An ideal Local Content policy could kick off a new wave of industrialization in Guyana, Nicholas Boyer, President of the Georgetown Chamber of Commerce and Industry (GCCI) said Wednesday evening.
At a roundtable discussion on the third draft of the Local Content Policy, Boyer recognized that the country’s leading businesses are behind in certain areas. They would need to overcome some hurdles in putting themselves in line to benefit for opportunities in the oil and of development.
This is especially so given the huge interest by the Caribbean in doing business in Guyana.
“Our trade policies have left us so open to shell corporations being registered by CARICOM nationals,” Boyer said, and it is very hard to guard against this.
He said that for a very long time, Guyana was considered the ugly step-sister of the Caribbean but now there are several “doing business in Guyana” forums in the Region, including one recently held in Barbados where the interest was “almost out the door.”
The level of interest is mind-blowing, Boyer said.
He noted that while the new draft of the Local Content policy dictates that oil operators and their sub-contractor companies should show a preference for domestic suppliers as long as performance, quality and delivery are competitive with international performances and prices.
But that is not an easy matchup for local businesses.
“At our scale, achieving price competitiveness is not an easy task. So that is something we need to sit down and honestly look at.
“A lot of our regulations in our industries are very sub-standard to what oil and gas expects,” Boyer stated.
For example, he said this is lacking in the area of Health, Safety, Security and the Environment.
Boyer noted that said that updating the country’s occupational health and safety laws may help but there is a long way to go with that.
He said that while in the draft policy there is no minimum stipulated participation of domestic sub-contractors/suppliers in contracts awarded to foreign suppliers, there is language encouraging unbundling of contracts, or picking contracts apart so that local suppliers can bid to supply aspects needed for a particular job.
As such, Boyer said local business must step up their game and offer the highest quality services and products.
“We cannot offer-substandard products – substandard products in this industry means somebody’s life is at risk. That is why this industry is so heavily regulated. They place a high value on life,” he stated.
He said some businesses are catching on, citing how his hardware company is seeing increased sales because of the new emphasis on safety.
“The amount of safety helmets I sell compared to three-four years ago! Lives were almost at risk and throwing away three-four years ago,” he stated.
Boyer concluded that the new local content model is a much more stringent draft and there is still more that can be done to make the policy useful.
He said that there are no defined procurement targets and no domestic-only tender lists in the policy.
But he said the policy also outlines full, fair, and reasonable access to procurement opportunities for domestic suppliers.
While he said there are no mandated foreign/domestic consortia or sub-contractor alliances, the language of the policy encourages this.
In addition, according to Boyer while there are no specific targets for employment of nationals, he said the draft local content policy encourages the employment of nationals.
Boyer said that the new draft policy does not set penalties for non-compliance with targets in the policy.
Boyer reiterated his view that there needs to have a purely technocratic, body or organization set up to manage oil, its revenues, the implementation of local content policy.