Local Content Provisions must prepare you to take over oil industry in your country – TT Lawyer

Mar 12, 2018 ExxonMobil, News

By Kiana Wilburg

“I have a dream that one day; our children will not grow up only wanting to be doctors, lawyers and engineers, but they will also want to be owners of oil companies in their own country. And they will know that this is possible.”
Indira Ramphaul-Cheddie, an Attorney-at-law and Senior State Counsel in Trinidad and Tobago, shares this story wherever she goes to speak on the importance of Local Content; a practice that involves the use of local goods and services to a significant degree in the oil sector.
At a recent oil and gas forum for Guyana’s Judiciary, the Attorney-at-law said that she usually has a serious issue with a lot of local content concepts.
“Because to me, Local Content seems to be based on the concept that an international company must come into your country and then you have to fight to get a piece of the pie. But guess what? The pie is yours! The oil is in your jurisdiction!”

Minister of Natural Resources, Raphael Trotman

Trinidadian Attorney-at-law, Indira Ramphaul-Cheddie

“Why instead of having conversations on Local Content, we not have one on Foreign Content; on how these multinationals will be using outside labour in our markets? I am not saying to reinvent the wheel …I am not saying discard all that we already have about Local Content.”
“What I am asking for is a paradigm shift, where we no longer think of ourselves as mere employees seeking employment from a multinational. I am asking that we think of ourselves as persons being trained to one day run the operation; to run Guyana’s National Oil Company and take it to other countries.”
The Senior State Counsel at the Ministry of Energy and Energy Industries in Trinidad and Tobago insists that this is how Local Content needs to be approached.
“You see, the problem with Local content is that we put in all these clauses but if you notice, the multinationals would never train you on how to run an oil company. They would always train you to be the best engineer, the best lawyer. Try to get them to train you to be an owner of an oil company. They wouldn’t do it because of the possibility of training their own replacement…”
With that in mind, the Attorney-at-law who has spent over 15 years in the petroleum industry called on Guyanese to ensure that their Local Content provisions are geared towards putting them in the position to take over.
INCOMPLETE
After several months of consultations, Guyana’s Local Content Policy is still not completed. According to Minister of Natural Resources, Raphael Trotman, there are still some finishing touches, which need to be added.
Trotman said that several consultation sessions were held with stakeholders nationwide. He noted that the stakeholders included; the Georgetown Chamber of Commerce and Industry (GCCI); the Private Sector Commission (PSC); Chambers of Commerce in Essequibo, Berbice, and Linden; and the Guyana Manufacturing and Services Association (GMSA). From those meetings, the politician said that the Ministry of Natural Resources received valuable feedback on how to improve the Local Content framework.
Trotman said that at the end of 2017, the Ministry of Natural Resources received the latest iteration of world-renowned expert, Mr. Anthony Paul on the Local Content draft. He said that some in-house work is still to be done. He said that after that process, it will be sent back to the various Chambers for further comment with the intention of finalizing it within the first quarter of this year.
DRAFT POLICY
Guyana’s draft Local Content Policy has been criticised in recent months for lacking provisions, which would safeguard against exploitation by companies.
The draft speaks nothing of how to avoid procurement fraud, conflict of interest and favouritism, among other crucial areas.
Instead, the Local Content Policy framework seeks to address, the suite of opportunities that may arise and the approaches to be taken in selecting and developing opportunities related to enhancing the capabilities of Guyanese nationals and businesses.
The Policy articulates that this will be don’t through; training, development and employment initiatives (Capacity Development), ensuring availability of ownership participation for qualified Guyanese equity interest (Ownership Value), supplier development provisions for goods and services by locals to support sector operations (Local Content); and well-tailored social contributions for greater impact and benefits (Societal Benefits).
It also describes what will be done to ensure that the activities in the petroleum sector are conducted in a manner that transparently secures the maximum benefit for the people of Guyana, while recognising the limitations of the country; and holding all actors accountable to the present and future generations of Guyanese who are the owners of the nation’s petroleum resources.
Additionally, the draft policy recognises that the petroleum resources of Guyana belong to all its citizens, and represent an asset of significant intrinsic value, which once removed diminishes the wealth of the nation, unless there is transformation in value from resources below the ground to improved quality of life above it for current and future generations of Guyanese.
The draft says, “Guyana will approach the development of its petroleum resources, people and businesses in a pragmatic, transparent and accountable manner. This will be conditioned by existing circumstances and an analytical approach to understanding the resource, the activities it engenders and our input capabilities. We shall pursue strategic opportunities for local capacity development and participation that give us the maximum possible benefit now and in the future.”
The Policy also states that Guyanese will participate in a manner that gives preferred access and opportunities to improve and enhance the country’s capabilities so that it can become internationally competitive and in the end, the country will progressively provide a greater amount of future services.
Capacity development, to enable more value retention, will be treated as an investment, rather than a cost, the policy outlines.