Ministry, GRA team up to go after companies engaged in ‘rent-a-citizen’ practices

The Natural Resources Ministry has teamed up with the Guyana Revenue Authority (GRA) to intensify efforts to clamp down on “rent a citizen” and “fronting” practices being undertaken by companies in the oil and gas sector. The ministry on Monday announced that, through the Local Content Secretariat, it has intensified its tracking for practices known as “rent a citizen” or “fronting” by companies within the oil and gas sector.
“Rent-a-citizen” or “fronting” refers to the unethical practice where foreign companies use local individuals or local entities as mere fronts to meet local content requirements, while the actual control and benefits remain with the foreign entity
The government said it has so far identified these practices in cases of joint ventures undertaking. According to the government, “This practice undermines the objectives and spirit of the Local Content Act, which aims to ensure that the citizens of Guyana benefit meaningfully from and participate actively in the nation’s natural resources sector.”
To address these issues, the government revealed that the Natural Resources Ministry is actively pursuing measures to curb such instances. One of the steps being taken is enhancing its collaboration with the GRA.
The government said: “This closer working relationship aims to identify and penalise those engaging in fronting, ensuring that all stakeholders adhere to the legal and ethical standards set forth by the Local Content Act.” In this regard, the Ministry – which is headed by Minister Vickram Bharrat – said it remains committed to fostering a transparent and equitable petroleum industry that benefits all Guyanese.
Meanwhile, the government is in the process of reviewing the Local Content Act, with a view of increasing the areas in which companies are mandated to utilise Guyanese goods and services. The Act currently mandates companies to utilise Guyanese goods and services in 40 sectors. Moreover, 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. Attorney General Anil Nandlall has explained that the Act is based on a ‘build as you go principle’, so that the legislation remains alive and responsive to changing needs in the industry.