The move comes after the Labor Ministry warned companies in the red zone that they would not be allowed to renew work permits of their foreign employees if they do not improve their Saudization levels before Nov. 26, 2011, when the Nitaqat system will be fully implemented.
Companies labeled red will be deprived of basic ministry services such as renewal of work permits, change of profession, transfer of visas, issuance of new visas and opening files for new business branches.
Both yellow and red companies will also lose control over their workers, who will be allowed to move to companies in the green and premium categories.
Muhammad Al-Tawi, a member of the manpower committee at the Jeddah Chamber of Commerce and Industry, disclosed that many major companies are in the red zone.
“Not only small and medium enterprises (SMEs) but also famous companies such as big contracting firms are in the red category,” he said, adding that these companies have to employ at least 20,000 Saudis to get out of red.
Al-Tawi dismissed the claims of certain private companies that they cannot find qualified Saudis to employ.
“These claims are baseless. They can employ Saudis in areas where they can work, like liaison officers, field supervisors and drivers,” he said.
He said companies engaged in illegal cover-up business, run by foreigners who then pay a monthly fee to the registered Saudi owners, would be the first to leave the market as a result of the Nitaqat system.
“These companies have to either follow the foreign investment system to legalize their businesses or wind them up,” Asharq Al-Awsat Arabic daily quoted Al-Tawi as saying.
Abdul Aziz Al-Harithy, an expert in employment affairs, described Nitaqat as the most effective system implemented by the ministry so far to solve the country's unemployment problem. He said employment of Saudis in private companies should continue even after they get out of red zone.
The ministry has warned against any foul play.
“If any firms are found hiring Saudi job seekers on a temporary basis with the sole objective of switching over to green status, stringent punitive action would be taken against them. If they dispense with Saudi employees at a later stage without genuine reasons, they would fall again into yellow or red categories,” said Hetab Al-Anzi, spokesman of the ministry.
