On February 8, 2018, the Minister of Energy and Mineral Resources (Ignatius Jonan) officially revoked the obligation for companies in the Oil & Gas sector to obtain a MIGAS Recommendation for its foreign workers. By issuing Regulation number No. 6 of 2018 concerning the Revocation of the Minister of Energy and Mineral Resources Regulation, Minister of Mining and Energy Regulation and Decree of the Minister of Energy and Mineral Resources concerning Oil & Gas Business Activities ("Regulation ESDM 6/2018") the Minister officially revoked the Ministry of Energy and Mineral Resources Regulation No. 31 of 2013 on the Provisions and Procedures for the Use of Foreign Workers and the Development of Indonesian Workers active in the Business Field of Oil & Gas ("Regulation ESDM 31/2013).
ESDM Regulation 31/2013
Regulation ESDM 31/2013 previously regulated the terms and conditions for obtaining a MIGAS recommendation for a Expatriate Placement Plan (RPTKA) and for obtaining a MIGAS recommendation for a Foreign Workers Permit (IMTA) which were required for companies active in the Oil & Gas sector. The obligation to obtain an RPTKA recommendation and IMTA recommendation for foreign workers added limitations and restrictions to Foreign Workers as compared to regular work permit applications.
Implication of the Revocation
The revocation of Regulation ESDM 31/2013 will have the following implications:
- Oil & Gas Companies that intend to hire Foreign Workers in Indonesia do no longer require an MIGAS recommendation for the RPTKA and MIGAS recommendation for the IMTA from the Directorate General of Oil & Gas ("Dirjen MIGAS"). For the Partnership Contract Companies (K3S) we have not yet received confirmation whether or not a recommendation from SKK MIGAS is required;
- Oil & Gas Companies can now directly apply for an RPTKA and IMTA at the Ministry of Manpower of the Republic of Indonesia, by following the procedure as set out in the Minister of Manpower Regulation No. 16 of 2015 in conjunction with the Minister of Manpower Regulation No. 35 of 2015 on the Procedures regarding the Use of Foreign Workers ("Regulation 16/2015 in conjunction with Regulation 35/2015");
- Sub-contractor companies (both Oil & Gas or non-Oil & Gas) used by Oil & Gas Company can work in the Oil & Gas sector without any approval or recommendation from the Dirjen MIGAS. This applies to both new work permits and work permit renewals;
- The General Director of Oil & Gas no longer has the authority to supervise Foreign Workers in Oil & Gas companies. The supervision of foreign workers will from now on be conducted by the Ministry of Manpower and the Immigration Office.
In addition to point 2 above, we emphasize that Oil & Gas companies / contractors which intend to employ foreign workers for a period of more than 6 months (7-12 months - “Long Term Work Permit) no longer need to follow the document requirements set out by Regulation ESDM 31/2013. Aside from the standard document requirements, foreign workers and the Oil & Gas companies / contractors need to fulfill at least the following requirements to successfully apply for a Long Term Work Permit:
- Working experience (in the Oil & Gas sector) of minimum 5 years proven by reference letter;
- Minimum Bachelor Degree (Bachelor Degree);
- Indonesian Labor Companion (TKIP) for transfer of knowledge and technology;
- Project contract / project cooperation agreement with Oil & Gas Company .
In the future, it is also possible to issue new regulations or new policies related to foreign workers in the Oil & Gas sector.
This column is provided by PNB Immigration Law Firm Indonesia