Government to reject manufacturing licences tied to heavy low-skilled foreign labour use

Malaysia will turn down new manufacturing licence applications based on business models heavily dependent on low-skilled foreign workers, Investment, Trade and Industry Minister Datuk Seri Johari Abdul Ghani told the Dewan Rakyat.

Johari said industries approaching the Ministry of Investment, Trade and Industry (Miti) or the Malaysian Investment Development Authority (Mida) would be told to limit foreign labour to work classified as dirty, dangerous and difficult. Other positions should carry pay sufficient to attract local employees, he said.

He was answering Tan Hong Pin (PH-Bakri), who sought flexibility in recruitment rules to reflect industries’ differing labour needs and ability to automate. Tan said some manufacturers argued that further automation was no longer commercially feasible, leaving them with a continuing need for manual workers.

Johari said the government wanted existing industries to upgrade progressively, rather than move lower-technology manufacturing overseas across the board. He criticised companies seeking foreign labour while paying technical and vocational education and training (TVET) graduates at levels similar to those offered to low-skilled foreign workers.

Malaysia had about 2.6 million foreign workers, not counting undocumented workers, he said. Johari also challenged the view that Malaysians did not want to work, citing employment commutes to Singapore and participation in gig work. Pay needed to cover living expenses, including accommodation, he said, questioning why some companies with profits running into hundreds of millions of ringgit started local workers at RM1,700 rather than offering RM2,000 a month.