Vice President Bharrat Jagdeo has placed foreign companies on notice that government is working assiduously to remove bottlenecks and close loopholes in the local content legislation that are being used to “beat the system”.
Speaking at a press conference two Fridays ago, the Vice President underscored that by removing the ‘beat the system’, lengthy wait times for payments to local companies and fronting by some international companies will come to end. Addressing the issue which has been plaguing the sector, Jagdeo said regulators have identified several ways international companies have not been fully adhering to the newly introduced legislation.
He stated that what these companies have been honouring are “carved out” parts of the law. Jagdeo stated that while local companies must conform to the procurement process they must not endure lengthy payment waits. Jagdeo highlighted the 90-day waiting period and said that foreign companies and contractors must do everything in their power to pay companies earlier.
He pointed out that this is an unfair practice to local companies, as they are not afforded the full range of opportunities available to them. Additionally, he said that as they aim to address these issues, government will also have to find ways to address another thorny matter – contract bundling. With this consolidation of a contract for goods and services, some local companies are locked out from tendering opportunities as they are unable to fully meet the requirements of the ‘bundled’ services. Local companies have complained that the services they are capable of providing are often bundled with others that they cannot provide, thereby preventing them from bidding for some contracts in the sector.
“I believe the oil companies and the first tier contractors can do much more to present the opportunities here in a manner local people can utilise… There must be fair opportunities for Guyanese and other companies to be able to identify and bid on opportunities that are available to them,” he stated. “They can’t pay local companies in 90 days. I don’t care who defends that, Exxon or not… We will close this,” Jagdeo said as he sought to give assurances that the government will perfect the law in time. He stated that it was expected that loopholes would be found in the first phase of the implementation of the law but as they are identified, they will work to eliminate them.
“We will perfect the law, build capacity and amend the targets accordingly as we go along,” Jagdeo posited. Only last week, the Private Sector Commission (PSC) and the Ministry of Natural Resources (MNR) announced that they would continue to lobby for the unbundling of contracts and examine a 30-day payment period for small and medium-sized local operators in the oil sector.
The Vice President also gave notice that they will be clamping down on the use of junior staff who are positioned in managerial positions in a bid to secure local content certification. In these cases, the junior staff do not receive the level of payment for the executive positions they are listed in. While noting that the attitude of employers has changed since the passage of the legislation and locals are more respected at their place of employ, Jagdeo insisted that these companies must remove the “rent-a-citizen” practice.
A PSC delegation and Minister of Natural Resources Vickram Bharrat and representatives of the Local Content Secretariat met recently to discuss local content issues. The meeting identified the need for continuous awareness of local content issues and greater participation by members of the business community. It was agreed that the PSC and the ministry will convene a one-day forum next month to discuss local content issues, while both parties agreed to collaborate on conducting outreaches across the country aimed at sensitising Guyanese about the local content legislation and related opportunities.
As part of efforts to strengthen the local content programme and enable more opportunities for Guyanese businesses, Bharrat invited the PSC to be part of an ongoing process that the ministry is leading to examine the current schedule in the local content legislation and examine proposed changes. The meeting, held in the boardroom of the Natural Resources Ministry, was attended by Bharrat; Chairman of the PSC, Paul Cheong; PSC Local Content Advisory Group members, Shyam Nokta and Joel Bhagwandin; Executive Director of the Georgetown Chamber of Commerce and Industry, Richard Rambarran; Director of the Local Content Secretariat, Martin Pertab; Senior Petroleum Coordinator, Bobby Gossai; Head of Compliance, Mark December, and Legal Officer, Michael Munroe.
