Page 44 - BPAReport

42 The outcome of the corrupt ecosystem, in the first instance, leads to an escalation of
costs from collusive fees and charges imposed along the chain of the recruitment process.
This places a cost burden on employers but more harmfully on the workers themselves. Of
greater concern is that these corrupt practices are the foundation and principal causes of
workers getting into circumstances of debt bondage which may ultimately lead to forced
labour situations for the settling of the accumulated debt. The conditions then provide the
seed or trigger for foreign workers to escape from their predicament and become
undocumented workers.

43. Another layer of corruption may at first glance appear to be innocuous by hiding
behind what would seem to be legitimate business practices. This concerns the nontransparent
outsourcing of public sector functions previously undertaken by MOHA, MOHR
and other relevant government agencies (e.g. health assessments, visa renewals, etc) to
preferential companies at both the recruitment and in-country worker administration stages.
The outsourced functions at the recruitment stages include providing bio-metric information,
identifying certified health screening clinics, developing online processes for registering
these undertakings and uploading the findings of medical examinations, etc. At the in-country
administration stage, outsourced functions include the renewal of employment passes,
periodical health screening and provision of worker safety net coverage for work accident
and health insurance, etc.

44. The outsourcing of the digitalization of manual functions to online processes may
appear to be aimed at improving efficiency and reducing costs. However, how these
processes are managed and tendered for as well as the lack of clarity in the pricing of the
functions performed, including the duration of the concessions given to the service providers
as vendors give rise to questions. The service providers appear to have a captive market that
allows the generation of easy profits at the expense of government, employers and ultimately
the workers. Depending on the functions outsourced there are instances where charges are
apportioned to both employers and sometimes the government itself, whereas previously such
services were provided free of charge or with a nominal fee to the government. This then
contributes to augmentation and distortions in labour costs.

4.9 Demands for prolonging the length of stay and levy payments for PLKS workers

Duration of stay of a PLKS worker

45. The current policy allows for the extensions of the PLKS work permit for a maximum
period of 10 years. Employers have been pushing for a further extension of this period, as
they argued that such foreign workers have acquired the needed work experience and skills
while contributing to the productivity of the firm. Losing the experienced worker will entail
additional high costs to the firms from having to recruit a replacement who will not have the
required skills nor experience thus affecting productivity and requiring additional outlays for
training.

46. Recently, a decision was taken by government to allow for an additional stay of 3
years but with an increased levy of RM 10,000 a year per worker compared to the normal
highest levy of RM1,850. Some employers have expressed the willingness to pay this high

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