‘Local content was created for retention of wealth in country not extraction’ – GCCI President

Dec 17, 2022 News

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– urges Govt. to plug loopholes in Legislation

Kaieteur News – With the first anniversary since the passage of the Local Content Act in the National Assembly approaching, President of the Georgetown Chamber of Commerce and Industry’s (GCCI) Timothy Tucker, on Thursday night urged the Government of Guyana to plug all the loopholes in the Legislation.

Tucker was at the time making the opening remarks at GCCI’s 33^rd Awards Presentation and Gala Dinner held at the Marriott Hotel, Kingston.

He reminded attendees, who included President Irfaan Ali, that the Local Content Act is aimed at the “retention of wealth in country and not the extraction of wealth through rent-a- citizen [one of the loopholes being abused by foreign entities]”.

While thanking the Government for the passage of the very important Legislation, Tucker said that his organization spent four years lobbying for it. “The purpose and the rationale was for you in this room, the Guyanese businesses in this room, to be given the opportunity to participate in the oil and gas sector. It was for the retention of wealth in country not the extraction of wealth through rent-a-citizen”.

Foreign companies have been taking advantage of the loopholes in the Legislation by utilizing persons who have little or no connection to Guyana to obtain multi-billion dollar benefits carved out for Guyanese in the law.

The law mandates that in order for a joint venture to cash in on multi-million contracts in the oil and gas sector, they must show that 51% of the shares are owned by Guyanese. However, some Foreign Investors have been ‘renting’ citizens to meet the requirement stipulated by law.

“So it is important that the regulations are put in place to guide and ensure that they are true and genuine partnerships so we do not have an extraction and that the wealth is retained in country for our development for your development for everyone’s development, just want to make that one clear,” Tucker stated.

Last month Minister of Natural Resources, Vickram Bharrat had vowed  that his Government will do everything in its power to strengthen the Local Content Legislation with the aim of preventing foreign companies from taking advantage of certain loopholes.

He had said that the PPP/C administration will not stand idly by and see companies pluck random people from the sky, claim they have Guyanese parentage, and front with them as Partners so as to usurp multi-billion dollar benefits carved out for Guyanese in the law.

The Minister made those remarks at a Local Content Forum hosted by the Private Sector Commission (PSC) on November 17, 2022. Bharrat noted that he was keen to plug the loopholes following a recent court case with Ramps Logistics Inc.

Ramps Logistics Inc., a local registered company with Trinidadian parentage, had taken the Local Content Secretariat to court for refusing to grant it a Local Content Certificate.

The Chief Justice Roxane George-Wiltshire had said the Secretariat had asked Ramps to supply several pieces of financial documentation, which were not part of the legislation. This documentation was requested by the Local Content Secretariat, in an bid to prove that Ramps’ 51 percent sale of the company to Guyanese, Deepak Lall, was legitimate.

In June 2022, it was revealed by Ramps that Lall, who was not born in Guyana, only got his Guyanese passport for the first time in 2021.

The Chief Justice in her ruling said that the law is very clear on the requirements to get a Local Content Certificate. The company must show that 51 percent of its shares are owned by a Guyanese, ensure that at least 75 percent of executive and senior staff are Guyanese and have at least 90 percent of local non-managerial staff. Since Ramps satisfied all three, she ordered that the certificate be issued.

However, her judgment was not well received by Government because it was of the view that company had rented a citizen to cheat the law.

“People cannot show up or fall out of the sky or appear after 17 or 18 years or whatever the case and say oh ‘I am Guyanese to the bone.’ It can’t work suh. It is unfair. It is hurtful too that you can just show up, never pay a dollar to develop this country, don’t know how a road or school was built or how people were punishing in Berbice for water like I did but you just show up just like that and want benefits,” the Natural Resources Minister had said.

While the government seems fixed on preventing companies from “renting a citizen”, there are other

loopholes that are of equal importance. One of them is that the current Local Content Legislation does not give Guyana robust investigative power over oil companies.

This loophole was highlighted by New-York based Attorney-at-Law, Dr. Vivian Williams in one of his four analytical pieces published by Demerara Waves, on July 10, 2022.

Dr. Williams said, “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.”

Meanwhile GCCI presented a ‘Special Local Content Award’ to three of its members for the role they played in lobbying the Government for Local Content Legislation. The awardees are Richard Rambarran, former Executive Director of GCCI, Nicholas Deygoo Boyer, Former President of GCCI and Junior Public Works Minister and former GCCI Member, Deodat Indar.

“They were first to push for Local Content when Guyanese did not know even know what the phrase meant,” the GCCI President said at the ceremony.

 

 

 

 

 

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