Oil companies should be penalised for failing to meet local content obligations

Jun 18, 2021 News

– Financial Analyst, Floyd Haynes

Kaieteur News – Financial Analyst, Floyd Haynes, is of the firm conviction that oil companies should face punitive measures for failing to meet local content obligations.
The Certified Public Accountant (CPA) expressed this viewpoint during his first appearance on Kaieteur Radio’s show, Governance, Corruption and Justice on Tuesday.

US-based Financial Analyst, Floyd Haynes.

There, he provided his perspectives on the importance of local content and the role government, oil companies and the citizenry, must play to be successful on this front.
During his interview, Haynes explained that he sees local content as a triangle or a three-legged stool where one leg speaks to the role of the government in enacting the relevant policies and legislation along with systems to measure performance by oil companies.
He said that the second leg would refer to the operator or oil companies and their role in information dissemination and making people aware of what is available.
The third leg, the Certified Fraud Examiner (CFE), he said is for the people interested in being part of the sector to ensure they get the requisite skills via training along with the relevant certification. Haynes said the foregoing must work in tandem if the forthcoming local content policy and legislation are to be efficient and effective.
In this regard, Haynes categorically stated that when these local content goals and objectives are not met, the government should be able to punish non-compliant companies.
The US-based Chartered Accountant said, “If one side is doing it (alone) then it will not work and of course, all of that has to play alongside an ecosystem that supports that.”
Equally crucial for one to bear in mind is that the government cannot enforce legislation if the people are not ready “because what happens is if you aren’t sufficiently trained and the professional development needed is absent? Then it leads to inefficiencies. And if there are inefficiencies on the part of ExxonMobil then we ultimately pay through cost recovery. So we have to strike that balance.”
It was last year that President, Irfaan Ali, had appointed six individuals to a local content panel with the sole aim of producing an exposition on the best provisions for the country’s policy.
The members of the panel included Haynes; Trinidadian energy strategist, Anthony Paul; former T&T Energy Minister, Kevin Ramnarine; former Foreign Affairs Minister, Carl Greenidge; former President of the Guyana Manufacturing and Services Association (GMSA), Shyam Nokta; and trade unionist, Carvil Duncan.
Following the submission of its report last year, the Ministry of Natural Resources produced a draft policy which was subjected to wide consultations that were led by President Ali. The first session kicked off in February and concluded in March. The final policy is still to be completed.

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