CARICOM Private Sector group says Local Content Law breaches Treaty of Chaguaramas

Jan 14, 2022 News

…sparks outrage from local private sector

Kaieteur News – Local Private Sector organisations have come out to defend Guyana’s recently approved Local Content Legislation, in light of reports that the CARICOM Private Sector Organisation (CPSO) has raise concerns that the law might be in violation of the Treaty of Chaguaramas.

Chairman of the Caricom Private Sector Organization, Mr. Gervase Warner

Similar concerns were raised by Opposition Member of Parliament, David Patterson, during the debates of the legislation December last, but were shot down by the Attorney General, Anil Nandlall. At the time Patterson had asked the government for assurance on whether the legislation was compliant with the regional treaty.

The Treaty of Chaguaramas is an agreement that Guyana signed onto back in 1973, along with other Caribbean nations for the co-ordination of foreign policies and cooperation in several areas including labour administration and industrial relations and social security, among others. According to the Revised Treaty of Chaguaramas, signatories must “promote and develop policies and programmes to facilitate the transportation of people and goods”.
It goes on to state in Article 26 that Member Sates shall establish and maintain an efficient system of consultations at the national and regional levels in order to enhance the decision-making process in the Community. Moreover, the agreement clearly states in Article 32 (1) that “The Member States shall not introduce in their territories any new restrictions relating to the right of establishment of nationals of other Member States save as otherwise provided in this Treaty”.
Meanwhile, Article 38 adds “Subject to the provisions of this Chapter, the Member States shall remove discriminatory restrictions on banking, insurance and other financial services”.
This therefore means that Guyana must not discriminate against its sister nations, when it comes to the provision of jobs and services. However, Guyana’s long awaited Local Content Law, passed only December 29, 2021, is specific in terms of the local capacity it intends to employ to service the oil and gas sector.
The Law indicates that by the end of 2022, Guyanese and Guyanese Businesses must provide 90 percent of Office Space rentals, 90 percent of accommodation services (apartments and houses), 50 percent equipment rental, 75 percent surveying, 75 percent Administrative Support and Facilities Management Services, among others.
It also states that 100 percent of Immigration Support Services and Work Permit, Visa Applications, Visa on Arrival and In-Water Activity Permit are to be provided by Guyanese and Guyanese Businesses.
The Legislation explained “Guyanese company means (a) any company incorporated under the Companies Act- (i) which is beneficially owned by Guyanese nationals who ultimately exercise, individually or jointly, voting rights representing at least fift0one percent of the total issued shares of the company: and (ii) 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; or (b) any partnership between Guyanese nationals and a company constituted under subclause (a) in accordance with the Partnership Act”.
It defined Guyanese national as a citizen of Guyana. The Laws therefore would prevent foreign businesses from posing as a local one. Although the CARICOM Private Sector Organization (CPSO) has flagged possible violations in the Local Content Act, it did not specifically highlight which clause/s breach the Treaty of Chaguaramas.
Chairman of the Organization, Mr. Gervase Warner, in an email seen by this publication outlined “The legislation recently passed by the Government of Guyana (Gog) is attached for those interested in reviewing. At the Executive Committee today, we agreed that the legislation appears to violate several provisions of the Revised Treaty of Chaguaramas”.
“As a result” the Chairman pointed out “the CPSO will take on raising these concerns first to the GoG then ultimately to the Caribbean Community”.
In this regard, the Chairman of the Georgetown Chamber of Commerce and Industry (GCCI), Timothy Tucker, said that as former Chairman of the Trade and Investment Committee of the body its, CARICOM sister countries would frequently throw a barrier “to block the progress of Guyanese businesses”.
He explained that the Trade and Investment Committee was responsible for ironing out issues affecting members of the chamber when it comes to trade and offers support for members, promoting of members’ businesses and help with Investment for members of the GCCI. “I would have been involved with several projects that were aimed at creating new industry, building capacity for new and existing businesses, building support for existing industries. All together the goal was to develop and build a better private sector. But almost every time we took one step forward, one of our dear CARICOM sister countries threw a barrier to block the progress of Guyanese business,” Tucker related.

He said one example was the Chamber’s ‘beekeeping’ project where it trained 40 persons in apiculture. Even though 40 new entrepreneurs were ready to develop their trade and export their product, they were restricted by law.
“Because our major transshipment hub (Trinidad) has a law on their books since 1935 that prohibits honey that isn’t from Trinidad, coming within close proximity of their shores. this law has been challenged by Dominica at COTED (Council for Trade and Economic Development) for years,” the Business executive complained.

“The point of this message is, something as small as Guyanese honey has been blocked from being exported, not just to Trinidad, but to any country that Guyanese have to use Trinidad as transshipment to get to. Years before, a shipment of honey that was being transshipped by Laparkan was seized and destroyed. Laparkan was fined 5000 USD by Trinidad. This whole case is in violation of the Revised Treaty of Chaguaramas and Trinidad continues to dismiss, disobey and disregard COTED’s ruling and by extension CARICOM,” Tucker reasoned.

He opined that if CARICOM does not have “power” over Trinidad, Guyana should not be part of the organisation. Alternatively, he suggested that Trinidad be expelled from CARICOM for its “continued violations” of the Revised Treaty of Chaguaramas.

Georgetown Chamber of Commerce and Industry (GCCI) President, Timothy Tucker

According to Tucker, similar limitations are imposed on the exportation of meats, peppers, pineapples, ground provision, pumpkin and other local produce. Similar cases also exist for workers or work permits, registering a business or CARICOM Single Market & Economy (CSME) certificates.

The GCCI President was keen to note also that in 2019, an Oil and Gas vessel support company, which had more than 60 percent of Guyanese workers -as Guyanese in Trinidad- were ordered by the Authorities to reduce the amount of Guyanese onboard, since it is in violation of the Local Content Policy.

Ex-President also of the GCCI, Nicholas Boyer, in a social media post criticized the position of the CARICOM Private Sector Organization. He said, “I’ve seen an email which says that there could be possible legal challenges to (Guyana’s) Local Content Law under the Treaty of Chaguaramas. It would be quite interesting to see such a challenge mounted, as the context of the law, the email and its sender are quite amusing”.

“First, the law – the Local Content Law of Guyana affords Guyanese the opportunity to provide a select grouping of goods and services (within certain prescribed percentages) to the oil and gas industry. The schedule in the law has the 40 categories. This was heavily reduced from the initial proposed number of categories,” Boyer reasoned.

Secondly, he pointed out, the email was issued by someone in a senior role at a regional conglomerate. “I am quite interested as to what this conglomerate thinks it would have to gain if they challenged this law. For instance, this same conglomerate ironically benefits from a large number of sales of vehicles to local transportation companies which provide transportation services to the O&G industry.”

Moreover, the former Chamber head contended that it is the most disrespect he has seen from the conglomerates “who feel a sense of entitlement, the same ones who ironically have destroyed small businesses in their own backyard, and thereby hurt their own oil industry; now they want to do the same to ours”.

“Are they really coming to do transportation and the other 40 items that we’ve carved out for Guyanese? Is it that they either are that desperate for a piece of the pie or do they feel that entitled?” Boyer questioned. When this publication reached out to the Natural Resources Minister for a comment on the matter, he referred all questions to AG, Nandlall who said he was in a meeting and would return a call.
Up to press time, the AG did not respond.

Meanwhile, Mr. Suresh Beharry, in a statement to the media assured that he had not been “tasked” to intercede with the authorities in Guyana on a matter concerning apparent limits to CARICOM nationals doing business in Guyana, in the context of the recently enacted Local Content Act, as was falsely published by social media posts and even news pieces.
In fact Mr. Beharry said he supports Guyana’s Local Content legislation, in particular, as it relates to the nascent Oil and Gas Industry.