The benefits of an efficient local content policy to create value for Guyana

Dec 23, 2018 AFC Column, Features / Columnists

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(On Saturday December 8, the Shipping Association of Guyana hosted its 8th Awards Presentation ceremony for operators in Guyana’s shipping and cargo industry. The featured speaker was renowned Attorney-at-Law, C.A. Nigel Hughes. Here is the first of two parts (abridged) of that timely address.)

Recently UNESCO added Reggae music to its compendium of the ‘intangible cultural heritage of the world’. This was no mean feat. Reggae, home grown, home developed, home marketed and by the sheer force, power and potency of the product, has covered the world with its message of rhythm, peace, love, human rights, justice, dignity and mutual respect for each other.
You don’t get better local content than that.
Reggae created for the Jamaican tourist industry what millions of dollars spent on generic marketing in Jamaica could not achieve. It did that without state support or local content legislation. Its pioneers, long before Marley, were confident in themselves and their product. They were bold and audacious.
Permit me to quote a line from celebrated Jamaican dance hall artiste, Buju Banton who has returned with his talents to Jamaica: “I and I, I wanna rule my destiny”.
So here we are in Guyana in 2018, beneficiaries of a beneficence of world class proportions, gifted with a small population and more than adequate land mass, arguing about how poorly we will manage this gift from God, with frequent predictions that we won’t get it right. We have, perhaps unwittingly, displayed the poverty of our minds to the world by our inability to engage each other on how we will develop this resource.
The constant mantra published almost daily in the news is that we “ain’t getting this right”. It’s as if we say this often enough, we will indeed create that destiny. Poverty is a state of mind. What you think about most is who you are, and what you achieve.
Guyana has been inundated by experts, both local and international, coming with recommendations about what we have to do to avoid every curse known to oil, and what we have to do to catch up with the world. Well, my friends, I have a slightly different approach.
We don’t just want to catch up, we want to surpass what currently exists in the world. This requires a change of mindset, a change of approach and in some instances, a change in some aspects of our culture. This applies not only to oil and gas development but to our national development over the next quarter of a Century.
There has been much debate about local content since the first announcements of oil discoveries in May 2015. From the inception, local content has meant different things to different persons. For some, all the jobs generated by the industry had to be first offered to Guyanese. For some, the companies incorporated to provide goods and services for the oil and gas industry had to have local directorships. For some, the ownership of the companies which operate in the industry had to have significant Guyanese equity, and for others, most of the goods and services provided to the industry had to originate from Guyana.
And in a style, which we seemed to have made our own, we started shouting at each other about local content and each person in the conversations meant something different.
One had hoped that for a country which had no history of oil and gas production, that perhaps we might have been driven to agree on a few baseline definitions and objectives before we started a national conversation on local content.
To add further dislocation, the contretemps about local content was positioned against the raging dispute about the rate of Royalty which Guyana had just negotiated with the major operator, and which many believed was inadequate.
And so our oil and gas games began before a population, which did not have a clue about the production of oil and gas, the nature, the scope and magnitude of the discovery in Guyana, no history to call upon, with the most popular images of conditions generated from significant oil finds which ranged from wealthy Dubai at one end of the scale to poverty in the Nigerian Delta at the other end.
Daily, various experts, whether self proclaimed or otherwise, offer their opinions in the national media of how dire our condition is as a result of the discovery of oil, expounding on the less than optimal results from negotiating with an oil major on the production agreement, and less than adequate preparation for any potential disasters.
And daily, the population with no base data or framework against which to locate the various dramatic headlines, is being fed a diet of gloom – the almost certain corruption, exploitation, incompetence and greed that lie ahead of us.
It is open season on why this nation is doomed even before we start as an oil and gas producing country.
I almost forgot to add our (in)ability to manage our politics fifty years after independence, our (in)ability to manage large national projects whether it is Skeldon, the gold industry, infrastructural development and access to our natural resources which all enjoyed a less than stellar performance…
So it’s against this backdrop that I will endeavor to address the issue of creating value through local content in our imminent oil and gas industry…
(To be continued with his recommendations)

The AFC wishes every Guyanese a joyous, positive Christmas.

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