Once again, a Trinidadian has echoed an early Massy diatribe against our Local Content Policy (LCP), after the PPPC Administration had passed the legislation just before the end of 2021. The Local Content Policy having been initiated by the then APNU/AFC Government in 2017, the PPP continued the national discussion and consultations for the country to benefit optimally from the nascent oil and gas (O&G) industry.
From a macroeconomic standpoint, Guyana was simply doing what every other country tries to accomplish – increasing its Gross National Product (GNP), which measures income accruing to the nation, rather than only the Gross Domestic Product (GDP), which measures income emanating domestically but can be repatriated internationally. Development can be delivered only when there is local economic growth.
The issues that pertained to the intent, substance and implementation of our LCP, therefore, had been well ventilated by the time our Local Content Act (LCA) was passed, since oil had begun flowing for three years to the date in Dec 2019 when the President and Group CEO of Trinidadian conglomerate Massy issued a statement – purportedly on behalf of some hitherto unknown “Caricom Private Sector Organisation” (CPSO) – alleging that our LCA violated our obligations under the Revised Treaty of Chaguaramas (RTC). Now, almost three years later, the Director of Trinidad and Tobago Coalition of Services Industries (TTCSI) repeats the calumny – this time because a Trinidadian company had violated a requirement of the LCP – and threatened that Trinidadian companies would move their interest to Suriname.
There were any number of ironies in this allegation, not the least being that both entities had been the beneficiaries of the T&T Local Content Policy that had been informally in place for decades, but had been explicitly articulated in 2004. The document is available online as “LOCAL CONTENT & LOCAL PARTICIPATION POLICY & FRAMEWORK FOR THE REPUBLIC OF TRINIDAD AND TOBAGO ENERGY SECTOR LOCAL CONTENT & LOCAL PARTICIPATION POLICY & FRAMEWORK FOR THE REPUBLIC OF TRINIDAD AND TOBAGO ENERGY SECTOR OCTOBER 7TH, 2004”.
While it was not then explicitly legislated, the policy declared, “It is the intention of the Government and people of Trinidad and Tobago that the country will maximize the level of participation of its national people, enterprises, technology, and capital through the development and increasing use of locally owned businesses, local financing and human capabilities in the conduct of all activities connected with the energy sector, along its entire value chain, at home and abroad. As the nation rapidly grows its businesses to help the international community meet their energy needs, we shall use this opportunity to leverage the capabilities of international companies in our midst to build our own businesses, people, technology, and capital markets.”
Under the heading, “LOCAL CONTENT AND PARTICIPATION POLICY STATEMENT”, the Government would be “giving preference, firstly, to locally owned, controlled and financed enterprises, then to those that demonstrate a clear culture, commitment and capacity for maximising local value-added, participation and capability development, consistent with the country’s aspirations and vision.”
Finally, the TT Government LEGISLATED its definition of “local content”, but buried it in its “Public Procurement and Disposal of Public Property Act 1 of 2015”. Art. 4 explains that “local content” means the local value added to goods, works or services measured as the amount of money or percentage of each dollar of expenditure remaining in Trinidad and Tobago after the production of the good or the performance of the work or service.”
Art 7. addresses obligations under RTC: (2) To the extent that this Act conflicts with an obligation of the State under or arising out of the following: (a) a treaty or other form of agreement to which Trinidad and Tobago is a party with one or more States or entity within a State; the requirements of the treaty or agreement shall prevail, except that the procurement of goods, works or services shall be governed by this Act, and shall promote the socio-economic policies of Trinidad and Tobago, and shall adhere to the objects of this Act.”
Pres. Irfaan Ali and PM Keith Rowley have met to iron out the Trini-generated controversy, but it would appear that the Trinidadians have no confidence in their PM.
