Noise around local content
Guyanese have been clamouring for local content provisions in their relationship with ExxonMobil since it became obvious that oil production will be undertaken by the multinational oil giant. The preparation for Exxon’s continued upstream operations has led the company to signal its intention to acquire certain skills, services and even goods to carry on its business. While the noise around local participation in the oil industry brings Exxon into the picture, the issue really applies to all foreign investors who will need inputs into their production processes. But what some writers have pointed out is that the demands for local content policy have been more pronounced in the oil industry than in other industries. Countries like Brazil, Kazakhstan, Malaysia, Mexico, Nigeria and Uganda have been cited as examples of where there has been an insistence on the need for local content in the oil industry. The issue of local content is not as straightforward as it seems on the face of it. With the adoption of internationally-agreed trading rules in 1994, local content has become something of a pariah. It is a policy concept that countries have been discouraged from using since restrictions on its use became an integral part of the trading rules that govern trade between countries. In some of the local stories written about local content, it is often presented as if it is a right and one that cannot be challenged under the rules of the global trading system. This article seeks to provide some perspectives on the matter of local content. ….