No objection raised about Guyana local content law at CARICOM summit

No objection raised about Guyana local content law at CARICOM summit – Pres. Ali

Mar 07, 2022 News

Kaieteur News – President Irfaan Ali has brushed aside claims that Guyana’s Local Content legislation is in violation of CARICOM‘s Revised Treaty of Chaguaramus.
Speaking to media operatives at a Sunday morning press conference, Ali sought to clear the air on the issue. Ali said: “Let me make this clear, in no way shape or form was anyone critical on Guyana local content legislation. a matter of fact, the Chairman from [the CARICOM Private Sector Organisation] CPSO sought to take time to explain that they didn’t make any decision on the matter, they were only discussing it…and this email just escaped…” The President explained that a committee was established to discuss the LCP in a wider context.

Chairman of CPSO, Mr. Gervase Warner.

At the closing news conference of the CARICOM Summit Barbados Prime Minister, Mia Mottley, disclosed that discussions will be held among CARICOM Heads of Government to agree on an appropriate framework for local content. Mottley made that remark after she was asked a question during the 33rd Inter-sessional meeting of the conference of CARICOM Heads of Government, which was held in Belize. Following the passage of Guyana’s Local Content Legislation last year, concerns were raised by the CARICOM Private Sector Organization (CPSO) – in relation to Guyana’s new law being in breach of CARICOM free trade provisions.
In light of the aforementioned the question was asked to which PM Mottley said, “Within the context of CARICOM Single Market and Economy (CSME) we placed before heads and heads accepted there is need for us to review the issue of local content.”
To this end, she disclosed that there is an open ended committee of heads that will commence work shortly, in which it will recognize the new areas of economic activity. “I certainly support there is a case for some level of local content and the issue will be what should that percentage of local content be and what is the timeline that it should be valid for. Because if you are giving it to a sunrise industry then you won’t need it 30 years from now or 20 years from now,” Mottley noted.
As such, she noted that discussions on the matter will be held among the Heads of Government, with a view towards recommending to the full conference of heads what the appropriate frameworks should be so that no one will be held in breach for wanting to do that which is most natural.
There were heated debates last year when CPSO raised its objections on the Local Content Legislation. Opposition Member of Parliament, David Patterson, during the parliamentary debates on the bill, before it was passed into law December last, had raised similar concerns as the CPSO, but these 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 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 fifty-one 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. Although the CARICOM Private Sector Organization (CPSO) had flagged possible violations in the Local Content Act, it did not specifically highlight which clause/s breach the Treaty of Chaguaramas.