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For many years, the Committee of Experts as well as the Conference Committee on the Application of Standards, have been drawing the Government’s attention to the fact that the national legislation and practice need to be brought in compliance with the principle of equality of treatment between nationals and non-nationals with regard to compensation for industrial accidents, in conformity with Article 1(1) of the Convention. In 1993, foreign workers were transferred from the Employees’ Social Security Scheme (ESS) which provides for periodical payments to victims of industrial accidents and their dependants, to the Workmen’s Compensation Scheme (WCS), which only guarantees the payment of a lump sum. In 1997, the Conference Committee concluded that the level of benefits granted under the ESS was significantly higher than that guaranteed by the WCS and insisted that foreign workers benefit from the same protection as Malaysian nationals. An ILO high-level technical advisory mission visited the country in May 1998 to examine ways of giving effect to the conclusions of the Conference Committee. As a result, the Government stated in its 1998 report that it was planning to review the coverage of foreign workers under the ESS and to propose amendments to the Social Security Act of 1969 in this regard. Since then, however, no steps were undertaken to bring the law and practice into conformity with the Convention.

In its previous observation of 2008, the Committee noted that, taking into account the large number of foreign workers concerned and their high accident rate, the situation called for special efforts from the Government of Malaysia to overcome administrative and practical difficulties, that were impeding equal treatment of foreign workers who suffer industrial accidents. The Committee invited the Government to avail itself of the technical assistance of the Office in this respect.  In particular, the Government was asked to demonstrate the actuarial equivalence of the lump sum paid under the WCS to foreign workers in cases of temporary or permanent incapacity, invalidity or survivors’ rights to the amount of the periodical payments granted under the ESS to Malaysian workers in similar cases. With respect to the difficulties mentioned by the Government concerning the payment of compensation abroad, the Committee pointed out that these difficulties could be overcome by way of special arrangements between the Members concerned in line with Article 1(2) of the Convention. Such arrangements should be concluded in the first place with the main countries supplying workforce to Malaysia. Among the 1.9 million foreign workers currently employed in Malaysia, more than 1.5 million come from Indonesia, followed by India, Myanmar, Bangladesh, the Philippines, Thailand, Pakistan and China. All of these countries are parties to the Convention.

In its response to the Committee’s observation, the Government limited itself to reiterating its position that the WCS is a suitable and practical approach for managing compensation of industrial accidents for foreign workers in Malaysia, and expressed the opinion that the system is reliable and suitable to the needs of the workforce in Malaysia.

The Committee regrets to note that the Government, in its reply received on 30 July 2010, sees no need to modify the national law and practice to bring it into conformity with the Convention or to resort to the technical assistance which the international community is willing to provide for this purpose. In such a situation, it is the obligation of the Committee to advise the Government that it is breaching its obligations under international law by not observing the principle of equality of treatment between nationals of any other member State which has ratified the Convention and its own nationals. Such violation of the Convention by the Government of Malaysia undermines the system of automatic reciprocity in granting equality of treatment to nationals of ratifying States that the Convention establishes between them. Given the gravity of the situation, the Committee requests the Government to reconsider its position.

[The Government is asked to supply full particulars to the Conference at its 100th Session and to report in detail in 2011.]