A Peek into the Future: A Streamlined Indonesian Work Permit Process?

In early February, the President of Indonesia, Joko Widodo (Jokowi), delivered some exciting news for those of us monitoring work permit rules and regulations in Indonesia. In an instruction to the relevant government Ministers, Jokowi announced his goal of streamlining the work permit process for foreign nationals. 

Immediate developments

Jokowi’s instruction went out to several ministries, including the Ministry of Manpower (MOM), which oversees the work permit process, as well as the Ministry of Law and Human Rights, which covers the Directorate General of Immigration.

Following this sudden announcement, it did not take long for some of the government agencies to act.  In fact, within a few weeks, the Directorate General of Oil & Gas (MIGAS) (which falls under the Ministry of Energy and Mineral Resources, or ESDM) swiftly revoked many of its regulations, including the one governing foreign workers. Under that regulation, companies in the oil and gas industry were required to first obtain a recommendation (or rekom) from MIGAS before they could even proceed with the work permit process at MOM. This process tended to be protracted and could delay the process by several months, which was difficult for companies to plan around.  With the removal of this requirement, oil and gas companies could now, it seemed, enjoy the same work permit process as other industries. 

The challenges of intragovernmental coordination

That said, while this was very welcome news, it also highlights the difficulties in tracking new legislative or regulatory changes or announcements in Indonesia.  With multiple government agencies involved in the immigration process, while one department may issue new regulations or make sudden changes, that does not necessarily mean that the others will follow suit (or will follow suit as quickly). In fact, even after MIGAS had confirmed it would remove the rekom requirement and would no longer issue it, the situation was still in limbo, given there had not yet been confirmation from MOM that they would not require the rekom to proceed with oil and gas applications.  (This was only resolved subsequently after several follow-ups and then confirmed recently by the MOM, see below.)

Updates from the ministries

In fact, the challenge of intra-departmental coordination (and ensuring policies are aligned) was recognized by several government officers that we had the privilege of speaking with last week during a trip to Jakarta.  For example, while the MOM was supportive of Jokowi’s initiatives in deregulating the work permit process, they confirmed that the other ministries would also need to streamline their regulations as well (and the different ministries may take action within different timeframes). 

While the list of proposed changes mentioned was lengthy, they did all point to a more positive approach to immigration and foreign talent, with a focus on encouraging foreign investment (almost the opposite approach from the Manpower regulations issued in June 2015).  Among other upcoming changes, the Minister of Manpower highlighted longer durations for work permits (which will be tied to the foreign national’s work contract), faster processing times, and allowing foreign workers to come in for emergency or maintenance trips while simultaneously applying for a work permit (rather than having to apply for one in advance).  It was also around the time of our trip that the MOM confirmed that the rekom (above) was in fact no longer required (and this was also confirmed by the Minister). 

What we heard last week in Jakarta was good news overall, but we also understand that it will take time for these plans to be implemented and for existing rules and regulations to either be reconciled, revoked or rewritten.  Given the large number of regulations that are undergoing review as well as the number of government agencies involved, I believe this will take time and is likely to result in some uncertainty and even delays along the way.  That said, for the moment at least, I feel optimistic that the immediate future is looking brighter for a more streamlined Indonesian work permit process.