Private Sector lauds Govt’s tabling of local content legislation

– GOGEC says Govt included many of stakeholders’ views in bill

The Government’s tabling of the local content legislation continues to be lauded, with the Private Sector Commission (PSC) and the Guyana Oil and Gas Energy Chamber (GOGEC) following on the heels of praise from the Georgetown Chamber of Commerce and Industry (GCCI).

PSC Chairman Paul Cheong

In a statement on Saturday, the PSC, which is the umbrella representative of the entire Private Sector, extended congratulations to the Government and expressed confidence that the legislation would go a far way in developing the capacity of local companies by allowing them to meaningfully participate in the oil and gas sector.
“The need for this legislation has been advocated by the Commission for a number of years and we see its tabling and passage as a fundamental step in fostering the growth of many local businesses and advancing Guyana’s national development. We look to many businesses, both manufacturing and services quickly embracing the opportunities that the legislation opens up.”
“While the legislation caters to a number of specific areas, the percentages in some areas, we believe, require some revision. The PSC expects that, with effective implementation and monitoring, the required changes will be instituted,” PSC said in its statement.

GOGEC President Manniram Prashad

The organisation also urged local businesses to prepare themselves and develop in a way that would allow them to take full advantage of the legislation. In the same vein, the PSC also committed to working with the Ministry of Natural Resources and the Government to maximise the effectiveness of the legislation.

Meanwhile, GOGEC also issued a statement in which it welcomed the swift tabling of the legislation. According to the organisation whose primary focus is on the oil and gas sector, balance is important when it comes to operationalising local content laws.
“GOGEC welcomes the move by Govt to swiftly legislate local content in order to maximise the benefits to Guyanese firms from the oil and gas sector. At the same time GOGEC recognises that any local content framework should not be too stringent which in turn would diminish the competitiveness of the industry,” the organisation said.
“The local content has to be realistic and practical to the extent that it will take years for Guyanese firms to build certain specialised capacity to serve the industry. These targets therefore should be as realistic as possible.”
GOGEC noted that in cases where local capacity can be developed rapidly, maximum local content should be encouraged. Additionally, they noted the fact that the local content framework encourages joint ventures, which is important to build capacity through partnerships.
“Previously, there were three draft Local Content Policies of which the latest version was designed for the upstream sector – ignoring altogether that the true benefit for the locals is in the midstream sector or the wider value chain onshore. Therefore, the spirit of a true and genuine local content was lacking.”
“When the current Administration assumed office in August 2020, one of its first stakeholder engagement was with the wider Private Sector. In February of this year a Local Content Panel was put together and began a series of stakeholder consultation exercise that resulted in the first draft Local Content Policy, which widely reflected the views from those engagements.”

According to GOGEC, the policy was substantially overhauled to reflect a true and practical local content element – rather than the upstream sector where only the large oil companies can participate in.
It was also pointed out that there was another round of consultations with a wide cross section of Private Sector stakeholders this week, before the bill was tabled. According to GOGEC, many of the substantive issues and concerns raised during these consultative sessions, were reflected in the final bill… a development the organisation expressed happiness about.
“For example, the bill speaks to a local content secretariat that will be responsible for monitoring and evaluation, etc, penalties, local content master plan, among others. Overall, GOGEC commends the Govt on this front where especially the Govt appreciates the need to have that balance between local content and FDIs.”
Among the proposals in the bill, which was laid in the National Assembly on Thursday, is the requirement for foreign companies to engage Guyanese and Guyanese-owned businesses at specified and varying levels in at least 40 areas by the end of 2022.
These include 100 per cent exclusive use of Guyanese companies in the provision of immigration support services, work permits, visa applications, visa on arrival, in-water activity permit, custom brokerage services, and ground transportation.
According to the document, this is to ensure “maximum participation of Guyanese nationals and Guyanese companies supplying goods or providing services in the Guyanese petroleum sector; and local capacity development.”