- Temporary Suspension of Work Permit Applications for the Oil and Gas Sector
- March 20, 2018
At a Glance
The Ministry of Energy and Mineral Resources of Indonesia recently revoked a regulation which governs the entry of foreign workers in the Oil and Gas sector. As a result, the Directorate-General of Oil and Gas announced that it has suspended the processing of Rekom RPTKA and Rekom IMTA applications, which are two key steps within the Indonesian Work Permit process for Oil and Gas companies. Fragomen expects that the suspension will be temporary.
Processing of the Recommendation Letter to Apply for a Foreign Manpower Utilization Plan (Rekom RPTKA) and Recommendation Letter to Apply for a Work Permit (Rekom IMTA) are temporarily suspended.
A closer look
- Rekom RPTKA and Rekom IMTA. In order to be able to employ foreign national employees, oil and gas companies need the Directorate-General of Oil and Gas (MIGAS) to issue the Rekom RPTKA and Rekom IMTA recommendation letters to the Ministry of Manpower who can then issue a work permit.
- Effect of revocation. Foreign nationals who have not yet received their Rekom RPTKA and Rekom IMTA will not be able to apply for a work permit in the oil and gas sector until the suspension is over. Foreign nationals who have already received their Rekom RPTKA and Rekom IMTA can continue to apply for their work permits.
- Current activity. MIGAS will continue to hold discussions regarding new regulations both internally and with other Ministries while the suspension occurs.
- The regulation referenced above, which was revoked by the Ministry of Energy and Mineral Resources (ESDM), was issued in 2013 in order to regulate foreign workers in Indonesia’s oil and gas industry and to encourage companies to prioritize the hiring and training of local workers. It provides guidelines on what positions are allowed to be filled by foreign workers, what positions are prohibited, provides for age limits, and prescribes a 1:1 local to foreign worker ratio, among other details.
- The revocation by the ESDM of this regulation was likely a direct result of the President’s instructions to his Ministers to simplify the work permit process within two weeks.
Looking aheadIt is likely that the ESDM will implement new regulations to replace the revoked one, although this is not an assured outcome. Fragomen will continue to closely monitor developments over the next few weeks and provide further updates once available.