Local Content Bill: Private Sector would benefit long into the future – GCCI

The tabling of the much-anticipated Local Content Bill in the National Assembly on Thursday has been welcomed by the Georgetown Chamber of Commerce and Industry (GCCI), which says that the proposed legislation would facilitate material benefits to the Guyanese Private Sector.
In a statement on Friday, the GCCI said it had been pushing for local content legislation since 2017. In fact, the Private Sector body has, over the years, undertaken an expansive range of activities necessary to aid in the general public’s understanding of local content, including but not limited to forums, seminars, webinars, policy briefs, extensive commentary, advocacy, crafting of a model legislation, and consultation sessions.
Against this backdrop, the GCCI posited, the Local Content Bill tabled by the People’s Progressive Party/Civic (PPP/C) Government is representative of a gold standard instrument in supporting Private Sector development.
“The GCCI has actively participated in the consultations with the Government of Guyana, and is pleased to see that key areas where local capacity exists have been ring-fenced for Guyanese enterprises. Further, the Chamber is especially pleased at the Bill’s establishment of two key institutions – the Local Content Secretariat and the Inter-Agency Advisory Committee. These two institutions engender the dynamism which such a Bill ought to encapsulate. This will ensure that the Private Sector continues to benefit from this legislation long into the future,” the GCCI missive detailed.
The GCCI went on to outline that it now anticipates further improvements and reforms to both the institutional and legislative framework necessary to support the country’s development, including the establishment of the Petroleum Commission.
The Chamber also reiterated its commitment to being a partner in Guyana’s development, as it has done since coming into being in 1889.
Before Thursday’s tabling of the Local Content Bill, GCCI President Timothy Tucker was part of a final consultation session with stakeholders hosted by Government. Following that engagement, Tucker expressed satisfaction with the PPP/C administration’s Local Content Bill.
Among the proposals in the Bill is the requirement of foreign companies to engage Guyanese and Guyanese-owned businesses at specified and varying levels in at least 40 areas by the end of 2022.
These include 100 per cent exclusive use of Guyanese companies in the provision of immigration support services, work permits, visa applications, visa on arrival, in-water activity permit, custom brokerage services, and ground transportation.
According to the document, this is to ensure “maximum participation of Guyanese nationals and Guyanese companies supplying goods or providing services in the Guyanese petroleum sector; and local capacity development.”
The utilisation of goods and services in other areas, which ranges from catering services to environmental services and studies, is covered between 20 and 95 per cent. However, the Bill states that the subject Minister can waive these requirements in certain instances, such as if a petroleum operation is deemed of national interest and there is a lack of local capacity.
Meanwhile, the Local Content Secretariat to be established will, among other functions, keep a Local Content Register of “qualified” Guyanese nationals for employment, as well as of Guyanese and Guyanese businesses from which goods and services can be procured.
Qualified citizens and locally-owned businesses would have to apply for, and obtain, a certificate of registration to be included in the Local Content Registry. That certificate would have to be updated every year on its date of issuance.
As it relates to penalties, false declarations to get on the registry, or changes to citizenships, or changes in the company’s ownership status that are not indicated to the Secretariat, would carry a fine of $1 million for individuals and for companies, $5 million. Removal from the Local Content Register would also apply.
In addition, all companies operating in the petroleum sector are required to submit a five-year local content master plan within four months of this Act being passed, or within four months of being licensed to operate. The subject minister is tasked with approving or refusing this plan, after consultations with the Secretariat.
On the other hand, the five-member Inter-Agency Committee is expected to be set to support the Secretariat in carrying out its mandate, and will act in an advisory capacity.
President Dr Irfaan Ali has already touted the fact that the proposed Local Content legislation was not drafted in vacuum, and stressed the need for the local Private Sector to recognise the opportunities available to it.
The Head of State has said, “…there is enough scope through a legislative framework that incentivises investment from the local Private Sector”, and enables them to be an important party of the development of the oil and gas sector”. (G8)