Penalties normally excluded from local content policy – Bynoe

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Director of the Energy Department, Dr Mark Bynoe has responded to criticisms about the lack of penalties in the country’s local content policy.

“The Local Content Policy is different from the local content legislation and often sanctions are not found within policy documents. That’s the issue we have here. So while we understand the need for sanctions… that will come in subsequent legislation,” Dr Bynoe said.

With oil production slated to begin in December 2019, there is no indication when a local content legislation will be put in place.

The recently released Local Content Policy has come in for criticism, particularly for its lack of penalties for oil companies who do not honour their commitments.

The third draft of the local content plan was released weeks ago and was subject to discussions among stakeholders. The lack of penalties was a prevalent concern by those who reviewed the document. In fact, the policy itself said that there were limits to its scope.

The Georgetown Chamber of Commerce and Industry (GCCI), identifying a number of weaknesses within the policy, including the most obvious one of the lack of penalties for delinquent operators, had sent out an analysis on the document.

They had said that with no penalties to hold operators accountable to their commitments and international principles of providing employment and business opportunities for Guyanese, “handshakes” and good faith are not enough.

“The Local Content Policy does not speak to anything regarding penalties for companies which fail to report or follow the commitment to local content. Good faith and ‘handshaking’ cannot suffice”.

“Whilst there does not need to be the inclusion of details of penalties in the Local Content Policy, there ought to be some mention of what the penalty in a general sense will look like, should there be violation”.

One of the GCCI’s recommendations was for a fine to be imposed on such operators who fail to comply with the order. This fine, according to GCCI, should be a percentage of an identified indicator.

“In addition, there should be a general policy on dealing with foreign companies which will affront Guyanese partners simply to obtain local content treatment, in situations where the company is not materially a Guyanese. The Local Content Policy is the document which needs to set out a general guiding principle as to how these situations will be dealt with”.