Local Content Law…Police can be called in to probe false declarations by oil companies – AG

Sep 26, 2022 News

Kaieteur News – Attorney General and Legal Affairs Minister, Anil Nandlall, S.C has defended Guyana’s Local Content Legislation, insisting that crimes related to the Act can be probed by the Guyana Police Force (GPF).

Nandlall in an exclusive interview with this publication was at the time responding to an article published by this newspaper on Friday where a New-York based Attorney-at-Law, Dr. Vivian Williams, pointed out some of the loopholes he believes can hinder its effectiveness. One of the lawyer’s observations is that while the Act uses the Local Content Secretariat to regulate the extent to which foreign firms have access to procurement opportunities in the oil and gas sector, this body has no power to investigate firms in the local market. To gain local content certification, he said a firm is allowed to self-report on its ownership and governance structure, and the level of foreign workers participation in its workforce. Once the information is provided, he said the Secretariat decides whether to issue a local content certificate.

Attorney General and Legal Affairs Minister, Anil Nandlall, S.C

Dr. Williams wrote, “The problem is, the Secretariat has no power to investigate the information provided to or withheld from it. It has no subpoena powers. Further, the Secretariat has no power to seize and inspect documents and computers and electronic files from firms suspected of creative compliance or outright fraud.”

However, Guyana’s Attorney General has made it clear that crimes related to the Local Content Act will not be swept under the proverbial rug as the GPF is vested with the power to conduct investigations in this regard. He explained, “Our law requires beneficial ownership to be identified. If any person falsifies documents or information contained in those documents it constitutes a criminal offense and that’s the position all over the world.”

The AG went on to point out, “In drafting laws you have to ensure that certain principles are observed. Now the law requires ownership in a particular way. If a person comes forward and submits wrong information, false information (or) misrepresents true owners of the company, the law in various pieces of statutes creates an offense, a criminal offense for that.”

As such, Nandlall explained, “if the Registrar of Deeds gets information that suggests that the documents filed at the registry is false or contains false information, all the Registrar has to do is report the matter to the Police and the Guyana Police Force has all the investigative powers to investigate the veracity of the information.”

Another issue that was flagged by the lawyer, who holds a PhD in Business Administration from Baruch College, City University of New York, is that the Secretariat has a single Director rather than several Directors. Dr. Williams wrote, “A single director increases the prospect for corruption and corruptibility. This is particularly so because there is no administrative review process to create a check on the Director. To reduce the chances for corruptibility, enforcement agencies in the corporate arena avoid a structure where a single person or group handles a case from intake to decision.”

Taking these and other factors into consideration, the lawyer concluded that Guyana could be at risk of not realizing the noble aspirations of its legislation. To this end, the Attorney General acknowledged that while there is room for improvement to new Law, he maintains that it is an excellent first try. He reasoned, “There is a Local Content Secretariat I think and there is a whole structure there I don’t know about one director. The Act has a governance structure and in the governance structure there is place for accountability, there is place for transparency and there is place for oversight.”

While this is the case, the Minister said Government is not opposed to reviewing the Law to ensure benefits to its people. “I said when I spoke on the legislation in the Parliament that it’s an excellent legislation at first try. It is unprecedented in Guyana’s history and there is no such legislation in the Caribbean region. We said also that it’s an excellent initiative at first attempt but because of its newness- for the want of a better word- we will continuously review it as we become more and more experienced in the sector and where we see amendments are necessary we will amend,” he said.

In addition, Nandlall pointed out that the Local Content Act gives the Minister of Natural Resources the power to make regulations to better manage or enact the legislation so as to ensure its objectives are realized. That mechanism gives the Minister an elasticity of power, the AG said, to make regulations as situations unfold so that if there is a particular area that requires regulation changes can be made to that effect.

Just last month the Director of the Local Content Secretariat, Martin Pertab said the body is seeking to improve its auditing and investigative capabilities, to monitor oil companies’ compliance with the law. The Director told this newspaper that “This would serve to verify the information submitted to the Secretariat by companies operating in the sector.” The Local Content law is intended to regulate the way companies operate in Guyana’s oil and gas sector; employ persons, buy services and the way that they procure goods.

Under the Act, the Local Content Secretariat (the Secretariat) has been established and functions as the focal point for the monitoring, evaluation, coordination, and reporting of Local Content in the petroleum operations of Guyana.
Therefore, the Secretariat key role is to monitor and evaluate companies’ performance with respect to the Guyanese utilization targets outlined in the Act.