Draft Policy…Minister’s approval not necessary for foreign companies’ local content plans

Sep 08, 2019 News

The third and current draft of the Department of Energy’s local content policy leaves much to be desired. So far, Kaieteur News has uncovered a series of issues in the policy which essentially favour the international oil companies it is primarily geared at, instead of the Guyanese people it should benefit.
This time around, it has been discovered that, even though foreign companies are required by the policy to submit a report of their local content plans, it’s not entirely necessary for the Minister of Natural Resources to approve those plans.
This issue was highlighted by Attorney-at-Law Charles Ramson Jr., during the first episode of Guyana’s Oil & You, Guyana’s first radio show dedicated to issues related to the Petroleum sector, on Kaieteur Radio 99.1FM, last Friday.
In the plan it is stated that Operators shall prepare and execute a yearly local content plan, spanning all of their Petroleum-related activities in Guyana. The plan purports this mandate to be necessary for the identification of their local content utilization levels.

Attorney-at-Law, Charles Ramson Jr.

The plans are to be submitted within 60 days prior to the beginning of each year. Then, within 21 days from receipt of the plan, the Minister shall invite and meet with the Operator to determine how effective the plan really is. The two parties would determine together whether modifications should be made within the policy, to ensure that it is consistent with the Contractual obligations of the Petroleum Agreement(s).
Within 21 days of that meeting, the Operator is expected to submit to the Minister a final plan. Then, within 14 days from receipt of the final plan, the Minister would approve or reject the plan and, with the latter, give evidence for his rejection and state the policy’s objectives.
Emphasized by previous reports by Kaieteur News is the fact that the Minister’s rejection would have no teeth, since another issue that has been widely criticised about the policy is its exclusion of sanctions for non-adherence to its targets.
But what is even more alarming is that the plan states “Should the Minister not respond to the submission by an Operator of its Local Content Plan in accordance with the timings herein, the Operator shall consider the Plan to be approved by the Minister.”
Ramson explained how this indicates that the benefits of oil and gas that must be advocated for by Government via the protections listed in this policy are not being advanced by Government.
“The local content policy framework produced by the government abdicates responsibility, which is solely a remit of the Government,” Ramson stated.

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