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Local Content Policy… Ghana’s highly successful plan was drafted by Expert Guyana bypassed
By Kiana Wilburg
Trinidadian Local Content Expert, Anthony Paul
When Ghana had discovered in 2007 that it had sweet crude offshore, developing a Local Content Policy as fast as possible was high on its agenda.
With the help of the World Bank, Trinidadian Local Content Expert, Anthony Paul was brought in to share with Ghanaian stakeholders, the experiences of Trinidad and Tobago in developing skills and businesses to support the sector.
Following several discussions, the African state contracted the services of the Trinidadian expert for the development of a Local Content Policy. By 2010, Paul supported the government in delivering, a policy fraught with provisions that ensured preferential use of Ghanaian goods, labour and services in the oil industry.
Similarly, when Guyana discovered in 2015, that the Stabroek Block contained significant amounts of oil, the United Nations Development Programme (UNDP) invited Paul to make the Government of Guyana aware of the requirements for administering the industry. During that time, transparency advocates advised that a Local Content Policy was needed too. Paul was subsequently hired for the job and the first draft was produced in 2017, followed by the second draft in 2018. This he did after extensive consultation with business, educational and other stakeholders through a series of public sessions around the country.
But when it came to the completion of this policy, Guyana did not continue with Paul who began the process of drafting a policy that ensured maximum use of Guyanese goods, services and labour. In fact, the procurement process used by the Energy Department appears to have prevented Paul from being selected for the job.
Following questions from this publication a few months ago, Energy Department Head, Dr. Mark Bynoe had acknowledged that the tender to complete the policy was not made public. He said that the procurement processes used for the $22M contract is called “A limited competitive selection of individual consultants.”
The Energy Department Head said that this process allowed for the use of a three CV process and the subsequent assessment of the consultants based on their expertise and qualifications as well as their ability to deliver.
British Consultant, Dr. Michael Warner
It is common knowledge however that consultants with the experience of Paul, (40 years in the industry), typically customise CVs for specific assignments, based on the terms of reference. Since these were never published, one has to wonder how the CVs were sourced and compared.
Nevertheless, Dr. Bynoe told this newspaper that after his assessment, an evaluation report would have been completed and sent to the World Bank for its no-objection. British Consultant, Dr. Michael Warner, who has no track record of independently producing a local content policy for a country, was subsequently selected as the “best candidate” to execute the consultancy.
Since the securing the $22M contract, Dr. Warner who has ties to ExxonMobil, produced a draft policy which recommends no tax breaks for local suppliers, does not require foreign companies to be incorporated or registered here, and seeks to make the local content plans and reports of the foreign companies confidential.
Additionally, when Kaieteur News scrutinised the Local Content Policy that Trinidadian Expert, Anthony Paul produced for Ghana, it was quite obvious that Guyana’s draft policy has absent from it, a host of other crucial provisions which put locals first.
The chart attached to this news item highlights some of the provisions contained in Ghana’s highly successful plan that are nowhere in Guyana’s draft policy.
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Ghana’s Local Content Policy done by Trinidadian Local Content Expert, Anthony Paul |
Final draft of Guyana’s Local Content Policy by British Consultant, Dr. Michael Warner |
| 1) In the case of non-Ghanaian ownership and operations, the entity must provide for the participation of a citizen of Ghana in an interest of at least five percent in the exploration and production activities under petroleum licences. The interest of the citizen of Ghana shall not be transferable to a non-citizen of Ghana.
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NO SIMILAR PROVISION |
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2) In order to ensure increased financial benefits to Ghanaians, and the Ghanaian state, all operators in the oil and gas industry, shall as far as practicable use goods and services produced by or provided in Ghana for their operations in preference to foreign goods and services. The Operators shall give priority to the purchase from citizens of Ghana local products and services that are competitive in terms of price, quality and timely availability. A preference for Ghanaian entities, even if they are up to 10% more expensive is mandated. |
NO SIMILAR PROVISION |
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3) Where bids are being evaluated, and where bids are otherwise equal, the bid containing the highest level of Ghanaian content shall be selected.
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NO SIMILAR PROVISION |
| 4) Where a foreign entity is to provide goods and services for the licensee, the foreign entity shall operate from Ghana and partner with a Ghanaian owned and registered company. After the commencement of operations, the participation of Ghanaians shall be at least ten percent by value in the provision of goods and services or as may be prescribed by regulations. The percentage contribution shall increase to at least twenty percent in the second year and shall increase by at least ten percent each year thereafter or as may be prescribed by regulations. These targets shall be assessed and revised annually as part of the regular assessment of the Annual Local Content Plan to determine the progress of national entities relative to their competitiveness with respect to price, quality, and timely availability and other commercial terms.
(“Operate from Ghana” means that the foreign entity shall be incorporated under the Companies Code, 1963, Act 179.) |
NO SIMILAR PROVISION |
| 5) An Operator shall publicly advertise and give preference to the employment of citizens of Ghana who have the requisite qualification, competence and experience required to carry out the required work. With respect to employee training, an operator shall prepare a scheme for the training of its Ghanaian employees. For the effectiveness of this policy, the scheme shall be submitted to the Petroleum Regulatory Agency for approval as part of the Annual Recruitment and Training Programme. Where such a programme or a scholarship proposed to be awarded has been approved by the Regulatory Agency it may not be varied without the permission of the Regulatory Agency. Where Ghanaians are not employed because of their lack of training, the Operator shall ensure that every reasonable effort is made within a reasonable time to supply such training locally or elsewhere.
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NO SIMILAR PROVISION |
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6) The Operator shall, within twelve months after the grant of a license (or effective date of a Petroleum Agreement), submit to the relevant Regulatory Agency for approval, a detailed Annual Recruitment and Training Programme for recruitment and training of citizens of Ghana in all job classifications and in all aspects of petroleum activities, which may be carried out in or outside the country.
The Annual Recruitment and Training Programme shall ensure that the following targets are met : (a) management staff, at least fifty percent of the management staff are Ghanaians from the start of petroleum activities of the licensee and the percentage shall increase to at least eighty percent within five years after the start of the petroleum activities; (b) core technical staff, at least thirty percent of the technical staff are Ghanaians from the start of petroleum activities of the licensee and the percentage shall increase to at least eighty percent within five (5) years after the start of petroleum activities and ninety percent within ten (10) years; and (c) Other staff, one hundred percent are Ghanaians. Such programme shall provide for the training of Ghanaians in all aspects and phases of petroleum activities and as many staff categories, including management, as is possible and shall be reassessed and revised on an annual basis (the “Annual Recruitment and Training Programme) and may include scholarships, industrial training for students and other financial support for education.
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NO SIMILAR PROVISION |
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7) In order to ensure competitiveness of Ghanaians in the provision of the full range of services required in the oil and gas industry, the local training and technical institutions will be supported by both Government and the petroleum operators to develop the requisite capacity to international standards to be able to train Ghanaians to comparable high levels as required by the industry in drilling and support services, marine, catering and housekeeping, supplies and other support services. This measure will focus on all aspects of training, including the following: (i) Lower skill artisanal training such as welding, catering services; (ii) Middle-level skill training of technicians to provide maintenance services, offshore and on shore drilling etc.; (iii) High-level skill training including general management, engineering design, procurement and business strategy development. Attention will also be given to technology development skills towards indigenization of oil and gas technologies. High-level seminars and workshops will be used to create the necessary awareness and interest of local businesses in the development of the requisite technologies and provision of technical support for the oil and gas industry.
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NO SIMILAR PROVISION |
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8) An Oil and Gas Business Development and Local Content Fund will be established to support local capability development aspects of the local content framework. The fund will be used primarily for education, training and research and development in oil and gas. Sources of the fund will include contribution from Licensed Operators (at amounts specified in the applicable Petroleum Agreements), Oil and Gas Revenue, levies, grants and other support from Ghana’s Development Partners. The Ministry of Energy or the Ministry responsible for petroleum will oversee the disbursement of the fund.
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NO SIMILAR PROVISION |
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