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Local content
DEAR EDITOR,
The Government is preparing a “local content” policy (document) for the development of the oil and gas industry.
Local Content means using local skills (manpower) and resources (from Guyanese suppliers or companies) including transferring technology, training local workforce (in all skilled areas) in the industry, promoting energy related manufacturing, and encouraging ownership by Guyanese (individuals and companies).
It is generally recommended that local content comprises over 50% input in the industry by way of staff and purchases from companies. But how should this amount (of over 50%) be measured? For example, if 100 workers are employed and 75% are Guyanese with 25% foreigners, does it meet the requirement of over 50%? One has to be careful in that 75% staff may mislead the public that local content is being fulfilled when in fact earnings of 75% staff may not even come close to half of what the 25% foreigners earn. For example, a Guyanese worker in the oil industry on the rig may earn $100 a day while the foreigner earns $750. There is gross inequality in that the foreigner earns over seven times the local employee. Energy local content expert Anthony Paul of Trinidad advises that local content be measured in value of input (how much is spent in dollar amount) or purchases by the oil companies from Guyanese companies rather than the quantity amount of purchase or number of staff employed. If for example, the energy company is spending US$100 M on employees or on purchases, over $50M in value should be from Guyanese companies or earned by Guyanese.
Whatever is budgeted to be spent on the industry in the development of oil, over 50% of the amount must be on Guyanese. The energy companies must specify how many staff will be employed and goods purchased and how many will be Guyanese including the value associated with their employment and purchases.
Mr. Paul also advises that the public should have open access to information on the activities of the energy company through the government; must be available to the media and stored in the public library and university. The government must be open in providing unlimited information to the public to monitor and hold accountable the activities of the government and the energy companies.
Regards,
Deo Gosine/Managing Director
Labidco Port Services Ltd
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