Oil companies will have to provide five year plans for employment, procurement, capacity building – Natural Resources Minister

Dec 30, 2021 News

Kaieteur News – Now that the Local Content Bill 2021 has received the blessing of the National Assembly, oil companies and their subcontractors will have up to December 2022 to prepare a five-year plan that outlines how they intend to employ and procure indigenous services, along with the implementation of programmes for capacity building.

Natural Resources Minister, Vickram Bharrat

Outlining this was Natural Resources Minister, Vickram Bharrat, during the opening of debates on the Bill yesterday morning. Bharrat who was listed among 16 parliamentarians to speak on the Bill was keen to note that the contents of the bill are not cast in stone. He said the government will make changes as the law is implemented and there is need for strengthening. The minister stressed as well that the Bill was not crafted in a willy-nilly fashion as it benefitted from a year of consultations and expert reviews.
Bharrat was keen to note that the Bill protects the interests of all citizens, starting with the very definition of what constitutes a Guyanese company. The Bill defines a “Guyanese company” to mean any company incorporated under the Companies Act which is beneficially owned by Guyanese nationals who ultimately exercise, individually or jointly, voting rights representing at least fifty-one per cent of the total issued shares of the company; and that has Guyanese nationals holding at least seventy-five percent of executive and senior management positions and at least ninety percent of non-managerial and other positions. It has also been expanded to mean: any partnership between Guyanese nationals and a company constituted in accordance with the Partnership Act.
Minister Bharrat said too that a Local Content Secretariat of highly skilled professionals will be in place to monitor and ensure enforcement of the Act as well as to do assessments. He said the first task of the body would be to create two registers: one for persons who would like to undergo training and seek employment and the other for businesses in any related field that can provide services to the sector.
Following this, he said oil companies and their subcontractors will be asked to provide a master plan which will cover a period of five years and contain sub plans for employment, procurement and capacity development. Upon submission of the master plan, Bharrat said every year operators and their subcontractors will have to provide an annual plan for review by the secretariat and the minister.
Bharrat said he believes that the foregoing plans would be crucial to the nation as it would provide a better understanding of the oil sector and what the requirements are for skill-sets as well as for businesses to know what they need to bring to the table on an annual basis. If it is found that certain targets within the Schedule of Minimum Local Content Requirements are too high or low, the Minister said an order can then be issued for changes to be effected.
Additionally, Minister Bharrat said it would be easy for one to criticise the schedule to say that certain targets should be higher. He stressed however, that such an approach cannot be taken when there is no true understanding of what the national capacity is.
The Minister said, “We have never really done that assessment so we had to base the schedule on consultations with various groups over the year so by the end of 2022, we will have an understanding of capacity in the sector… We will keep changing and adding different services as we build capacity but we need to recognize our limitations…” He concluded, “We need to be honest and straight up because we have challenges and we lack capacity within certain technical areas in the oil sector and therefore there are certain services we cannot offer now.”