Local content policy to be finalised soon – Dr Bynoe

GUYANA’s Local Content Policy will be finalised in two and a half months, Director of the Department of Energy, Dr. Mark Bynoe has assured.

Speaking during a recent news conference, Dr. Bynoe said the Department of Energy has engaged a consultant to finalise the policy. The policy document, when adopted by the National Assembly, would outline the framework on which local content will be understood, developed, measured and secured.

Capturing of local content contributions both in terms of dollars and jobs, and provision of a better definition of the activity level to allow for multipliers to be captured are among areas being covered.

“Even without a policy there are conditions in the respective Production Sharing Contracts to allow the operators to increase local content going forward,” Dr. Bynoe noted.

In the interim, he said the Department of Energy has been encouraging joint ventures to better allow Guyanese to participate in the sector and raise their own standards.

According to him, there aren’t an insignificant number of joint ventures in place. These joint ventures include partnership in shore bases, aviation, oil spills and supplies among others.

Already, operators in the oil and gas industry have submitted their Local Content plans to the Department of Energy, however, there are areas for improvement. “The department has since requested greater granularity, improved analysis of the multiplier and indirect benefits,” the director said.

The department, he further posited, is working with a needs assessment completed in 2018 for the Technical, Vocational Education and Training (TVET) graduates to be absorbed in the oil and gas industry. Additionally, the Energy Department is deepening its civic engagement through youth forums, TVET institutions, the University of Guyana and through radio and television programmes. Notably, it is in the process of appointing a communication company.

Local content, in the context of Guyana, is the sum of inputs of local goods and services including employment across the oil and gas value chain.

It is intended to ensure the education, inclusion, and advancement of as many as possible in the value chain of the oil and gas industry.

In an effort to maximise benefits and retain value from Guyana’s petroleum resources, considerable focus will be given towards capacity development, local content and value addition. Additionally, the policy framework is built on five themes: value maximisation, training and employment, supplier development, ownership and taxation.

The Georgetown Chamber of Commerce and Industry (GCCI) is among entities that have made submissions, during the second round of consultation. In 2018, GCCI submitted to Government, what it called, a ‘Model Local Content Legislation’.

The model legislation defines Guyanese companies as “companies that are registered in Guyana where 51 per cent of the share capital are owned by citizen (s) of Guyana; where the board meetings of the said companies are held in Guyana; the head office of the company is located in Guyana and 70 per cent of the workforce of the company follows suit with the definition of a citizen of Guyana as defined in the Guyana Citizenship Act of 1967.”

Part II, Section Three of the crafted GCCI Local Content Bill stipulates that an operator or contractor must ensure that first consideration is given to Guyanese companies in the provision of goods and or services directly related to the petroleum industry.

“In the event that a Guyanese company is not selected to provide a good and or services, the burden of proof lies with the relevant party in the form of the operator or contractor to demonstrate why [the] Guyanese company has not been selected,” Section Four reads. It also includes provision for Human Capital Development and Monitoring and Accountability.

However, the director of the department of energy has long warned against making the Local Content Policy too prescriptive. He said as the country moves closer towards finalising the policy document Guyanese must determine whether they have the capacity to take advantage of the Local Content Policy.