Consultations to start soon to revamp Local Content laws – AG
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Attorney General and Legal Affairs Minister Anil Nandlall, SC, has indicated that the consultation process to update the Local Content Legislation will commence soon as Government seeks to strengthen the laws which ensure that Guyanese adequate benefit from the burgeoning oil and gas sector.
“The government has commenced a review of the Local Content framework… So, I want to assure our viewers that that is an undertaking that is ongoing and the review will involve consultations which we will embark upon very shortly,” Nandlall said during his recent programme, Issues In The News.
Attorney General and Legal Affairs Minister Anil Nandlall, S.C.
After being passed in the National Assembly in December 2021, the Local Content Laws were enacted in January 2022. The Act lays out 40 different services that oil and gas companies and their subcontractors must procure from Guyanese companies. These including 90 per cent of office space rental and accommodation services; 90 per cent of janitorial services, laundry and catering services; 95 per cent pest control services; 100 per cent local insurance services; 75 per cent local supply of food; and 90 per cent local accounting services.
The Local Content Act mandates penalties, such as fines ranging from $5 million to $50 million, for oil and gas companies and their sub-contractors who fail to meet the minimum targets of the legislation, as well as those who are in breach of the Act.
Fair opportunity
But according to the Attorney General, Government continues to receive complaints about Guyanese still not being afforded a fair opportunity to participate in the oil and gas, and related sectors.
“We have said, as a government that one of our first priorities is to ensure that Guyanese interests are advanced, and are accorded the highest of priority… [But we’ve received complaints that] they are being denied fair opportunities to participate [in the oil and gas sector],” the minister noted.
To this end, AG Nandlall underscored the need for the continuous revision of the local content laws to in order to ensure that Guyanese are also able to reap the benefits from this blooming industry.
“We did say, when that bill was being promulgated, that is it the first legislation of its type in the Caribbean, and that we will have to go back to the drawing boards very quickly to adjust it as we become acclimatize to this new and emerging sector. And with everyday passing, we are gaining more and more experience in the sector and our attention is being drawn to issues that require us to address in ensuring that the policy and purpose of the Act is being achieved, which is to ensure that Guyanese interests are protected foremost in this new oil and gas sector,” he posited.
Only last month, the first ever Local Content Summit in Guyana was hosted by private stakeholders, however, Vice President Dr Bharrat Jagdeo had said that the People’s Progressive Party/Civic (PPP/C) Government will use the occasion to begin planned consultations on revamping the local content laws.
“We thought that the summit is sufficiently, narrowly focused, that it could allow us to bring great value in the discussions to the people of this country. And it could also kick-start the review that we ourselves plan, to amend the local content legislation as promised in the past …from the Government’s perspective, as we discuss policies and the certification programme and the legislation that was passed, we’re here to listen since this is the first of a series of meetings that we’ll be having over the next several months,” Jagdeo stated.
The Vice President pointed out that coming up with amendments for the Local Content Act requires a joint effort between Government and stakeholders. And similar to the Act that was passed in 2021, amendments must be practical in Guyana’s context and strike a balance between securing more for locals without driving away investors.
“We would once again have to pursue the same balancing as we move to update and reform and change the current legislation,” he noted.
Since the Local Content Act was enacted, the Government has described the law as a gamechanger when it comes to how foreign companies deal with local suppliers of goods and services, as well as how they employ locals.
Recommendation
A review of the First Schedule of the Local Content Act was conducted at the end of last year.
Former President of the Georgetown Chamber of Commerce and Industry (GCCI), Timothy Tucker, disclosed last month that the private sector had recommended 25 new areas to be added to the list of 40 that were ring-fenced for Guyanese. He added too that another 10 areas were to be proposed soon.
“We started with 40 areas and now you’re seeing an additional 25 areas being up. Guyanese have the capacity to now do 65 things and even more. I think the chamber has identified another [10] more. So, you’re at all in all, [over] 70 areas. Almost doubling the 40 areas that we’ve recommended,” Tucker stated.
However, the former GCCI Head pointed out that even as Guyanese expand their businesses to capitalise of these opportunities in the oil and gas sector, there are a lot of loopholes that needed to be closed that are placing locals at a disadvantage. These include foreign companies exploiting the definitions surrounding a “local company”, whereby they “rent” a citizen to meet the requirements for a Guyanese-owned company. He noted that these infractions and more, are things the private sector must support the Government in tackling. (G8)
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