–PSC says policy will serve as conduit for locals to enter various sectors

BUILDING an inclusive environment, amidst increasing foreign investment and interest in Guyana, hinges on the implementation of a comprehensive Local Content Policy, a draft of which will be presented to the President, Dr. Irfaan Ali, this week.
Guyana, with its new-found oil wealth, is on the cusp of economic transformation and has already received the title of “investment capital” of the region and possibly the world. This title has served as a magnet for investors who are turning their attention to Guyana.

Hoteliers, agro processors, key players in the global energy sector and many other investors are either already in Guyana or are interested in penetrating the country’s growing economy- which has a Gross Domestic Product (GDP) of about US$4 billion.
And, outside of the overarching development, the lucrative oil and gas sector, which officially came on stream in 2015, has been productive, but there has been no regulatory/legal framework in place to guide the utilisation of local content in the sector.

There is, however, a high level of confidence that this will no longer be the case, as the Minister of Natural Resources, Vickram Bharrat, has said that President Ali will receive a draft Local Content Policy this week.

The government, in September, had established an advisory panel on local content. The panel was tasked with undertaking a review of all existing initiatives and policies relating to local content in the petroleum sector and to provide guidance for the development of Guyana’s Local Content Policy and Legislation.

The panel comprises Shyam Nokta (chair), Carl Greenidge, Anthony Paul, Kevin Ramnarine, Carville Duncan and Floyd Haynes.
From all indications, the panel has completed its work, and, as said by Minister Bharrat in an invited comment on Sunday, the President will soon receive the product of the two-month deliberations.

The Guyana Chronicle was informed that the panel, as part of its work, had engaged various stakeholders like the Private Sector Commission (PSC) and the Guyana Manufacturing and Services Association (GMSA), among other key stakeholders.
Chairman of the PSC, Nicholas Boyer, told the Guyana Chronicle, on Monday, that his organisation’s main concern was ensuring that there are precursors for Local Content Legislation.

“We have asked for the architecture to take us from policy to legislation, and we are widening the scope and not just focusing on oil, but other sectors as well,” said Boyer.
While the expectation is a broad policy, he said there were direct conversations about the inclusion of locals in Guyana’s nascent oil and gas sector.
“The panel understood what we brought up with them…as locals we want to participate in the industry. This [the policy] will serve as an entry point for locals to become part of the industry and not just from a perspective of waiting for handouts,” Boyer reasoned.

A top priority of the government, according to Minister Bharrat, is to ensure that as many Guyanese, including small businesses and semi-skilled labourers benefit from the oil and gas industry.
It was reported that the former government had created a local content policy after many consultations with various stakeholders. This policy framework recognises the broader goal of the previous administration to optimise national income from development of the country’s sovereign hydrocarbon resources, and prudently invest these revenues to transform the economy to the benefit of all Guyanese, now and in the future.

The policy was designed to deliver both short-term opportunities for Guyanese citizens and Guyanese suppliers, and longer-term capacity building by raising the standards of Guyanese industries to be internationally competitive.
Despite the aims and objectives of the policy, Minister Bharrat is of the firm view that a policy is not enough.

“The previous administration spoke about first oil; oil and gas, and all this talk about the industry, and there is no local-content legislation; no draft of it… There is a local-content policy, but you need a legal framework to ensure that things happen,” said the minister in a past report.
He said that having a policy is not enough to hold a major player, or any player, in the oil-and-gas sector accountable, as there is nothing binding or regulating operations.

Even the Vice-President, Bharrat Jagdeo, was quoted by sections of the media as saying: “We have to have legislation. The legislation is what matters, not the policy. People can ignore that because it has no effect of law. When you pass the legislation – and we’re going to do it – you have to simplify it: what is it that we’re looking for from these oil companies to do? First of all, to make sure that they spend more in Guyana, using Guyanese labour and using Guyanese businesses. More business has to flow to our people and that is the purpose of local content policy. It’s a simple thing,”

Jagdeo said that, in order to craft a robust piece of legislation, the government must bring all the “local people” together and examine where there is the capacity and where there is none. By examining which sectors lack the capacity, only then can the government be “liberal” in allowing foreign investors to operate.