STA urges review of labour costs, rules amid industry strain

KUCHING (March 31): The Sarawak Timber Association (STA) has called on the state government to review rising labour-related costs and regulatory measures, saying the cumulative impact is placing significant strain on employers in the timber industry.

STA chairman Dato Henry Lau Lee Kong said while the association supports the Sarawak government’s Foreign Workers Transformation Approach (FWTA), introduced in January last year to modernise recruitment and reduce processing time to within 61 days, its current implementation has created uncertainty and added complexity.

He said employers are facing increased financial and administrative burdens due to system reliability issues, weak inter-agency coordination and the absence of a mechanism to verify whether prospective workers are blacklisted or have overstayed prior to application.

“FWTA should facilitate essential checks and streamline processes, not add further cost and uncertainty,” he said in his report on the association’s 2025 workings ahead of its annual general meeting at Wisma STA here on Tuesday.

Lau pointed out that employers are currently required to make upfront payments of RM904 per worker across various stages of processing, while renewal fees are set to increase progressively to RM1,854 per worker by 2027.

In this regard, STA has urged the government to maintain the renewal fee at RM904 to help ease cost pressures on businesses.

Lau added that 2025 has seen mounting cumulative costs, including the minimum wage increase from RM1,500 to RM1,700 effective Feb 1, the expansion of the Sales and Service Tax (SST), mandatory Employees Provident Fund (EPF) contributions for foreign workers and other compliance requirements.

“These measures, some of which were introduced without sufficient consultation or clear purpose, have intensified administrative and financial pressures on employers,” he said.

STA has also voiced strong objection to certain proposed labour reforms, including allowing enforcement officers to enter and inspect business premises without a warrant, as well as granting broad access to company records for study purposes.

Lau said such proposals raise serious concerns over procedural safeguards, confidentiality of business information and the protection of normal business operations.

“STA totally disagrees with these proposals and urges that they be discarded. Instead, there should be greater consultation with industry stakeholders to ensure productive and fair enforcement,” he said.

The FWTA is understood to acts as a digitalised labour management ecosystem under the Sarawak Premier’s Department to streamline foreign worker recruitment through the SANSOLS system, including new charges

On industry development, Lau, who is KTS Group managing director, said STA Training Sdn Bhd (STAT), recognised by the Forest Department and the Natural Resources and Environment Board (NREB), has expanded its programmes to include training in log extraction using excavators, environmental quality monitoring, compliance audits and log scaling to enhance professionalism within the industry.

He also welcomed the Sarawak Free Tertiary Education Scheme (FTES) for Science, Technology, Engineering and Mathematics (STEM) disciplines, funded through hill timber premiums collected from the industry, and encouraged the inclusion of forestry-related disciplines to support the next generation of professionals.

On emerging carbon initiatives, Lau advised caution, noting that while such efforts present promising opportunities, evolving global trends require careful study and full understanding before stakeholders commit.

Amid rapid changes in the industry over the past decade, he stressed that STA must also rationalise and adapt to remain relevant in an increasingly challenging operating environment.