Indonesia Looks Forward to Discussing the MoU on Formal Sector Workers with Malaysia
In response to Indonesia’s request, Malaysia agrees to consider discussing an MoU on formal sector workers in the upcoming month.
Steven Sim, the Malaysian Minister of Human Resources, stated that the joint committee between the two countries will also examine and discuss pertinent issues that require a thorough evaluation. The minister added that there are specific processes to facilitate discussions regarding the relevant MoU due to its cross-border nature and the strong diplomatic ties between the two countries.
In his statement during a press conference following today’s 2024 Labour Day and Pocket Talk Series 1 Programme pre-launch, Steven Sim emphasised the importance of a collaborative working committee involving Malaysia and Indonesia. He underscored that the event, set to take place in May with Malaysia as the host, will be a platform for both countries to discuss and deliberate any pertinent issues requiring additional analysis.
On 16 March this year, Malaysia Prime Minister Datuk Seri Anwar Ibrahim announced that Sim was assigned the responsibility of coordinating with his Indonesian counterpart over the request for discussing an MoU on formal sector workers between the two nations.
Review Underway
Responding to a request from the Indonesian Ambassador to Malaysia, Datuk Hermono, a long-awaited review of the MoU regarding formal sector workers from Indonesia to Malaysia is underway. This review, after a period of 20 years since the MoU was established, specifically focuses on workers in the agriculture and construction sectors, highlighting its significance.
One of the difficulties that has to be addressed is the embassy’s responsibility to supervise the recruitment of workers in Malaysia and the requirement to adjust compensation according to Malaysia’s minimum wage laws.
According to Hermono, Indonesia and Malaysia signed two Memorandums of Understanding (MoUs) in 2004 that cover all sectors linked to migrants. However, it is important to note that these MoUs do not include Indonesian domestic workers (PDI).
The two bordering countries mutually finalised the Memorandum of Understanding (MoU) pertaining to PDI or domestic workers on 1 April 2022.
Good News for Investors
In the context of labour liberalisation of the two leading economies of South East Asia, moves like these are only going to bring greater opportunities for investors looking to start a business in Indonesia. If you’re also one, you can contact 3E Accounting for guidance and range of our corporate services.
