Oil find… Laws to mandate foreign investors hire Guyanese- Min. Trotman -Consultations on Wealth Fund likely before year end

Oil find… Laws to mandate foreign investors hire Guyanese- Min. Trotman —Consultations on Wealth Fund likely before year end

Jun 30, 2016 News

An Exxon Mobil operation

Minister of Natural Resources, Raphael Trotman

By Jarryl Bryan
Come November 2016, Guyana will be applying to become a member of the Extractive Industries Transparency Initiative (EITI).
This is to ensure that Government remains accountable and transparent to the people, while handling an impending multibillion dollar oil sector.
According to Minister of Natural Resources, Raphael Trotman, Government is also looking at introducing key pieces of legislation that will ensure that not only is the surplus from the oil proceeds managed responsibly, but also legislation to mandate that a quota of Guyanese are hired by the oil companies.
He made this disclosure following an EITI symposium at the Arthur Chung Convention Centre yesterday. Trotman was asked about the guarantees that would be in place to ensure that jobs coming from Exxon Mobil’s work would not just go to foreigners, as has happened to Guyana previously with foreign investors.
Trotman revealed that Government has been having talks with Exxon Mobil on the matter of local job creation and that the response has been favourable to the Guyanese cause.
“We are looking at legislation to ensure that it is enforced,” the Minister said. “So this is something that is uppermost in our minds. (However while) it is easy to say that 100 percent of the jobs should go to Guyanese, there (might) be only three Guyanese in Guyana who could actually respond.”
Trotman acknowledged that once there are people with skills available they should be given the first preference.
“It’s based on several factors, one of them the dynamism of the market itself.
As you look around Guyana, there are very few people who have the skills and so it’s going to be difficult now but certainly the University of Guyana and the Ministry of Education are gearing up.
“(And) in another three to four years the University of Guyana is going to start producing graduates with skills in the oil and gas sector.”
SWF
Asked about the Sovereign Wealth Fund (SWF), Trotman stated that this fund is expected to play a key role in Guyana’s oil operations. He noted that between the Ministry of Finance and the Ministry of Natural Resources, the fund will be established.
“Some countries call it different names. Some call it a pension fund, some call it a heritage fund, but essentially this is one where the money for spending and infrastructural projects, for education, for better health care services, for roads, bridges, and airports in the interior would be stored.”
He listed other ways in which the fund would impact the country, including the potential for it to be used for budget support and to keep the economy going.
For instance, Trotman posited that if the price for oil per barrel were to dip too low (it currently hovers around $50 per barrel), Government could dip into the fund to ensure that there is no blowback on development.
“And the third and most important function of the fund is to prepare for the future. So 200 years or 300 years from now Guyanese should be able to enjoy the wealth that we have because, like everything else, whatever is in that well is going to dry up in time.
“So we don’t want to squander all of it now.”
In formulating the fund’s mechanisms, Trotman noted that Government was looking at other countries with SWF mechanisms. He identified Norway’s as one which stood out, but also flagged Trinidad and other new oil producing countries in Africa
“We are looking to them and we will put something in place by the end of this year.”
Consultations
While he could not be sure whether the legislation would be passed into law, he stated that it would certainly be brought to parliament for an open discussion.
He pointed to events such as the EITI symposium and the chance to become a member of EITI as positive steps in the interest of transparency.
“We intend to do briefings with stakeholders. We would like to be as open as possible. Of course, we will be briefing the parliamentary opposition, civil society, the press.
“All of you should have a right to know and help us disseminate that information.”
The legislative steps which Trotman identified would be taken as Guyana prepares to produce oil commercially, are just some of the preparations underway.
Another aspect is a workshop which is being coordinated by the Civil Defence Commission (CDC) which is working to formulate Standard Operating Procedures (SOPs) to be followed in case of oil spills.
The proposed legislation will come after some unsavory experiences the country would have had with foreign investors not hiring Guyanese labour.
Back in 2013, while the Marriott hotel was being constructed, the Guyana Trade Union Congress had cause to intervene because Chinese contractor, Shanghai Construction Group, was building the hotel on purely foreign labour.
The previous administration had boasted that the project, which cost almost US$60 million, would create hundreds of jobs; but after months of construction and repeated visits, Guyanese labour was nowhere to be seen.
Exxon Mobil is one of the world’s largest publicly traded international Oil and Gas Companies and with its coming, it is anticipated by many that there will be a demand for labour separate from the specialized workers.

1 thoughts on “Oil find… Laws to mandate foreign investors hire Guyanese- Min. Trotman —Consultations on Wealth Fund likely before year end”

M Nicols June 30, 2016 at 3:11 am

‘Oil find… Laws to mandate foreign investors hire Guyanese- Min. Trotman —Consultations on Wealth Fund likely before year end’
Impractical
Only from someone who never employ anyone and don’t know the liability
What happen if you employ Guyanese for Guyanese sake and caused a major oil spill.
Who will pay for the consequences?
Where will we find the Minister then?