Publications

Understanding The Potential Risks Regarding Employment in The Oil and Gas Industry [Upstream]

Proceedings Title : Proc. Indon. Petrol. Assoc., 46th Ann. Conv., 2022

In this article, we are trying to focus on employment matter as one of the big issues in the Oil and Gas industry Upstream Sector, such a topic that is often underestimated even though it has a significant impact on upstream activities. Human resources are a key factor in driving the industry forward. Based on the article Pratama Guitarra from CNBC Indonesia (Guitarra, Pratama. “SKK Migas Bidik 12 Proyek dan 19,6 Triliun di 2022”) stated that for every US$ 1 billion invested in the upstream oil and gas sector it will absorb approximately 100 thousand workers. Naturally, such conditions above may cause potential disputes that might arise due to the friction of interest between the employee and the employers. Hence, the Indonesian Government has stipulated several Laws regarding this matter, such as Law No. 13/2013 regarding Employment, which has been partially modified by Article 81 Law No. 11/2020 2020 regarding Job Creation along with several implementation regulations regarding employment. Need to be noted, that: these amendments have made a significant change in the Employment regulations. Even more, on 25 November 2021 the Constitutional Court through its decision No. 91/PUU-XV/III/2020 which in essence stipulated that Law No. 11/2020 be conditionally in-constitutional. That is a condition that simply could cause more confusion, both on the part of the employee and employers in implementing the employment regulation in their company. Therefore, in this article, the writer would conduct a comprehensive study of the applicable Laws and Regulations regarding employment along with the reality on the ground to provide a comprehensive overview of the potential risks regarding Employment in the upstream Oil and Gas Industry regarding Job Creation Laws, for example about: (i) compensation for the employee on a contract basis; (ii) termination reason or reasons; (iii) Lack of implementation of the prevailing regulation in the internal policy of the company. It is believed that this article will give significant insights into the practical application of the Employment Regulations in the upstream Oil and Gas industry.

Log In as an IPA Member to Download Publication for Free.