President Ali to lead consultations on draft Local Content Policy today
– Govt to introduce slew of legislation in National Assembly – Ali
– says Guyanese will not be 2nd-class citizens in oil & gas sector
The stakeholders’ consultation on Guyana’s draft Local Content Policy for its petroleum sector is slated to begin today and President Dr Irfaan Ali will be leading the discussion from which authorities are expected to receive feedback and comments for the finalisation of the critical document.
The consultation session will commence at 13:00h at the Arthur Chung Convention Centre (ACCC).
After assuming office in August last year, President Ali established a High-Level Local Content Panel to review policy initiatives on local content in the petroleum sector and provide guidance for the development of Guyana’s Local Content Policy and Legislation.
The panel, chaired by Shyam Nokta, compiled and submitted the Local Content Report. Also on the panel were Carl Greenidge, Carville Duncan, Anthony Paul, Kevin Ramnarine, Floyd Haynes and the Ministry of Natural Resources’ Legal Officer Sasha Rajkumar-Budhan.
Approximately 140 stakeholders were engaged by the Panel on the compilation of the report. The Report outlines several recommendations to improve the country’s policies and legislation.
Government is likely to hire experts to examine and incorporate comments and suggestions emanating from these stakeholders’ consultations into the final policy document that will be presented in the National Assembly.
However, during his inaugural address to the 12th Parliament last Thursday, President Ali noted that his Government will be introducing a slew of legislation in the National Assembly including the Local Content Policy that first undergoes public consultation.
“The aim is not only to align the Policy with international best practices, particularly regarding reporting and transparency but also to deliver more business and more jobs for our people. That legislation will be drafted based on the outcome of consultations that I will hold with stakeholders in our society, concerning provisions in the law that would best serve our national interest,” he posited.
According to the Head of State, Guyanese must not be second-class citizens in the oil and gas sector in their own country. He insisted that all Guyanese must be the principal beneficiaries of the sector, ahead of all and second to none.
“Thousands of Guyanese will be trained at every level to create a national corps of managers and technicians to effectively administer the sector,” he asserted.
Moreover, the President noted that for the benefit of this generation and those yet unborn, his Administration will ensure there is an arms-length approach to the Sovereign Wealth Fund from political interference.
“Legislation will be enacted to define how finances will flow from the Fund into the budget, and the purposes for which they will be used. My Government also intends to account to the nation for every cent earned from the industry and for every cent that is spent,” the Head of State added.
To accomplish this, President Ali told Members of Parliament that legislation will be introduced to make the Finance Minister and the Finance Secretary responsible for publishing details of all revenue and expenditure in the Official Gazette, allowing the people to track all transactions. Failure to do so will be punished severely under the law, he noted.
“The revenues from the sector, like all other sectors, are the peoples’ money; they are entitled to know how much money is earned, how much is spent and on what it is spent. I have also made it clear to my Ministers that transparency and accountability are the fundamental principles by which I expect them and myself to conduct ourselves, and to which I will hold them accountable. We are the custodians of the people’s assets and we will account to them for all that we do.
“That is why we will also establish a regulatory framework that is independent of politicians. And why we will build strong national capability to hold oil companies accountable and to verify production and other expenditures,” President Ali stressed.
Among the key objectives of the Local Content Policy are to enhance the skills and competencies of Guyanese citizens; promote maximum use of Guyanese in the petroleum sector workforce; maximise the use of locally sourced goods and services in the petroleum sector; enhance the capacity of Guyanese businesses and supply chains to become internationally competitive; enhance and make world-class the training, technology, innovation and research and development base of Guyana; promote alliances between Guyanese and world-class firms for the transfer of technology and knowledge transfer and research and development in the industrial sectors; enhance the quality of business support services, infrastructure, and facilities; enhance the global competitiveness of Guyanese industries; and promote and facilitate access to finance, local investment in businesses and industries, capital aggregation and enhance the depth and quality of Guyana’s capital markets.
The document also proposes that all foreign suppliers pay their fair share of taxes and that there be penalties for breaches.
During his parliamentary address last week, President Ali contended that his government wants a co-operative partnership with the companies now licensed to operate in Guyana’s oil and gas sector.
“Leaving oil and gas in the ground is not an option. It cannot be an option when their production and sales can transform the economy of Guyana, bringing in considerable revenues that can be utilised to dramatically improve the lives of all our people,” he noted.
The Head of State further pointed out that Guyana cannot reap the benefits of its oil and gas resources without foreign investors, who are entitled to a fair return on their investment. As such, he posited that the relationship between Government and these companies should be based on fairness, equity and mutual interests.
“That is the goal to which the Government will work to ensure future production contracts resound to the significant benefit of Guyanese without seeking to disincentivise foreign investment,” he insisted.
To this end, the President noted that among Government’s legislative and institutional initiatives will be updating the Petroleum Act, building the capacity and the institutional framework for the audit of expenditure and the drafting of new production agreements with international standards under which any new production licence will fall.