– A Plethora of Opportunities for all Guyanese (Part 2)
An examination of the act reveals that the LCA establishes its own regulatory mechanisms to implement, monitor, and evaluate participation in local content in Guyana. Two notable mechanisms are the establishment of the Local Content Registers and the Local Content Advisory Committee.
Pursuant to section 6 of the act, the Secretariat will be responsible for developing and maintaining Local Content Registers of (i) Guyanese nationals for employment and; (ii) Guyanese nationals and Guyanese companies from which goods and services may be procured. Notably, individuals and entities can apply for and be issued with a certificate of registration in a manner and form prescribed by the Secretariat: s.6(2).
There are two types of registration available: supplier registration and employment registration. A Guyanese national or Guyanese company can apply to the Secretariat for a Certificate of Registration for the supply of goods and/or the provision of services for petroleum operations in Guyana.
An examination of section 2 of the act reveals clear definitions for who is a Guyanese national and what is a Guyanese company. A Guyanese national is a citizen of Guyana and a Guyanese company means ‘(a) any company incorporated under the Companies Act – (i) which is beneficially owned by Guyanese nationals who ultimately exercise, individually or jointly, voting rights representing at least fifty-one percent of the total issued shares of the company; and (ii) that has Guyanese nationals holding at least seventy-five percent of executive and senior management positions and at least ninety percent of non-managerial and other positions; or (b) any partnership between Guyanese nationals and a companyconstituted under subclause a.’ These sections provide a safety mechanism to prevent foreigners from operating under the guise of Guyanese nationality.
Section 20 of the act establishes the Local Content Advisory Committee. The function of the Committee is to support the Secretariat in the discharge of its functions in an advisory capacity and to provide the Minister with recommendations: s.20(8). Section 20(2) stipulates that the Committee will consist of no less than seven members appointed by the President.
The act and the mechanisms established, certainly have the potential to stimulate broad-based economic development, alleviate poverty, achieve prosperity, ensure sustainable economic and social outcomes in the country’s oil and gas sector and prioritise Guyanese and Guyanese companies for the procurement of goods and services in the sector.
However, when one takes a deeper look at their use and results in some extractive developing countries such as Ghana, many critical issues can be seen which we as Guyanese should certainly consider avoiding.
It is noteworthy that Ghanaian authorities had raised the issue of the technical competency of members/ staff of Ghana’s Petroleum Commission which is primarily responsible for the implementation of the Local Content Law and Policy. One contention related to the appointment of the management and technical staff to the Commission which was considered to be partisan and that their tenure in office depended on the tenure of the political party in power. This opened the room for inconsistency in monitoring compliance whenever there is a change in leadership. 1
1Peter Arthur and Emmanuel Arthur, Local Content and Private Sector Participation in Ghana’s Oil Industry: An Economic and Strategic Imperative, Africa Today, Vol. 61, No. 2 (Winter 2014), pp. 57-77.
