Jail time, heavy fines a must for Local Content defaulters

Apr 09, 2021 News

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…legislation must apply across extractive industries sector—Tucker

Kaieteur News – The Georgetown Chambers of Commerce and Industry’s (GCCI) recently minted President, Timothy Tucker, is calling on the ruling administration to put in place not just a Local Content Policy but firm legislation, to punish defaulting companies—legislation to be applied across the extractive industries.
This could be done in a phased approach, since priority should be given to the emerging Oil and Gas sector.

Tucker gave his views as the new GCCI President on Wednesday, during a GlobeSpan 24X7 discussion, on ‘Local Content and Guyana’s Business Development’—moderated by Richard Rambarran.
The newly elected GCCI president—elected on Saturday last—in the discussion with the moderator said there must have consequences for when players are not adhering to local content guidelines and used as example, “companies that are trying to hoodwink the nation by having rent a citizen” type scenario.
He noted too that there is a need to have tough legislation in place for instances where companies outright refuse to adhere to a local policy, and said there must have repercussions in place for such scenarios.
Legislation, he reiterated can enshrine penalties, “jail time, heavy fines and things like that.”
According to Tucker, it cannot be a situation like in neighbouring Trinidad and Tobago (T&T), which only set about putting in local content provisions for its citizens in 2004.
That country, he reminded, though more developed than many of its Caribbean counterparts, would have been producing oil for over a century, and as such would have waited for some time before looking to ensure its citizens secured maximum benefits from its industry.
The GCCI President was adamant, “local content is vital to the development of the country,” and posited, a country cannot be developed “without utilising the local businesses, the local skilled personnel, the local people, it is impossible.”
He suggested that without local content protections in place, it would simply be a case where as a country, “you would just be renting a piece of land” to remain in an underdeveloped state, when the oil and other extractive industries’ interests, pack up and leave.
He noted that the infrastructure put in place cannot simply be temporary and portable and as such, local content laws would ensure that whatever resources are available for the country to garner, be used to develop the country holistically.
According to Tucker, this includes, since local content does not relate to a single field but rather must impact on Guyanese’s lives, from the grocery store to the electricity being generated in-country.
“It is not just one thing, it is a series of events, not just developing your people but building a nation, building a country.”
The newly elected GCCI President reiterated that local content “is the backbone of developing this nation.”
Emphasising the private sector body’s call for legislation in place, Tucker said it cannot be a situation in Guyana where, like many other countries, the people suffer after the resource interests who are primarily extracting, then pack up and leave.
It cannot be a “straw in a glass story” where everything is being sucked out of the country and nothing being put back in, he opined.
Looking to underscore the need to ensure that citizens can secure optimum benefits from its oil and gas resources, the GCCI President reminded that Guyana has been reclassified as an upper middle income country.
This status, he reminded, means that a lot of the donor funding that the country had relied on in the past would not be available anymore.
As such, he noted that local content will have to take into account government’s spending of the oil revenues and that “Guyanese must benefit from all of the spending.”
Kaieteur News this past month reported that in Ghana, citizens are afforded a number of opportunities to reap the maximum benefits from their oil resources, thanks to a suite of robust guidelines, policies, and regulations that protect their interest.
The legislative framework ensures, for example, that any foreigner who desires to set up shop and bid for contracts can only do so if they partner with locals.
Moreover, for those who even contemplate effecting schemes to cheat the system, Ghana had clear-cut fines and jail time stipulated for such actions.
The Local Content Regulations of that African nation state, for example, “A citizen who acts as a front or connives with a foreign citizen or company to deceive the Commission as representing an indigenous Ghanaian company to achieve the local content requirement under these Regulations, commits an offence and is liable on summary conviction to a fine of not less than one hundred thousand penalty units and not more than two hundred and fifty thousand penalty units or to a term of imprisonment of not less than one year and not more than two years or to both.”
It also notes, “A person who connives with a citizen or an indigenous Ghanaian company to deceive the Commission as representing an indigenous Ghanaian company to achieve the local content requirement under these Regulations, commits an offence and is liable on summary conviction to a fine of not less than one hundred thousand penalty units and not more than two hundred and fifty thousand penalty units or to a term of imprisonment of not less than one year and not more than two years or to both.”
It is instructive to note as well, that anyone who knowingly submits false documents and makes false statements to Ghana’s Commission along with fronting for a foreign individual or a company to give the impression that local content is being achieved, would also have to face the proverbial music.
Ghana’s regulations in this regard specifically states that, “A person who submits a plan, returns, report or other document and knowingly makes a false statement, commits an offence and is liable on summary conviction to a fine of not less than one hundred thousand penalty units and not more than two hundred and fifty thousand penalty units or to a term of imprisonment of not less than two years and not more than five years or to both.”

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