Importing retail items to oil companies is not Local Content – ExxonMobil Representative.
Kaieteur News – The Local Business Development Center (CLBD), sponsored by ExxonMobil, is currently embracing the view that what constitutes local content needs to be paid much more focus, as just importing an item for retail importing is for a small markup profit. not count as true local content.
The post was voiced at the weekend by CLBD Director, Dr. Natasha Gaskin-Peters, then guest panelist on OilNow’s Local Content webinar, moderated by Chris Chapwanya.
Natasha Gaskin-Peters, CLBD Director.
According to the director of CLBD, “when we are thinking of true local content we must also focus on the economic definition; so we have to think about leaks in our economy. ”
He explained that when the oil companies spend to procure goods from a local company “if they import them, that doesn’t really include local.”
The director of CLBD explained that when this gets it, it would mean that most of the money is still going to be released overseas as the companies supplying the oil companies would have to pay for their items. outside the country.
Dr. Gaskin-Peters also had the occasion to state, “if I’m a local company and don’t invest in the country then it becomes a leak.”
According to the Director of CLBD, “we want to make sure that spending doesn’t focus on pass-through items; not just wholesale and retail and not just profit marking. ”
She was adamant that “if we think about spending (on local content), we have to think about emissions too.”
The director’s comments on mourning heels come from one local company that had applied for the supply of personal protective equipment, namely safety helmets, vests and gloves but was turned down due to inexperience.
That importer had teamed up with an international partner to supply SBM Offshore – one of ExxonMobil’s main contractors – to supply the security gears but was turned down.
In mourning for the situation, the medium-sized manufacturer said it was quite shocking that after partnering with WW Grainger, Inc., an American industrial Fortune 500 supplier founded in 1927, he thought he would have been able to pre-qualify.
The local company said it was flabbergasted to learn it could not tender for the contract because it had no experience.
“How do you expect the little guy to benefit from the sector when he can be excluded for not having experience in a sector that is new to the country? How do you expect the little guy to get experience in the first place? We are told to prepare ourselves for partnerships and invest our money but when we do, we close out due to inexperience. This needs to be addressed, ”the local company expressed.
Senior Vice President of the Georgetown Chamber of Commerce and Industry (GCCI), Timothy Tucker, who also appeared as a guest panelist on the local content debate, while offering a different view on the issue, argued that the practice of importing items for retail sale could to consider the oil companies a local content.
He pointed out that while items are imported, the country still benefits generally from paying taxes and for workers who earn a living.
GCCI’s senior vice president reiterated the need for Guyanese to have the first choice and not be treated as window dressing.
Almost a year ago, the international Energy Solicitor, Mr J. Jay Park, had conducted a review of the provisions in the Guyana-ExxonMobil Production Sharing Agreement (PSA) for the Stabroek Block and found that the clauses, which should ensure that Guyanese being allowed the first choice for jobs and contracts in the oil sector left much to be desired.
The terms were found to be so poor that it gave the said provisions a “Grade F”.
The renowned energy expert, who has practiced energy law for over 30 years, with a particular focus on creating the best possible petroleum regimes for States, explained that the reason for such a degree was based on the fact that the provisions would disadvantage Guyanese, as they give Exxon, and its contractors, enough room to make excuses for not giving first priority to local business contracts.