The Guyana gov­ern­ment says it is in­ten­si­fy­ing its ef­forts to strength­en the lo­cal con­tent frame­work in the coun­try’s oil and gas sec­tor, with new com­mit­ments aimed at in­creas­ing ef­fi­cien­cy, tight­en­ing le­gal de­f­i­n­i­tions, and ex­pand­ing op­por­tu­ni­ties for lo­cal busi­ness­es.

Dur­ing the re­cent Lo­cal Con­tent Sum­mit, Nat­ur­al Re­sources Min­is­ter, Vick­ram Bhar­rat, an­nounced a ma­jor step for­ward in the cer­ti­fi­ca­tion process, com­mit­ting to a three-week time­line for the is­suance of Lo­cal Con­tent Cer­tifi­cates for ap­pli­cants with com­plete and ver­i­fi­able doc­u­men­ta­tion.

“If your ducks are lined up, then I don’t think it should take more than three weeks to re­ceive your cer­tifi­cate,” he said.

In a state­ment, the Min­istry of Nat­ur­al Re­sources, Mon­day said that this pledge comes amid per­sis­tent calls from lo­cal busi­ness­es for short­er ap­proval times to par­tic­i­pate in the coun­try’s rapid­ly grow­ing pe­tro­le­um sup­ply chain.

It said that since the pas­sage of the Lo­cal Con­tent Act in De­cem­ber 2021, hun­dreds of Guyanese com­pa­nies have re­ceived cer­ti­fi­ca­tion, po­si­tion­ing them­selves to de­liv­er ser­vices rang­ing from lo­gis­tics to cater­ing and trans­porta­tion to off­shore op­er­a­tors and their con­trac­tors.

“To date, 1,250 Guyanese com­pa­nies have reg­is­tered with the Sec­re­tari­at, tap­ping in­to a sup­ply chain that has wit­nessed over US$1.5 bil­lion spent on Guyanese busi­ness­es,” the min­istry said.

But it not­ed that the cer­ti­fi­ca­tion process has not been with­out chal­lenges. Bhar­rat said at­tempts by some to ex­ploit loop­holes have led to de­lays and forced the Lo­cal Con­tent Sec­re­tari­at to tight­en scruti­ny.

Un­for­tu­nate­ly, the process slowed down a lit­tle bit be­cause we had some is­sues where we had to deal with in­di­vid­u­als try­ing to front for com­pa­nies or forge doc­u­ments. Too many peo­ple are look­ing for a loop­hole or a crack in the sys­tem…

“Even though the ap­pli­ca­tion process was seam­less, the team at the Sec­re­tari­at did a lot of work to en­sure that this process was so.” Bhar­rat said.

Le­gal Of­fi­cer at the Min­istry of Nat­ur­al Re­sources, Michael Munroe, said to fur­ther close these loop­holes, le­gal re­forms are al­so on the ta­ble and that a ma­jor area un­der re­view is the de­f­i­n­i­tion of who/what qual­i­fies as a “Guyanese com­pa­ny” un­der the Act — a key cri­te­ri­on for cer­ti­fi­ca­tion.

“With the cur­rent de­f­i­n­i­tion, the com­pa­ny needs to be ben­e­fi­cial­ly owned by a Guyanese, with sup­port­ing op­er­a­tional and struc­tur­al man­age­ment of the com­pa­ny,” Munroe said.

“Some Guyanese are lever­ag­ing their na­tion­al­i­ty as a means to al­low for­eign­ers, who should be the mi­nor­i­ty share­hold­ers, to more or less ben­e­fi­cial­ly own the com­pa­ny.”

Among the con­sid­er­a­tions for strength­en­ing the de­f­i­n­i­tion are a res­i­den­cy re­quire­ment and the oblig­a­tion for ap­pli­cants to be reg­is­tered tax­pay­ers in Guyana and Munroe said that these re­forms can­not be rushed, giv­en the con­text of the changes.

“We want to en­sure that there is a le­gal force with what we are try­ing to achieve,” he said, adding “these are things we have to take a mea­sured ap­proach to, to en­sure con­sis­ten­cy in the ap­pli­ca­tion of the Act”.

In ad­di­tion to re­fin­ing the law and ex­pe­dit­ing cer­ti­fi­ca­tions, the gov­ern­ment has sig­nalled plans to ex­pand the sched­ule of ser­vices cov­ered un­der the Act. The ex­ist­ing sched­ule out­lines 40 cat­e­gories, in­clud­ing cater­ing, trans­porta­tion, in­sur­ance, waste man­age­ment, and le­gal ser­vices, where for­eign com­pa­nies op­er­at­ing in Guyana’s pe­tro­le­um sec­tor are re­quired to use Guyanese firms.

“We’re go­ing to ex­pand the sched­ule to in­clude more ser­vices where Guyanese can par­tic­i­pate. The aim is to en­sure even greater val­ue re­ten­tion in the lo­cal econ­o­my,” Bhar­rat said.

The gov­ern­ment said this lay­ered ap­proach, tight­en­ing the le­gal frame­work, stream­lin­ing bu­reau­cra­cy, and ex­pand­ing op­por­tu­ni­ties, sig­nals the gov­ern­ment’s in­tent to en­trench lo­cal par­tic­i­pa­tion in the oil and gas val­ue chain.

“For the thou­sands of Guyanese en­tre­pre­neurs and work­ers hop­ing to ben­e­fit from the sec­tor, the promise of faster cer­ti­fi­ca­tion and greater in­clu­sion could mark a new chap­ter of eco­nom­ic em­pow­er­ment,” the min­istry added.

In No­vem­ber last year, Guyana’s vice pres­i­dent Bhar­rat Jagdeo said the coun­try’s gov­ern­ment was mov­ing to amend the Lo­cal Con­tent Act to en­sure that all loop­holes were reg­u­lat­ed ef­fec­tive­ly. He warned that com­pa­nies who are non-com­plaint with the leg­is­la­tion will have a lot to wor­ry about in the fu­ture.

Guyana’s lo­cal con­tent law man­dates 75 per cent of man­age­ment po­si­tions in com­pa­nies, be held by Guyanese, with on­ly 25 per cent al­lowed for for­eign work­ers. How­ev­er, com­pa­nies are al­leged­ly ro­tat­ing for­eign work­ers every six months and sub­vert­ing the re­quire­ment for Guyanese man­agers.

“I spoke with the com­mis­sion­er and we are now draft­ing leg­is­la­tion that will cov­er that loop­hole,” Jagdeo said.

He said in ad­di­tion, the gov­ern­ment was re­view­ing the el­i­gi­bil­i­ty per­cent­ages for a num­ber of sec­tors out­lined in the leg­is­la­tion, in­clud­ing rentals re­quir­ing 100 per cent lo­cal pro­cure­ment.

Jagdeo hint­ed at the pos­si­bil­i­ty of adding new sec­tors to the lo­cal con­tent sched­ule.

“It’s not just that sort of re­form that will come but al­so, we are look­ing to close the loop­holes here…Some com­pa­nies are do­ing this and they would be writ­ten to short­ly to en­sure greater com­pli­ance,” he added.

Jagdeo said that the sit­u­a­tion was be­ing mon­i­tored care­ful­ly as the well­be­ing of Guyanese is a pri­or­i­ty and that it has pro­vid­ed sup­port to these ‘big’ com­pa­nies, and they will not be al­lowed to “shaft” Guyanese.

“Be­cause our ul­ti­mate aim is to get our peo­ple, not just as work­ers in these places, but as man­agers too. So, they have to train and im­prove (their) skills. And so, on­ly when they can re­al­ly demon­strate that we don’t have this skill, then we can tol­er­ate that. But some of them are do­ing this to by­pass Guyanese man­age­ment,” Jagdeo said.

Al­so last No­vem­ber, Jagdeo said the gov­ern­ment in George­town would vig­or­ous­ly go af­ter the delin­quent en­ti­ties to en­sure the peo­ple of Guyana ben­e­fit un­der the Act which re­quires for­eign and lo­cal firms op­er­at­ing in the oil and gas sec­tor in the coun­try to hire Guyanese and source lo­cal ma­te­ri­als.

“We are se­ri­ous about this…. We are ex­am­in­ing the ways in which they are do­ing this and the in­for­ma­tion is cred­i­ble and we’re go­ing to act on this in­for­ma­tion soon,” Jagdeo said.

He said that com­pa­nies will not on­ly lose their lo­cal con­tent cer­tifi­cate, but be slapped with fines if they are found to be in breach.

Un­der the Act, any per­son who know­ing­ly sub­mits false and mis­lead­ing in­for­ma­tion to the Lo­cal Con­tent Sec­re­tari­at, would be fined in the case of an in­di­vid­ual, GYD$5 mil­lion (US$23,812); while a com­pa­ny would be fined twice that amount.

T&T’s Ramps Lo­gis­tics has been in­volved in sev­er­al bat­tles with the au­thor­i­ties in Guyana, as it has sought to ex­pand its cus­toms bro­ker­age and lo­gis­tics busi­ness in­to the South Amer­i­can coun­try.

(CMC)