Local Content refers to the maximum or preferential use of a country’s goods, services and labour. It is one of the critical ways in which countries can retain billions of dollars from the oil sector.
If the right provisions are in place to ensure maximum use of local content, the value retained can be equivalent to Guyana’s two percent royalty.
And that’s why transparency advocates have been pushing for Guyana to have robust provisions in its policy that ensure the maximum use of locals.
But the final draft which was prepared by Dr. Michael Warner, a British Consultant who has ties to ExxonMobil, has come in for heavy criticism in recent weeks.
Against the advice of the United Nations Development Programme (UNDP), the draft policy contains no recommendations for tax breaks for locals and explicitly states that participation between local and foreign companies will not be mandated. It also proposes that the Local Content Report and Plans of the Oil Companies and their subcontractors remain confidential.
The weaknesses of the draft were further exposed when Kaieteur News published on Sunday, a news item which looked at some of the strong provisions contained in Ghana’s Local Content Policy against those in Guyana’s final draft policy. Upon reading the news item, Attorney-at-Law and Oil Consultant, Charles Ramson categorically said “it is clear that Guyana is sleeping at the wheel.”
During an interview yesterday afternoon, Ramson commented that Ghana’s Policy was prepared by Trinidadian Expert, Anthony Paul, the same individual who had started the process of preparing Guyana’s policy but was bypassed by the Energy Department for the completion of the said document.
Kaieteur News was the first to expose that the $22M contract did not go to tender. Subsequent to this, the Energy Department had revealed that it used a procurement process called “A limited competitive selection of individual consultants.”
The Energy Department Head, Dr. Mark Bynoe had said that this process allowed for the use of a three CV process and the subsequent assessment of the consultants based on their expertise and qualifications as well as their ability to deliver.
Dr. Bynoe also told this newspaper that after his assessment, an evaluation report was sent to the World Bank for its no-objection. British Consultant, Dr. Michael Warner, who has no track record of independently producing a local content policy for a country, was subsequently selected as the “best candidate” to execute the consultancy.
Considering this, Ramson said, “It seems as though there is a breach of procurement regulations based on the procedure utilized by Dr. Bynoe. This is not a case where only three individuals can do this job. There are several local content experts attached to the Natural Resource Governance Institute (NRGI) and even Chatham House that Guyana could have tapped into. Therefore, one has to question why the contract did not go to public tender.”
The Oil Consultant added, “It is important that we get answers on this matter because the nation remains in the dark about why a man who never wrote a policy for a country and has ties to the oil companies, was given priority to finish off a nation’s policy. It is critical that we ensure we are not being taken for a ride.”
Ramson also said that the provisions of the Ghanaian Local Content Policy in comparison to what Guyana has for its final draft exposes the distinction between a government looking out for its people versus a government abdicating its responsibility to protect the interests of its citizens.
The chart attached to this news item highlights some of the provisions contained in Ghana’s highly successful plan that are nowhere in Guyana’s draft policy.
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