Private Sector Commission proposes enhanced and transparent procurement system for Local Content legislation

The Private Sector Commission has proposed several amendments to the Local Content Act, which it believes will enhance the procurement process for oil and gas contractors to provide equal opportunities and access to all Guyanese companies.

The PSC’s position paper, which was recently shared with the Government, proposes recommendations to the Act backed by evidence from the local private sector.

The PSC has pointed to the need for more transparency in the procurement opportunities covering the oil and gas sector. It complained that Local suppliers are often unaware of upcoming procurement opportunities, which hinders their ability to plan, invest, and build capacity to meet sector demands.

In its report, the PSC claims to have gathered information from its sectoral and corporate members through surveys, interviews and focus group discussions along with information from competitiveness studies conducted by the Centre for Local Business Development.

Among the other proposals by the PSC is for there to be a more structured approach between local contractors, sub-contractors and foreign companies.

In one of its proposals the PSC submits that any contract entered into by a Contractor, Sub-Contractor, or Licensee with an international supplier for the provision of services, a Local Content Development Clause shall be included, stipulating that the international supplier will prioritize utilizing products or services offered by qualified Guyanese companies, provided that they are available within Guyana and meet the necessary standards for contract support.

Under that same Clause, the PSC is also proposing that the international supplier should employ qualified Guyanese nationals for roles within the scope of the services needed with the aim of prioritizing local labour even if candidates lack specific experience and pair them with expatriates to facilitate hands-on training and skills development and transfer.

The PSC is also seeking the insertion of a new clause that will address the issue joint venture companies and wants the definition of “Guyanese companies” to be modified.

It proposed that when a contract is awarded to a joint venture company, that company should prioritize utilizing products and services offered by qualified Guyanese companies, providing that the products and services are available here.

Private sector organisations have long accused foreign companies of abusing certain clauses of the Local Content Act, it had made reference to the companies using Guyanese to front for them so that their companies could be beneficiaries of the Act.

It is against that backdrop that the PSC is proposing a list of measures on that question.

It wants any company incorporated under the Companies Act which is beneficially owned by Guyanese nationals who ultimately exercise, individually or jointly, voting rights representing fifty-one percent of the total issued shares of that company; and is also proposing that Guyanese nationals should hold at least seventy-five percent of executive and senior management positions and at least ninety percent of non-managerial and other positions, with a minimum residency requirement that Guyanese nationals in executive and senior management roles, among other proposals.

The PSC said its recommendations proposed for the Act aims to uphold the integrity of the Act, and support sustainable, inclusive growth in Guyana as it will foster significant growth in the private sector.