Publications

The creation of the MEA (Asian Economic Community) is a welcome development, but there has been quite a concern that there will be a mass flow of ASEAN Workers to Indonesia. However, specifically for the Oil & Gas industry, it may prove to be the opposite especially as the industry is quite well protected by the Government of Indonesia. Referring to the available VICO Indonesia data on National employees who left the company between 2007 and 2012, almost 1 of every 5 of them was leaving due to an overseas job offering. A further survey of 67 PSCs also shows an increase in the number of National employees resigning & working overseas each year from 2011 to 2013. This means that the issue has been ongoing from before the MEA was established. In addition, it is projected that in 2020 there will be a significant gap between demand and supply of middle level employees and it will be followed by a shortfall in entry level employees in almost all industries worldwide. Looking at the facts and data presented in this paper, it is a wakeup call for the country to change the way of governing the oil & gas industry. From a total reward perspective, the country’s remuneration package can be easily outbid by international companies. Furthermore, the industry is not as flexible and agile as other industries since the GOI also has an influence in controlling the management of Company operations through laws & regulations. In this paper, three major government regulations will be evaluated: PSC Mechanism, PP 79 and PTK 018. It is suggested that those regulations should be modified to provide room for the industry to innovate and transform promptly in facing the competition ahead for the sustainability of the industry in Indonesia. The world keeps changing everyday thus the way we manage our human capital also need to be updated. Keywords: Talent, Total Reward, PSC, PP 79, PTK 018