Oil contractors must now provide analysis of employment and procurement activities with locals every six months

Sep 17, 2022 News

Oil SERIES PT 6

By Kiana Wilburg

Kaieteur News – Guyana’s Local Content Legislation has paved the way for the institution of a series of robust guidelines which demand foreign oil contractors to provide detailed information about their employment and procurement activities with Guyanese.

Specifically, the guidelines state that contractors, sub-contractors, and licensees must provide the Local Content Secretariat with a Local Content Half-Yearly Report.

That report must consist of two parts: a Local Content Half-Yearly Comparative Analysis Report and a Local Content Half-Yearly Expenditure, Employment and Capacity Development Report.

Kaieteur News will examine the elements that must encompass Local Content Half-Yearly Comparative Analysis Report.

The Secretariat’s guidelines state that it shall:

(a) Specify how programmes for ensuring that first consideration is accorded to Guyanese Nationals for employment, have ensured that Guyanese nationals having the requisite skill set and experience have been afforded employment opportunities over the reporting period;

(b) Specify how programmes have ensured that Guyanese nationals, having the relevant qualification but lacking the requisite experience, benefitted from training over the reporting period;

(c) Provide case studies of how the Contractor’s, Sub-Contractor’s, or Licensee’s employees have benefited from training conducted during the reporting period;

(d) Compare the procurement activities undertaken during the reporting period with planned procurement activities;

(e) Indicate the common factors that limited companies from being successful in bidding for contacts advertised and awarded during the reporting period;

(f) Outline partnerships, joint ventures, or other alliances that were facilitated during the reporting period;

(g) Indicate in detail how, over the reporting period, Guyanese nationals or Guyanese companies were provided with timely and appropriate access to Information; Business opportunities; Technology and know-how; Contract and payment terms that facilitate competitive financing and growth; and Performance management systems and procedures, with feedback and support for improvement; and

(h) Compare the capacity-building initiatives undertaken during the reporting period with planned capacity-building initiatives.

Background

The Government of Guyana has solidified its commitment to ensuring that the benefits derived from the foreign direct investments into Guyana’s petroleum sector are captured and retained in-country, through the enactment of the Local Content Act.

The Local Content Act No. 18 of 2021 (‘the Act’) provides for the implementation of local content obligations for companies and persons engaged in petroleum operations or related activities in the petroleum sector and prioritizes Guyanese nationals and Guyanese companies in the procurement of goods and services for the enhancement of the value chain of the sector.

The Act also serves to enable local capacity development and provides for the investigation, supervision, coordination monitoring, and evaluation of, and participation in, local content in Guyana.

The Local Content Secretariat (‘the Secretariat’) is mandated to ensure that the provisions of the Act are implemented and functions as the focal point for the monitoring, evaluation, coordination, and reporting of local content in the petroleum operations of Guyana.

In so far as the Act mandates every Contractor, Sub-Contractor, or Licensee to implement local content as an essential component of their petroleum operations, the Secretariat, through the issuance of industry guidelines, aims to provide detailed and specific guidance to Contractors, Sub-Contractors, or Licensees with regards to their reporting obligations.

The Act obligates Contractors, Sub-Contractors, or Licensees to submit a local content report to the Secretariat, within 30 days after the end of each half calendar year, which is referred to as the Local Content Half-Yearly Report.

As such, this guideline discussed in this series serves to standardise reporting requirements, procedures, and the form with regard to the submission of the Local Content Half-Yearly Report.