Due to the billions of dollars at stake in the procurement of oil and gas contracts, the PPP/C Government is proposing to have a Local Content Register of qualified nationals and companies so as to keep schemers of the system at bay.
This robust layer of protection is being proposed as part of the historic Local Content Bill 2021 which was tabled in the National Assembly on Thursday. The draft legislation proposes that the government will establish a Secretariat to be housed in the Ministry of Natural Resources and its members appointed by the Minister. Among the functions of the Secretariat will be for the development and maintenance of Local Content Registers which include Guyanese nationals for employment and Guyanese companies and persons from which goods and services may be procured.
According to the Bill, a Guyanese national and Guyanese companies may apply for and be issued with a certificate of registration in a manner and form prescribed by the Secretariat. The certificate would be issued provided that Guyanese nationals and Guyanese companies supplying goods or providing services to the petroleum sector immediately before the coming into operation of this Act apply for and be issued with a certificate of registration within six months of the coming into operation of this Act.
OilNOW understands that a certificate of registration shall be an annual certificate which shall become renewable on the anniversary date of the issuance of the certificate. The Bill further notes that an application for the renewal of a certificate of registration shall be made to the Secretariat in a manner and form prescribed by the Secretariat. Upon being issued a certificate of registration, the qualified Guyanese nationals and Guyanese companies shall be added to a Local Content Register.
The Bill categorically states that a Guyanese national or a Guyanese company shall immediately notify the Secretariat where there has been a change in the status of citizenship of the national or a change in the composition of the company in contravention of the definition prescribed in the draft law.
Importantly, the Bill states that a person who fails to notify the Secretariat of the foregoing commits an offence and shall be liable on summary conviction to –a fine which in the case of an individual would be one million dollars; and in the case of a body corporate, five million dollars. Both found in breach of the law would be struck off the Local Content Register.
The Bill states, “A Guyanese national or Guyanese company who is not registered on the Local Content Register shall not be measured for the purpose of compliance with the minimum local content levels as set out in the First Schedule.”
It therefore means that oil companies can only use those persons or companies that the government has deemed to be representative of its vision for local content.