Promoting Skill Transfer for Human Capacity Development in Papua New Guinea

The Role of Externally Financed Infrastructure Projects

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• Publisher: Asian Development Bank
• Year: 2017
• Print ISBN:
  9789292578077
• eBook ISBN:
  9789292578084
• Topic: Business
• Subtopic: Business Skills
• Index: Business

Pacific countries lack workers with construction skills and rely on large firms to import skilled workers for large infrastructure projects. In Papua New Guinea (PNG), for example, the working-age population is estimated to grow by 2.2 million people between 2014 and 2030. The country faces a growing challenge to create work opportunities for its people. This report examines the correlation between skills gaps and labor market efficiency in PNG's construction industry. Using six case studies, the report proposes actionable recommendations for policy makers, development partners, and other stakeholders. Find out how these recommendations---although based on PNG infrastructure projects funded by the Asian Development Bank---may be used by a broader range of stakeholders to address skills gaps across the Pacific.

Recommendations

Review of work permit and census data indicates that the highest-yield opportunity for promoting skill transfer—and corresponding greater substitution of domestic for foreign workers—in the short and medium terms exists for mid-level skill occupations in the construction sector in Papua New Guinea (PNG).

Analysis of the current barriers to labor market efficiency suggest that improved collection and use of data, paired with changes to contractual and regulatory structures, are the most immediate and cost-effective ways of narrowing skill gaps in PNG’s construction industry.

The following recommendations outline six steps that can be taken to reduce current inefficiencies, encourage skill transfer, and promote the sustainability of intended results. Successful implementation will require the prior feedback and ongoing participation of multiple stakeholder groups to ensure that outcomes complement and support each other.

Recommendation 1

Improve the process of workforce data collection, using reports prepared by contract supervisors and work permit documentation.

Consistent and accurate data is essential to assessing skill gaps, identifying specific training needs, and providing effective monitoring and evaluating of the outcomes of skill transfer arrangements. At present, contractors provide supervising engineers with monthly progress reports that contain valuable workforce data, such as the number of workers by occupation and nationality. However, neither the PNG government nor ADB requires that this information be submitted in a standard template. As a result, the format for presenting this information varies by project, and in some cases, within a project, over time.

To increase the consistency of data, it is suggested that the government specifies for all construction contracts a format for the monthly collection of simple workforce data. This can be instituted through the existing contract processes. Specific points of information to be collected should include the job performed, nationality, gender, and the type of employment contract. implementing this recommendation will ensure consistent reporting, which in turn will support the assessment of skill shortages and more effective evaluation of skill transfer arrangements.

This recommendation can be implemented in the short term, and should be established as quickly as possible to ensure that the results of subsequent recommendations can be monitored effectively. Although the PNG government is the primary stakeholder for this recommendation, consultation with development partners, supervising engineers, and construction firms will be useful in establishing the specifications for the reporting template.

Recommendation 2

Identify specific skills to be transferred at each level by developing skill transfer arrangements that correspond to different skill levels.

To narrow the skill gaps between domestic and foreign workers, it is important to identify those skills that are most in demand, and least available in the domestic workforce. These skills, in turn, should be the focus of skill transfer arrangements. Different training opportunities and approaches will be relevant to different skill groups. To identify the most relevant skills for each level of the value chain, as well as methods for improving skill transfer to each group, it is suggested that research and corresponding arrangements be organized according the following categories:

(i)	Basic skills. Most appropriate for casual day laborers. opportunities for skill transfer may include short training sessions covering construction basics, such as use of battery-powered hand tools and other equipment.
(ii)	Trade and technical skills. Most appropriate for workers who have already received some occupation-based skills training, either formally or informally, to enable them—through on- and off-the-job learning—to reach designated standards of occupational competency. some examples of corresponding occupations include carpenters, electricians, masons, mechanics, welders, and equipment operators.
(iii)	Managerial and professional skills. Most appropriate for workers with formal education in specific professions, such as graduate engineers and architects, who require on-the-job experience and training to qualify for membership in professional associations.
(iv)	Organization-wide skills. Most appropriate for local firms. capacity building could focus on enhancing the firm’s ability to manage complex projects while ensuring quality standards and workplace health and safety.

This recommendation can be implemented in the short term, and is of particular relevance to parties preparing tenders for infrastructure projects. Designation of skill transfer arrangements can be made using up-to-date information based on a revised and more accurate listing of occupations in approved work permits (Table 3).⁹ Successful identification of requisite skills will strengthen the value of the corresponding skill transfer opportunities for PNG’s labor markets.

Recommendation 3

Design contractual obligations to promote skill transfer.

Bid documents should expressly require that contractors implementing publicly financed infrastructure projects provide opportunities for skill formation and transfer to the domestic workforce. it is proposed that such obligations be placed in contracts in one of three ways—as a project input, an output, or an outcome. Contract design should consider the following advantages and disadvantages associated with each method to determine which method is most appropriate on a case-by-case basis.

Table 3: The Top 15 Construction-Related Occupations Listed in Work Permits Approved in 2013 and 2014

Occupations	Number
Technicians and trade coordinators and supervisors	5,700
Specialist heavy machinery mechanic or technician	2,337
Steel fixer	1,743
Scaffolder	1,022
Structural steel erector	849
Construction rigger	722
Metal fabricator	714
Building and construction manager	604
Crane, hoist, or lift operator (Special)	418
Professional builder	345
Electrician	332
Fitter (General)	275
Occupational health and safety adviser	269
Safety inspector	258
Welder	209
Total	15,797

Note: Papua New Guinea work permits approved by occupation in 2013 and 2014.

Source: ADB. 2016. Promoting Skills Formation through Public Investment Projects: Case Studies from ADB-Financed Infrastructure Projects in Papua New Guinea. Table 3. Technical assistance consultant’s report. Manila.

(i)

Project input. including skill transfer obligations as a project input can be accomplished by requiring a contractor to provide a predetermined skill transfer activity as a component of the project. Skill transfer can be framed as a project input by determining a specific number of training opportunities based on factors such as size of the project or number of foreign workers. The number of training opportunities would then be included in the bill of quantities. For examp...

Table of contents

• Front Cover
• Title Page
• Copyright Page
• Contents
• Figures, Tables, and Boxes
• Foreword
• Acknowledgments
• Summary
• Introduction
• Understanding the Challenge—Skill Gaps and Barriers to Skill Transfer
• Recommendations
• Conclusion-Overcoming the Skill Gaps
• Appendixes
• References
• Back Cover