Private Sector Commission calls for appointment of Local Content Advisory Committee

Nov 18, 2022 News

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– As form for feedback on legislation opens

Kaieteur News – Head of the Private Sector Commission (PSC), Paul Cheong called on government yesterday to appoint members to the Local Content Advisory Committee- a key body that is provided for under the Local Content Legislation.

According to the Act, the advisory body would help the Local Content Secretariat with the discharge of its functions which includes developing and maintaining measures for the effective implementation of local content by contractors, subcontractors and licencees.

Its members would be selected from the following agencies: Office of the President; the Ministries of Natural Resources, Finance, Home Affairs, Labour, Foreign Affairs, Tourism, Education, Public Works; the Guyana National Bureau of Standards, the Guyana Revenue Authority, the Attorney General’s Chambers and Ministry of Legal Affairs; Guyana Office for Investment; Private Sector Commission, Labour Union, National Toshaos Council, Guyana Bar Association, Parliamentary Opposition, and Local Petroleum Organizations.

Cheong made the call for the appointment of the body during the opening ceremony of a forum hosted by PSC at the Pegasus Suites and Corporate Centre for feedback on the legislation.

Cheong said advocating for local content in the oil and gas industry has always been high on the agenda of the Private Sector Commission, while adding that the hosting of the forum is a further demonstration of its commitment to that aspect of the industry.

Following the enactment of the Local Content Law in December 2021, Cheong said the commission had established a Local Content Advisory Group which has been working and meeting monthly with the Local Content Secretariat to discuss key issues. He said these range from the payment period for small and medium sized businesses, contract bundling, and fronting to get companies registered.

In relation to those matters, he thanked the government for its progress in getting oil companies to agree to pay small to medium scale businesses within 30 to 45 days.

With regard to contract bundling, Cheong said, “We would have come across cases where companies are issuing tenders for a number of services under one contract when same could be competitively tendered to allow local companies to participate.

“How can there be a commitment to local content and the participation of Guyanese businesses in the value chain when such acts are taking place? How will Guyanese companies get that opportunity to build capacity, to invest, to grow, if not given a chance? This has to be addressed.”

As regards fronting or the rent- a-citizen a tactic used by some companies to fool regulators that they are in genuine partnerships with locals, he urged the Secretariat to be aggressive in condemning this practice. He said the agency must use the full force of the law to nip such behaviours in the bud.

Since the implementation of the First Schedule of the Local Content Act which ring fences 40 categories of work for Guyanese participation, Cheong said the business community has made several observations. He said it is the belief of the commission that the time has come for expansion of the categories which  include rental of office space, accommodation services, janitorial services, catering, laydown yard facilities, security, local accounting, insurance services, customs brokerage services and pest control.

“The capacity and skills of Guyana have expanded beyond this. Many companies have invested and established partnerships for more sophisticated works. The Commission is pushing for more opportunities for Guyanese businesses. It is now up to us to up our game to deliver quality services in keeping with the standards and requirements of the oil and gas sector,” expressed the PSC Head.

He also welcomed government’s recent statement regarding the drafting of regulations and guidelines to accompany the Local Content Act. Cheong said the commission stands ready to work with government to ensure that these are put in place at earliest to enhance and strengthen the legislation.

In closing, the PSC Chair said, “Guyana has come a far way on local content in a short space of time. I wish to commend the Government of Guyana for standing firm on local content and in passing legislation. We recognize it has not been easy. This legislation has opened the door for Guyanese companies to participate. We have much work to do to show we are up to the task.”

Other presentations were made by Natural Resources Minister, Vickram Bharrat and Senior Petroleum Coordinator, Bobby Gossai.

Bharrat in his remarks was keen to remind that the legislation will continue to undergo periodic reviews to ensure it is strengthened and loopholes for abuse are closed. He was keen to note however that the commission must temper its expectations when it comes to targets since the country is not only gripped by a labour shortage but also a capacity deficit.

As for Gossai, he said the Secretariat has kept an open line of communication with the private sector as it is seen as a critical stakeholder and the engine of growth.

Frequent collaborations he said have allowed the regulatory body to better understand the role of all stakeholders in the sector and the measured approach that must be taken to better analyze the impacts of oil investments.

He was keen to remind that Guyana’s Local Content Act prioritises the use of Guyanese nationals and companies in the procurement of goods and services for the enhancement of the value chain of the oil sector.

The Act also serves to enable local capacity development and provide for the investigation, supervision, co-ordination, monitoring and evaluation of, and participation in, local content in Guyana.

The Local Content Secretariat of which he is apart, is mandated to ensure that the provisions of the Act are implemented and functions as the regulatory arm for the monitoring, evaluation, coordination and reporting of local content in the petroleum operations of Guyana.

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