After much controversy, Trinidad-based Ramps Logistics has been issued with its Local Content Certificate following a High Court ruling on Friday last.
Chief Justice (ag) Roxane George found that the company has met all the requirements for Local Content certification and therefore ordered Director of the Local Content Secretariat Martin Pertab, to certify the company by noon on Monday, November 14.
Pertab was warned by Justice George that he would be held in contempt of court and fined if he fails to comply with her orders.
In September, the company had filed judicial review proceedings against Natural Resources Minister Vickram Bharrat, the Local Content Secretariat, Pertab, and Attorney General Anil Nandlall, SC (the respondents) over the decision to deny it a Local Content Certificate.
In its application, Ramps Logistics said that it is a “Guyanese company” and contended that the government’s June 8th decision to refuse its application that was submitted in April for a Local Content Certificate is not only “unlawful, unreasonable and arbitrary”, but breaches the Local Content Act 2021. The application was refused by Minister Bharrat.
Justice George delivered her brief oral ruling on Friday, about two hours after she wrapped up hearing arguments in the matter. She held that the respondents had fallen woefully short of countering the company’s application for judicial review. Besides finding that Minister Bharrat had no authority under the Local Content Act to decide whether to grant or refuse certification, she found that Pertab considered irrelevant matters in deciding to refuse the company’s application. The irrelevant factors she alluded to include the criminal charges against Ramps Logistics for making false declarations to the Guyana Revenue Authority (GRA) which were instituted in October, several months after the company submitted its application.
Particulars of the charges stated that between 2021 and 2022, at GRA’s Camp Street, Georgetown headquarters, the company made several false declarations for consideration of a customs officer, on an application presented for tax exemption on items.
Solicitor General Nigel Hawke, who appeared on behalf of the respondents, conceded that Ramps Logistics had indeed met the requirements for registration in the Local Content register. According to him, after the company resubmitted its application, that application was, however, halted pending the hearing and determination of those criminal charges.
While the law does not stipulate that a criminal charge is a ground upon which a company can be refused certification, Hawke argued that considering this goes towards the company’s conduct especially since, the allegations levelled against Ramps Logistics involved tax evasion.
He said that not being Local Content certified does not prevent the company from operating in the oil and gas sector, but rather just limits what it can and cannot do.
The Chief Justice, however, questioned the Local Content Secretariat’s rationale for refusing to grant the company the certificate. “It’s just a charge; it hasn’t been proven,” she told Hawke while reminding him of the presumption of innocence principle in the Constitution of Guyana.
Justice George reasoned that the company cannot be denied a Local Content Certificate on a basis that is not set out in the Local Content Act and given the above constitutional parametres.
According to her, the Local Content law provides a simple regime for registration once a company satisfies the criteria. After reviewing the relevant documents submitted by Ramps Logistics, the Chief Justice said that the company has satisfied all the requirements and pre-conditions required by the law, in this case—being a Guyanese company—for the issuance of the certificate.
“There is no evidence submitted by the respondents to counter the information provided by [Ramps Logistics] which I have concluded satisfies the requirements of the Local Content Act. Mr Pertab from his Affidavit in Defence refers to a Form C—a list of requirements that have no statutory basis. He also refers to charges by the Guyana Revenue Authority which are irrelevant to the determination of an application under the Local Content Act,” held Justice George.
Lacks regulations, rules
Justice George observed the Local Content Act “may be deficient” as “it has no regulations, or rules whatsoever” which, she emphasised, are needed to prevent arbitrary decision-making.
The Solicitor General assured that these deficiencies in the law will be looked at.
Considering her findings, Justice George declared that the Local Content Secretariat breached the Local Content Act when it refused to grant the company certification.
As a “Guyanese company”, the Chief Justice further declared that Ramps Logistics is entitled to be issued with a certificate and to be entered into the Local Content register and consequently granted an order of certiorari quashing Minister Bharrat’s June 8th decision.
Accordingly, she ordered Pertab to issue Ramps Logistics with a Local Content Certificate by noon on Monday, November 14. On the issue of costs and damages that the company sought against the respondents, Justice George said that these will be assessed at separate hearings.
The case comes up again on February 20, 2023, for further directions. Ramps Logistics (Guyana) was represented by Senior Counsel Edward Luckhoo and Attorney-at-Law C.V. Satram.
Ramps Logistics in a statement on Friday said it welcomed the Chief Justice’s decision.
“This win is significant for the people of Guyana. This swift verdict shows the independence of the Court and that private and foreign businesses invest in Guyana with the support of a fair and transparent judicial system. Those following our case should feel confident that the judicial system in Guyana is sound, and independent and will support those willing to invest in and grow Guyana’s economy.”
According to Ramps, it is willing and committed to working with the government and the people of Guyana to make Guyana shine on the world stage.
Guyana’s Local Content Act defines a local company as one incorporated under the Companies Act and is beneficially owned by Guyanese nationals.
Beneficial ownership is defined as owning 51 per cent of the company. Additionally, a local company is expected to have Guyanese in at least 75 per cent of executive and senior management positions, and at least 90 per cent in non-managerial and other positions.
In a letter to Ramps Logistics, Pertab had informed the company that among the reasons for the denial of the Local Content Certificate was its failure to provide accurate information in compliance with the Local Content law. Also included in the reasons was the company’s submission of questionable documents which did not clearly state the amendments to incorporation and the failure to have its Executive Board of Directors be 75 per cent Guyanese.
At a press conference, Ramps Logistics (Guyana) Chief Executive Officer (CEO) Shaun Rampersad had related that the company divested 51 per cent ownership of its Guyana operations to Trinidad-based investor Deepak Lall, who has Guyanese parentage, to bring its operations in compliance with the Local Content Law.
Lall’s grandfather and father are both Guyana-born but migrated in 1961, and the family now operates one of the largest oil and gas companies in the Caribbean out of Trinidad. In fact, Lall’s grandfather was in the petroleum business in Guyana, operating a gas station – Lall’s Esso Station in Vreed-en-Hoop, West Bank Demerara (WBD), during the 1950s.
According to the CEO, Lall bought 51 per cent shares for $210M, and the monies were earmarked for two major projects for the company – a new cargo airline for additional airlift into and out of Guyana, and a new shipping line to move cargo among Guyana, Trinidad, and Suriname.
Despite the assertions of the Local Content Secretariat as to its excuses for not addressing the issuance of the certificate, the company claimed that the Secretariat has granted a number of certificates to companies that are in a similar position to it, including Crane Worldwide Logistics (Guyana), which submitted its application on or about July 20 and was granted a Local Content Certificate on August 3. “51% of the issued shares in that company are held by Guyanese nationals and 15 of its Board of Directors are comprised of Guyanese nationals,” it noted.
Lose multimillion-dollar contracts
The company complained that it has been severely affected by the decision and risked losing multimillion-dollar contracts from operators in the oil industry.
In an affidavit in support of its pleadings, Ramps Logisitcs’ Logistics Director, Samantha Cole deposed that if the company is not added to the Local Content register, it will be forced to reduce its operations and dismiss a majority of its employees.
According to Cole, Ramps Logistics was selected for the award of a new contract by Esso Petroleum and Production (Guyana), a subsidiary of ExxonMobil (Guyana) on May 31, and has an existing contract with the company which expires at the end of this month.
The new contract which is for a period of five years and valued at a minimum of US$25M, she pointed out, is ready for signing, but has not yet been signed because the company has been unable to secure a Local Content Certificate of registration.
Considering this, the Logistics Director deposed that if the Local Content certification is not granted in a timely manner and before October 31, Esso Petroleum and Production will be forced to award the tender to another. This could result in Ramps Logistics being unable to secure another contract with the oil sector operator, she pointed out.
According to her, the Director of Local Content Secretariat has been discouraging people/companies from doing business with Ramps Logistics because it does not have Local Content certification.
During the period July to August 20222, she said that several of Ramps Logistics’ customers informed the company that at a monthly supplier meeting with the Local Content Secretariat, they were specially advised against using the services of the company because it was not the holder of a Local Content Certificate. Schlumberger (Guyana), SOS International, Baker Hughes, G-Boats, Frank’s International, and CGX, Cole said, have all been advised by the Local Content Secretariat against using Ramps Logistics which is a major logistics supplier to the latter.
In October, the Guyana Revenue Authority (GRA) had instituted 10 charges against Ramps Logistics (Guyana) over alleged false declarations made.
According to the GRA, these charges, which are in accordance with the provisions of the Customs Act Chapter 82:01, and filed at the Georgetown Magistrates’ Courts, stemmed from a recently completed investigation carried out by its Law Enforcement and Investigations Division.
Ramps Logistics’ CEO appeared in court on behalf of the company and pleaded not guilty to the charges. He was released on $500,000 bail and is due back in court on November 25.
The 10 charges are not the first run-in Ramps Logistics has had with the Revenue Authority here. It was revealed in June of this year that the company was fined $20 million by GRA for violating local customs laws. Ramps Logistics acts as the agent of motor vessel—Seacor Mixteca—and, according to GRA, had failed to report the vessel departing Guyana, which violates the Customs Act. Hence, the fine was paid in lieu of court proceedings being instituted against the company.