No more ‘fronting’
Minister of Natural Resources Vickram Bharrat
Minister of Natural Resources Vickram Bharrat

–Minister Bharrat says rigid systems to be established to prevent foreign companies from dodging Local Content Act

THE Government of Guyana will be putting new systems in place to block companies from using Guyanese conveniently in order to obtain a 51 per cent stake to merely satisfy the provisions of the Local Content Act.

This was according to Minister of Natural Resources, Vickram Bharrat, during his remarks at the Private Sector Commission (PSC)’s Local Content Forum, which was held at Pegasus Suites and Corporate Centre, Kingston, on Thursday.

He was at the time commenting on the recent court case in which Acting Chief Justice Roxane George, S.C., ordered the Local Content Secretariat (LCS) to issue a local-content certificate to a Trinidadian-owned company, Ramps Logistics Guyana.

The company, which was incorporated in 2013 in Guyana, is parented by RAMPS Logistics Limited out of Trinidad and Tobago. Some 51 per cent of the local company was sold to Trinidadian businessman, Deepak Lall, who has Guyanese parentage.

The Guyana Chronicle understands that Lall has never represented Ramps Logistics publicly at any of its press conferences, and Trinidadian Shaun Rampersad, remains the face of the company.

It was reported too that the sale of majority shares of the logistics company came after Guyana’s Parliament enacted its updated local content rules, which are set to protect the interest of Guyanese and Guyanese companies in the growing local oil-and-gas sector.

Minister Bharrat related that there are “strong concerns” about the eligibility of such companies’ application for local-content certification.

“The Local Content Legislation was designed to ensure that it brings benefits to Guyana and to Guyanese businesses. There are only 40 services in schedule one, which is fair enough. And we’re saying leave those 40 services for Guyanese businesses… we are not even unfair…” the minister said.

The first schedule of the Act carves out 40 different services for Guyanese participation via the supply of goods and the provision of services
According to the legislation, companies must procure from Guyanese companies, 90 per cent of office space rental and accommodation services; 90 per cent 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.

“If you look at those 40 services, not all are 100 per cent, some are 25 per cent or 30 per cent, 50 per and 60 per cent. So, there is still an opportunity for foreign companies there too. So, we haven’t locked any foreign company out of Guyana.

“Some of them might run around crying, running to the courts saying that the government is unfair. We are not unfair. Anyone who knows the oil-and-gas sector knows hundreds or thousands of services that are necessary to service the oil-and-gas sector…And we only identify 40 and say reserve this for Guyanese,” Minister Bharrat said.

He added that the government is “serious” about this initiative to stop the “fronting” and “renting” of citizens.

This phenomenon – commonly referred to as ‘fronting’ or ‘rent-a-citizen’ – has the potential to reduce the amount of value which accrues to Guyana and runs counter to the spirit and intent of the LCA.

“We are serious about people now trying to acquire Guyanese passports just because of some line of family members down the line. People who are not even born in Guyana.

“Because it is only fair that us [Guyanese] who stayed, who worked, who toiled, who sacrificed to develop this country that we should benefit first and not people who were born elsewhere, but today they come to reclaim their Guyanese citizenship just for benefits,” Minister Bharrat lamented.

He said while the government has its reservations on the issue, it is, however, committed to respecting the rule of law and issuing the certificate to the company, given the ruling by the CJ.

“… There are concerns by the government that people cannot show up or fall [from] the sky or appear after 70-80 years or whatever the case is and say “Oh, I’m Guyanese to the bone. It can’t work like that,” Bharrat said.

He highlighted too that companies have taken advantage of the legislation by “fronting” and Guyanese businesses are getting the short end of the stick.

Against this backdrop, Minster Bharrat said that the government expects companies to act in good faith and not to “resurrect” persons who have Guyanese parentage to apply for Guyanese passports.

“We expected some amount of professionalism, we expected maturity, and we expected that companies would have acted in good faith. And obviously, they didn’t.

“There are hundreds of Guyanese businesses owned by born-and-bred Guyanese, who have the ability and resources and capacity to partner with any international company, but we saw what played out,” he said.

Minister Bharrat further related that the government will be putting systems in place to ensure that such matters are dealt with as they arise.

“We can’t have people holding a Guyanese passport but never pay a dollar tax in the country to develop it where it is today, but want to benefit from it today. It is unfair, it’s hurtful,” he added.

The minister said that the government intends to hold a series of meetings with a number of stakeholders to ensure that systems are put in place to avoid instances such as this, since the Local Content Legislation was not designed for foreign companies to take advantage of it.


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