New Law Implemented to Promote Localization
December 4, 2020
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At a Glance
- The Angolan authorities have implemented a law under which oil and gas companies must enter into an agreement with the Ministry of Minerals and report on the progress they are making annually in training and integrating local workers.
- Companies failing to comply with the new rules will face fines and may be denied the right to hire foreign nationals.
The situation
The President of Angola has signed a law promoting localization in the oil and gas sector. The law only affects contracts signed after October 20, 2020.
A closer look
- Contract agreement requirement. Companies operating in the oil and gas sector must enter into an agreement with the Ministry of Minerals and Petroleum (MIREMPET) each time they sign a new contract for goods or services. The agreement will outline the company’s plan for recruitment, integration, training and development of their workforce in order to prove to the government that it will attempt to train local workers.
- Reporting requirement. Affected companies will also need to submit to the MIREMPET an annual human resources development plan that will outline the work done by foreign workers to train and transfer skills to local workers, before October 31 of each calendar and an implementation status report on the human resources development plan on March 31 of each calendar year.
- Penalty for noncompliance. Companies failing to comply with the decree will face a fine ranging between USD 50,000 and USD 300,000 and may be denied the right to hire foreign nationals.
Impact
Companies in the oil and gas sector will need to ensure their human resources department and other operational departments are aware of the new requirements and that the training and integration plans are developed and available for review. Fragomen can assist with these plans.
Background
- Regional trend. The implementation of the new law is part of an initiative by the Angolan authorities to improve the local skills base and to ensure that locals benefit from the country’s growing oil and gas sector. This requirement is in line with policies in most African countries for this sector, since most countries’ governments intend for local workers to gain knowledge and skills from the temporary foreign workforce.
- COVID-19 effects on the oil and gas sector. The oil and gas sector is a major part of the Angolan economy and has been greatly affected by COVID-19 as exploration and production had to be halted due to the implementation of travel bans. This resulted in many businesses depending on the oil and gas sector closing, resulting in massive job losses.
Looking ahead
It is expected that Angolan authorities will closely monitor the implementation of the new law and will penalize companies that fail to comply.
In Africa, the potential for economic growth for large oil producers will require policies that support such growth. However, worldwide, government enforcement and compliance checks are likely to remain at a high level through 2021, as borders slowly re-open and more foreign nationals are allowed to visit and work. Government watchdog organizations are likely to be granted increased authority to inspect employers, especially in industries known for hiring high volumes of foreign workers, such as the oil and gas sector.
This alert is for informational purposes only. If you have any questions, please contact the global immigration professional with whom you work at Fragomen or send an email to [email protected].
