malaysia (GBC), Persatuan Kontraktor India Malaysia (PKIM), Royal Institution of Surveyors, Malaysia (RISM), Real Estate and Housing Developers' Association (REHDA) Malaysia, Association of Consulting Engineers, Malaysia (ACEM), Pertubuhan Akitek Malaysia (PAM) and the Malaysian Institute of Planners (MIP). 

Earlier in July, Ismail Sabri told employers to consider hiring foreign workers from approved source countries and not merely rely on traditional source nations alone. He also requested the MOHR to speed up the employer interview process by increasing the number of interviewers at One Stop Centres (OSCs) according to zones and states.

To receive CEO Morning Brief please click here.

Read more: 
What is the Construction Labour Exchange Centre? 
Rehda urges govt to amend Covid-19 Act to enhance protections for contracted parties 
Stop relying on traditional source countries alone for foreign labour, says PM

Kathy Fong