Ghana imposes a fine, jail time for local content fraud
By Kiana Wilburg
Kaieteur News – In Ghana, citizens have many opportunities to reap the maximum benefits from their oil resources, thanks to a set of sound guidelines, policies and regulations that protect their interest. The legislative framework ensures, for example, that no foreigner wishing to set up shop and bid for contracts can do so unless partnering with local people. Furthermore, for those who are even considering putting in place plans to defraud the system, Ghana was keen to note clear fines and jail time for such actions.
The Local Content Regulations of that African nation-state, for example, “A citizen acting as a frontman or contacting a foreign citizen or company to defraud the Commission as representing a native Ghanaian company to deliver ‘ r the local content requirement under these Regulations. is a criminal offense and liable on summary conviction to a fine of not less than one hundred thousand penalty units and not more than two hundred and fifty thousand punitive units or to a term of imprisonment of not less than one year and not more than two years or to both. ”
It also states, “A person who contacts a Ghanaian citizen or indigenous company to deceive the Commission as representing a native Ghanaian company to fulfill the local content requirement under these Regulations commits an offense and liable on summary conviction to a fine of not less than one hundred thousand penalty units and not more than two hundred and fifty thousand punitive units or to a term of imprisonment of not less than one year and not more than two years or both . ”
It is also helpful to note that anyone who knowingly submits false documents and makes false statements to the Ghana Commission as well as facing a foreign person or company would have to give the impression that local content is being delivered , face the proverbial. music.
The Ghana regulations in this regard specifically state, “A person who submits a plan, returns, reports or other document and knowingly makes a false statement, commits an offense and is liable on summary conviction to a fine not less than one hundred thousand penalty units and not more than two hundred and fifty thousand penalty units or to a term of imprisonment of not less than two years and not more than five years or both. ”
GUYANA EFFORTS
Since August last year, the PPP / C Ministry has made several attempts to make a draft Local Content Policy available for consultation. That process began last February and several strategic discussions took place with stakeholders on key provisions essential to providing Guyanese-like opportunities for maximum participation and benefits in the sector.
It is important that the draft document, considered by Kaieteur News, did not specify that there should or should be penalties or any form of punishment for those involved in various types of local content fraud.
Be that as it may, the draft document proposes that there should be targets for local content. It is envisaged, by the government, that these will be progressive to reflect the changing state of the domestic supply base and demand going forward.
The draft document proposes that companies should have up to five to seven years to secure supervisory staff, technical core staff, professional support staff, and semi-skilled and unskilled workers, more than 50 to 60 percent Guyanese and 10 years to get management staff at least 45 percent locally. This is for upstream oil businesses such as those involved in exploration, drilling and extraction of the petroleum resources.
Targets are also set for companies in the midstream and downstream aspects of the oil industry. Midstream companies are those involved in the wholesale transport, storage and marketing of raw or refined petroleum products. Downstream businesses are involved in converting oil and gas into finished products. These include refining crude oil into gasoline, natural gas liquids, diesel, and a variety of other energy sources.
The draft policy proposes that these companies have up to seven years to secure the employment of local people for their supervisory staff, technical core staff, professional support staff, and a semi-skilled and unskilled workforce over 60 80 percent. They have up to 10 years to go beyond that.
The draft policy also states that Guyanese must be given opportunities to provide services in the areas of:
1) Front-end Engineering Design (FEED)
2) Fabrication, Construction and Storage
3) Procurement of Materials
4) Research and development related to services in the country
5) Transportation, distribution and disposal services
6) Good drilling services
7) Health, safety and environment services
8) Information systems, information technology and communications services
9) Marine operations and logistics services
10) Financial and insurance activities.
For further benefit to Guyanese businesses, the draft policy recommends that contracts be unbundled to reflect state potential and local market growth; market conditioning, including early notification of planned activities; favorable treatment of local people; contract management with supplier performance improvement strategies.
It also recommends facilitating partnerships between Guyanese and international suppliers; provide contract terms that facilitate access to competitive finance; opportunities to learn and increase transparency and accountability for procurement decision making; measure and report on local content policy implementation and achievements; along with benchmarking, sharing of best practice and continuous improvement.