Local content targets to be updated by legislation – oil coordinator

…says some targets were exceeded by companies since enacting Act

As consultations on the Local Content Act continue, the People’s Progressive Party/Civic (PPP/C) Government is making it clear that the intent is not only to add new areas in which foreign companies must provide opportunities to locals, but also targets for how much local goods and services must be used.
Making this revelation on Wednesday was Senior Petroleum Coordinator in the Natural Resources Ministry, Bobby Gossai. According to Gossai while participating in a webinar bringing together Guyanese and Ghanaian stakeholders, the intended changes to the Local Content Act are manifold.
On one hand, the industries oil companies must give precedence to locals for will be increased, as their capacity has grown since the Local Content Act was first passed. And on the other hand, the targets that oil companies must achieve under the Act to be compliant will also be updated.
“The Attorney General had indicated, yes, and of course, this has been signalled by both the Minister of Natural Resources, as well as the President and the Vice President, that the law will be adjusted to include other areas, new opportunities that we’ve seen have grown over the years.
“And by the end of 2022, it would have reached the stage where these business/services can be provided in country. And we will, of course, not only add new areas to the schedule, but also amend the targets that we would have set originally back in 2022,” Gossai further said.
He then explained the lessons learnt since the implementation of the Act. For instance, some targets were exceeded while others need more work. He noted that the areas highlighted in the Act were arrived at through a consultative process the Government undertook.
“There were some challenges… there were some areas in which we more than excelled in reaching our target requirements. And there were some areas in which we did not reach our target requirements,” Gossai said.
“And we try to ensure that while we’re measuring from the reports that were provided, that we determine exactly if we had excelled something, or if it’s an area of business services or physical products that we did not take into account that those can be provided for within new opportunities that may come beyond the amendment that we will put in place.”
Since the Local Content Act was enacted, the Government has described the law as a gamechanger when it comes to how foreign companies deal with local suppliers of goods and services, as well as how they employ locals.
The Local Content Act lists out 40 different services that oil and gas companies and their sub-contractors must procure from Guyanese companies by the end of 2022. For instance, these companies must procure from Guyanese companies 90 per cent of office space rental and accommodation services; 90 per cent of janitorial services, laundry and catering services; 95 per cent of pest control services; 100 per cent of local insurance services; 75 per cent local supply of food; and 90 per cent local accounting services.
These are just a few of the services highlighted in the first schedule of the Local Content Act. The Local Content Act mandates penalties 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. These fines range from as low as $5 million to as high as $50 million.
Meanwhile, the Government has also set up a Local Content Registry, in keeping with the Local Content Act which mandates the creation of a Local Content Register of Guyanese nationals for employment and a register of Guyanese nationals and companies from which goods and services may be procured. In keeping with this mandate, two registration options are available: supplier registration and employment registration. (G3)