Local Content in evil state can inflame tensions, fuel lopsided distribution of wealth

Local Content in evil state can inflame tensions, fuel lopsided distribution of wealth – NY Lawyer warns

Sep 28, 2022 News

By Kiana Wilburg

Kaieteur News – The PPP/C Government has been praised by stakeholders here and abroad for its swift approach on instituting the Local Content Legislation. This document ensures Guyanese and their services are respected and prioritised in the oil and gas sector.

Even as one commends the Government for such a move, there are some concerned actors who are urging authorities to not lose sight of the dark side of local content.

Specifically raising this point was New York based Attorney-at-Law, Dr. Vivian Williams. In a four part series published by online media site, ‘Demerara Waves’, Dr. Williams was keen to note that local content is not merely about retaining a large chunk of the economic pie from petroleum production.

He alluded that it is also about avoiding certain key loopholes that could encourage wealth inequality. In this regard, the lawyer warned that local content could be used as a mechanism to ensure lopsided distribution of wealth to politically connected persons and groups.

NY-based Attorney-at-Law, Dr. Vivian Williams

With this in mind, he said Guyanese authorities ought to be mindful of local content efforts marching into the dark side.

Dr. Williams said countries that ‘invoke the demons of local content, create an economic geography with the filthy rich in gated communities that meander through abject poverty.’ He added that when it leads to economic hegemony by an ethnic group in a plural society, local content is a self-destructive ticking time bomb.

To avoid dark side effects of local content, he appealed that the law or policy must be carefully drafted, and most importantly, the enforcement mechanism carefully constructed.

In its current construct, Dr. Williams holds the view that Guyana has not armed itself with the legal mechanisms that would allow for robust enforcement of the law. Dr. Williams holds the view that the law has weaknesses which studies of other countries bearing similarities have found contribute to corruption, linkage patronage, economic hegemony of groups associated with the controllers of political power, and seething anger of those who are left out and left behind. He is of the belief that these are the ingredients of the ‘resource curse.’

Dr. Williams is also concerned that the Local Content Secretariat is under the complete control of the Minister. This he believes is a grave error. The Lawyer argued that autonomy and independence ought to be given fully to the Secretariat. He said this is needed for effective enforcement over private enterprises, particularly in areas that impact competition.

The Lawyer said countries that deviate from this model have often times, been plagued by corruption, anti-competitive effects, and marginalisation of political opponents.

Taking this into consideration, he believes it would be wise for the Government to re-examine such state of affairs in the interest of avoiding the taint and animosity from charges of political control and victimisation.

In an invited comment, Dr. Williams told Kaieteur News that his commentary should not be misconstrued as being against the spirit of the legislation. In fact, he is in full support of it. He does believe however that there are better ways to achieve the objectives of the law.

Dr. Williams said, “First, I do not argue against local content. I believe local content is a good and necessary step. Every major country in the world implemented some form of local content at some time or another. So, to be clear, it is not my view that Guyana should not implement some form of local content. To the contrary, I argue that the present law is not adequately designed to protect and promote local content.”

To adequately protect and promote local content, the Lawyer said emphasis should be placed on a strong local nexus and not merely citizenship that is remotely connected to the local economy.

“I agree that the local content law has increased the value of Guyanese citizenship, so I don’t disagree with anyone who shares that view. My view is that there should be a distinction between local content – which should mean homegrown, as against Guyanese content which may not necessarily be homegrown, given the requirements for Guyanese citizenship,” expressed Dr. Williams.

He said the law’s focus on citizenship, presumes that Guyanese citizenship equals local content which is not necessarily the case. He said this is where it opens the door for “creative compliance” that undermines the law’s noble goals. Dr. Williams said Guyanese across the world should have an opportunity to participate but that participation should be premised on a strong rather than a superficial nexus to the country.

Dr. Williams posited that most people who are excited by the Local Content Law are driven by its promise and intent. However, Dr. Williams said laws are not evaluated based on such notions. It is their likely and actual effects that should form the basis to assess a law, he expressed.

It is on the foregoing premise he sought to warn that the Local Content Law is, perhaps, not properly designed to achieve the goals it sets out to achieve. “Those who are loud in its support, take for granted that the goals of the law would be achieved. My caution is – that dream would not be a reality with the present design of the law. Therefore, it should be thoroughly reviewed and amended to produce a more effective design,” Dr. Williams concluded.