Addressing mobility challenges in the African oil and gas boom

As the partner responsible for the Immigration practice at DLA Piper Africa member firm in Mozambique, SAL & Caldeira Advogados, LDA, Issufo has assisted numerous oil & gas companies to secure work permits for their employees in Mozambique, a process that is straightforward when it falls within the quotas but more complex when it falls outside of them.

Preparing for the Boom

The five biggest oil and gas projects are situated in eastern and southern Africa. In Mozambique, the discovery of 60 trillion cubic feet of natural gas in the Rovuma Basin has produced many opportunities for foreign investment. In 2017 alone, foreign investment in oil and gas projects was estimated at USD 7 billion. The discovery has also created its fair share of challenges however, and in order for Mozambique to take its place on the global LNG producers’ stage, there is a massive requirement for improved infrastructure, and the rolling out of natural gas pipelines. That need translates into a need for individuals who are in experienced in rolling out such projects.

For the most part, the expertise needed to achieve success across the numerous planned oil and gas projects will come from ex-pat foreigners. This is where the challenge lies, as Mozambique, and a number eastern and southern African countries are not yet ready to process the projected 16,000 work permit applications that are expected to flood in. This could result in serious project delays.

While the projects are still in early stages, by 2020 we are going to see huge activity related to the oil and gas pipelines in Mozambique, so we need to prepare for this boom. There will be a mass of foreign workers hired who will all need permits in a short period of time. It is becoming harder and harder to hire foreigners in Mozambique, and the current legislation, and the system are simply not experienced in dealing with such an influx.

Mozambique’s labour law is currently being reviewed and we are hopeful that other related legislation will be harmonized as well. Provisions of immigration law which benefit investors are already on the books but need to be duly implemented by the authorities, as current legislation is not always evenly applied. Improvements to the SIMIGRA system, the electronic system which reviews, and processes work permits, would be welcomed by all as it would increase efficiency across the labour administration. It would also enable the required work permits for the influx of employees to be promptly expedited.

Soraia Issufo, a DLA Piper Africa immigration lawyer, is optimistic however, that Mozambique is moving in the right direction. When dealing with matters that need quick resolution but are not covered by current immigration laws the authorities have been flexible to refine and adopt legal approaches suggested by private sector lawyers.

Addressing the challenges facing multinational companies

The management of strategic immigration, labour and tax matters for expatriate employees is fundamental, particularly for multinational companies. Expatriate employees cannot get onto sites without the right visas and work permits. Due to the SIMIGRA system, the issuance of work permits, whether within or outside the quota, can take longer than established by law. Therefore, it will be a challenge for the authorities to prepare themselves for swift issuance of the 16,000 work permits applications that are expected. Delays can lead to compliance headaches, reputational damage and significant losses for the companies and the employees involved.

DLA Piper Africa offers mobility services in several African jurisdictions where oil and gas megaprojects are ramping up. This is aimed at assisting oil & gas businesses which are deploying their international workforce to countries in, for example, southern and eastern Africa including Angola, Kenya, Mozambique, South Africa, Tanzania and Uganda.

The service helps to simplify the assignment process and mitigate the businesses` exposure to the risks of non-compliance through a package of services which includes assistance with secondees’ visas, work permits, custom clearance of personal goods, labour and tax compliance.

The offering also covers appropriate visas for secondees’ dependents, drafting of residential lease agreements and model domestic employment contracts with secondee’s personal staff. DLA Piper's aim is to work as part of its client’s team that gets its employees to site on time, reducing legal and administrative headaches as much as possible.

Having immigration lawyers on your team, who know how the system works, and who are keen to explain the problem as well as find legal solutions is important to ensure that oil and gas projects in southern and eastern Africa stay on track.