Audits to be conducted to ensure companies comply with LCA

The Local Content Secretariat (LCS) has recently written contractors, subcontractors and licensees to remind them of their obligation to prioritise Guyanese nationals having the relevant qualification and experience for employment. This is in keeping with the approved Local Content Master Plans and Local Content Annual Plans.
A release issued by the Natural Resources Ministry on Friday has stated that the parties have been reminded that when a Guyanese national has the relevant qualification but lacks the requisite experience, that Guyanese shall benefit from necessary training. Therefore contractors, subcontractors, and licensees are required to ensure that Guyanese nationals employed to support their operations continuously benefit from training and capacity development.

The Secretariat has also said it would be conducting audits to ensure compliance with the foregoing and other requirements stated in the Act.
“As part of those audits, Contractors, Subcontractors, and Licensees will be required to submit evidence of, inter alia, providing Guyanese nationals the opportunity to apply for new and vacant positions, ensuring a level playing field of benefits between Guyanese nationals and non-Guyanese applicants, and consideration for overcoming experience gaps for Guyanese national applicants through training and mentorship.”
Failure to comply with this and other requirements of the Act would render contractors, sub-contractors and licensees non-compliant, and therefore hinder the receipt of the Local Content Certificate of Compliance and other related approvals.
The Local Content Act, having been passed in the National Assembly in December 2021, was enacted in January 2022. The Act lays out 40 different services that oil and gas companies and their subcontractors must procure from Guyanese companies.
These include 90 per cent of office space rental and accommodation services; 90 per cent of 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.
The Local Content Act mandates penalties, such as fines ranging from $5 million to $50 million, 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.
It was reported that Local Content earnings for the first half of 2023 have accounted for US$322 million, while thousands of Guyanese have benefitted from opportunities to provide services to the sector. These earnings were projected to increase to US$720 by the end of 2023.
As of the end of 2023, there were 840 local companies registered to provide services under the Local Content Secretariat. This translated to employment for over 33,943 Guyanese directly and indirectly linked to supporting the sector.