GCCI’s proposed local content legislation stalled

In a move to safeguard the rights of Guyanese businesses, the Georgetown Chamber of Commerce and Industry (GCCI) had submitted a model local content legislation to the Government of Guyana for consideration.
But according to President of the GCCI, Deodat Indar, having met with several top Government officials to discuss this, the Chamber is convinced that this process will be delayed.
“We did not get a definite word to Government’s response to the legislation. So, right now we are unsure of where Government is going,” he told Guyana Times on Tuesday.
Indar has expressed GCCI’s disappointment that there is no legislative framework since 2015 when the first oil discovery was made in the Stabroek Block offshore Guyana.
The GCCI President said Government has proposed finalising the Local Content Policy first before consideration is given to tabling legislation. However, the second

review of the local content policy is expected to be completed by the first quarter of next year.
“I said to them in that meeting that I’m not in agreement with that approach. I said that you can pass legislation to fix hitches in the business community that we believe that Guyanese company are not getting their share of the pie for various reasons,” he added.
Indar argued that the legislation should not be delayed, explaining that the draft that was sent to Government is a simple one. Therefore, he feels that serious consideration should be given to it, not at the detriment of waiting for a policy to be implemented first.
He said the main objective is to give Guyanese businesses first consideration, unlike the contract that Government signed with United States oil-giant ExxonMobil where it stipulates that first preference will be given to that particular company.
He said, “We are not asking for preference, we are asking for consideration… I am saying that the legislation should be looked at. And the one we proposed is simple, flexible and it does not constrain the scheduling of the operators in terms of execution of their job.”
The model legislation presented to Government by the Chamber defines Guyanese companies as companies that are registered in Guyana where 51 per cent of the share capital are owned by citizens of Guyana.
In addition to that, it stipulates that the board meetings of the said companies

should be held in Guyana; the head office of the company is located in Guyana and; 70 per cent of the workforce of the company follows suit with the definition of a citizen of Guyana.
Another section of the bill also stipulates that an operator or contractor must ensure that first consideration is given to Guyanese companies in the provision of goods and or services directly related to the oil industry.
The GCCI have been actively pushing to have Government place more emphasis on ensuring local content remains a critical area of focus for the oil and gas sector. The Chamber said Guyanese businesses should cash in on the opportunities from this new and emerging sector. It said local businesses can provide a whole host of services related to the sector.
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.
The document does not cater for issues such as how to avoid procurement fraud, conflict of interest and favouritism, among others.
According to the draft local content framework document, the policy seeks to address the suite of opportunities that may arise and the approaches to be taken in selecting and developing opportunities related to enhancing the capabilities of Guyanese nationals and businesses through training and well-tailored social contributions for greater impact and benefits among others.
When Guyana Times contacted Head of the Energy Department in the Ministry of the Presidency, Dr Mark Bynoe for a comment he declined to speak on the matter. Rather, he said all the issues related to oil and gas will be discussed whenever a decision is made to hold a press conference. (Samuel Sukhnandan)