Foreign workers and labour segmentation in

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Foreign workers and labour segmentation in Malaysia's construction industry Abdul-Rashid Abdul-Aziz Published online: 21 Oct 2010.

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Construction Management and Economics (2001) 19, 789–798

Foreign workers and labour segmentation in Malaysia’s construction industry ABDUL-RASHID ABDUL-AZIZ School of Housing Building and Planning, Universiti Sains Malaysia, Minden 11800, Penang, Malaysia

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Received 1 September 2000; accepted 24 May 2001

One of the profound changes to have taken place over the last two decades in the construction industry in Malaysia is the emergence of foreign site operatives as an indispensable component of the labour force. This research shows that they have been exposed to some degree of discrimination at the hands of local employers. Labour segmentation has prevailed as a consequence of variability in country-speciŽ c traits. Schisms between the foreign nationals and local workers and between the various foreign nationals operate to the employers’ advantage in that greater control can be exerted. Labour violations have always been an inexorable feature of the Malaysian construction industry, with little prospect of reform. As there seem to be no signs of the dependence on foreign workers attenuating, future waves of migrant workers can expect to be subjected to the same employer treatment, and hence labour segmentation. Keywords: Labour, Malaysia, segmentation, site operatives, treatment

Introduction The 1986–1997 period of rapid economic expansion in Malaysia stimulated contemporary labour  ows from abroad of unprecedented proportions (Kassim, 1996). A labour void the resultant of fairly inelastic domestic manpower unable to meet rising demand was the driving force. From the approximately 500 000 foreign workers in 1984 (Abella, 1996), numbers swelled to in excess of 1.2 million by 1991 (Pillai, 1992). By the mid-1990s, foreign workers made up 15% of the labour force (Lin, 1996). Even after the tumultuous Asian Currency Crisis, which led to retrenchment, the ofŽ cial assessment was that the number of foreign workers in Malaysia had doubled to 2.4 million (early 1998 Ž gures). Accurate statistics are difŽ cult to come by due to the signiŽ cant incidence of clandestine entry as well as non-documentation of exit for regularized workers. *Author for correspondence. e-mail: [email protected]

As for the construction industry, which experienced growth rates much higher than the general economy, labour shortages were particularly acute in many indispensable trades such as concreting, carpentry, bricklaying, painting, tiling, bar bending, and plumbing by the late 1980s and early 1990s (Abdul-Aziz, 1995). A combination of factors contributed, including the unattractiveness of manual construction work to local youths, an expanding manufacturing sector that offered better employment conditions, labour attrition, increasing opportunities for tertiary education, a lower birth rate and out-migration of Malaysia workers to high wage countries such as Singapore and Japan. The statistics on regularized foreign workers (Table 1), and especially on apprehended illegal foreign workers (Table 2), indicate the construction sector as being the most active in utilizing foreign workers. The Union of Employees in the Construction Industry conceded we can’t do without them’ (Hiebert, 1995). Foreign labour has become a vital component of the construction

Construction Management and Economics ISSN 0144–6193 print/ISSN 1466-433X online © 2001 Taylor & Francis Ltd DOI: 10.1080/01446190110072022



Table 1 Number of regularized foreign workers by nationality (July 1992–December 1995). Source: Immigration Department, as quoted in Kassim (1996). Country

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Indonesia Bangladesh Philippines Thailand Pakistan Others Total Percentage

Construction Plantation Domestic help Manufacturing 92 805 26 484 1 160 6 342 1 121 2 218 130 130 30.6

101 521 16 416 49 10 845 183 460 129 474 30.5

62 347 56 26 876 3 818 2 83 93 182 21.9


16 188 40 996 1 298 166 672 660 59 980 14.1

workforce in Malaysia. An estimated 60% of all manual workers in the construction industry were foreign nationals in 1987 (Gill, 1988), a Ž gure which was revised upwards to 70% in 1991 (Pillai, 1992) and then 80% in 1995 (Balaisegaram and Pillai, 1996). A study was conducted during 1996 and 1997 to acquire information about foreign site operatives in Malaysia, prompted by the dearth of information about the work situation they faced and the adverse public reaction they received following the rapid build-up of their presence. Many of the Ž ndings echo previous studies on international migration. However, as Ghosh (1996) notes, Ž ndings on migration tend to be country and area speciŽ c. The socio-cultural and economic factors in labour sending and receiving countries have rarely presented a uniform migration pattern. Indeed as this paper suggests, in the Malaysian construction industry context, international migration has posed unique complexities to the migrants and the employers alike (although the social impact is not considered in


2 063 4 743 191 1 126 67 867 9 057 2.1

1 125 416 554 519 3 574 3 191 0.8



276 049 89 111 30 128 22 816 2 048 4 862 425 014

64.96 20.96 7.09 5.37 0.48 1.14 100.00

the present study for lack of space). This paper locates the attributes of the foreign site operatives that have in uenced the manner in which Malaysian employers treat them. SpeciŽ cally, it sheds light on the interplay of these attributes that gave rise to labour segmentation. The paper ends with some policy conclusions in the context of the study.

Methodology The sample locations of Georgetown, Kuala Lumpur and Johor Bahru, were chosen for their highly intense construction activities. Data were collected through several routes. 1. Three different sets of questionnaire surveys were conducted randomly on 58 construction employers, 1342 foreign and 768 local site operatives. Response rates were 83%, 65% and 24%,

Table 2 Number of illegal foreign nationals apprehended by Malaysian Police according to country of origin and sector (February 1993–1996). Source: Ž eldwork, The Police Force. Country Indonesia Bangladesh Myanmar Thailand India Pakistan Philippines Nepal Cambodia P. R. China Vietnam Sri Lanka Othersa Total Percentage a

Construction Plantation Services Manufacturing 47 948 11 130 1 290 600 616 429 7 24

13 606 2 842 307 950 172 111


2 62 047 46.6

1 17 989 13.5

5 055 2 041 402 274 145 27 2 15 4 1

3 7 969 6.0

2 786 3 849 271 113 16 24 40 8

7 107 5.3

Petty trading


113 99 58 56 28 14

5 26 64 5

10 18 6 6


408 0.3

101 0.1

Others 8 587 11 986 10 056 4 263 1 049 1 207 357 106 63 21 23 10 48 37 776 28.3



78 100 31 973 12 448 6 261 2 026 1,812 406 163 67 42 29 16 54 133 397

58.54 23.97 9.33 4.69 1.52 1.36 0.30 0.12 0.05 0.03 0.02 0.01 0.06 100.0

Iran, Taiwan, Ghana, Afghanistan, Singapore, Kampuchea, Somalia, Sudan, Algeria, Iraq, North Korea, Britain, Brunei, Mali, Punjab, Lesotho, Brazil, Argentina, USA, Turkey, Burma and Barbados.

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Foreign site operatives in Malaysia respectively. Of the foreign sample population, 1131 were Indonesians, 141 Bangladeshis, 37 Myanmars, 14 Filipinos, 11 Thai, 6 Singaporeans, 1 Indian and 1 Pakistani. As for construction employers, the focus was on subcontractors since, just as elsewhere (Ball, 1988; Furusaka, 1990; Assaad, 1993, Hsieh, 1998), normally actual construction work in Malaysia is undertaken by them. Collecting data from foreign workers, especially the illegals, is never easy (Wells, 1996). To overcome inhibition and suspicion, the author (as well as some of the enumerators) solicited the help of contacts in the industry (site managers, Ž eld construction executives and main contractors) to introduce the enumerators to subcontractors and workers. Subsequent discussions took place after work in the absence of these contacts. While some workers refused to participate in the study, others warmed to the attentiveness of the enumerators to their welfare, so much so there were occasions when they encouraged others to contribute as well. Many enumerators reported back the warmth and generosity they received from the surveyed foreign workers, with the response rate surpassing original expectations. Collecting data from the locals posed another sort of challenge in that they were difŽ cult to search out due to the preponderance of foreign workers. 2. Observers were placed on 20 randomly selected construction sites for an average of 3 months to record qualitative information on site operatives (local and foreign) that could not be captured from the survey mentioned above: social structure, interaction between various nationalities, attitude towards safety, work motivation, employer–worker relations, on-site living conditions, etc. In no way did the observers in uence the processes and the people they were documenting. The observers were construction undergraduate students who, because of their youth, were not seen as a menace by anyone, and yet were able to carry out their work effectively. The consent of the main contractors was obtained prior to the placement of the observers on their sites. 3. Information was also obtained from various independent and government agencies, local and foreign, including the Immigration Department’s Task Force, the police, the Ministry of Human Resources, the Department of Occupational Safety and Health, the National Institute of Occupational Safety and Health, SOCSO, the Foreign Workers Agency Association, foreign

791 embassies, the Indonesian Welfare Association, the Construction Industry Development Board, the Master Builders Association of Malaysia, the Malay Contractors Association of Malaysia, the Union of Employees of the Construction Industry, and journalists. The survey data, onsite observations and interviews support one another, thus giving conŽ dence that the information collected mirrors the situation throughout peninsular Malaysia.

ProŽ le of the foreign site operatives International migration has a strong element of selfselection in terms of age, gender and education (Jansen, 1970; Kosinski and Prothero, 1975; Gunatilleke, 1986a; ILO, 1995). Of the surveyed foreign workers, 79.4% were aged 21–35 when they came to Malaysia. Being young and in the most productive years of their lives, they stand the greatest chance of recouping their investment to work abroad (Stalker, 1994). The Malaysian construction industry beneŽ ted from attracting foreign workers at the peak of their productive potential (Stahl, 1984). Due to the physical nature of site work, the survey population was dominated by men (96.0%). Most (81.2%) did not undergo formal schooling beyond the age of 15, and therefore could seek only the low-skill, low-paying jobs at home and abroad. Lack of education can be attributed to low income and the relatively lower educational facilities in rural areas. The surveyed foreign site operatives of the same nationality displayed rich regional diversity in terms of social and work behaviour. In this regard, the Indonesians featured most prominently, by virtue of their predominance; the Minangs and Bawaeans saw themselves as superior to others, whereas the Madurese acquired a reputation for belligerence and violence. The sample population did not originate uniformly from all over their home countries. Certain regions featured prominently as labour suppliers, in part due to chain migration, in part due to better migration facilities: e.g. the island of Java provided 60.9% of the Indonesians surveyed, the Dhaka region provided 20.3% of Bangladeshis, and Rangoon provided 28.6% of Myanmars. As discussed later, the place of origin had a profound in uence in shaping work and social clusters. The issue of migration  ows is complex (Marshall, 1984; Bale and Drakakis-Smith, 1993). The perceived costs and beneŽ ts associated with moving varies widely between individuals, depending on economic resources and expectations, social obligations, and the level of information available about opportunities elsewhere.


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792 Simplistically, it can be said that the main ‘push’ factors for migrating for the surveyed foreign workers were low wages (46.9%), scarcity of work (31.7%), parental or family encouragement (10.7%) and sheer boredom (9.2%). Hugo (1982) posits that certain Indonesian ethno-linguistic subgroups value migration as an intrinsic process in attaining manhood. The responses from the Indonesian survey subpopulation did not explicitly allude to this trait as being an inducing factor, although possibly it may have been subsumed in other responses (e.g. parental pressure). Of the ‘pull’ factors which impelled the survey population to choose Malaysia as their destination, abundant job opportunities ranked the highest (74.1%), followed by better work offers (20.4%) and higher wages (6.0%). The data concur with Kassim’s survey (1986) that found perceived greater employment opportunities (76.8% of responses), not high wages, to be the main catalyst behind the Indonesia–Malaysia labour movement. Only 11.6% of the surveyed foreign site operatives had pre-migration construction work experience. When asked why they entered the construction industry in Malaysia, low skill requirement (40.1%), friends and relatives working in the construction industry (37.9%), plentiful job vacancies (34.1%) and employers willing to engage them (31.1%) were the more common answers. High pay was not a signiŽ cant determining factor (7.5%). What these responses point to was the concern foreign workers gave to securing employment opportunities over choice, job familiarity and high economic returns. Limited construction experience helps explain how it was that foreign workers came to be associated with poor workmanship. Some site managers and employers reminisced during interviews about the competence of earlier waves of migrants (the Indonesians in woodworking and Thais in plastering) which subsequent migrants conspicuously lacked. Foreign site operatives have entered into all kinds of trades, although their distribution has differed from the locals’ (Table 3), partly because local workers have yet to relinquish their dominance in some trades, and possibly because of ‘occupational chaining’, whereby new arrivals from abroad have entered the same occupation as their relatives and fellow villagers (Wickberg, 1994; King, 1996). When asked about the positive and negatives attributes of foreign labour, 16.7% of the employers surveyed pointed to low work quality, in contrast to 8.0% who said otherwise. The statistics compiled from construction employers afŽ rm foreign labour as being perceived as unskilled and locals as skilled. The ratio of unskilled/semi-skilled/skilled/supervisor for the former was 32.9:33.4:31.0:2.7 as opposed to 10.7:24.7:49.2:15.4 for the latter. Unskilled workers

Table 3 Construction trades of foreign and local site operatives (in percentages). Source: surveyed foreign and local workers. Note that the Ž gures exceed 100% as some respondents acquired multiple trades. Trade



Carpentry Concreting Plastering and paviouring Bricklaying General labouring Bar-bending Painting Metal-working Welding Plumbing Wiring Tiling Drainage laying Machinery operating Glazing Sheet metal working Joinery Others

20.4 19.5 12.8 12.2 10.0 6.1 5.7 4.3 4.0 3.5 3.3 3.1 2.8 2.2 1.6 1.3 0.0 1.4

10.9 12.6 11.7 9.1 3.1 6.1 8.5 8.7 8.5 9.2 13.5 8.5 3.4 12.2 3.1 2.6 4.0 7.7

do not remain so indeŽ nitely: an apprentice needs on average about 6 months to become semi-skilled and 3 years before becoming fully skilled (Osmani, 1986). Long-staying foreign workers can be expected to master their respective trades eventually, as was found to be the case in the Middle East (Gunatilleke, 1986b; Khan, 1986), although it has to be said that the rotational migration system adopted in Malaysia conspires against the build up of a large stock of skilled workers among the regularized workforce. The conventional method of acquiring skills in Malaysia is through learning-by-doing. There are proper public training institutions that offer manual construction courses. Legal entry of foreign site operatives was premised on their being skilled, and therefore not requiring postmigration formal training. Cross-border migration is a costly affair. The three most common means of raising Ž nance to migrate for the survey population were borrowing money (48.5%), using up own savings (21.9%) and selling livestock (15.5%). Having invested so much Ž nancially, not to mention psychologically, in migrating to Malaysia, the desire to recoup was so intense that most foreign workers (though not all) exhibited dispositions that endeared them to local construction employers. The sampled construction employers ascribed willingness to work extra hours (86.0%), obedience (74%), low wages (74.0%) and lack of fastidiousness (58%) as merits of foreign labour. Of the major nationality groups, the Indonesians possessed attributes which rendered them the most desirable to engage (73.6% of

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Foreign site operatives in Malaysia


the surveyed employers indicated so) as opposed to the next largest group, the Bangladeshis, who registered the highest score (52.1%) for the least preferred choice. Indonesians were praised mainly for their indomitable spirit to work long and hard (60.5% of the surveyed employers who preferred Indonesians indicated so), ease of communication (47.4%) and skills (10.5%) (Abdul-Aziz, 1999). Poor resilience to the rigours of construction work (58.3% of the surveyed construction workers who indicated the Bangladeshis as the least appealing indicated so), inability to communicate (58.3%) and skills deŽ ciency (12.5%) were the distilled weaknesses of the Bangladeshis. Pertaining to skills, Table 4 afŽ rms the Bangladeshis as the least skilful foreign nationality group. If general workers can be equated as being unskilled, then the responses from the workers themselves also indicated the Bangladeshis as being the least skilled: 23.6% of them placed themselves in this category as opposed to the 7.9% of Indonesians and 8.1% of Myanmars. Language similarity between Bahasa Indonesia and Bahasa Malaysia gave the Indonesians an advantage. Although some Bangladeshis did speak English, the same cannot be said of local employers. However, in time they were able to overcome the language barrier. Site observations found work evasion most rampant among the Bangladeshis whenever left unsupervised. The inability of the Bangladeshis to withstand punishing outdoor manual work cannot be ascribed to age (their average age of 28.7 being almost the same as that of the hardy Indonesians (28.2)), and neither can gender (a higher proportion of them were men (99.3%) compared with the latter (95.5.%)). If average migration cost can be used as a proxy for the motivation factor, the Bangladeshis paid an average RM3438.37 should be a more determined group than the Indonesians paid RM1307.47. Data on pre-migration work experience does reveal that the former were less accustomed to heavy outdoor work compared with the latter, i.e. petty trading, factory operating, taxi driving, as opposed to farming and Ž shing (Table 5), which can account for the nationality-speciŽ c variation. Besides, a smaller proportion of the Bangladeshis had worked in the conTable 4 Skill distribution of foreign workers as indicated by their employers (in percentages). Source: surveyed construction employers. Note that the Ž gures relate to the entire stock of workers engaged by the surveyed employers. Skill category Unskilled Semi-skilled Skilled Supervisor Total




29.1 33.6 34.1 3.2 100.0

26.3 36.8 36.8 0 100.0

60.4 31.5 8.1 0 100.0

Table 5 Types of work held by the Bangladeshis and Indonesians prior to migrating to Malaysia (in percentage). Source: surveyed foreign workers. Work



Farming Petty trading Factory operating Unemployed Construction Menial work Taxi or lorry driving Stevedoring Fishing Others

27.9 22.1 13.6 11.4 7.9 5.7 4.3 3.6 1.4 2.1

43.4 11.1 4.1 12.8 12.2 3.5 1.8 2.2 6.6 2.3

struction sector than the Indonesians. Thus the foreign nationals were not equally productive (Stahl, 1984).

Labour treatment Wages Wage setting in the Malaysian construction industry is determined by market forces, free from institutional imposition and trade union involvement. Being a signatory to the ILO Migration for Employment Convention (Revised) 1949 (No. 97) and (No. 143), Malaysia is obligated to ensure employers give equal treatment to foreign workers (Lee and Sivananthiran, 1996). While dissatisŽ ed regularized foreign workers (clandestine workers are deprived of protection) are entitled to complain to the Labour Department, such action is rare for fear of reprisal. The normal practice is to seek alternative employment (although the consequence for regularized workers is that they become illegal in the eyes of the law). The study found a wage hierarchy in the industry, with the Malaysians occupying the apex, followed by the Indonesians, and the least favoured Bangladeshis at the bottom (Table 6). When asked about the causative factors for wage segmentation, the construction employers sampled pointed to skill variation, diligence, docility and nationality (see Table 7), responses that underscored the link between perceived national variation and wage structure. Hence even though skill Table 6 Mean daily wages of site operatives according to nationality (in Ringgit, Malaysia). Source: surveyed construction employers. Unskilled Semi-skilled Malaysians Indonesians Bangladeshis

30.12 26.77 25.12

40.35 34.30 30.50



60.44 46.97 41.23

76.75 54.00 51.25


794 Table 7 Perceived factors for wage segmentation by employers. Source: surveyed construction employers. Note that the Ž gures exceed 100% as some respondents gave multiple responses. Factors

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Skill Diligence Ability to follow instructions/ perform work unsupervised Nationality

Percentage 65.0 32.5 5.0 5.0

is a major in uence in wage setting, it is not the only one. So among the unskilled, the Bangladeshis received the lowest pay packet. On nationality as a wage determinant, the data set concurs with Wells’ observation (1996) that wage structure re ects the willingness of the various nationality groups to work for different wages. Similarly, Dacanay (1982) had observed that wage segmentation arises from the different levels of incentives needed to attract a particular nationality group to work in a certain economic sector. On another note, Kossoudji (1989) posits that employers pay lower wages to foreign workers due to lack of information about their productivity. As the Bangladeshis were the most recent arrivals, it is possible that Kossoudji’s rationale is true. Wage gradation by nationality tends to be manifest in a multinational labour market setting (Stalker, 1994; ILO, 1995). During the construction boom in the Middle East of the 1970s, for example, a wage hierarchy prevailed, with Arab workers occupying the highest stratum, followed by the South Koreans and Filipinos, with the Bangladeshis and the Pakistanis at the bottom of the stack (Gunatilleke, 1986b). Up to the present, labour market segmentation remains intact in the region (Wells, 1996), thus afŽ rming Lalonde and Topel’s (1991) point that although wage gaps between foreign migrant workers and locals tend to narrow over time, they seldom disappear completely. On this basis, the same scenario is likely to prevail in Malaysia. Interestingly, the majority of the foreign workers surveyed either thought wage equality prevailed (54.1%) or were uncertain whether wage segmentation existed at all (25.9%). The dominance of small and medium size Ž rms, and propensity for construction employers to abstain from having a multinational workforce (see below) may have impeded the free  ow of information about wage levels. Given this limited information, it is not surprising that only 7.7% of the population surveyed indicated their dissatisfaction with wage levels. Besides, as mentioned earlier, abundant job opportunities, not high wages, provided the main stimulus for migrating to Malaysia, and indeed for entering

the construction industry. Having said that, the survey population enjoyed earnings several times the amount they last received back home (Table 8). Even allowing for a time lag between the last occupation at home and the current job, migration has certainly brought economic improvement for foreign workers and their families. From her study of migrant construction workers around the world, Wells (1996) concludes that many countries pay only lip service to the principle of equality. Briggs (1996) observes that no recipient country is willing to endorse labour importation programmes to reduce wages or, worse, aggravate prevailing working conditions, although some might do so to forestall potential increases in wages and improvements in working conditions under conditions of full employment. Rist (1979) on the other hand notes the absence of political will in some countries to address equity issues, so that foreign labour remains marginalized in the economy. The research Ž ndings could not shed light on which policy stand the Malaysian government had tacitly adopted. Construction safety There are various safety legislations which main contractors are supposed to implement at their construction sites, the latest being the Occupational Safety and Health Act 1994. Construction industry safety performance leaves much to be desired. OfŽ cial statistics (Table 9) do not reveal the true situation, as onsite observations found under-reporting of accidents to be frequent. While stricter enforcement and publicity campaigns have inculcated greater safety awareness in the construction industry, ofŽ cers of the Department of Occupational Safety and Health (DOSH) complained that main contractors were slow in upgrading safety standards. With clients pressing for their projects to be completed rapidly, safety was compromised. From on-site observations, it is difŽ cult not to blame the unsatisfactory construction safety record on both employers and workers, a conclusion accepted by DOSH. Site operatives habitually wore wide-brim straw hats and slippers in preference to helmets and boots. Those who worked from high places often dispensed with safety harnesses. Site managers interviewed complained about site operatives impervious to incessant safety reminders and warnings. Equally at fault were main contractors for their failure to provide proper scaffolding, platforms, working procedures and such like. The Union of Employees of the Construction Industry (UECI) has accused employers of making foreign workers work in dangerous situations shunned by locals, an allegation that is supported by a few data sets

Foreign site operatives in Malaysia


Table 8 Ratio of mean wages in Malaysia and at home for selected nationality groups (in Ringgit, Malaysia). Source: surveyed foreign site operatives. Wages

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Current (A) Home (B) A/B







1002.13 224.56 4.46

897.76 238.74 3.76

1105.52 334.48 3.31

1220.83 241.67 5.05

1450.00 361.25 4.01

1007.21 234.96 4.29

indicated below. Even though it was not speciŽ cally framed in the questionnaire, 7.1% of the construction workers surveyed indicated the willingness of foreign workers to work in hazardous conditions as one of their merits. Of the foreign workers surveyed, 10.8% indicated the unsafe working environment as a drawback of the industry in contrast to 14.2% for the local workers population, which serves to afŽ rm the employers’ perception. As it turned out, 23% of the foreign workers surveyed were found to have a higher rate of workrelated accidents than locals (19.7%). It would seem, therefore, that the UECI’s allegation is not unfounded, although other factors such as inability to comprehend safety instructions and signs, induction courses and manuals may render them vulnerable to accidents. OfŽ cials of the Thai Embassy and an Indonesian welfare organization expressed concern during interviews over the high incidence of accidents among their nationals engaged in the construction sector. The response from the foreign workers surveyed on whether they have been injured at work do not hint at any particular nationality being singled out to work in unsafe situations, despite more Bangladeshis expressing dissatisfaction with work safety (13.4%) than any other nationality groups. Interestingly, during the construction boom, newspaper reports about accidents and deaths on construction sites did give the impression that the Indonesians were the most vulnerable, which on re ection may have been due to their preponderance in the industry. On-site accommodation Main contractors usually provide kongsi (on-site accommodation) for the convenience of site operatives (regardless of whoever engages them) whose homes are too distant for daily commuting. With the in ux of Table 9

foreign workers, kongsi-dwellers tend to be dominated by them. Often, Kongsi are built by the workers themselves with building materials provided by main contractors. As the facility is provided without charge, kongsi tend to be constructed with the cheapest material and method of construction. At worst they are no more than dilapidated huts. Sleeping space is minimal, just as with the amenities provided. Piped water is usually supplied, but not electricity. Drainage, toilets and bathrooms tend to be basic. Where proper accommodation is lacking, construction workers have opted to sleep in half-completed buildings. When asked to comment about the poor state of kongsi, main contractors argued that foreign workers lived in even worse conditions back home. As attested by on-site observers, toilets and bathrooms provided are not always utilized. Quite often, kongsi take on the semblance of the slum areas the workers left behind. On-site observation found foreign workers interacting little across the nationality and even ethnolinguistic divide. Living and sleeping spaces were noticeably cleaved. Independent subcommunities of foreign nationals prevailed, each with its own sociocultural features and structure. The greatest complaint from foreign workers about working in Malaysia was being away from family and loved ones (56.7%). Loneliness, compounded by hardship, fostered a high level of camaraderie between people of similar geographical origin (perhaps more so than otherwise), and in the process accentuated even more the distinction between themselves and others. Internecine clashes between the different groups, occasionally culminating in death, invariably arouse police scrutiny. The Thais and Madurese from Indonesia in particular have a disposition for violence. All these help explain why most construction employers deliberately avoid maintaining a heterogeneous mix of foreign nationals.

Reported accidents to SOCSO. Source: Annual Report SOCSO, various years

Year Construction Reported cases Deaths All economic sectors Reported cases Deaths










3 123 40

3 377 35

3 615 39

4 207 51

4 311 44

4 406 60

5 401 116

3 510 81

979 104

121 104 390

12 4 898 363

130 019 541

133 293 653

122 688 644

114 134 952

107 635 1 205

86 289 1 307

85 338 1 046


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796 Behind hoardings, foreign site operatives live in virtually self-contained enclaves that centre around the kongsi. Social tension and mutual mistrust tend to prevail whenever immigrant workers juxtapose with the host community (Brennan, 1984). The local and foreign workers surveyed similarly expressed difŽ culty in interacting with one another, although the malaise is more widespread among the former (39.7%) than the latter (29.7%). Illegal workers are concerned to avoid drawing public attention to their presence. Hassle (26.4%) and detention (11.8%) by police for travel and work documents (even bribes) deterred the foreign workers surveyed from venturing unnecessarily beyond the construction site. Isolation from the outside world enhances the reliance of foreign site operatives on their employers who then can exert greater control over them. Schisms between foreign and local workers, and between differing foreign nationals, also have that effect. Just as main contractors forge ‘big brother’ relationship with their subcontractors (Navamukundan, 1992), so local construction employers were observed inculcating dependence among their foreign workers by assisting them with Ž nance (97.4%), remittances (26.3%), health (15.8%), children’s schooling (2.6%) and correspondence (2.6%). On-site observers also note some employers teaching their workers to gamble as a ploy to bind workers once in debt. Another common tactic practiced elsewhere (Stalker, 1994), is to conŽ scate passports belonging to regularized workers despite protest from foreign embassies. Nonetheless, under severe mistreatment (e.g. nonpayment of wages for several months at a time) or lured by higher wages, workers still absconded.

Discussion The research shows that foreign site operatives in Malaysia have been subjected to unsatisfactory treatment at the hands of local employers. Having said that, local workers themselves have not fared much better (which partly accounts for the diminution of interest among local youths in construction manual work as a career option). The construction industry is notorious for depriving manual workers of their legal social protection (Lee and Sivananthiran, 1996). Employers do not normally provide written contracts and the work relationship is invariably ad hoc in nature (Devi, 1996). To recompense the lack of social protection and remuneration stability, generally construction workers are paid higher than comparable workers in other industries. Labour violations can be attributed to the many small and medium size independent production entities that operate in the informal realm of the national

economy, and as such are unconstrained by the legal institutions of society (Edgren, 1990). Labour relations in the Malaysian construction industry are indeed archaic, with existing arrangements such as ‘kongsi’, ‘kongsi kang’ (daily-rated labourer who does miscellaneous jobs) and ‘kepala’ (foreman) harking back to the pre-independence era when Chinese coolies were brought in (Jackson, 1961; Siew, 1961). Trade unionism has had little impact on labour relations in Malaysia’s construction industry. Malaysian trade unions have always been small, thus giving rise to the term ‘peanut unions’ (Arudsothy and Littler, 1993). In the 1980s the government introduced policies to suppress their development even further (Jomo and Todd, 1994). Limited membership stemming from apathy also enfeebled the unions in the construction industry (the UECI, for example, has only approximately 600 members). Ironically while trade unions have protested against the entry of foreign workers, they have concurrently been trying to attract new members from among them – a move prohibited by the government which is wary of trade unions being possibly imbued with foreign-style assertiveness. By contrast, construction employers’ organizations (Master Builders Association of Malaysia and Malay Contractors Association of Malaysia) maintain a good relationship with the government in the spirit of ‘Malaysia Incorporated’. The organizations are often consulted on policy matters, but improving the welfare of site operatives has not been their priority. Construction workers may look towards the Malaysian Construction Industry Development Board (CIDB) formed in 1994 for possible labour reform. Of late, it has been concentrating on improving construction work safety. By March 2001, every construction worker is expected to have undergone a one-day safety and health induction course under the ‘green card’ programme. So far there is no indication that CIDB will address the other issues plaguing the industry. A request by one local authority a few years ago for CIDB to look into kongsi has yet to be addressed.

Conclusion Despite weak construction orders in the wake of the Asian Financial Crisis, the preponderance of foreign nationals continues, portending continued dependence on foreign labour in years to come. Despite CIDB’s wish for the industry to intensify mechanization and prefabrication as a means of reducing imported labour demand, the industry has initiated change only at a slow pace. CIDB has also begun offering training courses to youths from its own training facilities but, judging by the public response from other public

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Foreign site operatives in Malaysia training institutes run by the Ministry of Labour and Ministry of Entrepreneur Development, the target of generating 25 000–30 000 skilled local workers annually is overly optimistic (Abdul-Aziz, 2000). Insurmountable barriers to major labour reforms are likely to persist in the Malaysian construction industry. While labour supplying nations can propose regulations and legislation to protect their citizens against labour violations, these are hard to enforce extra-territorially (Gunatilleke, 1986a; Wells, 1996). Meanwhile labour attachés of labour supplying countries such as those at the Indonesian, Bangladeshi and Thai Embassies in Kuala Lumpur do their utmost to safeguard their nationals against discriminatory hiring and working practices. For as long as the various foreign nationality groups are associated with the traits indicated in this paper, the structure of the labour hierarchy is unlikely to alter.

Acknowledgement The author acknowledges a research grant from the Ministry of Science, Malaysia under the IRPA (IntensiŽ cation of Research in Priority Areas) programme.

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