The bundling by oil contractors of hazardous and non-hazardous waste management into a single contract has put Guyanese companies at a significant disadvantage as they do not currently have the capacity to handle the former and the Local Content Secretariat (LCS) is addressing the matter.
The LCS has also confirmed that it has been receiving complaints from local companies on the effects of contract ‘bundling’ by oil contractors. Arising out of the complaints the Secretariat has now included stipulations in the procurement process to erase future problems of the same kind.
Martin Pertab, LCS head, told Stabroek News: “We have received complaints of cases where waste management services were bundled into hazardous and non-hazardous waste. While there is little doubt about our local capacity to handle non-hazardous waste, the same cannot be said for handling hazardous waste since some of our local providers are yet to develop that capacity”.
Addressing what stipulations are now in place to prevent a recurrence, Pertab explained that the Secretariat “has included some built-in mechanisms in its Procurement and Bid Evaluation Guidelines whereby all purchase orders (PO) or call-off orders stemming from the Master Service Agreements, will have to get the Minister’s approval before execution.”
He added “At this stage, the contractor, sub-contractors, or licensees must provide detailed scope of work of the proposed purchase order. In cases where there is suspicion of bundling of contracts, companies are advised to unbundle before the reviewing process could commence at the level of the Secretariat”.
According to the Local Content Act, which was passed and assented to last December, the Secretariat is tasked to compile data to show developmental and maintenance measures for effective implementation of local content by contractors, sub-contractors and licensees. The agency is also required to ensure that under its development and implementation of strategies, Guyanese nationals and companies are given preferences, or enjoy equal treatment. The Secretariat is also stipulated to develop and maintain a local content register of qualified Guyanese nationals and companies and recommend for approval or refusal, any master and annual plan submitted. Its duties include ensuring contractors meet the 45-day stipulation to submit [to the secretariat] their performance report on local content activities.
The recent revelation in Stabroek News that US-based medical services provider, RemoteMD obtained contracts for COVID-19 testing and then subcontracted the work to local companies for which it charged high fees propelled the George-town Chamber of Com-merce and Industry (GCCI) to lodge a complaint with the LCS over the practice of bundling. GCCI President, Timothy Tucker, told this newspaper that since the local content legislation, the GCCI has received complaints and information that even the logistics field, which the local content legislation has unbundled and singled out into fields and identified specific areas, such as customs brokerage, companies were still bundling these with other services. He said while locals are fully capable of executing some jobs required by big oil companies and their subcontractors, the bundling of several jobs into single contracts requires any prospective contractor to have had years of oil and gas experience.
“This is a situation that the private sector has been speaking about for the longest while. We have said that on many occasions over the past years, since oil discovery, based on contracts, local companies are not awarded. Contracts are awarded to foreign companies because they have experience in the oil and gas sector. But then those same foreign companies that win the contracts, end up sub-contracting the work to locals when locals could have won those jobs from the beginning. If they have the capabilities and capacity to do the works, why is the oil and gas industry demanding that they have someone in the field who is charging them a lot more money and increasing the cost which will be recovered from government or the country, when locals can provide the service? This something we have pointed out over and over again,” he said.
“They are putting many different fields, bundling them together and the companies that are bidding to do customs brokerage or immigration clearances respectively, cannot do so because for example, they don’t do, say transportation, and are thus unable to compete, because everything is still being bundled under logistics. The local companies, although the local content legislation specifies requirements, are still asked to produce their experience in the oil and gas industry… tools that are being used to keep locals out,” he added. Tucker said that since third party foreign companies subcontract locals for some of the fields required and have to also make a profit, there would be an increase in the cost.
ExxonMobil has said that more than 3,500 Guyanese are now supporting its activities in Guyana and the company and its direct contractors spent approximately US$219 million with more than 880 local suppliers in 2021, a 37% year-over-year increase. The LCS should have all its local content data at the end of the year, and therefore, ought to be in a position to provide to the public a statistical breakdown of performance-based local content.
ExxonMobil has listed, in their Comprehensive Waste Management Plan (CWMP), given to Environmental Protection Agency (EPA), the following companies as their “approved Guyana and Trinidad and Tobago Waste Contractors and Shorebases”. Tiger Rentals Guyana (TRG), Guyana Haags Bosch Landfill (HBL), Guyana Shore Base (GYSBI), Guyana Eternity Investments Inc., Guy-ana Sustainable Environmental Solutions (SES), Trinidad Oil Mop, Trinidad Enviro Care, Trinidad Tiger Tanks and Trinidad Chaguaramas Shorebase .
