The recent introduction of RM350 as the guaranteed monthly wage for rubber estate workers as result of the agreement between Malaysian Agricultural Producers Association (Mapa) and the National Union of Plantation Workers (NUPW) has been hailed by some organisations and the mainstream newspapers as an historic deal.

Two years ago, the provision of RM325 monthly wage for oil-palm estate workers was described as a significant milestone in the historical relations between employers and workers in the country. However, despite the compliments paid to the employers and the union, the stark fact remains that the monthly wage system introduced for both the categories of workers simply does not address the fundamental material problems faced by plantation workers in the country.

The concept of monthly wage does not really address the main problem of the low wage structure in the plantations. There is no honest attempt to provide for increased wages for workers o­n the grounds of their productivity, rising costs and not the least the handsome profits derived by plantation companies.

Most exploited group

'Monthly wage' remains a mere slogan to legitimise the tripartite unequal relationship between the state and capital o­n o­ne hand and the union o­n the other hand. While the actions of the state and capital truly reflect the dominant classes, the union position is hardly representative of the thousands of workers sinking in the quagmire of poverty and underdevelopment.

Ultimately, the monthly wage system that has been hailed as historic by certain interested parties, is nothing but a larger manifestation of capital's diabolical domination of labour in the country.

Numerous studies have shown that plantation workers in the country are the most marginalised and exploited segment of the Malaysian population.

While workers in the other modern sectors have benefitted from modernisation and development, plantation workers have not really gained much. There is glaring disparity in wages between those in the plantation sector and those in the manufacturing, service and public sectors.

It must be remembered that the plantation sector was o­ne of the first to be established by British colonialism by bringing in indentured workers from India, China and Java. However, despite this earlier historical start, workers in the plantations never made any substantial material advance. It is rather strange that plantation workers contribution to the development of the country have never be acknowledged or rewarded in any meaningful sense.

Perennial problem

Plantation workers in Malaysia face the perennial problem of low wages. The wage structure in plantations is very tied to the price of commodities in the international market. While there are some fixed items in the wage bill of workers, the major portion of the payment is very much tied to price of commodities.

Because the price of commodities fluctuate in the market, there is frequent tendency for wages to go up and down. In other words, the core wage structure for plantation workers is highly unstable. It is this instability that is the prime cause of low wage structure for plantation workers not o­nly in Malaysia but in other primary commodity-producing countries.

For a long time, plantation workers have demanded for some kind of wage stability in plantations. Following political independence, it was the NUPW that sought to intervene and bring about wage stability for workers.

Unfortunately, the union - lacking the strength and vision to chart a new course which will bring about changes to the plantation social and economic structure toward better living and working conditions for workers - very often than not sought to accommodate to the whims and fancies of plantation employers, especially those represented in Mapa.

Given the extreme forms of state control o­n labour and the pathetic character of the union, plantation workers have been denied benefits that accrued to workers in other dynamic sectors of the economy.

Although the union could not do much to alter the exploitative structures of plantations, it nonetheless sought to provide an image that it cared for workers after all. In the last two decades or so, the union sought to ingratiate itself with its members and plantation workers in general by advocating the introduction of a wage system that would provide some kind of stable income for workers.

Real wages decline

However, from the beginning, given the overall conservative and reactionary thrust of the union, it never really cared much to change the gross character of the pernicious system of exploitation.

Instead of arguing for improved wages and benefits, it merely sought to introduce and advance the concept of monthly wage for workers; as though a monthly wage would somehow satisfy the real needs of workers.

The employers in plantations have been very consistent from the very beginning; they were against any form of improved wages for workers. Plantation capital operated o­n the premise that any alteration of the existing socio-economic structure of plantations would be detrimental to the derivation of profits.

Given the support the blind support of the state for employers, the latter was basically left free to manage and operate o­ne of the most exploitative sectors of the Malaysian post-war economy. This would explain why plantation workers especially rubber tappers have not seen any real wage increase over the last two decades.

In fact, o­ne could even argue that real wages accruing to rubber tappers have gradually declined over the years. For instance, real monthly wages for rubber tappers were: RM134 in 1990, RM135 in 1995, RM150 in 2000 and RM117 in 2003.

Although the union basically survived due to its accommodationist strategies, it could not ignore the growing demands from workers for the overall improvement of the socio-economic structure.

It was in this context that it came up with the idea of a guaranteed monthly wage system for plantation workers in the 1980s and 1990s. The union's first proposal of monthly wage system for workers was rejected by the Industrial Court in 1985.

The court simply argued that since the union did not believe in the monthly wage system by not implementing in its own plantations, it could not expect employers to support the introduction of the system.

Moreover, the court also concurred with the employers that the monthly wage system would impose a great financial burden o­n the industry and might consequently affect the viability of the plantation industry as whole.

There was a considerable time lapse of nearly 15 years before the union o­nce again took up the issue of monthly wage for workers.

The discussion o­n the issue of monthly wage took place in somewhat changed conditions. Growing labour shortage faced by the industry, the migration of workers, mainly Malaysians, from plantations, the difficulty to obtain services of foreign workers, the rising labour costs associated with the recruitment of labour and others influenced the employers to hold dialogues with the union o­n the question of a guaranteed monthly wage for workers.

To bring about some sort of 'sane' industrial relations in the plantation sector, the state was behind the efforts of both the employers and the union to reach a compromise o­n the issue of the monthly wage.

Two phases

The introduction of a monthly wage system for all workers went through two phases. In the first phase, starting in 2001, Mapa and the NUPW concluded an agreement for the implementation of a monthly wage system for oil-palm harvesters and mill workers. In the agreement, it was stipulated that RM325 would be the monthly wage for these two categories of workers.

However, although the concept of monthly wage was something new to the industry, it did not mean anything in practice. It was soon found that this figure was something hastily introduced more to gain political mileage rather than really addressing the material position of plantation workers. It was more of a political gimmick to hoodwink workers.

According to the agreement between the employers and the union, the monthly wage of RM325 would o­nly be implemented if the monthly wages of the two categories of workers fall below this figure.

Since these two categories of workers earn an average salary of RM550-600 and RM400-450 per month, the monthly wage would not be applicable. However, if their salaries go below the stipulated mark, then monthly wage would be automatically applicable.

But there is catch. For monthly wages to go below the stipulated mark, workers either do not report or fall sick. If this happens, then there are grounds for employers either to sack the workers or medically board them out. Thus, in real practice, the monthly wage is not applicable at all to plantations workers.

It took another two years before the monthly wage scheme was introduced for workers in the rubber sector, rubber tappers and mill workers. A few days ago, Mapa and the NUPW announced the so-called historical conclusion of the monthly wage scheme for workers in the rubber sector.

For workers in the rubber sector, the monthly wage was stipulated as RM350, an increase of RM25. Just like the oil-palm sector, the monthly wage for rubber workers is basically a non-starter.

Vicious circle

It is rather strange that little or nothing concrete has been forthcoming for thousands of plantation workers in the country. Their immense contribution and sacrifice needs no mentioning. But plantation capital manifesting in agencies such as Mapa and others have been the most reluctant parties to even concede minimal benefits to labour.

It is not that plantation companies are losing profit or finding it hard to continue their operations o­n the grounds of labour shortage. For instance, the pre-tax profits of major plantation companies are as follows: RM118 million for Golden Hope Plantations, RM3.4 billion for Kumpulan Guthrie, RM272.2 million for IOI Corp Bhd, RM374.3 million for Sime Darby and RM273.2 million for KL Kepong Bhd.

Despite this excessive profit, these companies are extremely reluctant to concede minimal benefits to workers, but are more prone to come out arguments about declining profit and rising costs. But surely these companies could address the problem of labour productivity by providing a better material deal for workers?

Unfortunately, as some have argued, it could be the nature of the production system based o­n primitive accumulation that predisposes plantation capital to pay little or no attention to the welfare of workers.

Unless and until there are major political and economic changes, it would be virtually impossible to break the vicious circle of exploitation in plantations. Under the present circumstances, plantation capital and the state in combination would impose the most intolerable political, social and economic order o­n workers.

The pathetic union cannot do anything; it is merely a insignificant appendage of the dominant forces in plantations. As Gramsci perceptibly remarked in his Prison Notebook , it would give the impression of conflict with capital, but in the actual sense, the union is in consensus with capital.

This would explain the nature of industrial relations in the country and why capital has gained such an ascendancy over the years. The plantation sector merely illustrates in gross form the nature of the relationship between capital and the state, and that the so-called representatives of workers have deviated from the actual struggle.

In the final analysis, given the twilight nature of the plantation industry, there are definite limits to what workers can do. But nonetheless, through the practice of resistance and waging of struggles, workers can stand to gain much.

The so-called historic deal should spur members of the plantation working class to depend o­n their ability to bring about desired changes. Such struggle presupposes not o­nly confronting capital, the main culprit, but the state and their so-called representative.

P RAMASAMY is a professor of political economy at the Political Science Department, Universiti Kebangsaan Malaysia, and has academic interests in Malaysian politics and labour.