Indonesia imposes temporary freeze on sending migrant workers to Malaysia

KUALA LUMPUR (REUTERS) - Indonesia said on Wednesday (July 13) that it has temporarily stopped sending Indonesians to work in Malaysia, including thousands recruited for the plantation sector, citing a breach in a worker recruitment deal.

The freeze is the latest blow for Malaysia - the world's second-largest palm oil producer and a key link in the global supply chain - which is facing a shortage of some 1.2 million workers that may derail its recovery.

Indonesia's Ambassador to Malaysia Hermono told Reuters the freeze was imposed after Malaysia's immigration authorities continued using an online recruitment system for domestic workers that had been linked to allegations of trafficking and forced labour.

The system's continued operation violated the terms of an agreement signed between Malaysia and Indonesia in April, aimed at improving the protection of domestic workers employed in Malaysian households, said Mr Hermono, who goes by one name.

Malaysia's Human Resources Minister M. Saravanan confirmed receiving a letter from Indonesia informing him of the freeze. He told Reuters he would discuss the matter with the Home Ministry, which oversees the immigration department.

Malaysian companies have submitted around 20,000 applications for workers, about half of which are for jobs in the plantation and manufacturing sectors, according to Mr Hermono.

Malaysia relies on millions of foreign workers, mainly from Indonesia, Bangladesh, and Nepal, to fill factory and plantation jobs shunned by Malaysians.

Despite lifting a pandemic freeze on recruitment in February, however, Malaysia has not seen a significant return of workers amid slow government approvals and protracted talks with source countries over employee protections.

There have been growing concerns in recent years over the treatment of migrant workers, with seven Malaysian companies banned by the United States in the last two years over what was described as "forced labour".