Local Content Law does not give Guyana robust investigative powers over oil companies - Attorney-at-Law, Dr. Williams

Local Content Law does not give Guyana robust investigative powers over oil companies – Attorney-at-Law, Dr. Williams

Sep 23, 2022 News

Kaieteur News – Following his review of Guyana’s Local Content Legislation, New-York based Attorney-at-Law Dr. Vivian Williams said its framers must be commended for capturing the spirit of nationalism in the document. He firmly believes that it adds tremendous value to Guyanese citizenship.

Attorney-at-Law, Dr. Vivian Williams

Unfortunately, he posited that there are certain legal loopholes which can hinder its effectiveness. Specifically, the lawyer contended that the law does not give the Local Content Secretariat the overarching powers it needs for proper enforcement to avoid abuses and ensure maximum benefits are achieved.

In one of his four analytical pieces published by local media entity, Demerara Waves, published July 10, 2022, Dr. Williams who is admitted to a number of Bars in the Caribbean and holds a Master of Laws in Global Antitrust Law and Economics from George Mason Law School, outlined the basis for his conclusion.

Though the Act uses the Local Content Secretariat to regulate the extent to which foreign firms have access to procurement opportunities in the oil and gas sector, Dr. Williams said this body has no power to investigate firms in the local market. To gain local content certification, he said a firm is allowed to self-report on its ownership and governance structure, and the level of foreign workers participation in its workforce. Once the information is provided, he said the Secretariat decides whether to issue a local content certificate.

Dr. Williams wrote, “The problem is, the Secretariat has no power to investigate the information provided to or withheld from it. It has no subpoena powers. Further, the Secretariat has no power to seize and inspect documents and computers and electronic files from firms suspected of creative compliance or outright fraud.”

The lawyer who holds a PhD in Business Administration from Baruch College, City University of New York, also opined that the Secretariat cannot summon and depose witnesses with potentially useful information and conduct hearings. Where the Act speaks of investigation and monitoring, Dr. Williams said it specifically restricts the jurisdiction of the Secretariat to oil companies that have contracts with the government.

He reasoned therefore that self-reporting and the absence of a robust investigative power, give domestic firms and foreign firms seeking to enter the market, an incentive to cheat. Dr. Williams said it is not surprising that companies have indulged in creative ways of compliance which is already becoming a major problem for the State. With the law as it is, he said things are expected to get worse not better.

He further noted that there are no checks and balances within the law. He pointed out that the Secretariat has a single Director rather than several Directors. Dr. Williams wrote, “A single director increases the prospect for corruption and corruptibility. This is particularly so because there is no administrative review process to create a check on the Director. To reduce the chances for corruptibility, enforcement agencies in the corporate arena avoid a structure where a single person or group handles a case from intake to decision.”

Taking these and other factors into consideration, the lawyer concluded that Guyana could be at risk of not realizing the noble aspirations of its legislation.