See below for a statement from the Local Content Secretariat:
The Local Content Secretariat wishes to respond to two Local Content articles published by Kaieteur News headlined “There is nothing we can do,” and Local Content law gives Minister Bharrat the power to regulate bundling of contracts, payment delays – both dated Thursday, August 18, 2022.
The Government of Guyana, through the Ministry of Natural Resources, continues to dialogue with all stakeholders of Guyana’s petroleum sector, including the Private Sector. Such dialogue is aimed at ensuring that the goals of the Local Content Act are achieved to ensure Guyanese reap the benefits of this lucrative and rapidly expanding sector.
On Tuesday, August 16, 2022, the Minister of Natural Resources Hon. Vickram Bharrat met with the Private Sector Commission’s Local Content Advisory Committee (LCAG) where a slew of principle local content matters were discussed. Among the multitude of issues discussed, specific emphasis was placed on the bundling of contracts and lengthy payment periods. There was a general agreement to continue pushing for the unbundling of contracts as well as examining a thirty-day payment period for small and medium-sized businesses.
With regards to the Contractors and Sub-Contractors’ practice of contract bundling in Guyana, on Wednesday, August 17, 2022, the Secretariat issued a final caution for them to desist from this practice of bundling of services stated on the First Schedule of the Act with respect to any competitive bidding award.
The Secretariat also reminded that any contract awarded after the Act came into force, where there is the bundling of contracts with respect to services stated on the First Schedule of the Act, will not be recognized or counted towards the measurement of compliance with the minimum local content levels as set out in the First Schedule, in keeping with section 7(1) of the Act.
By failing to achieve the minimum local content levels, the Contractor or Sub-Contractor will not be awarded the Certificate of Compliance by the Secretariat at the end of the calendar year. Without a Certificate of Compliance, it means that the Contractor or Sub-Contractor has failed to carry out petroleum operations without the minimum local content requirement, thereby committing an offence and is liable on summary conviction to a fine of fifty (50) million dollars.
Rest assured that the Ministry of Natural Resources and the Local Content Secretariat are committed to working continuously with all stakeholders in Guyana’s oil and gas sector to ensure maximum participation of locals and the attainment of capacity development.
