Consultations ongoing on possible local content amendments – VP Jagdeo

– says one-year implementation of Act has been a learning curve

Since it was passed in December 2021, the one-year implementation of the Local Content Act has been described by Vice President Bharrat Jagdeo as a learning experience for the Government, as they continue consultations on possible amendments to the principal act.
Jagdeo made this revelation during a recent press conference, where he was asked if the Government still intended to make changes to the law. Jagdeo noted that while the law is a landmark one that has proved the naysayers wrong, they are consulting on ways in which the law can be improved.
“We are consulting now on all the issues that are coming up, the problems we have had in its infancy stage. The application. And I’m pleased, people were saying oh you can’t get this done, it’ll be a humbug to the sector, it will slow down the oil and gas sectors, we shouldn’t do this, we should have a policy.”
“A lot of naysayers who didn’t want this at all. Especially the oil and gas companies. They didn’t want a law to force them to do this. They wanted a policy. And we said no, we want a legal basis and penalties for not complying,” Jagdeo said.
He noted that among the excuses companies had proffered was that the law would shut down their operations offshore. However, Jagdeo noted that the Government has demonstrated through the Local Content Act, that it is possible for the industry to survive and thrive even with the legal mandates for local content.
“We showed that it can work, it can serve its purpose without affecting the operations of the company. So having overcome that, because it’s new and most countries didn’t move at the pace we moved, we still have some issues of clarifications, some new regulations to put in place that will give stronger effect or clarity to the law. So, we’re hoping to improve. The one-year experience would help us to improve, to look at the areas where we have or don’t have the capacity in.”
Jagdeo gave the example of insurance for oil companies. He explained that oil companies are required to get their insurance from a Grade A institution. However, if the local companies do not have a Grade A, then this is a conflict.
“Because we’re interested that they have real insurance that you can draw on if anything happens. But if a local body is not classified as a Grade A and the regulatory requirement is Grade A, then even if we put 100 per cent in the local content law, you can’t effectively get it done.”
“So those sorts of things have to be worked through. As I said, it’s also a learning process for us. Because as we implement, we need to improve. So that’s what’s going on now. The process of consultation, getting in all the info,” Jagdeo further explained.
One of the most notorious cases that relate to the Local Content Act is the case of Ramps Logistics. The company, whose parent company is Trinidadian, took the Government to court after its application for a Local Content Certificate was refused on June 8, 2022. It was claimed that the company had failed to meet the requirements of beneficial ownership as defined in the Local Content Act 2021, for a company to be deemed local.
Beneficial ownership is defined as owning 51 per cent of the company. Also, a local company is expected to have Guyanese in at least 75 per cent of executive and senior management positions, and at least 90 per cent in non-managerial and other positions.
Maintaining that it had met all the requirements of the Local Content Act including being a local company incorporated under the Companies Act and beneficially owned by Guyanese nationals, Ramps Logistics (Guyana) filed judicial review proceedings against Natural Resources Minister Vickram Bharrat, Attorney General Anil Nandlall, SC, and Director of the Local Content Secretariat Martin Pertab (respondents).
Acting Chief Justice Roxane George subsequently ruled that Ramps Logistics is entitled to be issued with a certificate and to be entered into the Local Content Register. The Government issued the company its Local Content Certificate last month, in keeping with that order.