By DayakDaily Team
KUCHING, May 19: The Sarawak Oil Palm Plantation Owners Association (SOPPOA) has called for a review of the Foreign Workers Transformation Approach (FWTA) implementation framework, particularly the fee structure imposed on employers, as it could financially burden industries that are highly dependent on foreign labour, particularly the oil palm plantation sector.
In a statement, SOPPOA said that it supports the government’s aspiration to modernise and streamline the recruitment and management of non-resident workers through a more integrated digital ecosystem, as well as initiatives that improve efficiency, enhance regulatory oversight, and strengthen labour management systems for the long-term development of Sarawak.
However, it said that the implementation of FWTA has also created significant operational and financial challenges for industries that are highly dependent on foreign labour.
“The industry’s primary concern is the additional administrative fee of RM1,854 per worker, excluding SST, which has significantly increased employment costs for labour-intensive industries.
“Stakeholders note that this additional charge is unique to Sarawak and is not imposed in Peninsular Malaysia or Sabah. This places Sarawak-based industries at a clear competitive disadvantage, particularly when businesses are already facing rising operating costs across multiple fronts,” it said.
The association also noted that the implementation of FWTA also coincides with major federal-level cost increases, including the RM1,700 minimum wage policy and the planned mandatory Employees’ Provident Fund (EPF) contributions for foreign workers.
It added that industry stakeholders are also concerned about the pace of implementation and the limited transition period provided for businesses to adjust workforce planning and operational budgets, as many employers were required to absorb substantial additional costs within a short timeframe without sufficient adjustment mechanisms or phased implementation.
“Despite ongoing improvements, employers continue to experience technical disruptions and system instability involving the digital platform. Industry stakeholders are of the view that compliance costs of this magnitude must be supported by a system that is fully stable, efficient, reliable, and operationally seamless.
“Operationally, employers continue to face coordination challenges arising from overlapping federal and state procedures involving multiple agencies. While official statistics indicate improvements in processing timelines, experiences on the ground continue to reflect procedural bottlenecks and inter-agency coordination issues that affect approval efficiency and operational planning.”
At the same time, the association highlighted that Sarawak currently has approximately 1.67 million hectares of oil palm plantations, and although the industry has invested in mechanisation and productivity improvements, the most critical harvesting activity—fresh fruit bunch cutting—remains heavily dependent on manual labour.
As a result, the industry remains heavily dependent on trained foreign workers to sustain productivity, maintain harvesting standards, and ensure operational continuity.
Highlighting that the palm oil industry remains one of the largest contributors to Malaysia’s economy and government revenue, while continuing to play a critical role in employment generation, rural development, downstream industrialisation, and export growth, in Sarawak alone, the industry contributed approximately RM78.3 million through the Malaysian Palm Oil Board (MPOB) cess and RM88 million under the Windfall Profit Levy (WPL).
“The industry also remains a major contributor to Sarawak’s State Sales Tax (SST) revenue. In 2025, approximately RM673 million was contributed through the five per cent SST imposed on crude palm oil and crude palm kernel oil.
“Given the industry’s substantial economic and fiscal contributions, SOPPOA strongly believes that greater consideration must be given towards balancing regularity objectives with operational realities and the escalating cost pressures faced by labour-intensive industries.”
On Monday (May 18), Minister in the Premier’s Department Dato Sri John Sikie Tayai said that FWTA ensures that the industries benefiting from foreign labour bear the ecosystem and regulatory oversight cost, rather than shifting the financial burden onto the general taxpayer. — DayakDaily
