Guyana’s Minister of Natural Resources, Vickram Bharrat, says the newly installed PPP/C government will take steps to review and amend the Local Content Policy which was this year finalized by the previous administration.
Mr. Bharrat said that following an initial perusal of the policy, he is left with the impression that “it is weighted towards the investors” rather than Guyanese.
He said that in order for local business both in oil and gas and also in the spin off industries to benefit from the sector, there first must be a strong Local Content Policy in place.
“I’ve had a chance to look at it, but I can tell you…that policy is more slanted to the investors rather than to the locals,” he said. “That is something that we need to look at and change.” Mr. Bharrat was speaking at the time as a guest on local radio programme, Guyana’s Oil and You, aired on Thursday evening.
He said President Irfaan Ali has already given a directive for the policy to be reviewed “and we have contacted consultants who have [the] knowledge and who would have worked on such documents before to assist in drafting a local content framework that will benefit Guyana [and not just the investor].”
The Minister said the current policy lacks specifics as to numbers of persons to be trained and/or employed yearly and the percentage of the workforce that must be Guyanese and these are what the review will seek to remedy.
He said however that all stakeholders must be cognizant of the fact that Guyana still has a far way to go in building capacity which is necessary if companies are expected to use a certain percentage of locals in their operations.
“We’ll be engaging our international partners to develop, if possible to have one of the oil and gas universities coming to Guyana and offering courses to Guyanese because we may ask in the local content policy and demand in our contracts that 10 percent of the work-force should be Guyanese. But then the investor may very well say; fine; but we need 10 percent of trained people to work with us,” he pointed out. “That is where we might have an issue because we don’t have the technical capacity right now…”
At the launch of the Local Content Policy on February 10, 2020, Director of Guyana’s Department of Energy (DE), Dr. Mark Bynoe, told reporters that the policy remains a ‘fit for purpose’ one as it offered a balanced alignment between the Government of Guyana’s policy goals whilst maintaining consistency with the country’s international and regional trade and economic obligations.
A sector under heavy scrutiny
Addressing a question on disclosure of information about local content commitments that companies undertake, the minister said that the oil and gas sector is under heavy scrutiny. “The Government of Guyana through His Excellency [President Ali] and through the leader of our party Dr [Bharrat] Jagdeo have made it clear on the campaign trail that transparency and accountability must be the order of the day in government but particularly in the oil and gas sector because this I believe is something that was lacking,” he stated. “If you look back at the signing bonus and the secrecy in some of the deals and agreements…these are things that we intend to change.”
The Minister also assured that the new administration will be aiming to have good governance and oversight of the sector, noting that the government is adhering to the Santiago Principles along with the Extractive Industries Transparency Initiative (EITI).