Hasn’t this been done before?
Government officials first mooted the idea of a language proficiency test for foreign workers in 2003 but nothing came of it. This time around, the proposal comes at a time when Indonesia is clamping down on companies that may be flouting employment laws, with severe consequences such as revoked work permits and confiscated passports. In extreme cases, administrative sanctions may include the suspension or cancellation of the employer’s business licence. On a practical level, the application process for foreign work permits is becoming increasingly difficult, and employers are advised to ensure that their paperwork is in order.
So how will it work?
Following informal discussions with the Ministry, we understand that the test will be a condition precedent to applying for a work permit. At a minimum, the test will cover basic language skills, with higher levels of proficiency required for technical or administrative positions. On the other hand, non-executive director or commissioner roles are likely to attract a less rigorous test.
Few other details have been released, leaving uncertainty as to what the test may cover specifically, what happens if an applicant fails the test and if the test is to be mandatory for foreign workers applying for a permit renewal. If the regulations are too heavy handed, there is a risk that businesses with Indonesian operations will look closely at relocating professional teams to Singapore or other offshore locations which are competing for foreign talent.
What’s the reaction from foreign employers so far?
Employers of foreign labour have urged the government to reconsider the proposal or at least provide a transitional period. Employers already face substantial obstacles – they are required, amongst other things, to prepare a foreign manpower plan (RPTKA), obtain written permission from the Indonesian government to employ foreign workers (IMTA) and file a report with the government every six months on the use of the foreign workers to educate and train nominated Indonesian employees. In response to these concerns, the Ministry is considering a transitional period as well as allowing a limited amnesty for companies with a RPTKA.
What other regulations are in place?
In recent years, the Indonesian government has introduced a number of regulations preventing or discouraging companies from recruiting non-Indonesian workers into certain positions. For example, there are restrictions on companies in the oil and gas industry from hiring foreign workers in human resources, legal, health and safety, supply chain management and quality control. Particularly high-skilled roles, such as those occupied by geologists, are technically off-limits to new foreign workers.
Apart from the usual responsibilities such as providing appropriate educational qualifications, competency certificates or relevant work experience of at least five years, foreign workers must undertake to transfer knowledge and skills to a nominated Indonesian colleague. In practice, however, the regulations are difficult to enforce and do not sit comfortably with the deployment of human resources in practice.
What happens now?
As we wait to see what shape the proposed language regulations will finally take, “Anda berbicara Bahasa Indonesia?” is a timely question for companies that would be well advised to ensure that their employment practices and documentation are compliant. At least for the foreseeable future, the clamp-down on foreign workers and their proficiency in the Indonesian language shows no sign of abating.
This update is for general information purposes only and does not constitute advice on Indonesian law or any other jurisdiction.