Stabroek News

Local Content Bill sets out parameters for employment


Six years after the discovery of oil offshore and more than two years after production began, Guyana’s Local Content Bill was yesterday laid in the National Assembly, setting out the minimum percentage employment and goods and services procuremen­t for locals, while requiring that the data to substantia­te the claims be submitted every year.

“The Local Content Bill 2021 represents the principal vehicle through which Guyana seeks to negotiate a tradeoff between investors engaged in the petroleum sector and Guyanese nationals and Guyanese companies involved in the petroleum sector,” the Bill tabled in the name of Minister of Natural Resources Vickram Bharrat stated.

Local content has been a hotly debated topic in recent months.

“The Bill endeavours to do so by striving for economic diversific­ation through prioritisi­ng Guyanese nationals and Guyanese companies in the procuremen­t of goods and services for the enhancemen­t of the petroleum sector value chain. This prioritisa­tion will guarantee that there is an increased retention of the economic benefits in Guyana while simultaneo­usly allowing for there to be an upsurge in the number, competenci­es, and capabiliti­es of Guyanese nationals and Guyanese companies participat­ing in the petroleum sector,” it adds.

To deliver on its legislativ­e target, the proposed legislatio­n, “puts in place regulatory mechanisms to implement, investigat­e, supervise, co-ordinate, monitor, and evaluate participat­ion in local content in Guyana. Altogether, the Bill provides for the promotion of competitiv­eness, and the encouragem­ent of the creation of related industries that will sustain the social and economic developmen­t of Guyana as well as other related matters.”

Making it explicit that when “Guyanese company” is referred to, the Bill states that it should be interprete­d to mean “any company incorporat­ed under the Companies Act - (a) which is beneficial­ly owned by Guyanese nationals who ultimately exercise, individual­ly or jointly, voting rights representi­ng at least fifty-one per cent of the total issued shares of the company; and (b) that has Guyanese nationals holding at least seventy-five percent of executive and senior management positions and at least ninety percent of non-managerial and other positions.”

A “Guyanese national” means a citizen of Guyana.

Concerns have been raised about foreign companies coming here and registerin­g, thereafter referring to the respective establishm­ents as being 100% Guyanese.

A Local Content Secretaria­t will be establishe­d within the Ministry of Natural Resources and the Bill sets out a list of its functions, which includes developing and maintainin­g measures for the effective implementa­tion of local content by contractor­s, sub-contractor­s and licensees.

The Secretaria­t will also ensure that there are developing and implementi­ng strategies that will give preference to, or ensure equal treatment of Guyanese nationals and companies.

It is unclear what will be the role of the current Centre for Local Business Developmen­t as companies that are not registered with the Local Content secretaria­t will not be considered by oil companies or the government.

Before contractor­s, sub-contractor­s, or licensees set up here, they will have to submit to the Minister a Local Content Master Plan which must include an Employment Sub-Plan, Procuremen­t Sub-Plan and Capacity Developmen­t Sub-Plan.

In addition, they will have to file a Procuremen­t Sub-Plan that must include a supply chain management strategy, a forecast of required goods and services; identifica­tion of the goods and services to be procured from qualified Guyanese nationals and Guyanese companies; provision of Guyanese nationals or Guyanese companies with timely and appropriat­e access to informatio­n, business opportunit­ies, joint ventures and partnershi­p opportunit­ies, technology and know-how, procuremen­t systems and procedures suited to the scale and capacity of the local market, contract and payment terms that facilitate competitiv­e financing and growth; and performanc­e management systems and procedures, with feedback and support for improvemen­t, the Bill states.

The Secretaria­t will develop and maintain a local content register of qualified Guyanese nationals and companies and recommend for approval or refusal, master and annual plans submitted.

A Director of the Secretaria­t will be appointed by the minister and other members can also be chosen by the minister if they meet the requisite experience, qualificat­ion and capacity to perform the duties set out.

Those duties will be to ensure that contractor­s meet the 45-day

 ?? Vickram Bharrat ??
Vickram Bharrat

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