Guyana’s Local Content Secretariat has become more detailed in its screening process so that it can root out fronting by companies seeking preferential access to opportunities, the body’s Director, Martin Pertab said this week.
Per Guyana’s Local Content law, Guyanese are given preferential access to opportunities in the nascent oil and gas sector in some clearly defined areas. Those opportunities are carved out for Guyanese and companies with Guyanese majority-ownership.
However, some challenges have emerged. Fronting is one such issue. This refers to the listing of nationals (that is, Guyanese) as those in top management and ownership without their real participation and ownership.
“Under the Local Content law, a minimum 51% ownership is required but Guyanese are settling for one or two per cent behind closed doors,” Pertab lamented at this week’s Local Content Secretariat.
So, he explained that more documents are being requested to root out such occurrences.
“What we have done is strengthened the due diligence process.
Some of the documents that we are requesting at the application stage would allow us to carefully examine the relationship between local and foreign companies,” the Director said.
The issue of fronting is one raised by many locals including President Dr. Irfaan Ali and members of the private sector.
“… That is a hindrance to local content that must be addressed very frankly and very honestly if we are to be truthful about the conversation on local content,” the Head of State said at the Local Content Summit this week.
