The Local Content Secretariat (LCS) is seeking to draft guidelines that will signal clearly, how joint venture partnerships will be deemed genuine. Noting this recently was the President of the Georgetown Chamber of Commerce and Industry (GCCI), Timothy Tucker.
Director of the Local Content Secretariat, Martin Pertab, confirmed that the agency is examining the issue closely. He indicated that the Secretariat is examining its options and the legal implications.
The issue at hand is a practice observed by Guyana’s LCS, called ‘Fronting’. In the context of local content, this occurs when nationals are listed as shareholders, executives, or management, without real participation in the strategic decision-making process of foreign companies. They may even have lower salaries than their expatriate peers.
During his appearance on local radio programme, Guyana’s Oil and You, Tucker last Thursday said he learned that the Secretariat is seeking to remedy this, after enquiries were made. In light of growing concerns and complaints, he reasoned that it became important to understand what steps the regulator is taking to ensure Guyanese are not being used as mere window dressing for joint-venture partnerships with foreign entities. Tucker said it is critical that provisions are in place to flush out anyone who is insistent on skirting the law.
The GCCI President said, “I believe a joint venture should always be a relationship that benefits the parties involved equally or based on what their agreement stipulates. If I have 51% of a company, I’m expecting when that company becomes profitable, I will get 51% of the profit… my shares should also reflect my voting rights.”
Tucker said it is disappointing that some actors are devising various schemes to circumvent the legislation. He said the guidelines which are being drafted by the LCS will now set the stage for what is acceptable.
“They will be publishing a draft for public review first and then they will make final changes. But this is a step in the right direction for Guyana…” expressed Tucker.
He also noted that the Private Sector Commission has its own Local Content Advisory Committee, chaired by environmentalist, Mr. Shyam Nokta. It also includes economist and finance specialist, Richard Rambarran; proprietor of National Hardware Guyana Limited, Nicholas Deygoo-Boyer; and financial consultant, Joel Bhagwandin.
He said the committee conducts frequent meetings with LCS officials following consultation with its membership. Essentially, Tucker said GCCI, therefore, acts as an added layer of oversight to ensure the Local Content legislation works for the benefit of all Guyanese.