The Government and many of its affiliates have continually praised the Guyana-ExxonMobil contract for the many opportunities it has for the training and employment of locals.
But when one compares those “opportunities” to that of another deal ExxonMobil signed with Ghana, some worrying discoveries are made.
In the contract ExxonMobil signed with Ghana, the entity agrees to provide a training allowance of US$2M annually. It also provides Ghana with a one-time technology support payment of US$7M.
In Guyana’s contract, ExxonMobil only commits to a US$300,000 payment for training. No provision was in place for financial support in the area of technology.
As it relates to employment, ExxonMobil agrees to employ as “far as reasonably possible” Ghanaians for all positions it may have open. In the contract ExxonMobil has with Guyana, it is not obligated to employ Guyanese to the “maximum extent.”
Additionally, ExxonMobil agreed to give the Government of Ghana, the opportunity to nominate individuals to hold any position that it would need in the foreseeable future. Guyana did not get this chance.
ExxonMobil also agreed to, once requested by the government of Ghana, to provide opportunities for a mutually agreed number of personnel nominated the government to be seconded for on-the-job-training or attachment in all phases of its oil operations. ExxonMobil also agrees to handle all costs associated with the secondment contract. This arrangement is absent from ExxonMobil’s contract with Guyana.
Guyana’s Production Sharing Agreement (PSA) with US oil giant, ExxonMobil, has been criticized for having limited or rather, ‘mediocre” provisions in place for local content. But even with the inadequate provisions in place, no penalties exist if ExxonMobil turns out to be negligent in this regard.
On the other hand, there are several nations which have inescapable penalties should oil operators decide to shirk their local content responsibilities. Uganda is just one of the many countries in this regard.
In fact, Uganda’s move towards penalties was due to the findings and recommendations of the Global Witness in relation to PSAs there. The Global Witness is an international body that works to break the links between natural resource exploitation, corruption, and human rights abuses worldwide.
According to the anticorruption body, local content obligations in contracts and laws seek to ensure that companies employ nationals, train local staff and procure local services. It notes that the intention is for local industries to benefit directly from the oil sector and that local people develop the skills to manage the oil sector in future.
The Global Witness noted however, that none of the contracts it examined prior to 2008 for Uganda, set benchmarks or penalties for failure to comply with the local content obligations. The International body noted that other countries have included stricter provisions for the procurement of local goods and services in their PSAs and required that they are verified by the relevant government agencies.
After revealing this, the government of Uganda made swift moves towards including penalties in PSAs for failure to comply with local content provisions.
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