Strategies for Job Creation In Extractives

At a Glance
  • Strategies often rely on a mixture of skills improvement, targeted corporate policies, and reforms intended to create an enabling environment that facilitates the establishment of inter-sectoral linkages.
  • Government strategies for direct employment tend to place the emphasis either on quantitative targets, or on ‘softer’ methods that rely on consultation and facilitation. 
  • Policies supporting the recruitment and development of national human capital can be grouped into three broad categories: those designed to increase the absolute and/or relative number of nationals employed in an organization or workforce; those that promote the development of higher technical and managerial skills for national employees; and those designed to restrict the number of foreign workers and the duration of their employment.
  • Cooperative strategies which focus on collaboration between government and industry tend to be more successful when they mobilize active support from other interested parties such as trade unions, civil society organizations, and lower level government. 

Strategies for job creation may focus narrowly on employment within an extractive industry project itself, or more broadly aim to reinforce the linkages between extractive industry activity and the rest of the economy in order to support and facilitate economic development. Strategies often rely on a mixture of skills improvementtargeted corporate policies, and reforms intended to create an enabling environment that facilitates the establishment of intersectoral linkages.

Government strategies for direct employment tend to place the emphasis either on quantitative targets, for instance, statutory or contractual minimum levels for the employment of nationals (Ghana is a recent example, which also offers examples of different approaches to oil and gas and to mining), or on “softer” methods relying on consultation and facilitation, exemplified, for instance, by Chile for mining, and Norway for oil. In Norway, for example, oil and gas companies are required to submit plans detailing their local employment efforts, and to provide training, but there have been no binding targets for employment of Norwegian nationals.[1]

Policies in support of the recruitment and development of national 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 foreigner workers if at least 70 percent of the workforce is formed by Angolan nationals and the company employs more than five workers.[2]
  • 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 submit, annually, 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 PSAs where the parties agree on the percentage of national citizens that will progress 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 policy for the recruitment of expatriate workers only if “obtaining confirmation that no Angolan personnel duly qualified to perform the job required is available in the local market.”[3]

These types of policies may result in supply bottlenecks in countries with shallow labor markets or countries that are new to extractives.

Although local employment policies usually target direct employment, it is important to note that a larger potential for employment usually lies with companies that supply oil and gas and mining companies (indirect employment).

Cooperative strategies focus on collaboration between government and industry. Whether for direct or indirect employment, they tend to be more successful if they also mobilize the active support of other interested parties such as trade unions, civil society organizations, and lower level government. Such strategies involve taking stock of the various interests and resources of each of the potential stakeholder groups, bringing these groups together to discover and build alignment, and collaborating on practice-shifting and programs towards common goals. 

View footnotes

[1] CCSI, Local Content Norway-Petroleum, (n.p, n.d)  

[2]Serviço de Migração e Estrangeiros,"Decree No. 5/95 of April 7 - Employment of Non-Resident Foreign Citizens.”, Accessed October 17, 2018

[3] Republica De Angola, “Decree 6/01 the Exercise of Professional Activity of the Non-resident Foreign Worker”, can be downloaded from 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

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