Guyana’s Local Content Act 2021 does more than set rules for how Guyanese workers and businesses participate in the petroleum sector. It also establishes penalties for companies and individuals that fail to meet specific local content obligations.
The fines range from GY$1 million (about US$4,800) to GY$50 million (about US$240,000), depending on the offense. The GY$50 million penalty is the highest and applies specifically to anyone who carries out petroleum operations without meeting the minimum local content requirement.
The penalties are set out under Section 23 of the Act and apply on summary conviction.
The highest penalty
A person who “carries out petroleum operations without the minimum local content requirement” commits an offense and can face a GY$50 million fine.
This is different from failing to meet the requirements of an approved local content plan.
Failure to satisfy the prescribed content requirements of an approved local content plan carries a GY$10 million fine (about US$48,000).
Fines for plans and reports
The Act also sets separate penalties for failing to submit required documents.
A person who fails to submit a local content plan, return, report, record or other document required under the Act can face a GY$5 million (about US$24,000) fine.
Submitting the required document after the prescribed deadline is a separate offense, carrying a GY$1 million fine.
The same GY$1 million penalty applies to failure to submit a performance report.
A person who fails to comply with a request from the Minister or the Local Content Secretariat to provide or review records can also face a GY$1 million fine.
False information and attempts to bypass the rules
The legislation also carries penalties for misleading information.
Submitting false or misleading information to obtain a certificate of qualification can result in a GY$10 million fine.
The Act also addresses attempts to help others circumvent local content obligations. A Guyanese national or Guyanese company that aids or abets a breach for that purpose can face a GY$5 million fine if an individual or GY$10 million if a body corporate.
Where a corporate offense occurs with the consent, connivance or neglect of an officer, Section 24 provides that the individual and the company can be liable for the same penalty.
The Minister responsible for petroleum can amend the monetary penalties through an Order, subject to affirmative resolution by the National Assembly.
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The penalties are intended to give those requirements legal force as Guyana’s petroleum industry expands. The Local Content Act was designed to increase the involvement of Guyanese nationals and companies through employment, training and the procurement of local goods and services.
The impact of that framework is already visible in the value of business reaching local companies. To date, over 1,200 Guyanese businesses have been registered with the Secretariat, and over US$2 billion in goods and services have been procured from Guyanese companies and nationals.
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