— Minister Bharrat

MINISTER of Natural Resources, Vickram Bharrat said mechanisms are being put in place to ensure compliance by oil companies and their contractors with the Local Content Act.
At the same time, assessments are being done to see how the local content areas can be expanded.

Speaking with the media on Friday on the sidelines of the signing of a new agreement between ExxonMobil – Guyana and a local consortium at Roraima Duke Lodge, Bharrat noted that while the Act goes into full effect at the end of 2022, the government is working to ensure it strengthens enforcement and ensures compliance.

“We are now putting together a few new mechanisms to ensure compliance, because we haven’t reached the stage where we will start monitoring compliance as yet. Right now, it’s more the initial stage of putting together the plans and looking at the procurement methods and all of that,” the minister explained.

Signed into law on December 31, 2021, the Local Content Act has paved the way to ensure Guyanese gain equal opportunities and access in the oil and gas industry, and to ensure maximum benefits for Guyanese businesses.

The Act outlines 40 sub-sectors in which oil companies are legally required to procure the goods and services from Guyanese businesses, and also speaks to the need to employ specific percentages of Guyanese in their day-to-day operations.

Provisions in the Local Content Act includes the stipulation that a company has to have a Guyanese national owning 51 per cent of its shares to be considered a “local entity,” but the company’s management team also has to comprise seventy per cent Guyanese, while its overall staff complement has to also be 90 per cent Guyanese.

“The legislation says that by the ending of 2022 these targets must be met for the 40 different services. After that, we will do an assessments of who is in compliance and who is not in compliance.

“Also [we are looking at] services that we can add to the 40, because I think there are a few areas that we might look at once we have the capacity to add to that schedule,” the Natural Resources Minister said.

PAID EQUALLY
The Act also mandates that Guyanese who possess the same skills and competencies as their foreign counterparts are paid equally. The government has affirmed that as more Guyanese are trained and become competent, the laws would be amended to guarantee increased employment and business opportunities for the people of Guyana.

Oil companies that fail to outsource the services to entities owned and run by Guyanese could face a penalty of up to $50 million, according to provisions set out in the Act.

Implementation and oversight of the Local Content Act is overseen by the Local Content Secretariat, which has already been established and is headed by Director Martin Pertab.

Bharrat noted that the establishment of the secretariat is the first step in working on ensuring compliance by the oil companies.

“We have the Local Content Secretariat in place already. It is fully staffed as well we are working with all the licensees, contractors, and subcontractors on the preparation of the master plan and annual plans. That is happening as well as registration, physical registration is taking place.”

Foreign companies operating within the petroleum sector are required to submit a master plan, containing three sub-plans that depict their employment practices, their procurement strategy, and their programmes to train and build capacity among their local workforce.

Those plans would have to be updated and submitted annually for review by the secretariat, after which it will be forwarded to the subject minister for approval. Bharrat assured that the secretariat is already working on this area.

The Local Content Secretariat is also charged with setting up two registers — one comprising local businesses, and another outlining a list of Guyanese seeking employment within the petroleum sector.

However, while the registration is being done physically, Bharrat said works are apace to get a virtual portal up and running. And it could be launched in a few weeks time.