Consultations on local content laws get underway with inaugural summit

…updated law must be balanced – Jagdeo

The first ever Local Content Summit in Guyana got underway on Tuesday, with the People’s Progressive Party/Civic (PPP/C) Government also using the occasion to begin consultations on revamping the local content laws.

The summit was hosted by MBW Energy Support Services Incorporated, at the Pegasus Suites and Corporate Centre and brought together local businesses looking to benefit from the oil and gas sector and other stakeholders.
Vice President Bharrat Jagdeo, who was the keynote speaker, explained why the Government is supporting the event. He said that it was not only an opportunity to support the enterprising minds behind the event, but also a launching pad for planned consultations on updating the Local Content Act.
“We thought that the summit is sufficiently, narrowly focused, that it could allow us to bring great value in the discussions to the people of this country. And it could also kick-start the review that we ourselves plan, to amend the local content legislation as promised in the past,” Jagdeo said.

“So today we’re here to clarify from the Government’s perspective as we discuss policies and the certification programme and the legislation that was passed. And we’re here to listen, since this is the first of a series of meetings that we’ll be having over the next several months.”
According to Jagdeo, coming up with amendments for the Local Content Act requires a joint effort between Government and stakeholders. And similar to the Act that was passed in 2021, amendments must be practical in Guyana’s context and strike a balance between securing more for locals and not driving away investors.
“In the Local Content Act, we had to go through an iterative process, to craft a piece of legislation that is appropriate for Guyana. That is appropriate to the stage of development of goods and services and capacity here, without harming the interest of companies operating here, the first-tier contractors, without slowing their momentum. So, it was a careful balancing act.”
“And we would once again have to pursue the same balancing as we move to update and reform and change the current legislation. So today we’re not going to be giving you a definitive position. None of the Government speakers will say, this is what we will change in the new law. We’re here to listen,” Jagdeo explained.
The summit will see panel discussions between Government, industry leaders and economists. Those panel discussions will include capacity building, success stories and navigating the local content environment.
Since the Local Content Act was enacted, the Government has described the law as a gamechanger when it comes to how foreign companies deal with local suppliers of goods and services, as well as how they employ locals.
The Local Content Act lays out 40 different services that oil and gas companies and their subcontractors must procure from Guyanese companies by the end of 2022. For instance, these companies must procure from Guyanese companies 90 per cent of office space rental and accommodation services; 90 per cent janitorial services, laundry and catering services; 95 per cent pest control services; 100 per cent local insurance services; 75 per cent local supply of food; and 90 per cent local accounting services.
These are just a few of the services highlighted in the first schedule of the Local Content Act. The Local Content Act mandates penalties for oil and gas companies and their sub-contractors who fail to meet the minimum targets of the legislation, as well as those who are in breach of the Act. These fines range from as low as $5 million to as high as $50 million.
Meanwhile, the Government has also set up a Local Content Registry, in keeping with the Local Content Act which mandates the creation of a Local Content Register of Guyanese nationals for employment, and a register of Guyanese nationals and companies from which goods and services may be procured. In keeping with this mandate, two registration options are available; namely, supplier registration and employment registration. (G3)