Private sector undermining Local Content efforts with ‘rent-a-citizen scheme’ - Min. Indar

Private sector undermining Local Content efforts with ‘rent-a-citizen scheme’ – Min. Indar

Aug 05, 2023 News

Kaieteur News – Amid the government’s concerted efforts to ensure optimal benefits for the Guyanese private sector under the provisions of the 2021 Local Content Act, it appears that certain members of the private sector are impeding these efforts. This is according to the Minister within the Ministry of Public Works, Deodat Indar, who expressed the concern during his keynote speech at the Guyana Manufacturing and Services Association’s mid-year dinner on Thursday.

Minister Deodat Indar during his presentation

Indar pointed out the disturbing trend of “rent-a-citizen” practices within the private sector, whereby foreign investors exploit partnerships with local companies to sidestep the rigorous mandates outlined in the 2021 Local Content Act.

The Local Content Act, enacted in December 2021, designates 40 sectors and sub-sectors for exclusive priority to Guyanese businesses. Foreign investors desiring to operate within these domains are legally required to collaborate with local companies, maintaining a controlling beneficial ownership stake of 51% or more.

Interestingly, Indar isn’t the sole government representative to publicly condemn the “rent-a-citizen” manoeuvre. In May, Attorney General and Minister of Legal Affairs, Anil Nandlall, publicly criticized the dishonest practice. He announced that due to a surge in grievances regarding the marginalization of locals, the government would undertake a comprehensive review of the local content framework.

Speaking on his weekly programme, ‘Issues in the News,’ Nandlall had stated, “We (the government) continue to receive complaints in relation to the local content framework and the local content legislation. Reports indicate that Guyanese citizens are being denied fair opportunities to participate in the oil and gas sector and related industries.” He expressed the government’s commitment to addressing the emergent issue and indicated forthcoming consultations with stakeholders.

It is worth noting that the initial entity to spotlight this issue was the Georgetown Chamber of Commerce and Industry (GCCI), a representative body for hundreds of local private sector businesses, including some operating within the oil and gas sector.

Last June, in a strongly worded statement, GCCI expressed its strong disapproval of fronting tactics that exploit Guyana’s local content laws, ultimately stifling the nation’s benefits. The Chamber even advocated for a meticulous examination of the “beneficial ownership” behind companies seeking Local Content certificates. Additionally, it recommended that the “burden of proof” concerning beneficial ownership lie with the applicant company. This careful scrutiny, according to GCCI, would serve as an extra layer of protection against unethical behaviour in the industry.

GCCI has been at the forefront of advocating for local content long before the law’s passage in December 2021. Prior to the legislation being presented in Parliament, the organization’s former President, Timothy Tucker, stressed the necessity of a precise definition for a “local company” for the legislation to succeed. In an interview on Kaieteur Radio’s “Guyana’s Oil and You” programme, Tucker had emphasized that local content should not hinder foreign companies but should prioritize locals for work opportunities.

In addition, he had underscored that if a Guyanese entity lacks the required capacity or technical skills for a particular service, only then should they seek overseas resources or expertise through joint ventures. However, the majority ownership of such arrangements must remain local.

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' Nandlall had stated, Issues in the News, Parliament, Speaking on his weekly programme, stressed the necessity of a precise definition for a "local company" for the legislation to succeed. In an interview on Kaieteur Radio's "Guyana’s Oil and You" programme, the organization's former President, Timothy Tucker

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