Strategies for Job Creation In Extractives
At a Glance
- Government policies meant to foster the creation of jobs in the extractive industry take a variety of approaches. These include requiring extractive companies to fill certain quotas with local talent, establishing programs to build the relevant skill set of the domestic workforce, and creating an enabling environment for intersectoral linkages.
- Strategies to increase direct employment tend to emphasize either quantitative targets or softer methods of facilitation that rely on consultation with industry players.
- Some policies also seek to restrict the number of foreign workers and the duration of their employment.
- Cooperative strategies, based on collaboration between government and industry, tend to be most successful, particularly when they mobilize support from other interested parties, such as trade unions and civil society organizations, and include the participation of lower levels of government.
- BP in Angola, Sustainability Report 2016 (BP)
- Investments in the Saskatchewan Communities through the Supply Chain (International Council on Mining and Metals)
- Promoting Local Enterprise Development in Botswana (International Council on Mining and Metals)
- Collaborative Strategies for In-Country Shared Value Creation: Framework for Extractive Projects (Organisation for Economic Co-operation and Development)
- Commodities and Linkages: Industrialization in Sub-Saharan Africa (David Kaplan, Raphael Kaplinsky, Mike Morris)
- A Practical Guide to Increasing Mining Local Procurement in West Africa (World Bank, Kaiser Economic Development Partners)
- IGF Guidance for Governments: Local Content Policies (Aaron Cosbey, Isabelle Ramdoo)
- Local Content Policies in the Oil and Gas Sector (Yahya Anouti, Osmel E. Manzano, Silvana Tordo, Michael Warner)
- Local Content Policies: Stimulating Direct Local Employment (Tim Grice)
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Government policies meant to foster job creation in the extractive industry may focus narrowly on direct employment within an extractive project itself, or may aim more broadly to support and facilitate economic development by reinforcing the linkages between extractive industry activity and the rest of the economy. Strategies often rely on a mixture of skills improvement programs, targeted corporate policies, and reforms intended to create an enabling environment that facilitates the establishment of intersectoral linkages.
Government strategies focused on direct employment tend to emphasize either quantitative targets (such as Ghana’s recent implementation of statutory minimum levels for the employment of Ghanaian nationals) or softer methods relying on consultation and facilitation (such as Norway’s requirements that oil and gas companies provide employment training and submit plans detailing their local employment efforts, without requiring companies to meet binding targets for employment of Norwegian nationals).
Policies in support of the recruitment and development of domestic human capital can be grouped into three broad categories:
- Policies designed to increase the absolute and/or relative number of nationals employed in an organization or workforce. For example, in Angola, Decree No. 5/95 mandates that national and foreign companies can only employ nonresident foreign workers if at least 70 percent of the workforce is formed by Angolan nationals and the company employs more than five workers.
Policies that promote the development of higher technical and managerial skills for national employees. For example, in Angola, Decree Law 17/09 requires companies who are engaged in petroleum-processing activities to annually submit a human resources plan and enter into a contract with the government to implement this plan. In Azerbaijan, this type of arrangement is negotiated in public service agreements on the percentage of national citizens that in different job categories over time.
- Policies designed to restrict the number of foreign workers and the duration of their employment. These policies aim to promote local workforce recruitment and progression. For example, in Angola, Decree 6/01 establishes a policy for the recruitment of expatriate workers only upon “obtaining confirmation that no Angolan personnel duly qualified to perform the job required is available in the local market.”
These types of policies may result in supply bottlenecks in countries that have shallow labor markets or are new to extractives.
Although domestic jobs policies usually target direct employment, it is important to note that, in extractives, there is greater potential for indirect employment—. In other words, more people will be hired to supply the goods and services required by oil and gas and mining companies than will be directly employed by these companies.
Cooperative strategies, meanwhile, rely on collaboration between government and industry. Whether these focus on direct or indirect employment, they tend to be most successful if they also mobilize the active support of other interested parties, such as trade unions and civil society organizations, and involve the participation of lower levels of government. This approach involves assessing the various interests and resources of each potential stakeholder group, bringing these groups together to identify and foster points of alignment, and collaborating in the work of shifting practices and developing programs toward common goals.
 Columbia Center on Sustainable Investment (CCSI), “Local Content: Norway—Petroleum,” n.p., n.d.
 Serviço Migração e Estrangeiros, “Decree No. 5/95 of April 7—Employment of Non-Resident Foreign Citizens,” Angola, accessed October 17, 2018.
 Republica de Angola, “Decree 6/01 the Exercise of Professional Activity of the Non-Resident Foreign Worker,” http://www.sme-angola.com/attachments/article/219/Decree%20No.%206-01%20of%20January%2019%20%20Regulation%20on%20the%20Exercise%20of%20Professional%20Activity%20of%20the%20Non-resident%20Foreign%20Worker.pdf