–VESHI Director; praises Local Content Act, anticipates expansion of protected areas, safeguards against fronting

SINCE Guyana’s enactment of the Local Content Act in December 2021, the country has witnessed transformational changes in its workforce and economy.
This monumental legislation was created to ensure that citizens and local businesses reap significant benefits from the bourgeoning oil and gas sector. Notably, it has created opportunities in as many as 40 categories of work.
This development has not only trapped more oil revenues within the economy, but also provided a foundation for capacity building among Guyanese workers.
Although lauding the Local Content law as a ground-breaking tool, former Chairman of the Private Sector Commission (PSC), Director of the Vreed-en-Hoop Shore Base Inc. (VESHI) and prominent businessman, Nicholas Deygoo-Boyer, called for an expansion of its scope.
In an interview on a recent episode of the Energy Perspectives Podcast, Deygoo-Boyer expressed his firm belief that Guyanese workers and companies are well equipped to take on more substantial roles within the oil and gas sector.
“The law has certainly helped. I am happy with what the law has done for us because, coming from where we came from—which was, ‘You will never,’ ‘You cannot,’ ‘There is no capacity,’ these sorts of phrases—and when you’re coming from that perspective, you just want to get in. Now that we have a law in place, and it has protected 40 areas, and we’re in these areas, we want to expand. Now, we need to adapt and refine too the situation that has happened,” he said.
He acknowledged two main criticisms: “fronting,” a practice which undermines the law’s intent and the need to expand the 40 protected areas. Fronting refers to the practice of listing Guyanese individuals as executives to meet local participation requirements, while in reality, they hold little to no significant ownership or influence in the company.

Deygoo-Boyer finds these criticisms valid, emphasising the need for advocacy and amendments to ensure the law aligns with the country’s current capacity and needs, which may have evolved since its enactment. However, he cautioned against dismissing the efforts made to establish the law initially.
He said: “But I don’t think we should be criticising the efforts of getting the law in place, because some of the people criticising either have forgotten, did not understand, or were not part of the industry when there were, essentially, really very high barriers just to get in.”

He continued: “It’s continuous improvement. So, we need to now adapt and figure out how we improve, so that we mitigate or reduce fronting, and expand the protection in areas that Guyanese have now gone to. You’ll find Guyanese businesses in and above those 40 areas.”
The government has said that penalties for “fronting” are among the areas that will be reviewed and considered when it decides to update the Local Content Act of 2021.
Rather than categorising fronting as entirely negative, he argued that its impact depends on the specific area, good, service, and competition involved.
According to the businessman, the central concern is whether fronting affects the country’s ability to retain economic benefits.

He reasoned: “And if it hurts what we can retain in the country, yes, it is very bad, and we need to look at those areas and figure out how we either redefine what is a Guyanese company or put rules around or penalties in place for ‘fronting.’”
Deygoo-Boyer added: “If it is areas where there is really no existing competition and the other alternatives for the operator are an entirely foreign set of entities, so there is going to be very little or no value retained in the country otherwise, then what are we stopping, or what are we saying no to?”
Under the Local Content Act, oil companies and their subcontractors are obligated to give first preference to Guyanese goods, services, and human resources.
The local employment and business access has increased noticeably since its promulgation, wherein thousands of citizens benefit from the opportunities opened to them in areas such as logistics, transportation, accommodation, catering and technical support, among others.
Furthermore, the law has facilitated partnerships between international corporations and local businesses, leading to technology transfer and increased skill sets for Guyanese workers.