T&T Energy Chamber develops new local content management system to track country’s progress

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Trinidad and Tobago’s Energy Chamber recognised, back in 2017, that the country lacked a proper system to accurately report and analyse the local content delivery of industry players operating there.

Upstream operator companies have an obligation to report to the Ministry of Energy on their local content policies and how they have performed. But according to the Energy Chamber Head, Dr. Dax Driver, those confidential reports are only ever reviewed internally with no system to aggregate and share the information submitted with wider industry stakeholders.

“The reports are not even reviewed by the Permanent Local Content Committee (PLCC) established under the 2004 Local Content and Local Participation Policy and Framework. As a long-standing member of the PLCC, I find this very frustrating. How can we guide local content policy if we do not have access to any data,” Dr. Driver said.

To fix it, the Chamber developed a new Local Content Management System (LCMS) – one to ensure transparent measurement and standardised reporting of T&T’s local content progress.

Dr. Driver explained the LCMS was created based on extensive consultation with service companies, operators, and other industry stakeholders.

“My hope is that this system, now fully entrenched in the industry, can become the basic tool that is used to measure and monitor local content,” the Chamber Head added.

At the heart of the LCMS is a detailed questionnaire filled out by companies that sell goods and services to the energy industry in the Twin Island Republic. This questionnaire is designed to determine what percentage of the spending by operators with these companies is retained in the local economy.

And Dr. Driver explained that the system is based on the “value retention” definition of local content included in T&T’s public procurement legislation which has also been adopted by the PLCC and the Energy Chamber.

T&T’s “value retention” definition contrasts with the definition used by some other countries – like Guyana – that places the emphasis solely on ownership and employment. With a mature energy service sector like T&T’s, the value retention approach concentrates how much of the spend of operators circulates in the local economy.

“And it was determined to be the more appropriate system by our stakeholder engagement process used to design the LCMS,” he pointed out.

The Energy Chamber has been collecting extensive data over the past year with the LCMS and according to Dr. Driver, it already has questionnaires from a total of 482 companies.

“The data coming out of the system is showing some really interesting patterns and highlights some of the important issues that we face in trying to maximise the retention of value in country,” he added.

From the data already obtained, the Energy Chamber concluded that restricting operators’ ability to source goods and services from local T&T companies will have little impact on value retained in the country. Instead, it urged that there be a well-developed system of suppliers operating in T&T and identifying goods and services being imported, that could be sourced locally.

The Energy Chamber said too that there are significant opportunities to maximise value retention in the region if equipment is allowed free movement between the three main markets – TT, Guyana, and its neighbour – Suriname.

Dr. Driver said, “Removing barriers to the free movement of equipment around [Caribbean Community] CARICOM could actually help boost value retention in all economies of the region. I hope that a more analytical, data-driven approach to local content can help develop the policies that are needed at the levels of specific companies, the overall industry, national governments and at CARICOM.”

The issue of T&T’s local content progress was raised back in June, by its former Minister of Energy Kevin Ramnarine. He had urged both T&T and Suriname to take a page from Guyana’s local content book, where the government has been pushing to ensure maximum participation by its citizens.

Guyana’s Local Content law was introduced in December last year; it paved the way for local companies and citizens to participate in 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 utilise more local services and products.

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