Local Content and Employment Issues in South Sudan

As of mid-2011, the majority of foreign owned firms operating in South Sudan, including oil companies, had very few indigenous employees, according to Melody Atil of the finance organization Peace Dividend.

The South Sudan Petroleum Bill of 2012, which as of April 2012 was in its third reading in the National Assembly, endorses the concept of local content using South Sudanese, if competent and available, to fill skilled and unskilled positions in the petroleum industry.

=Local content development= The critical issues hindering the development of local content in South Sudan, according to Atil, are the labour court, the attitude and values of the majority of the labor force, and the lack of transparent information that enables employers to rapidly identify and hire suited employees.

The labor court in South Sudan is one of the biggest hindrances to foreign companies hiring local employees, according to Atil, because it is almost impossible to fire a South Sudanese staff without the employee filing a claim with the labor court. Since a court proceeding is expensive and the ruling almost inevitably in favor of the local employee, foreign firms in South Sudan often opt for an informal arrangement offering the employee several months’ salary as means of severance pay. The employment culture in South Sudan is another issue. According to Atil, foreign firms report that on average South Sudanese employees tend to be unreliable, insubordinate, and often tend to prioritize family and culture before their employee contract. Many also find it demeaning to work in the lower rungs of a corporate hierarchy, according to Atil. The effect, in sum, of these complexities is that foreign firms often view local employees as more of a liability than an asset.

One solution suggested by Atil is the creation of a public employment database, which would reduce the friction within the labor market, while a further facilitation system between job seekers and employers could ease the burdensome screening for the larger firms. Atil also suggests the creation of a small and medium enterprise (SME) fund geared toward driving the growth of Sudanese firms with high local content. Granting indigenous firms in South Sudan access to capital and knowledge networks, according to Atil, is key to generating a competitive local industry.

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