Wednesday, February 1, 2023

Extending transition period for compliance with Local Content law could foster more genuine partnerships – businessman

Must Read

OilNOW
OilNOW is an online-based Information and Resource Centre
- ADVERTISEMENT -

While he agrees wholeheartedly with Guyana’s move to implement robust Local Content legislation, Chief Executive Officer (CEO) of Ascending Limited, Andrew Schnitzer da Silva, asserts that authorities may wish to consider extending the transition period for compliance beyond 2022. This, he said, would allow for trust to be built between potential foreign and local partners.

Da Silva said it is critical that time is allowed for trust to be fostered as it is ultimately the foundation of any genuine joint venture arrangement that must withstand due diligence by regulators.

Since the passage of the Local Content Act late last year, companies have been encouraged to comply with regulations so that they can be listed on the Local Content Register by the end of 2022. To do so, the law states that a company must satisfy several criteria to qualify as being “Guyanese.” The law states that the applicant company must first be incorporated under the Companies Act and be beneficially owned by Guyanese nationals who have 51% of the total issued shares of the company. Secondly, Guyanese nationals must hold at least 75% of the Executive and senior positions; and thirdly, at least 90% of the non-managerial staff must be taken up by locals.

Guyana won’t become next Dubai without foreign expertise, development of entrepreneurial talent – Int’l Advisor | OilNOW

Given his experience in the industry, da Silva who heads a Human Resources Specialist Group said it would be in the country’s interest to extend the period for companies to get their proverbial house in order. He said the timeline should be extended for two main reasons. The first he explained is that the country has a thin labour market for which up-skilling is needed. He said it would take time for companies to meet the employment targets set out not only because of the training needed but because of market constraints.

He also noted that a foreign entity already operating in certain areas of work listed in the First Schedule of the Act would need time to scrutinise and build trust with a Guyanese that will assume 51% of its firm.

During his recent participation in a panel discussion hosted by the Guyana Business Journal, da Silva said his company’s experience in other parts of the world is what has informed his recommendation.

He said, “I do feel from experience, lots of times there is a big eagerness in wanting to implement these policies or laws but there has to be a transition period from where the country is to where it wants to be and what it entails to get there.”

Local educator says rapid development of skills must be high on Guyana’s agenda | OilNOW

The CEO appealed that the transition period for compliance with the law cannot happen overnight. He believes another grace period would assist companies in getting on board with the government’s agenda.

The Local Content Act was passed in December 2021. The government has committed to exacting periodic updates to the first schedule based on its assessment of the needs of the industry and the ability of locals to meet same.

The government will be conducting a national assessment at the end of the year, with a view of ascertaining deficits and strengths, to inform the updating of the Act.

- Advertisement -
spot_img

Latest News

Guyana First Lady says new oil production vessel creates link to brighter future

Singapore, February 1, 2023: First Lady of Guyana, Arya Ali, says the name of the Prosperity floating production, storage...

More Articles Like This