Guyana’s Local Content Bill 2021 which was tabled in the National Assembly on Thursday has offered several protective measures that close the door to imposters or schemers seeking to amass fast wealth in the sector. One of those measures speaks to a strict definition of a “Guyanese company.”
The Bill proposes that this should only mean any company incorporated under the Companies Act – which is beneficially owned by Guyanese nationals who ultimately exercise, individually or jointly, voting rights representing at least fifty-one percent of the total issued shares of the company; and have Guyanese nationals holding at least seventy-five percent of executive and senior management positions and at least ninety percent of non-managerial and other positions.
As another layer of protection, the government has proposed that its Local Content Secretariat develop and maintain a Local Content Register for Guyanese nationals for employment; and Guyanese nationals and Guyanese companies from which goods and services may be procured.
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The Bill states that a Guyanese national and Guyanese company may apply for and be issued with a certificate of registration in a manner and form prescribed by the Local content Secretariat provided that Guyanese nationals and Guyanese companies supplying goods or providing services to the petroleum sector immediately before the coming into operation of the Act, and shall therefore apply for and be issued with a certificate of registration within six months of the coming into operation of the Act.
OilNOW understands that a certificate of registration shall be an annual certificate that shall become renewable on the anniversary date of the issuance of the certificate. An application for the renewal of a certificate of registration would also 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 would be added to a Local Content Register.
In the explanatory memorandum for the Bill, it was noted that the document represents the principal vehicle through which Guyana seeks to negotiate a tradeoff between investors engaged in the petroleum sector and Guyanese nationals and Guyanese companies involved the petroleum sector.
OilNOW understands that the Bill endeavours to do so by striving for economic diversification through prioritising Guyanese nationals and Guyanese companies in the procurement of goods and services for the enhancement of the petroleum sector value chain. It was noted that 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.
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.
Altogether, 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.
