The Omanisation process has been met with mixed results

Increasing the number of Omani nationals working in the private sector, coupled with the need to increase foreign direct investment and thereby generate job opportunities for Omanis, have been twin debate points in the public and private sector business community in recent years. Relevant data published by the National Centre for Statistics and Information over the past five years has not been encouraging.

Challenges

The more recent oil price shock and the attendant lack of liquidity in the economy have placed renewed focus on these challenges. However, there is widespread sentiment among private sector employees — of Omani-owned businesses as well as those that are foreign owned, or local/foreign joint-venture structures — that they are hindered in their best efforts to improve the situation by administrative laws and procedures. It is clear that as things stand the laudable aims of Article 11 of the Labour Law, requiring “Omani workers [to be employed] to the largest extent possible” are not being achieved. On the basis of our experience, several suggestion can be made. First, changes are needed to the application processes by which foreign employers obtain appropriate visas and permits to work in the sultanate. As things stand, an employer applying for a labour clearance and work visa for a proposed foreign employee will routinely be met by the bureaucratic assumption that he or she is not entitled to the labour clearance unless able to decisively prove otherwise. This process will typically involve multiple visits to the Ministry of Manpower, while a series of frustrating administrative hurdles are overcome, wasting time and money. Negotiating this bureaucratic maze tends to apply equally to Omani-owned businesses and those with foreign ownership.

Omanisation

The overall effect on Omanisation is adverse, simply because hiring foreign specialists tends to increase the capacity of a business to engage, train and transfer skills to Omanis. Experience in our own consulting business has been that, for every two appropriately qualified foreign lawyers we recruit, related opportunities are generated to recruit and develop the wider skills of at least four Omani lawyers. Denial of those foreign labour clearances, will correspondingly negate the opportunities to introduce and develop young Omanis. Therefore, our suggestion is that there should be a positive shift of assumption in favour of automatically granting the labour clearance application unless a valid reason is given for denying it.

Protocols should be established to ensure that businesses already established and operating in the sultanate should be given preference when work and/ or services are to be procured. Such protocols should apply equally to procurers in the public and private sectors. There will of course be cases where the requisite skills, expertise, products or track record can only be found outside the sultanate.

Currently, however, such cases are becoming increasingly few and far between. It should be kept in mind that where work and services are awarded to appropriately qualified Omani-based entities, there are multiple dividends in terms of Omanisation, in-country value and the benefits to the local economy.

 

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The Report: Oman 2017

Legal Framework chapter from The Report: Oman 2017

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