Draft Local Content Policy lacks key strategies – former PSC Chair

Draft Local Content Policy lacks key strategies – former PSC Chair
Before handing over the post of Chairman at the Private Sector Commission (PSC) on Friday, Desmond Sears spoke about the fact that there is need for a stronger Local Content Policy as the draft legislation is still missing key elements as to how it will achieve its goals.
According to Sears, the need for Local Content Policies and practices being imbedded within the legislative framework is critical at this point, given that oil production is expected within a few months’ time.
Although the importance of this legislation cannot be underscored enough, he made mentioned the inadequacies in the current draft, prepared by the Ministry of the Presidency’s Department of Energy.
According to him, “The draft Local Content Policy recognizes, in generic terms, the objective of local content strategies. It doesn’t speak to the specificities with respect to how it intends to execute local content activities and/ or strategies”.
Sears said that Guyana has enough evidence and experience from other oil-producing countries around the world, with respect to lessons learnt from having poorly implemented Local Content Policy (LCP).
However, as important as the legislation is, he pointed to the equal prominence balance would take, given that a strong LCP can scare away investors.
He explained, “In some countries, it is now imperative that local content strategy be adjusted to adjust important questions about definitions and the measurement of local content and seeking balance between strong regulation and encouraging investment that secures the best possible outcome”.
The former Chairman added, “It is the responsibility of the host Governments to link local content to Governance, anti-corruption strategies and substantive transparency by all parties”.
On this note, Sears said he believed that with the right policies and involvement with all stakeholders, the natural resource could be developmental. Nonetheless, “In order for local content policies to be effective, it is therefore imperative that we seek to enable the necessary legislative framework in so doing,” he urged.
The Local Content Policy would guide the State in guarding against local companies being bypassed for contracts and services, while foreign companies and workers are favoured.
Former Business Minister Dominic Gaskin had said the second review of the Local Content Policy is expected to be completed by the first quarter of 2019, as Government wants the new legislation to be ‘balanced’.
Just last month, Guyana Times reported that despite mounting pressure on the Energy Department to finalise the legislation Policy— which would allow Guyanese to benefit from the sector— the key piece of legislation is still in consultation phase.
According to the Director of the Department, Dr Mark Bynoe, he is looking forward to the consultancy phase being completed by June.
“The Local Content Policy… draft report is currently with us, and we are looking towards possibly the ending of June for the completion of that consultancy, given the consultations necessary before that policy is finalised,” he explained.
The Government’s Energy Department Head had assured that the document would be ready long before first oil, which is now due in a matter of months. This commitment was given more than three years after oil was first discovered off Guyana’s coast by United States oil giant ExxonMobil.