Energy Ministry Eases Path for Foreign Workers
Regulations revoked on age limits and work permit recommendations for foreigners
By Gilang Ardana
Tuesday, March 13, 2018
As part of a package of changes enacted in early February, the Ministry of Energy and Mineral Resources (ESDM) has revoked Ministerial Regulation No. 31 of 2013 on Foreign Workers in the Oil and Gas Sector, which restricted the use of foreign workers and prohibited the hiring of foreigners over the age of 55. The regulatory moves were part of an ongoing effort to boost investment and simplify permitting processes in the sector.
Previously, Ministerial Regulation No. 31 of 2013 called for oil and gas companies to prioritize the use of Indonesian workers and allowed the hiring of foreign workers only at the director/commissioner level. Other positions, including for supervisor, legal, health and safety environment and supply chain were not allowed to be filled by foreign workers. The regulation stated that companies could only hire a foreigner provided that he/she had at least five years experience and fell within the ages of 30-55 years old. A written recommendation from the Directorate General of Oil and Gas was also mandatory.
Investors have long chafed at the restriction, saying it was a burden that had a negative impact on operations, especially due to the age restriction, which excluded some of the most experienced potential employees in the industry. AmCham Indonesia has long advocated for the lifting of Regulation No. 31.
Now investors need only refer to existing procedures set by the Upstream Oil and Gas Regulatory Special Task Force (SKKMigas) and the Ministry of Manpower for hiring foreign workers.
In total, 32 regulations were revoked, 11 oil and gas regulations, four electricity regulations, seven mining regulations, seven renewable energy regulations and three SKKMigas regulations. As reported in the media, Minister of Energy and Mineral Resources Ignasius Jonan promised the Ministry would simplify or revoke more regulations in upcoming weeks.