The very point of a Local Content Policy is to ensure that the oil and gas sector of a nation significantly benefits native businesses and citizens. But in order for this desirable and attractive Policy to work, certain conditions must be present.
In order for Local Content to work, Attorney-at-law, Sanjeev Datadin, says that it must be free from political influence and corruption. He said, too, that there must be a watchdog body to ensure that the policy is enforced.
The lawyer made these statements, among others, during an oil and gas seminar that was held at the Ramada Princess Hotel last weekend.
There, Datadin said that Local Content is desirable and attractive because it has the potential of facilitating the oil sector wealth to permeate through a nation. He said that this is mind blowing in its promise.
He said, “The challenge with Local Content is that it requires a comprehensive legal and regulatory framework and then it must have watchdog body to enforce it. It must be free from political influence and corruption to be effective.”
“It may create bottlenecks because of poor local capacity and may chase away potential investors. However, with the oil finds off the Guyana coast it is unlikely any operator would be scared off …Our potential is simply too large.”
The Attorney-at-law said that Local Content has worked in Guyana before with Omai Gold Mines and Barama Company Limited to a lesser extent. Datadin stressed that the concept is not new to Guyana and with some wise choices; it may be the vehicle by which every sector benefits from the oil wealth.
Datadin also cited several countries where Local Content Policy was able to provide extensive benefits due to a comprehensive legal and regulatory framework.
In the case of Norway, the lawyer said that there exists a combination of legislation, regulations and contract clauses.
He noted that Norway created a compliance office by law and it enforces the Local Content Policy and law efficiently and speedily with imposition of penalties if necessary.
Datadin said that the Policy there ensures Norwegian companies are chosen based on several factors, one of which includes prior use of local companies in licensing awards.
The Guyana Bar Association Member said Norway had legislation that requires substantial monies to be spent on Research and Development and further requires that half of all that money be spent in Norway.
Datadin asserted that Local Content in Trinidad and Tobago is supported by the nation’s Petroleum Act, its Regulations and their Production Sharing Agreements.
Additionally, Datadin said that since 2004, a permanent Local Content Committee was created in Trinidad and Tobago for the specific purpose of developing policies, ensuring compliance and reporting back to the Energy Minister.
The CARICOM Member said it has regulations, which state that under ‘the general obligations of licensees’, foreign personnel can only be employed if local employees cannot be found after reasonable advertisement of the position in the country.
It also mandates that salaries and benefits of foreign employees shall be the same as local employees of the same category. Further, Trinidad ensures through its regulations that operators are required to prepare training in the industrial and technical fields with the approval of the Minister.
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