IPA CONVEX SPECIAL SESSION - Investing in Indonesians: Impact of the Current Landscape

The special session commenced with an overview of the talent base in Indonesia, noting that 95% of positions in the industry were filled by Indonesians. This positive situation has happened over several decades, involving the intake of graduates, training and in many cases filling of strategic positions in upstream companies by nationals. It was noted that in the period of decline that was occurring, efficiencies are key, and this applies to people as well. Activities are, however, declining and this has led to significant layoffs of staff, particularly amongst upstream project teams. This has been inevitable, despite the best efforts of the industry.

The various associations in the industry then provided their thoughts and solutions to the current situation and key points are shown below;

  • In the previous thriving industry environment, graduates were able to secure a position within 5 months – this has now extended to at least a year or longer. For example, of last years’ technical graduates, 30% are still searching for their first job
  • Many have gone to other industries, such as banks and insurance, although a significant number have entered academia, research or non-paying social organizations and institutions
  • In the geophysics sector, the 33 faculties providing courses produce 700-800 graduates a year – with limited options open to them and many are entering research institutions, which HAGI are encouraging to expand the R and D capabilities of the country
  • The petroleum geology field is experiencing similar issues – the association (IAGI) has 3610 members and 30% (1603) work in the oil and gas sector. 1000 new geologists enter the market every year and IAGI are encouraging these new graduates to enter social enterprises and research to maintain their competency levels
  • IAFMI have expanded their role into other sectors such as engineering and construction due to the drop in the oil price and reduced activity. Members are encouraged to work on white papers for government, certification and other areas in the slowing market
  • The Chairman of the SPE noted that oil and gas represents some 300K employees (or ~0.2% of the working population), but also contribute 3-5% of national income. The message is that the industry employees “mean something to Indonesia”. He remarked that globally, 33000 members had been lost to the industry in the last 3 years. The previous average age experts were 45-55 years of age, and are being replaced by 25-35 year olds, representing a decline in the knowledge base, although younger people are always encouraged. He added that Indonesia has a “national energy resilience plan” but there is no human capital strategic plan to manage and develop incoming students. Government collaboration is required.
  • The generic message to students is that a long-term strategy is needed, and that international and domestic companies are not hiring significant numbers of students in these difficult times. Graduates need to be trained to be ready for work and internships are encouraged to develop not only technical skills but also soft skills. Mentoring programs are also crucial.
  • Regarding resourcing for the CBM industry, there has been limited action to date in terms of resourcing for this “new” industry, although initiatives are being made in terms of open data access – collaboration with government is needed to develop the skills that this industry will need.
  • The Association chairpersons concluded by summarizing their expectations from government in this period of low oil prices and declining growth.

Competitiveness is needed to re-attract investment to grow companies and recruit the talent that is available in Indonesia. Ease and speed of doing business, legal certainty, collaboration with industry were all highlighted as being essential for the future growth of the industry with its effect on human resources. It is important to prepare for the future, collaborate with government and ensure that there are adequate trained professionals ready for the eventual upturn in the industry.

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