Out at 55 is not Cricket [Coal Asia Vol. 41]
Out at 55 is not Cricket
The author is an expatriate principal geologist of about 28 years experience in the Indonesian exploration & mining industry, and is employed by an international consultant company.
By Ian Wollff
This article looks at this age factor for both Indonesian and expatriate workers in the broader exploration and mining industry.
The age setting regulations
The Minister of Manpower has the authority to grant work permits to foreign workers, and does so in consideration with the views of relevant Ministers, [Presidential decree No. 75 of 1995 Article 6 & 7]. The Ministry of Energy and Mineral Resources (MEMR) issued a new regulation (No.31 of 2013) on the use of foreign labour in the oil and gas industry with a new twist, limiting the recommendation for such foreigners to the age of between 30 and 55 years old [Article 7 (1)c]. Exceptions for directors and other cases are made in consistency with past regulations. It would seem this age requirement is also being considered in other branches of the Mines Department, and in the Ministry of Education. This MEMR regulation of 2013 seems to be in conflict with society’s trend to extend the working life of professionals, as reflected in the BPMIGAS letter of decision (KEP-0058/BP00000/2010/SO dated 17 May 2010) where the BPMIGAS age limit is raised from 56 to 58 for regular staff and to 60 for executive staff.
Indonesian Retirement
“An entrepreneur may terminate the employment of his or her workers/laborers because they enter pensionable age” is from Article 167 (1), Law No. 13 of 2003 concerning manpower. However the term “may” is used, wherein individual companies can vary their options on age for Indonesians or foreign workers.
The chapter titled “Evaluating and implementation of aging-related policies in Indonesia” by Nugroho Abikusno published in the 2009 book titled “Older persons in southeast Asia – an emerging asset”, provides an insight on Indonesian retirement. The first law on the elderly was Law No. 4 of 1965, wherein the recognition of “frailty” was a principal motivation, and the age of 55 was one determining factor. In 1961 there were approximately 6.4% (6.2 million people) aged 55 and above. The laws developed over time with Law No. 3 of 1992, Law No. 13 of 1998, Law No. 39 of 1999, Law No. 40 of 2004 plus the Presidential decrees No. 52 of 2004 and 90 of 2005. This progression of laws led to the further development on social security for workers, and consideration to reflect the United Nations 1998 principles of older persons, being; “independence, participation, care, self fulfillment and dignity”. Indonesia is considered an age-structured population where some 7.3 % (16 million) are above 60 years in 2005, and predicted to be more than 20% by 2050. This reference notes the rapidly aging population raises such issues as: How do older persons remain independent and economically active in order to reduce the burden on the younger population, and on future Government social service systems?
The Indonesian Provident fund and social insurance system of the 1992 Law on employees social security applies the age of 55 as a determining factor for old age and disability benefits etc. The Immigration Department now offers retirement visas to foreigners for those over 55 years, provided they have adequate financial support etc. The Jakarta Post item of 12 July 2011 notes “As Indonesians live longer, government must raise pension age” and, refers to the Indonesian Elderly Association (LLI) call to raise the pension age from 55 to at least 60 years as the present life expectancy is 70-72 years. The Central Statistics Agency (BPS) indicates the number of Indonesians aged 60 and above is about 10% (24 million) in 2010.
It is interesting to note that the retirement age for United Nations staff is 62, or older for experts and consultants under the technical co-operation programs. One web site shows comparative age limitations for work visas in various countries for University teaching, with 2 faculties less than 55 years, 4 faculties at 55, 11 faculties at 55 to 60 years, some 20 faculties at 60, some 3 faculties at 65 to 70 years and 4 faculties with no age limit. This trend shows that older lecturers and experts have an increasing recognized ability to contribute to the development of the future generations.
In December 2013 parliament passed the Bureaucracy Reform Bill that was signed by President Susilo Bambang Yudoyono less than a month later. This includes an extension in the compulsory retirement age from 56 to 58 for administrative employees, 60 for senior executives, 65 for teachers and health workers and 70 for university professors.
It is also interesting to note there appears to be no age limit for politicians. The politicians work is to develop the laws of Indonesia and the policies for which all Indonesians will live by. Clearly this is a most responsible roll, and the lack of an age limit reflects the communities’ acknowledgement, and expectation, that older persons can work responsibly.
Discrimination
Indonesia’s Act No 13 of 2003 concerning manpower (Indonesian Labour Law) as approved by the Parliament and the President of Indonesia, Chapter 3, Equal Opportunities Article 5 – “Every person available for a job shall have the same opportunity to get a job without discrimination”. This act should apply equally to Indonesians and foreigners who have a work permit, but MEMR may be introducing the concept that “availability” is to exclude to foreign workers younger than 30 and above the age of 55.
The ASEAN Human Rights Declaration (AHRD) dated 18 November 2012 as attended by the President of Indonesia, reaffirmed adherence to ASEAN and UN principals of human rights, including the General Principal section item 2 “Every person is entitled to the rights and freedoms set forth herein, without distinction of any kind, such as race, gender, age”…etc. Item 3 “…Every person is equal before the law…..”. Also the Economic, Social and Cultural Rights section includes item 27 (1) “Every person has the right to work, to the free choice of employment…etc”, but this last point is further qualified by item 34 wherein “ASEAN Member States may determine the extent to which they would guarantee the Economic and Social rights found in this Declaration to non-nationals, with due regards to human rights and the organizational and resources of their respective national development”. From this it is clear that Indonesians may not be restricted from employment due to age, however it is not so clear that foreign workers are necessarily afforded the same rights.
Professional views
Finding oil, coal and minerals may look easy to the casual observer, with successful stories grabbing the headlines. But what most people do not see is the hundreds of expensive exploration failures. The easy oil, coal and minerals era is passed, where the remaining deposits are well hidden and need the more experienced geologists to lead teams for the future discoveries. Investors want to reduce their risk of failure by engaging the best minds, and these are typically found with the more experienced Indonesian and foreign geologists. Geologists and mining engineers are committed scientists. A variation of a Sir Isaac Newton quote might read “If I have seen further it is by standing on the shoulders of giants”. But now the Indonesian government has regulated that both expatriate and Indonesians are not so free to fully develop into giants, and Indonesia as a whole will not be able to look so far ahead.
A medical doctor uses his science and training on diagnosis to peer inside the body, and sometimes needs to operate on very specific parts of our body, to extend the patients life. The geologist is yet another scientist that uses his training on ore genesis, to peer inside the earth to find minerals that are so vital for modern life, from coal that drives our industries in the day and light globes at night, hand phones that keep our family close to us, refrigerators to keep food fresh so that we may stay healthy, or planes that allow us to travel so easily between the many islands to maintain the unity of Indonesia. The geotechnical engineer may also peer inside the earth to make safe dams so that cities can drink, or foundations for apartments to rise safely in this earthquake zone. Indonesians seeking medical help, or finding mineral ores, will seek out the more experienced doctors or geologists to ensure their success in life. Indonesian patients seeking the best medical treatment may also travel out of Indonesia to Singapore or Germany etc. However minerals are hidden in remote parts of Indonesia, wherein geological experts have to travel into Indonesia to have the best chance of finding such resource, or to assess the geotechnical aspects of a bridge foundation etc. The government regulations that stops all senior scientists from working at a certain age is depriving the Indonesian people of their most experienced practitioners. Experienced doctors or geologist may seek further work only outside Indonesia, representing a “brain drain” for Indonesia.
Text books on geology are written by people of considerable experience. However geology is a developing science, and the experience of the senior Indonesian and foreign geologists here is the most positive way to develop technology transfer. To “learn by other peoples mistakes” allows the next generation to more quickly find the right path. To take senior and experienced Indonesian and foreign geologists away from the industry upon reaching 55 is not optimizing technology transfer.
Adding Value
The choice by private industry employers is driven by the outlook of finding the right person for the job, and in many cases the most suited applicant is one with a combination of technical ability and social maturity. Companies are profit driven, yet they are willing to offer significant remuneration packages for top engineers and managers because the companies recognize such mature Indonesian and expatriate staff, can add value to their operations. The capabilities and value adding does not magically stop at 55 years of age. This value for maturity is partially acknowledged by the MEMR in allowing some expatriate work permits to be allocated to specialists, directors and such. However there is no reasonable justification to limit free enterprise companies from offering work in other categories for staff over 55 years.
When a private company pays a premium to engage a mature Indonesian or expatriate, then it is also paying a premium in tax, and typically providing housing, higher insurance premiums and other benefits that flow into the general economy. The company is providing value adding to the general economy through its preference for more costly mature workers. There is no down side for the government to provide such expatriates with large public pensions or community health benefits like in some other countries.
The Government and industry are looking to growth for the long term development of Indonesia. By “cutting out” the older engineers so as to make room for the younger engineers is negative growth, or at best simply stagnant growth. Allowing the mature engineers to work longer provides for upward growth, and recruiting younger engineers provides outward growth for a company. Now that’s adding value!
Many International companies, and indeed international trade associations, recognize the value of cross cultural understanding in the business world. Expatriate engineers and business men that have experience in operating in Indonesia are often sought out by foreign companies wishing to reduce country risk when investing in Indonesia. The more years spent in Indonesia often reflects a wider experience and ultimately “adds value” for Indonesia to attract foreign investment. To place a limitation of 55 is not helping Indonesia.
Expatriates that have lived in Indonesia for many years often develop a deep commitment to Indonesia, as is seen in some of the scholarly books written about Indonesia’s history and social culture. Engineers working in the exploration and mining fields are no exemption, where genuine concern is felt towards community development programs, training of younger engineers and the broader development of Indonesia. This recognized form of cultural ambassadors usually affects the hearts and minds of individuals living in the cities and the remote work sites. This is a very valuable form of adding value towards peace and good will towards others. For the MERM to force such sympathetic engineers to stop their commitment once they have reached 55 is simply not an acceptable social etiquette to reflect a Government that represents a caring community.
Conclusion
This article was triggered by taking a closer look at the impact of the MEMR’s new regulation limiting foreign workers to the age group of 30 to 55. However it quickly becomes apparent that Indonesian’s are also similarly affected by this age restriction. Setting an age limitation only provides for negative impacts on the wider exploration and mining industry. We may hope the December 2013 Bureaucracy Reform Bill shall stimulate a change in the various implementing regulations, including MEMR No. 31 of 2013.
I recently attended a friend’s social gathering where Titiek Puspa entertained us with some lovely songs. She is 76 and clearly enjoys such occasions. She continues to be an inspiration, and so do mature exploration geologists and mining engineers that continue to contribute and influence their industries. There is no social justice or dignity in setting age limits for willing engineers to work with willing employers.