The wait for local content policy continues

Jan 08, 2018 News

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– Despite Minister’s year end projection

The nation continues to hold its breath hoping that the APNU+AFC government will at least put in place a good and proper Local Content Policy. But, so far, there are no indications that that provision will be in place anytime soon.
Business owners are getting fidgety. They worry that oil production will begin and they will be left in the cold. A Local Content policy could mandate oil companies to utilize a certain percentage of local skills and commodities. The absence of this leaves the companies to decide whether or not they want to use anything or anyone Guyanese.
The Private Sector Commission (PSC), on Saturday, issued a statement noting that little has been put in place to secure local content in the oil industry.
The PSC even noted that the contact signed by ExxonMobil and the Government of Guyana makes little provision for local content.
The statement read, “It is the opinion of the PSC that much more could have been done to incorporate local content. In addition, we were expecting that greater benefits would have accrued to local businesses. This, we find, is sadly lacking.”
The fate of local businesses is now to be decided by the long awaited local content policy.
Last year, Minister of Natural Resources, Raphael Trotman said that the policy was “very likely” to be in place by the end of the year.
Trotman had said that Government has retained the services of world-renowned expert, Mr. Anthony Paul. Minister Trotman noted that Paul was keen on completing and having distributed for consultation, the first draft policy.
Trotman had said: “The idea for this is that we could not move to legislation without first having a policy. Legislation should follow policy rather than the reverse and so it was thought that we should craft the policy before 2020.”
The Parliamentarian had added, “Paul, who was away for a few weeks, has returned and in September last, he held consultations with various members of the Private Sector along with others across the region. He has resubmitted another draft taking into consideration the new views and ideas shared by stakeholders.”
Guyana’s draft local content policy has been criticised in recent months for lacking provisions which would safeguard against exploitation by companies.
The draft speaks nothing of how to avoid procurement fraud, conflict of interest and favouritism among other crucial areas.
Instead, the draft Local Content Policy framework seeks to address, the suite of opportunities that may arise and the approaches to be taken in selecting and developing opportunities related to enhancing the capabilities of Guyanese nationals and businesses.
The Policy articulates that this will be done through; training, development and employment initiatives (Capacity Development), ensuring availability of ownership participation for qualified Guyanese equity interest (Ownership Value), supplier development provisions for goods and services by locals to support sector operations (Local Content); and well-tailored social contributions for greater impact and benefits (Societal Benefits).
It also describes what will be done to ensure that the activities in the petroleum sector are conducted in a manner that transparently secures the maximum benefit for the people of Guyana, while recognising the limitations of the country and holding all actors accountable to the present and future generations of Guyanese who are the owners of the nation’s petroleum resources.
Additionally, the draft policy recognises that the petroleum resources of Guyana belong to all its citizens, and represent an asset of significant intrinsic value, which once removed diminishes the wealth of the nation, unless there is transformation in value from resources below the ground to improved quality of life above it for current and future generations of Guyanese.
The draft says, “Guyana will approach the development of its petroleum resources, people and businesses in a pragmatic, transparent and accountable manner. This will be conditioned by existing circumstances and an analytical approach to understanding the resource, the activities it engenders and our input capabilities.
“We shall pursue strategic opportunities for local capacity development and participation that give us the maximum possible benefit now and in the future.”
The Policy also states that Guyanese will participate in a manner that gives preferred access and opportunities to improve and enhance the country’s capabilities so that it can become internationally competitive and in the end, the country will progressively provide a greater amount of future services.
Capacity development, to enable more value retention, will be treated as an investment, rather than as a cost, the policy outlines.

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