Jagdeo is humming and hailing
Kaieteur News – The PPP / C is pussyfooting on the question of local content. In August, just weeks after being sworn into office, the President announced the establishment of a Local Content Advisory Panel.
There was no need for a Local Content Advisory Panel. It would be interesting to know where this suggestion came from as it is known that the PPP / C is opposed to taking on local council or establishing such advisory panels.
The APNU + AFC had already developed a draft local content policy. That policy was heavily criticized but could have been saved by reforms rather than the PPP / C trying to restart the whole process, as it seemed to be doing when the Local Content Advisory Panel was set up.
According to Vice President Jagdeo, the Advisory Panel has presented a bulky report. The government has asked the panel to cut it to about 30 pages. Based on what the Vice President noted during his appearance on Kaieteur Radio on December 23, 2020, the report incorporates many of the recommendations presented by the various sectors.
According to the Vice President, the next steps would be to ensure that the report is broken down to size and from this, the President will then conduct consultations with the various stakeholders. Arising from these consultations, a negotiation brief will be developed to inform the drafting of a Local Content Act.
The long winding process outlined by Jagdeo will take another year. The Panel will need at least another month to summarize the various recommendations. Consultations will take another six months and then little else to produce what Jagdeo misleads calls a “Negotiation Brief”.
The only entity with which discussions must take place is the Cabinet. Once the consultations have been completed, a policy can be produced. But Jagdeo did not mention policy. He seems to want to go straight to Local Content Law. Putting the cart in front of the horse is typical of the PPP / C immaturity.
This long drawn-out process is not required as detailed by the Vice President. It’s synonymous with pussyfooting. Why consult again with the exact stakeholders whose views the Advisory Panel would have sought?
Developing a Local Content Policy and Local Content Law is not rocket science and should not be subject to this extended process as outlined by Jagdeo. Local Content Policies exist in other parts of the world. All you need to do is tailor policy first based on the advice of the Local Content Advisory Panel, develop a revised draft policy (as one already exists) and then proceed immediately to draft a local content law.
Government is humming and hailing. Consultations for the PPP / C are tantamount to window dressing. The PPP / C has no reputation for taking public consultations seriously. So he plays for time.
Jagdeo and the PPP / C have been in opposition for five years. They have seen what the APNU + AFC has done in relation to Local Content. The PPP / C therefore had sufficient time to have produced a revised draft of the existing Local Involvement Policy.
The local content ship has already sailed. A Local Content Policy will have little impact on Exxon. No new policy or law can prejudice Exxon’s rights. This was an integral part of the contract signed between ExxonMobil and the Government of Guyana.
The Stability Clause in the Sharing Production Agreement isolates Exxon and its contractors from any adverse economic effects caused by changes to Guyana’s laws. Should such adverse economic effects occur as a result of any new law being passed, the Government is required to recover the lost or impaired economic benefits to Exxon and its contractors.
ExxonMobil has the upper hand. His agreement was drawn up by legal experts, unlike the situation on the Guyana side where the Coalition entered the negotiations without such expertise. Exxon must simply claim that any Local Content Law or Policy adversely affects the contracts it has signed or will enter into in the future. This will effectively remove any Local Content Law and Policy.
The PPP / C knows this all too well. Therefore, it is not in a hurry to rush through any Local Content Law and Policy.
Anyway, most of the contracts for the supply of goods and services have already been snapped up by foreign companies and there is not much left for Guyanese, even for transporting those large pipes from the wharves to shore bases. Unsurprisingly, the PPP / C is pussyfooting with the Local Content Policy and Local Content Law.
(The views expressed in this article are those of the author and do not necessarily reflect the views of this newspaper.)