Last August, we stressed the strategic importance of an “Industrial Baseline Study” (IBS) to inform our “Local Content Policy” (LCP). To proceed otherwise is to place the cart before the horse. How can we design an LCP if we do not know our present local capabilities? We repeat our advice.
The IBS analyses the existing business landscape in the country, and while addressing the present upstream needs of the unfolding oil sector, most germanely connects them to the strategic development plans of the nation. Instead, the APNU/AFC Government allowed Exxon, in 2017, to develop a “Center for Local Business Development” (CLBD), which focuses solely on the needs of its upstream activities. While this entity is at least a start – in that it provides a registration portal for interested businesses, and promises “to be a reliable resource for information on safety, technical standards, procurement opportunities and project-specific information” – it is both rather passive and inevitably inward-looking, as it promises to “focus primarily on developing local vendors that serve key sectors of the oil and gas industry, including areas such as safety equipment, marine operations, offshore supply and civil construction. It will also provide mentoring, coaching and access to financial support.”
In contrast, anticipating a deep sea oil strike in their adjoining oil blocks after our success, Suriname commissioned an IBS, back in 2018, which has provided them with a roadmap for governmental development of their business readiness, and also appropriate industrial training in their school system, not just for oil, but for the development plans that would become viable with the flow of oil revenues. For instance, several hundred businesses were evaluated along the metrics of “Business Capacity; Business Inputs: Cost and Prices; Market Experience; Workplace Safety; Quality Standards; Timeliness; Workforce Skills; and Financial Standing.” On a scale of 0 to 6, for instance, the performances ranged from 2.5 for “timeliness” to 6 in “Financial Standing”.
But the IBS looked backwards, to examine the educational institutions to determine their readiness to train the workers that would be needed both in the oil sector and in the wider developmental thrust. These institutions were assessed on four criteria: Curriculum, Instructors, Finance & Organization, and Infrastructure. It was found that the curriculum in most programmes did not follow a competency-based training (CBT) mode; most schools did not have return-to-industry schemes to ensure instructors have up-to-date industry knowledge; public institutions were underfunded, and had limited capacity to invest in updated equipment or curriculum design; and workshops and labs often had malfunctioning equipment, so students missed out on practical training.
The State Oil Company and the oil operators were mandated to coordinate resources and pool funding to develop a high-impact initiative to support the enhancement of TVET education through a combination of interventions, which included curriculum development support, equipment, apprenticeship programmes, and teacher training.
In Guyana, not only did the APNU/AFC Government not conduct such an analysis, and suggest intervention involving the oil operators, but they actually shuttered the GuySuCo Apprenticeship Training School at Port Mourant, which should have been upgraded since 2015, when oil was first struck.
The goals of the Suriname LCP were threefold: to “guide investments and operations over the next 5-10 years; leverage local content as a catalyst for economic development; and emphasise capacity-building and skill upgrading of the private sector. Their strategy aims to achieve these goals by focusing on transferable capabilities to ensure maximum spill-over into other industries of the economy, such as manufacturing, agriculture, tourism, and logistics.”
The strategy envisaged a phased implementation; strong emphasis on supplier development; emphasis on transferability of supply-chain capabilities that have application to other sectors of the economy; balance between targeted and broad-based development; and finally, industry coordination to pool resources, dilute risk and increase economies of scale. While they also plan on a supplier registration portal, the state institutions would be much more proactive to ensure local companies were made aware of opportunities and needed qualifications.
It is our hope that the Local Content Panel would embark on an IDS before more spinning of wheels.
