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TAPPING local TALENT

The basic principles of Omanisation must be understood by all businesses operating within the sultanate
Charles Schofield

Through Omanisation the government seeks to encourage the employment of Omani citizens in the national economy. In Oman, there is a larger proportion of expatriate employees than one would expect to find compared to many other countries around the world. While these expatriates have contributed to the growth of Oman's economy to its present levels, as the economy continues to grow, Omanisation seeks to ensure that more Omani nationals participate in the benefits of that growth.

While many countries do not have a policy equivalent to Omanisation, they ensure prefe-rence for local employment by making it hard to bring expatriate employees into the country. The way in which Omanisation has been implemented in the sultanate means that expatriates can still come to Oman wherever their skills are required, but at the same time there is a strong incentive for employers to ensure a greater perc-entage of Omani employees over time.

The basic principles of Omanisation are well understood by all businesses operating within Oman, as the rules apply to all employers. However, the details of those rules may not be so well known. Here is an overview of the legal framework which has been implemented to establish Omanisation.

Relevant law
The current laws relating to Omanisation are set out in the Labour Law which came into effect on June 1, 2003 (under Royal Decree 35 of 2003). The Labour Law is the key law which regulates employment relationships in Oman.

Prior to the enactment of that law, there was a patchwork of various laws relating to the subject. As early as 1978, there were laws in place requiring employers in Oman to give priority to Omani nationals when recruiting. The current system has been developed over time.

Omanisation targets
Article 11 of the current Labour Law sets out the key requirements of the Omanisation laws. It sets out the main requirement of Omanisa-tion, which is that employers in Oman must employ Omani nationals to the greatest extent possible. The actual legislative tool for enforcing and measuring compliance with this principle are Omanisation targets.

The Minister of Manpower allocates each sector of industry a percentage target, or targets for different categories of employees or activities within a sector. Each business operating in the industry sector must comply with applicable targets by ensuring that the relevant percentage of its employees are Omani nationals.

For example, the Omanisation targets for businesses operating in the transport and shipping industry this year are: 74 per cent for sea ports, 71 per cent for shipping agencies and clearance offices, 90 per cent for marine services and 64 per cent for marine transport.

For some industries, those targets are also applied across categories of employees. For example, 70 per cent of the draftsmen employed by consultancy firms must be Omani nationals but only 25 per cent of the engineers employed by those firms need be Omani nationals. The difference in targets reflects the availability of the required Omani employees.

Omanisation targets can also be applied to different parts of a large business which engages in a number of activities in different industry sectors. This means that a single employer may have to meet several Omanisation targets which apply to the different activities it undertakes.

The current targets apply to a five year period from 2006 to 2010, with most of the targets increasing over that time. The Labour Law specifies that every January employers must report to the Ministry of Manpower about their compliance with Omanisation targets. Detailed information needs to be provided. This includes information about the number of employees, their job type, salary and natio-nality. Information also needs to be given about any new positions created during the year or any difficulties filling positions. The employer must also provide a statement with a forecast about future employment requirements.

Article 16 of the Labour Law also requires each employer to maintain a register of the Omani nationals employed in its business. The register must record specific details including the address, age, sex, salary and type of work assigned to the employee. These records may be inspected by the Ministry of Manpower.

There are penalties for failing to meet an applicable Omanisation target. First, companies which fail to comply with the applicable targets may be fined. The fine is 50 per cent of the average total salary of the expatriates, representing the difference between the relevant target percentage and the actual percentage achieved. Companies that fail to meet Omanisation targets may find it difficult to obtain any further labour clearances for expatriate employees.

Omani positions
Another plank to the Omanisation initiative is specifying certain jobs which can only be filled by Omani nationals. There are some jobs that can only be undertaken by Omani nationals and others that are slowly being transitioned, as no new labour clearances are permitted for expatriates for the specified jobs.

Some examples of the jobs that can only be performed by Omani nationals as of now are commercial driving, sale of gas cylinders and reading of electricity and water meters. Examples of jobs which are being transitioned are the sale of certain food items and sale of some household items.

Assistance for Omani employees
The measures referred to above are the primary parts of the legal framework which has been implemented to support and facilitate Oma-nisation. However, the Labour Law also requires the Ministry of Manpower to provide assistance to Omani nationals seeking work.

Article 12 of the Labour Law permits any Omani who is capable of work to register with the Ministry of Manpower. The ministry will then provide assistance to the registered cand-idates to find a job. Such assistance includes reviewing available positions, nominating the candidate for jobs, providing vocational advice and training for registered candidates.

Conclusion
Omanisation as it has been implemented has a number of different facets. While it aims mainly at employers, through Omanisation targets and employment restrictions, there are also some obligations which apply to the government to assist Omani candidates looking for work. The fra-mework is therefore comprehensive and seeks to implement a social policy through the legis-lative measures outlined above.