Protecting jobs, ensuring training and the transfer of knowledge, are tenets and priorities of the government’s Local Content Bill. To ensure jobs are protected and first preference is given to Guyanese and Guyanese businesses, the Bill pellucidly articulates those two components, in a bid to prevent foreigners from disguising as locals and/or their businesses.
“I know that in the past,” Minister of Natural Resources Vickram Bharrat explained, “anybody could have come, register at the court and say, ‘Oh, this is a Guyanese company’, but it is a Guyanese-registered business.”
How does the government’s Local Content Bill protect against this smoke mirror? The Bill, soon to be made law, defines a Guyanese company as one incorporated under Guyana’s Companies’ Act. It goes on to say that the company must be owned by Guyanese, who ultimately exercises, individually or jointly, voting rights representing at least 51 per cent of the shares of the company. In addition, a Guyanese company is defined as a national holding at least 75 per cent of executive and senior management positions, and at least 90 per cent of non-managerial and other positions.
“We don’t want to encourage fronting,” Minister Bharat expressed, “We don’t want to encourage that because we have seen models around the world in where locals would just act as a front for foreign companies. We don’t want that. That is not the intention of a local content bill. That would not bring benefits to Guyanese.”
The government’s Local Content Bill proposes the establishment of a Local Content Register which will be developed and maintained by the Local Content Secretariat. The register will comprise of Guyanese for employment, along with Guyanese nationals and companies, from which goods and services may be procured.
The Local Content Bill lays out 40 services that oil companies and sub-contractors must procure from Guyanese companies and nationals by the end of 2022. For instance, by the end of the upcoming year, Guyanese should provide 90 per cent of office space rental and accommodation services; 90 per cent for janitorial, laundry, catering services; 95 per cent pest control services; 25 per cent medical services; 20 per cent aviation and support services and 75 per cent local food supply. These are just a few of the services highlighted in the schedule.
This Bill is still to be debated in the National Assembly. The Government has committed to ensuring that it is passed and made into law before 2022.
The Bill to amend the Natural Resources Fund (NRF) was also tabled in the National Assembly on Thursday. The amendments make way for the more prudent, transparent and accountable management of the oil fund.