Jagdeo dismisses calls for local content requirements for mining industry

Jul 14, 2022 News

By Renay Sambach

Kaieteur News – In 2021, Guyana passed its local content legislation, which caters to locals getting first preference in the country’s oil and gas sector. The Local Content law is intended to regulate the way companies operate in Guyana’s oil and gas sector; employs persons, buy services and the way that they procure goods.

Vice President, Bharrat Jagdeo, on Tuesday night at the GMSA dinner

Despite the local content legislation being in effect, there have still been some related issues in the industry and several concerns have been raised. On Tuesday night the Guyana Manufacturing and Serving Association (GMSA) hosted its mid-year dinner, at the Princess Ramada Hotel located on the East Bank of Demerara – in attendance was Vice President, Bharrat Jagdeo, who gave the main address.

Following his address, Jagdeo was questioned on whether the government would consider extending the local content requirements into the mining, bauxite, and other major industries. To this, the Vice President said: “Right now, that is not on the cards. We promised in the manifesto that we will do it for the oil and gas industry but if we do this in every sector of the economy then it can kill the national momentum that we have and right now the answer is no, we are not planning to do that for any other sector at this point in time.”

In giving points to support the position, Jagdeo explained that as it is the government is having a difficult time administering the local content laws in the oil and gas sector, as they are now in the process of learning. He noted that Guyana has to build its capacity, adding that the government does not want the legislation to promote rent-a-citizen behaviour. “We did not want the legislation to promote a rent-seeking behavior on the part of Guyanese but on the other hand we didn’t want people to try to juke us and they are many people who are trying to bypass the provisions of the legislation,” Jagdeo said.

Moreover, it was stated that the government also needs to take into account that Guyana is part of the World Trade Organisation (WTO) and the Caribbean Community (CARICOM). Jagdeo disclosed that it is not desirable to implement the local content legislation in other sectors because if the government starts shutting down every sector to foreigners or imposing requirements for their investment in every other area it can create a reciprocal behaviour for Guyanese investors abroad or alternately the foreign countries can put up trade barriers, countervailing taxes to prevent Guyanese products from going into their markets.

“So it’s not desirable but for the oil and gas industry, we thought it was necessary because frankly speaking, these oil and gas companies have a pattern of behaviour that they find it very convenient to work with big companies, and often foreign companies. They don’t make the necessary or the effort or additional effort to grow local companies and we believe the law has to force them to do that,” the Vice President explained.