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Sime Darby Plantations Should Prioritize People Before Profits



02 Jun 2018


Sime Darby Plantations Should Prioritize People Before Profits

Tenaganita is perplexed to learn that Sime Darby Plantation is preparing an appeal against the proposed increase in minimum wage for workers (http://www.freemalaysiatoday.com/category/nation/2018/05/31/rm1500-minimum-wage-will-hurt-plantation-industry-says-sime-darby/ )

In discussions regarding wages of plantation workers, many Sime Darby estate managers have previously claimed - with pride - that the earnings of most of their workers are already well above the current minimum wage of RM1000, pointing out that many workers earn more than RM2000 per month. If this is indeed true, it is difficult to understand Sime Darby Plantation’s cause for concern. The rise in statutory minimum wage should have little or no impact on their cost of production. It is claimed that the wage rise will increase labor cost’s share of total production cost from 26% to 35% resulting in an additional cost of RM185 per tonne.

There must be more transparency in how these figures have been arrived at.

Assuming that the figures cited above are accurate, Tenaganita believes that as a socially responsible company that it claims to be, with RSPO approval and certification, Sime Darby Plantation should not begrudge its workers a pay rise to a level which still falls far short of Bank Negara’s estimated living wage of RM2700.

It should be noted that Sime Darby Plantation Bhd posted a 93% increase in net profit to RM1.69 billion for the nine months ended March 31, 2018. With such healthy profits, (undoubtedly with generous bonuses for management and staff) it would seem petty and rapacious of Sime Darby Plantations, reputedly the world’s largest oil palm plantation, try to keep down the wages of its workers.

Sime Darby Plantation’s concern for increasing productivity and profits, should not be at the expense of a better quality of life for its workers especially those who earn the least and arguably work the hardest. At least 70% of this group of workers are migrant workers who, leaving behind their families and loved ones, and another 30% local workers- pre-dominantly women, who labor in our plantations with work conditions which are harsh and difficult.

As such Tenaganita proposes that Sime Darby Plantation, must take the lead in rallying the other players in the plantation industry to raise the wages of plantation workers to above the minimum to reflect the demanding and difficult nature of plantation work, instead of using its dominant market position to keep workers’ wages at an unfairly low level. 

Sime Darby Plantation is also concerned that the government will make good on its pledge to reduce the number of foreign workers. This heavy dependence on a shrinking supply of migrant workers is unstainable in the long run. Instead of trying to keep wages low by exploiting the poverty and vulnerability of migrant workers, Tenaganita would suggest that the Sime Darby Plantation lead the way in transforming the living and working conditions in plantations, with decent living wages so that more Malaysian will bel be prepared to earn a living on the plantations.

It is time for Sime Darby to stop this form of corporate hegemony which prioritizes profit over people and treats the market as an invincible force that directs the fate of its workers with the dominance of economic and corporate interest.  

THE END

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