Guide to Oil & Gas Working Permit Recommendation Letter Suspension in Indonesia

Oil & gas is one of the most lucrative work fields in Indonesia, with a specific set of requirements for working permit application. However, Indonesian Ministry of Labor has suspended recommendation letter requirement for working permit in Indonesia, starting at the beginning of February 2018. Since recommendation letters had been required for every foreign worker in the industry, there are several aspects of the permit application that are likely to be affected

Reasons to Suspend Recommendation Letter

Ministry of Labor’s current suspensions put a hold on recommendation letters for Foreign Manpower Employment Plan (RPTKA) and Working Permit (IMTA). The recommendation letters were tools to ensure the 1:1 proportion between local and foreign recruits in Indonesia’s oil & gas industry, which has been known to attract foreign workers.  Any foreign workers who did not receive recommendation letters from the ministry will not be able to apply for working permit.

The recommendation letter suspension was a response to President Joko Widodo’s investment strategy. One of his demands is the shortening of permit application process for foreign workers, especially in oil & gas industry. This step was likely taken to encourage investment climate in Indonesia. The recent decision made the application process shorter for foreign workers.

However, President Jokowi also stated that priorities must be given to foreign workers with highly specialized skills, who have crucial roles in their respective companies.

Impacts of Recommendation Letter Suspension for Permit

Here are several impacts that happened to oil & gas industry (and the prospective foreign workers) after the recommendation letter suspension:

·         Shorter RPTKA application period

RPTKA application process for oil & gas expats normally happens between 15 to 30 working days, if there are no problems. The process can be shortened almost half without recommendation letter.

·         Shorter IMTA application period

Previously, it took another 10 to 20 days to apply for IMTA after RPTKA is obtained. Without recommendation letter, the IMTA application period may only need five to 10 days to finish.

·         Smoother, less complicated procedure

The suspension of recommendation letter creating less complicated permit application procedure. This means that an expat can start working in Indonesia without too many hassles. There are also fewer requirements and documents to prepare.

However, there are several cautions that may arise from this new regulation. For example, since there is more leniency in the application process, the ministry and Indonesian government may apply more restrictions in different areas, judging the lucrative nature of oil & gas industry.

What to Do Next

Since there are always possibilities for changes after temporary suspension, foreign workers (or companies that employ expats) must prepare for all possibilities. Any workers who have received their IMTA and other related documents will have no trouble in extending their permits. Meanwhile, those who will just start working in Indonesia for the first time need to discuss with the employer and consultant service.

Foreign workers, especially those with specialized skills or positions, need to follow the news regarding of this regulation. Make sure everything is in order, and there are no other changes before starting to apply for working permit in Indonesia. If possible, make use of the suspension period to find less complicated but legal method for permit application.

How Can Elson Help You?
ELSON Indonesia is a company that focus on providing comprehensive legal solution for expatriates, foreigner, and mixed marriage couple in Indonesia. Contact us: e-mail info@elson.co.id office (+62) 21 8067 4920 hotline (+62) 819 3274 1 333