Oct 20, 2020 News
Kaieteur News – If it is the intention of Guyanese authorities to have a Local Content Policy and legislation that allow for the progressive participation of citizens in the oil sector, there are two key ingredients that must be present in the formulation of that document.
According to Chatham House Expert, Dr. Valerie Marcel, the two major ingredients are clear definitions on what qualifies as local content and robust systems to monitor the performance of companies in using local businesses as well as their training and hiring citizens.
During an interview on Kaieteur Radio’s programme, Guyana’s Oil and You, the industry expert said it is critical to have a clear definition on local content as ambiguous terms open the floodgates for loopholes that would be exploited.
Dr. Marcel said, “What qualifies as local, is where the government can kind of play around with what it really wants. Local could be regional, it can be CARICOM. You could say regional is local. But I understand that in Guyana that is not very desirable because you’ve got a small workforce and neighbours with much larger forces.”
The expert added, “Local can also mean that the company is registered or incorporated in Guyana. So, it does not matter if the owner of the company or the directors is Guyanese. It only matters that they are registered in Guyana…”
The Chatham House Associate Fellow went further to state that clear definitions on what would be accepted as local content will also help the government to manage the performance of oil companies while being able to know what targets are realistic and those which may in the early stages, be too ambitious.
“In essence, the clearer you are on the terms, the clearer you can track and monitor the localization. It therefore means that systems to account for the progress made on those targets will be a necessity,” the expert noted.
Earlier this month, the Ministry of Natural Resources had said that the Local Content Advisory Panel, which was appointed by President, Irfaan Ali, is expected to submit its first report and recommendations by next month.
The panel, chaired by Shyam Nokta, is expected to review all existing initiatives and policies where local content is concerned and guide the development of a new policy and legislation.
Government said that the panel has been meeting regularly, and intends to conduct consultations with key stakeholders, including from the private sector, government and civil society.
The panel members comprise Nokta; former Foreign Minister, Carl Greenidge; Trinidadian local content expert, Anthony Paul; former Trinidad energy minister, Kevin Ramnarine; trade unionist, Carvil Duncan, and accountant, Floyd Haynes.
The local content policy currently in place was drafted under the former David Granger administration but was controversial because of a glaring absence of provisions that would give Guyanese people and services, first preference in the sector. In fact, the final document was completed by ExxonMobil affiliate, Dr. Michael Warner. Warner is the UK consultant that APNU+AFC used to replace Paul, a Trinidadian local content expert. When Paul was hired to produce the first two drafts, he had included several provisions to protect the interest of locals. But Dr. Warner quickly removed all of those provisions upon being hired to put the finishing touches on the policy.
Paul has since been retained by the Irfaan Ali administration to assist with the revision of the policy and the installation of legislation.
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