14 palm oil groups urge govt to reconsider mandatory EPF for foreign workers
KUALA LUMPUR: A total of 14 palm oil industry associations have called on the government to reconsider the government’s 2025 Budget proposal to mandate Employees’ Provident Fund (EPF) contributions for foreign workers, warning of severe cost pressure.
The associations include Malaysian Palm Oil Association (MPOA), Malaysian Estate Owners’ Association (MEOA), Sarawak Oil Palm Plantation Owners Association (SOPPOA), and East Malaysian Planters Association (EMPA), among others.
According to the associations, the labour intensive Malaysian palm oil industry relies heavily on foreign labour due to persistent local workforce shortages, particularly for the demanding fieldwork required on plantations.
“The association warns that implementing the policy in its entirety could severely affect the operating costs of companies, especially SMEs,” it said in a statement today.
As such, the association advocates for a phased approach to any new EPF contributions for foreign workers to mitigate immediate financial impact on companies.
Plantation companies, particularly smaller operators, are likely to face additional pressures in managing these new requirements, diverting resources from investments in productivity and sustainability initiatives.
The associations encourage the government to consider support measures or exemptions to alleviate this burden, especially for smaller entities within the palm oil sector.
It said ongoing engagement with the government is essential to ensure that any changes to EPF contributions are economically feasible and aligned with the unique operational constraints of the palm oil industry.
The association said while it appreciates the government’s efforts to enhance foreign workers’ welfare, there is a need for a well-thought-out and feasible approach to achieve these goals.
It added that it is committed to working alongside the government to develop solutions that respect the rights and needs of foreign workers while supporting the sustainability of Malaysia’s palm oil industry.
“As Malaysia strives to be a global leader in sustainable palm oil, the association believes that policies supporting foreign workers should be fair, feasible, and mutually beneficial.”
“The success of the palm oil industry relies on a positive relationship between employers and foreign workers, and the association is ready to engage in constructive dialogue with the government and other stakeholders to develop a policy framework that works for everyone,” it noted.
Source : 14 palm oil groups urge govt to reconsider mandatory EPF for foreign workers