Further restriction on employment of expatriates in the oil and gas industry Westhill Consulting Career Tips

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• Further restriction on employment of expatriates
  in the oil and gas industry

• Westhill Consulting Career Tips

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• According to Partner and Vik Tang, International
  Counsel at HBT, Nadia Harto, Associate, Jakarta,
  last year, the Indonesian Ministry of Energy and
  Mineral Resources (ESDM) issued ESDM Decree No.
  31/2013 on Expatriate Utilization and Development
  of National Employees in Oil and Gas Business
  (Decree 31), which introduces more stringent
  requirements and restrictions on the employment
  of expatriates for certain roles in the oil and
  gas sector.

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• Decree 31 requires an responsibility on upstream
  and downstream companies in the Indonesian oil
  and gas sector, and related supporting
  industries, to make a priority on the employment
  of Indonesian workers, and particularly forbids
  employment of expatriates for the following roles

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• human resources
• legal
• health, safety and environment
• supply chain management, including procurement
  and logistics
• quality control, as well as inspection and
• exploration and exploitation functions below
  superintendent level or equivalent positions.

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• Decree 31 allows the utilization of expatriates
  for oil and gas activities in restricted
  circumstances, slike employment of expatriates
• as director or commissioner for the purpose of
  encouraging investment in the oil and gas sector
• for professional positions requiring specific
  skills and technological expertise in this sector
  in order to transfer knowledge relating to new
  technology and
• for certain positions that cannot be filled by
  domestic workers.

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• The application of expatriates for
  non-prohibited functions in the oil and gas
  industry ought to be permitted by the Directorate
  General of Oil and Gas. Decree 31 endows with for
  a reasonably meticulous set of requirements that
  should be met by the expatriates in question.
  -For example, they should have at least of 5
  years related working experience, be 30 55
  years of age, be able to communicate in the
  Indonesian language and enthusiastic to transfer
  knowledge and skills to Indonesian workers. The
  Indonesian language requirement for expatriates
  has attributed in some of regulations, even if to
  date it has not been imposed firmly.

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• Although Decree 31 is intended for encouraging
  the use of Indonesian workers in the oil and gas
  sector, there had been no complaints, but there
  is a warning, it risks further limit the
  availability of skilled senior international
  personnel that the Indonesian oil and gas
  industry presently requires.

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• Businesses operating in the Indonesian oil and
  gas sector should be aware of the restrictions
  concerning hiring expatriates, as a result of
  nonconformity with the said restrictions range
  from nuisance of administrative sanctions,
  probable revocation of the pertinent expatriates
  work permit and non-recovery of operating costs
  from the government. The degree to which the new
  requirements are enforced in practice must be
  monitored by companies operating in the
  Indonesian oil and gas sector.

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• For more information
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