Draft Local Content Policy to finally have meaningful additions -Substantial use of goods and services to be in place

Draft Local Content Policy to finally have meaningful additions -Substantial use of goods and services to be in place – Chatham House Advisor

Feb 17, 2018 News

By Kiana Wilburg

The “substantial” use of local goods and services by oil operators is just one of the many meaningful features one can expect to see when the nation’s draft Local Content Policy is released once more for consultations.
This is according to Oil and Gas Advisor to Chatham House, Mr. Anthony Paul. The Trinidadian national also serves on Guyana’s Local Content Committee.
He confirmed the aforementioned during an interview with Kaieteur News.
The Chatham House Advisor was asked to provide an update on Guyana’s draft policy.
Paul reminded that the first draft of the Local Content Policy Framework was posted on the Ministry of Natural Resource’s website and shared with a range of stakeholders for feedback. Several stakeholders provided written comments.
The Oil and Gas expert reminded that last year, a series of public and private engagements were held with stakeholders in Georgetown, Berbice, Linden and Essequibo. He said that based on feedback from those sessions, the policy draft has been amended and a second draft is being considered by the Ministry of Natural Resources.
Paul said that some of the meaningful changes include; an extended introduction and narrative, intended to provide more context and explanation/education to those unfamiliar with the industry; definitions, including of local individuals and firms and local content; a strategy for implementing the policy; and an approach to developing an implementation plan, inclusive of public education;
The Oil and Gas advisor said that the Ministry is advanced in its review of the updated draft and should be releasing a final version shortly after the appropriate approvals.
SUBSTANTIAL USE
Since its release, Guyana’s Draft Local Content Policy was criticized for the absence of provisions which ensure that there is a substantial use of local goods and services. Many commentators have also cited nations which ensure such provisions are in place.
In Brazil, for example, local content policies obligate the oil contractor to buy a specific percentage (as agreed upon with the government based on regulatory criteria) of goods and services locally during the exploration and development phases of petroleum operations. The performance of this obligation is verified by means of certification on local content by the relevant government agency.
In the second review of Guyana’s Local Content Policy, Paul was asked if such a provision was taken into consideration.
He said that Guyana’s Policy Framework highlights that there will be areas identified for Guyanese to be given preference. He added that a suggestion is that the implementation plan will “identify targets for local content in specific areas of goods and services”.
DRAFT POLICY
Guyana’s draft Local Content Policy has been criticized in recent months for lacking many 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. Several commentators have expressed hope that the second round of reviews and consultations will see these loopholes being addressed.
In the interim, the Local Content Policy framework simply 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 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.

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Draft Local Content Policy to finally have meaningful additions -Substantial use of goods and services to be in place – Chatham House Advisor

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Draft Local Content Policy to finally have meaningful additions -Substantial use of goods and services to be in place – Chatham House Advisor

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