Local stakeholders such as the Guyana Oil and Gas Energy Chamber have lobbied diligently for a Local Content Bill (LCB). According to President of the Georgetown Chamber of Commerce and Industry (GCCI), Timothy Tucker, the LCB which was laid by the PPPC Government in the National Assembly last Thursday was “the perfect Christmas gift for Guyana”. He was on target, since appreciated Christmas gifts are longed for all year round, and Guyanese stakeholders have certainly longed for the empowering consequences of the LCB ever since our nominal “independence” from Britain in 1966.
Yet, six years after striking oil, and two years after pumping it in 2019, stakeholders have finally seen the Local Content Legislation that ensures that, while a very poor contract – as far as revenues for Guyana was concerned – had been signed by the PNC-led Coalition Government, at least the Guyanese people would now benefit maximally from the direct and ancillary oil production activities. As in so many other areas, the APNU/AFC Government had twiddled its thumbs.
But we now have the LCB which will be debated in the new year, and hopefully expeditiously passed with the support of all parties in the National Assembly. While it is the duty of the Opposition to identify weaknesses, lacunae and flaws in the proposed legislation, we hope these will be constructive and in the interest of Guyana, and not a repetition of the extremely jaundiced posture that has characterised their reaction to Governmental initiatives up to now. In our estimation, the LCB presents the opportunity for all Guyanese, irrespective of colour, ethnicity, creed or political affiliation, to enter the petroleum industry and its supporting businesses. In the longer term, this experience would position our labour force and businesses that, at long last, can compete in the globalised world in other areas than primary products.
As its name suggests, the LCB seeks to secure the maximum quantum of “local content” – that is, Guyanese participation – obtainable in the oil industry. Through its initiatives, not only would we obtain new skills to serve us in our development drive – fuelled by the direct revenues from oil royalties and profits – but the revenues secured from the services and goods provided would also remain in our country to create a broad, ground-up impetus to growth.
In a nutshell, this is to be achieved first of all, as pointed out by Tucker, by the legislation that precisely defines what is a “Guyanese company”: “any company incorporated under the Companies Act which is beneficially owned by Guyanese nationals who ultimately exercise, individually or jointly, voting rights representing at least fifty-one per cent of the total issued shares of the company; and have Guyanese nationals holding at least seventy-five per cent of executive and senior management positions and at least ninety per cent of non-managerial and other positions.”
This becomes critical because the LCB gives priority to companies – especially foreign ones that may have superior capital or expertise – with the highest quantity of Guyanese participation: “Where two or more bids are adjudged to be equal, or two or more bids are within five percent of each other when financially evaluated but are otherwise adjudged to be equal, the bid containing the highest level of local content shall be selected.”
To leave no ambiguity in its intention for Guyanese to reap the greatest benefit, the legislation has divided the opportunities into forty enumerated “sectors and sub sectors”. Taking into consideration the level of skills presently immanent in the Guyanese populace, it specifies the initial percentage of “Guyanisation” demanded, and the graduated time frame for it to be increased. In this way, the Government has demonstrated that it would not kill the goose before it can deliver the employment and skills egg to Guyanese.
There will also be a Local Content Secretariat to monitor and ensure the Guyanisation targets are met.