Guyana’s long awaited local content legislation will soon be a reality after the landmark Local Content Bill 21 of 2021 was passed today in the National Assembly.
The landmark bill paves the way for local companies and citizens to participate in no less than 40 critical areas in the oil sector which government and a number of private sector stakeholders say will ensure international oil companies and their contractors utilize more local services and products.
Minister of Natural Resources Vickram Bharrat, in the second reading of the Bill, said the secretariat which is to be established to monitor and oversee the local content framework will pay a key role in ensuring companies comply with the schedule of targets.
“We want to ensure that with this Bill, Guyanese benefit from the economic growth and growing opportunities in the country,” he said.
Mr. Bharrat also pointed out that the Bill will provide for training and capacity building and allow authorities to assess the level of preparedness of local companies and their capabilities, particularly over the next year.
The Bill will prioritise Guyanese nationals and Guyanese companies in the procurement of goods and services for the oil and gas operations. This prioritization will guarantee that there is increased retention of the economic benefits in Guyana while simultaneously allowing for there to be an upsurge in the number, competencies, and capabilities of Guyanese nationals and Guyanese companies participating in the petroleum sector.
The Opposition abstained from voting on the passage of the Bill. Shadow Minister of Natural Resources, David Patterson said while the opposition supports the establishment of a local content framework that would ensure Guyanese benefit from the oil and gas industry, more time is needed for the Bill to be reviewed and studied. Patterson and several members of the Opposition who took to the floor called for the Bill to be sent to the Parliamentary Sectoral Committee on Natural Resources.
Matters raised by the Opposition include a call for the establishment of a Local Content Fund to benefit small businesses, limitation on the number of years oil companies can enter into agreements with contractors in order to ensure local companies aren’t shut out indefinitely, and adjustments to targets where it is felt 100 percent local capacity exists.
But Parliamentarians on the government side of the House said local content legislation has been languishing for over five years since the Liza discovery in 2015 and further delays would see Guyanese continuing to lose out on opportunities in the oil and gas sector.
“It is an excellent Bill,” finance minister, Dr. Ashni Singh said, pointing out that seeking perfection is tantamount to delaying benefits to the Guyanese people.
Anil Nandlall, Attorney General and Minister of Legal Affairs said the government, when it assumed office in August 2020, established a unit and charged it with doing widespread consultations in terms of formulating the relevant policies to inform the legislative framework for the oil sector. He said the unit was guided by international experts and discharged its functions by hosting several consultations nationwide.
He said every Guyanese should be proud that legislation will soon be enacted to guarantee them a permanent and significant place in providing employment and services to the trillion-dollar sector.
To deliver on its legislative target, the Bill puts in place regulatory mechanisms to implement, investigate, supervise, co-ordinate, monitor, and evaluate participation in local content in Guyana. It also includes hefty fines for non-compliance.
Altogether, authorities say the Bill provides for the promotion of competitiveness and the encouragement of the creation of related industries that will sustain the social and economic development of Guyana as well as other related matters.