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FOCUS March 2001 Volume 23

Malaysian Plantation Workers: Bittersweet Story

S. Arutchelvan and Mohanaran

After decades of struggle, the Malaysian plantation workers finally got some relief. They will now be receiving monthly wage. The story however has not ended.

Historical background

The demand for the change from daily to monthly wage system started in the 1940s. Massive strikes organized by the powerful labor movements of those days resulted not in hefty pay increases for workers but small five cent increases. But they were still considered victories since they showed how a united workforce can present a serious challenge to the capitalists. More than 50 years later, a support group was formed to continue the struggle for change in the wage system. The Estate Workers Support Group (EWSG) launched the Wage Campaign on Labor Day 1996 in Bukit Rajah Estate, Klang in the state of Selangor. The past four years since then have been marked with numerous press conferences and demonstrations, culminating in a 3000-strong demonstration outside Parliament in April 1999, and recently, an ultimatum that if the issue remains unresolved, a national strike will be held.

The Malaysian government has long been ignoring the issue. It is recently argued that since the agricultural plantations in Malaysia are now part of the "twilight industry" and dominated by foreign labor, the fundamental issue of monthly wage for plantation workers is not an important one. 1

The issue

The issue of monthly wage for the plantation workers is rather simple and the reason why it was not resolved for a long time is quite obvious. The plantation industry has been very consistent in giving low wages as well as maintaining the status-quo in the wage system. In addition to the low wage issue, housing, health and education facilities issues have also been pending for a long time. The arguments expressed by the workers and groups' fighting to resolve these issues during the last eighty years seem to be same. All 5-year Malaysian National Economic Plans recognize these shortcomings. But still the government has failed to resolve them for a long time.

An examination of the three main players in the plantation industry can provide light on this problem. The three players are plantation labor, plantation capital and the state.

The plantation labor has been represented most of the time by the National Union of Plantation Workers (NUPW). The plantation work force was previously composed mostly of workers of southern Indian origin. In certain cases, non-Indian Malaysian workers represent as much as forty percent of the workforce. Currently, foreign labor such as Bangladeshi and Indonesian workers dominate the workforce. The present character of the workforce makes the issue less sensitive to the ruling party dominated by the Malay-based United Malay National Organisation (UMNO) party and Chinese-based Malaysian Chinese Association (MCA). This can explain why the Malaysian Indian Congress (MIC) seems to be highlighting this issue and passing one resolution after another indicating that the issue of the plantation workers is an issue of the Indian community rather than simply a workers issue. This likewise explains why the plantation community has not received the same privilege as other rural communities such as paddy farmers, Federal Land Development Agency (FELDA) settlers, etc.

Poverty eradication program has also missed the plantation communities. Almost all plantation schools are still not fully government-aided, while health facilities are in dilapidated conditions. The government for many years has remained uninterested in extending these facilities to the plantation community arguing that this is the obligation of the estate owners. Nevertheless, no serious action has been taken on plantation companies who neglect to fulfill their responsibility. One wonders why the double standard and why was there no will to improve these communities.

The plantation capital is currently composed of the big plantation companies such as Guthrie, Golden Hope Plantations, Highland and Lowlands, KLK and Sime Darby. The major shareholder in these companies (and consequently controls them) is the government. The government invests in these companies through government-supported institutions, namely, Permodalan Nasional Berhad (PNB) and Amanah Saham Raya. The government, therefore, has a very visible hand in the whole relationship. Works Minister Datuk Samy Vellu, and also MIC President, was correct in saying that the government must give monthly wages because it is the actual owner of these companies.

This monthly wage issue is not solely a question of monetary benefit. The daily wage system is used by almost all agricultural companies in the world. This system is feudal in every aspect and just a few steps ahead of the slave reward system. This colonial wage system practiced in Malaysia and other parts of the world is highly unfair and unjustified because the risk is borne by the workers rather than by the plantation capital. The struggle to replace this unfair system to a much fairer wage system has been going on for ages. It has taken place in other countries as well. A big strike on this issue was held a few years ago in Sri Lanka. If the daily wage system collapses in Malaysia, then its global system counterpart will also have similar pressure. Replacing the daily wage system, therefore, is an uphill task.

It is also argued that the replacement of the daily wage system will have little effect on the overall earnings of the plantation workers. This is not true because under a monthly wage, the workers will receive a fixed monthly wage and this is not linked to external factors beyond the control of the workers. The argument is based on the notion that wage is linked to productivity. Labor is paid in proportion to the amount of production. This is correct generally speaking. Can it apply to plantations? Production in plantations is not entirely in the hands of the plantation workers. There are external factors to consider. Weather, price in the world market, stimulants, etc. are not within the control of the plantation workers. The unjustness of the daily wage system in the context of plantations has been proven by numerous researches.

The plantation capital argument over the years is the same. They talk about losing profit and losing competitive advantage over other countries. In other words, their argument only points to one direction, i. e. , cheap labor policy and maintenance of competitive advantage. In this manner, the one who pays the cheapest is ultimately the champion and the most successful in the business. The Plantation Workers Support Committee has repeated many times before that if the cost of maintaining the current system is cheap labor policy, then the industry is not needed in the first place. Labor needs respect and full appreciation. If the Malaysian government concludes that the only way to save the plantation industry is by neglecting its workers, then the industry must be rejected in the first place. Why glorify an industry that lives on people's misery?

The government cannot justify cheap labor policy because it is inhumane and cruel.

New development

On 7 February 2001, a day before the plantation workers were planning a big demonstration at the industrial courts, the Human Resource Minister Datuk Fong Chan Onn announced that plantation workers will now be paid monthly wages. A minimum wage of 325 Malaysian dollars (RM) was agreed between MAPA and NUPW.

This however falls dismally short of the demand of EWSG for a RM 750 minimum wage. "That is a poverty line wage," remarked a palm oil harvester from Teluk Intan. He added, "How could the union agree to it? "

The government, represented by Dato Fong Chan Onn, who mediated at the negotiations between MAPA and NUPW, was weak in this negotiation process. MAPA was clearly in control. It rationalized the paltry sum of RM 325, and moaned how it will get RM 210 million over three years to make ends meet!

The minimum wage of RM 325 has to be seen in the context of the reality of the economic and political structure of the day. Only political change that leads to a greater say for workers in the decision-making levels of government can bring real and meaningful change to the pay structure of estate workers. Until then, the workers will have to make do with concessions, and these too will not come easy.

At the moment, both the Union and MAPA claim that the minimum wage agreed upon is a big breakthrough. EWSG will be monitoring the situation for two months to see if the breakthrough materializes in the workers' wage slip or if it is just another scam!

S. Arutchelvan and Mohanarani are members of the Estate Workers Support Group in Malaysia.

For more information, please send communication to Parti Sosialis Malaysia PSM <parti_sosialis@hotmail.com>, or visit its website: http://partisosialis. tripod. com/

Endnotes

1. See Prof. P. Ramasamy, "Labouring over wage issues," Sun, January 5, 2000.


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