–Dr Jagdeo says; affirms Local Content Act will be updated

VICE-PRESIDENT, Dr Bharrat Jagdeo, has said that locals “fronting” for foreign companies will face consequences for allowing this practice to persist.
During a press conference at the Office of the President (OP) on Thursday, the Guyana Chronicle posed the question to Dr Jagdeo about the serious measures that the government is pursuing to crack down on “fronting.”
Particularly, he highlighted that “fronting” is occurring under registration within the Local Content Act (LCA) and within this area, foreign companies take advantage of the benefits that were preserved for the Guyanese people.
“And so, the local companies that are complicit in this too will face consequences also, not just the foreign companies. So, we have started, we had a discussion with the Commissioner General about this matter. We are looking at it carefully because you have to show ownership of the company, more than 50 per cent ownership of the company, Guyanese ownership,” he said.

Additionally, Dr Jagdeo said that the government is working to update the LCA, address the loopholes and strengthen the enforcement and the penalties.
“But right now, the GRA is looking at some of these companies because they are, by fancy accounting, they’re defeating the purpose of the Act. [With] Fancy accounting, and with the complicity of some local individuals, [they are] defeating the purpose of the Act, which is to give preferences to our people,” Dr Jagdeo related.

Recently, President Dr Irfaan Ali highlighted his concern about the pervasive issue of “fronting”, which poses a significant threat to the integrity of Guyana’s LCA.
President Ali had underscored the urgent need to tackle this practice head-on, highlighting its detrimental impact on genuine local participation and economic development.
“We saw that the registration for local companies would have increased, tremendously. We also saw that there are some issues that we have to address, which include fronting and rent seeking. That is, renting a local company or renting a local name or renting citizens. That is a hindrance to local content that must be addressed, very frankly, very honestly, if we are to be truthful about the conversation on local content,” President Ali had declared.
This phenomenon – commonly referred to as ‘fronting’ or ‘rent-a-citizen’ – has the potential to reduce the financial benefits accumulated by Guyanese, and runs counter to the spirit and intent of the LCA.

Further, Attorney-General and Minister of Legal Affairs, Anil Nandlall, S.C., announced that the country’s local content laws will prevent this.
The updated local content laws will have a significant impact on Guyana’s economy in the years to come. With the country poised to become a major player in the global oil and gas industry, the laws will play a crucial role in ensuring that Guyana’s citizens benefit from the wealth generated by the sector.
The laws aim to ensure that companies operating in the country hire a certain percentage of local workers and use local goods and services. The decision to update these laws comes as oil production is expected to increase in the coming years.
This means that the country will need to develop its workforce and infrastructure to meet the growing demands of the industry. As a result, the updated laws will play a crucial role in shaping the future of Guyana’s oil and gas sector.
The laws are designed to promote economic growth and development within the country. By requiring companies to use local goods and services, the laws aim to boost local businesses and create jobs for Guyanese citizens.
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.
The updated laws will likely include new provisions that address issues such as training and capacity building for local workers, as well as requirements for the use of local content in the supply chain.