GCCI concerned about being sidelined in favour of foreign companies

Oil sector

…wants consultation before T&T MoU signing

The Georgetown Chamber of Commerce and Industry (GCCI) said it wants to be consulted first before the Government of Guyana moves ahead with signing a Memorandum of Understanding (MoU) with the Government of Trinidad and Tobago, as this could possibly open the flood gates for foreign companies to take over the oil industry.
This was the expressed view of President of the GCCI, Deodat Indar, who told a news conference on Wednesday that Guyanese businesses are already being sidestepped and instead contracts have been awarded to foreign-based companies to benefit from the local oil sector. But the GCCI wants the local Private Sector to get its “piece of the pie.”
“We don’t have a policy, we don’t have any legislation for local content (policy) but yet we are going and do these MoUs. I think that they should wait. I’m asking Government to hold on this. Let the Private Sector see what the verbiage is in this, so that we would know it would not be adverse to us,” he said.
It was recently reported that a MoU on energy cooperation between Guyana and

Trinidad is expected to be signed in the coming weeks. Since 2016, discussions commenced between Guyana and Trinidad on a MoU under which T&T would provide various forms of support to the oil and gas sector in Guyana.
As such, Indaar revealed that the GCCI has put together its own draft local content legislation/policy which has been dispatched to both the Government and the Opposition. This document was sent to President David Granger, Business Minister Dominic Gaskin, Attorney General Basil Williams as well as Opposition Leader Bharrat Jagdeo.
As part of that proposal, it said Guyanese companies must have 51 per cent ownership, the holding of board meetings must be in Guyana, 70 per cent of the staff must be Guyanese and its head office must be located in Guyana.
“We are Guyanese taxpayers and we believe that we should be given first consideration. That is what our (draft) legislation has inside. Not first preference. It does not go against any established law, no Competition Act or World Trade Organisation rules,” he said, while noting that there is now greater need for a Local Content Policy.
Indar lamented over the fact that several of GCCI members had submitted expressions of interest and most of them to date have not received a response. The GCCI, he said, hopes that the Government accepts the document in good faith and puts mechanisms in place so that foreign companies are legally obligated to purchase locally.
Meanwhile, GCCI Senior Vice President, Nicholas Boyer, who has responsibility for petroleum said the Government’s draft policy does not provide a clear understanding of the definition of a local company, nor does it include reporting mechanisms to ensure the operators are actually purchasing from the local economy.
The GCCI’s draft legislation proposes a more concise definition of Guyanese citizens and companies, he said. Boyer also warned that with the absence of a

strong policy and legal framework, then it could affect the chance of Guyanese business having a fair chance at this sector.
He said it could also result in companies skipping joint ventures and partnerships with Guyanese companies. But according to the GCCI Vice PREsident, joint ventures and partnerships allow for transfer of technology, information and the growth of capacity in Guyana.
He also cited an issue where the twin-island republic was called upon to scrap legislation that prevents foreign honey, to transition to that island and other countries. This archaic law has seen in the past, Guyanese honey being seized.
The GCCI has guaranteed that Guyanese businesses have the capacity to supply high quality services and goods to oil companies coming here. This include a whole host of services including: logistics, catering, and freight forwarding, among others.
As ExxonMobil prepares to officially commence production in 2020, there is much preparatory work currently ongoing, which requires services tailored to the specific needs of the industry.
The draft local content policy has been criticised in recent months for lacking provisions which would safeguard against exploitation by companies, especially since there have been intensified reports of the local companies being bypassed for contracts and services with foreign companies being favoured.
The document does not cater for issues such as how to avoid procurement fraud, conflict of interest and favouritism, among others.
Business Minister Dominic Gaskin has said that the second review of the local content policy is expected to be completed by the first quarter of next year. (Samuel Sukhnandan)