KUALA LUMPUR (Nov 2): The government will reject applications for new manufacturing licences that perpetuate heavy reliance on low-skilled foreign labour, according to Investment, Trade and Industry Minister Datuk Seri Johari Abdul Ghani.

Johari said businesses need to offer better-paying jobs to Malaysians and invest in automation. 

Any new investments should not replicate labour-intensive business models that have left some long-established manufacturers in Malaysia dependent on foreign workers, despite the country having seen growing availability of locally trained technical talent over 400,000 graduates, he added. 

“Anyone who comes and asks for a new licence to do something similar to companies already operating in our country, we say no,” Johari told the Dewan Rakyat during oral question time on Monday. 

Johari said if any industries approach the Ministry of Investment, Trade and Industry (Miti) or the Malaysian Investment Development Authority (Mida), they will be told that foreign workers should be confined to dirty, dangerous and difficult jobs, commonly referred to as “3D” work, only. 

For other roles, employers should offer wages that make the jobs worthwhile for local workers, he added. 

Johari was responding to Tan Hong Pin (PH-Bakri), who asked whether the government would allow greater flexibility in foreign worker recruitment according to the needs and automation capabilities of different industries.

Tan argued that some manufacturers maintained that they had already automated as much as commercially feasible but still required manual labour. 

He also questioned responses suggesting that businesses seeking cheaper workers should relocate to Indonesia or Vietnam, warning that such messages could encourage manufacturers to leave Malaysia.

Johari said the government’s approach was to progressively upgrade existing industries rather than pursue a blanket relocation of lower-technology manufacturing activities overseas. 

However, he criticised employers that continued to seek foreign workers while offering technical and vocational education and training (TVET) graduates wages comparable to those paid to low-skilled foreign labour.

“Unfortunately, some of these companies want to pay TVET graduates at foreign-worker wage levels,” he said. Malaysia already had about 2.6 million foreign workers, excluding undocumented workers, Johari said. 

He said some companies that had operated in the country for 10 to 20 years remained dependent on foreign labour, even as the country expanded its pool of TVET-trained workers.

Johari also rejected suggestions that Malaysians were “unwilling to work”, pointing to those who commute daily to Singapore for employment or took up gig work because the earnings there “made economic sense to them”. 

The issue, he said, was whether wages adequately compensated workers for their living costs, including accommodation.

Johari also questioned why some companies earning hundreds of millions of ringgit in profits were reluctant to offer local workers RM2,000 a month and continued to start them at RM1,700.

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