-company says has 398 Guyanese in its employ
Ramps Logistics Guyana – the largest logistics company servicing the oil and gas sector here has not ruled out legal action in its quest for a reason behind the Local Content Secretariat’s (LCS) denial of access to the local content register.
The company, which has a 49% Trinidadian ownership, is contending that it has satisfied all the requirements outlined in the Local Content Act to be considered as a “local company” and should therefore qualify for access to the register. Ramps, which was a 100% Trinidadian-owned entity just a few months ago, divested 51% of its shares to Deepak Lall – a Trinidadian businessman with Guyanese heritage. It says that it currently employs 398 Guyanese.
The Local Content Act was passed in the National Assembly and assented to by President Irfaan Ali in December last year. It states that to deliver on its legislative target, it “puts in place regulatory mechanisms to implement, investigate, supervise, coordinate, monitor, and evaluate participation in local content in Guyana. Altogether, the Bill provides for the promotion of competitiveness and the encouragement of the creation of related industries that will sustain the social and economic development of Guyana as well as other related matters.”
When a “Guyanese company” is referred to, the Bill states that it should be interpreted to mean “any company incorporated under the Companies Act – (a) which is beneficially owned by Guyanese nationals who ultimately exercise, individually or jointly, voting rights representing at least fifty-one per cent of the total issued shares of the company; and (b) that has Guyanese nationals holding at least seventy-five per cent of executive and senior management positions and at least ninety per cent of non-managerial and other positions.”
A “Guyanese national” means a citizen of Guyana.
Ramps is arguing that it has satisfied both the letter and spirit of the Act and that the denial of its local content certificate without reasoning is unacceptable.
At a press conference yesterday, Ramps’ Logistics Director Samantha Cole said that they approached the LCS in April to be added to the register of local companies to provide services to the oil and gas sector but on June 8, it received an automated message informing that the application had been denied.
The email said “Your application to the Local Content Register has been refused by the Minister. You have been denied access to Local Content Register.”
Cole says that the denial now threatens the livelihood of a number of Ramps’ employees.
Stabroek News tried to contact the Minister of Natural Resources, Vickram Bharrat for a response but those calls went unanswered. Stabroek News also reached out to the head of the Local Content Secretariat Martin Pertab who asked that questions be sent to him after which he would provide answers. That was done and up to press time, no response had been received.
Deepak Lall and divestment
The private sector here has been heavily advocating for local content legislation and following the passage of the Act, the business community here expressed concerns that foreign companies would capitalize on the loopholes in the criteria which define a local company. In addition, it was pointed out that foreign companies coming here would register at the Deeds Registry and thereafter be referred to as being 100% Guyanese.
There were also concerns raised by the CARICOM Private Sector Organisation that the law could be in breach of the CARICOM-founding Treaty of Chaguaramas.
Up until March 29, 2022, Ramps Logistics Guyana was solely owned by its Trinidadian parent company – Ramps Logistics – headed by Chief Executive Officer Shaun Rampersad. However, on March 30, the company registered as a 51% owned Guyanese company after its divestment agreement with Lall.
Lall, a Trinidad-born businessman, is the Managing Director of QUALITECH – one of the largest mechanical engineering companies in the Caribbean. The company was started in 1995 and has been a client of Ramps Logistics Trinidad for a number of years. Lall is also a business partner with Rampersad in the hotel industry.
According to the documents submitted to the Local Content Secretariat, Lall’s father Deo Nanda and grandfather Deonarine were both born in Guyana. They later moved away to the United Kingdom and subsequently Trinidad where QUALITECH was started.
Based on Guyana’s Citizenship Act, Lall is eligible for Guyanese citizenship since one of his parents is Guyanese by birth. Lall acquired his first Guyanese passport in 2021 before purchasing his stake in Ramps Logistics.
At yesterday’s press conference, from which Lall was absent, Rampersad said that a number of local businesses would have approached him to divest the majority shares but their values did not align with his.
“The local content legislation calls for 51% ownership by Guyanese nationals. So the first thing that we had to do was to make sure that we divested to a Guyanese national. The second thing, as Sam[antha] said, is that we wanted to make sure we divest to a partner who we felt could add value, not just to our company, but to Guyana as a whole. So we were very, very particular about making sure we divested to a Guyanese national who we felt could add significant value to the organization that was extremely important to us,” he reasoned.
With a workforce of about 400 and a large chunk of the oil and gas logistics work falling in its lap, Ramps was valued at US$1,960,780. Lall paid US$1 million ($210 million) for his 51% stake in the company.
Rampersad said that Lall was approached because of similar values. He noted that QUALITECH is particularly experienced in the field of gas processing and that Lall has intentions to establish here in Guyana once the gas-to-shore project comes on board. Additionally, Rampersad said that teaming up with Lall also brings experienced Guyanese from the diaspora back to invest here.
When asked about whether Ramps investigated the source of Lall’s US$1m investment, Rampersad replied in the affirmative explaining that it was funded by QUALITECH. The shares bought by Lall were ordinary shares since Ramps does not have preferential shares. Lall’s 51% stake in the company means he can also overturn any decision made by Rampersad.
He also said that prior to the company approaching Lall to invest, it also looked at various options to divest. Those options included using funds from its parent company to divest shares to its employees so that Ramps Guyana could be considered a local company.
“We would have explored every possible opportunity to find a way for our employees to be able to invest in the company and there are ways that you can do that…if the local Content Secretariat can put out a guideline to say that any company in Guyana who wants its employees to invest in the company, these are some of the guidelines. You could either do that or you could not do that. Again when you have transparency that just makes it easy for everybody to operate,” Rampersad said.
He added that the company moved away from its original plan to divest shares to its Guyanese team because of concerns over foreign businesses skirting around the Local Content Act. He reiterated his call for the LCS to publish guidelines as to how companies can legally divest to their employees.
“We decided that this local content certificate is extremely important to us. So instead of at this point divesting to our employees, let’s bring in a shareholder [and] get the additional capital and later on this year, we’ll put together an employee share ownership plan and a chunk of the shares that went to Deepak and a chunk of the shares that has been held by Ramps will then go towards our entire Guyanese team, so they get a chance to invest in a company,” he explained.
Certification and `stone-cold silence’
Ramps was incorporated in Guyana in November of 2013 and has been providing logistics services ever since. The new Local Content Act gives preferential treatment to Guyanese-owned enterprises and mandates operators in the oil and gas industry to utilize those businesses.
The company provides full-service logistics to the oil and gas sector here and has over 30 years in the field.
Rampersad said that access to the local content register is important since most of the logistics services are capped at varying levels. He said that in order for a logistics company to grow in Guyana it must qualify as a “local company” and that is the major reason behind the drive to divest.
He reiterated his argument that all of the outlined criteria were met so the company now remains dumbfounded at both the denial and silence from the Local Content Secretariat.
“…this is the part that I felt really, really hurt about. After we did all of this, the only thing that we got out of the Local Content Secretariat was an automated email that says you have been denied access to the local content registry. That’s it,” he remarked.
He added that the company would welcome some clarification from the Secretariat as to where it went wrong and be given the opportunity to fix it. Rampersad that they have reached out to the Secretariat via emails and through their lawyers but to date, no one has acknowledged, or responded to them.
On June 10, Ramps’ attorneys wrote to the Minister of Natural Resources and Pertab seeking the reasons behind the denial but neither party responded.
The letter stated “We hereby request pursuant to Section 15 of the Judicial Review Act 2010 that you supply us with the following: (1) A statement of all findings on material questions of fact relevant to our client’s application; (2) copies of all evidence and other material relied upon by the Minister and/or the Secretariat upon which the decision aforesaid was based; (3) a statement of the reasons for the decision denying our client’s application.
“You are reminded that by Section 16 (1) of the Judicial Review Act your response to us must be in writing. You will appreciate that your decision effectively ruins our client’s business and will result in severe loss of earnings and any delay in meeting our request will aggravate the loss and harm suffered. In the circumstances, we expect that you will supply the said statement(s) and other information requested within the shortest possible time.”
A follow-up letter was sent on June 21 but to date, there has been no response.
“I feel like we’ve done everything we could do, but we are not perfect. Maybe it was something we missed out on. Maybe there was something that I didn’t understand, maybe something that Sam[antha] didn’t understand. And if somebody comes and says hey Ramps listen, guys, we got everything but you all didn’t meet this criteria or give us a chance to fix it, I’m happy with that,” Rampersad said.
He told the media that the employees are uncertain about their future but clarified that Ramps has no intention to shut up shop and leave Guyana. He explained that while they would continue operating in the absence of a local content certificate, they would most likely have to downsize their staffing complement – which is of major concern to them.
“I think the next step here is to ensure that we continue to engage and dialogue with the authorities, continue to reach out to the Local Content Secretariat and ask them to tell us why we have not received our certificate. And if that doesn’t work, I mean, ultimately, which is the last thing and we really don’t want to have to, you know I’m very confident about the court system in Guyana. I think that the courts are open to anybody for redress, but I hope it doesn’t get to that,” he added.
Rampersad was reluctant to give a figure of the anticipated financial loss the company would suffer should it not receive access to the local content register.
He said that the company’s local content plans were approved by the Minister of Natural Resources adding that with a staff of 398 Guyanese, local content has always been at the fore for Ramps.
When asked why Ramps did not appeal the Secretariat’s decision directly to the Minister, Rampersad said that he was unaware of such provision and would be endeavouring to do that. He added that seeking reasons for the denial seems like the more practicable first step.
…‘rent-a-citizen’
Rampersad was asked, during yesterday’s press conference, whether Lall’s Guyanese identity was just “economic rent” which he denied saying that the businessman is looking for returns on his investment.
Also when asked about concerns from the private sector bodies about foreign companies’ attempts at circumventing the local content law, Rampersad said that his company has always been compliant and will remain compliant. He said that Ramps has a good working relationship with the Georgetown Chamber of Commerce and Industry (GCCI) – of which it is a member.
On Wednesday, without mentioning Ramps Logistics, the Private Sector Commission issued a statement supporting what it said was government’s effort to prevent the circumvention of the local content law.
“The Private Sector Commission (PSC) fully supports the Government of Guyana’s intention to take strong action against entities that are attempting to circumvent Guyana’s Local Content Law. The PSC is concerned by the ongoing practice to bundle contracts which often limits local businesses participating in the value chain. The Commission will continue its advocacy to ensure that the Local Content Law aids the utilization of Guyanese goods and services and supports skills development, and the training and employment of citizens,” the statement said.
The PSC recognizes the commitment shown by the Government of Guyana to ensure that Guyanese benefit from the oil and gas industry, but notes that the onus is also on the business community to support the implementation of the Local Content Law.
In response to that, Rampersad, without directly addressing the statement, said that he understands the PSC represents the local private sector well.
When contacted yesterday, GCCI’s President Timothy Tucker said that Ramps Logistics did not lodge a complaint with the Chambers.
“Ramps Logistics is a member of the GCCI but the company has not yet approached us on the issue so we do not have a position on it. We are aware of the situation and are discussing it. If we are approached [by Ramps] then we will make representation on behalf of the company to the Local Content Secretariat,” Tucker told Stabroek News.
Subsequently, in a statement, the GCCI said that it has taken note of the public discourse occurring in the domain of local content. The Chamber said that it is fully supportive of the Government’s efforts at promoting local content and benefits for Guyanese adding that local participation must be done in a manner that engenders meaningful and genuine partnerships.
The GCCI added that meaningful and genuine participation would ensure that Guyana benefits in the end.
Like the PSC, the GCCI, without referencing Ramps Logistics said “The GCCI wishes to strongly repudiate any enterprise or citizen that seeks to exploit the local content framework by operating under the guise of local participation when this is not, in fact, the reality of the operation.
“This phenomenon – commonly referred to as ‘fronting’ or ‘rent-a-citizen’ – has the potential to reduce the amount of value which accrues to Guyana and runs counter to the spirit and intent of the Local Content Act. As such, the Chamber calls on the Local Content Secretariat to examine the ‘beneficial ownership’ of enterprises seeking to obtain Local Content Certificates and recommends that the ‘burden of proof’ regarding beneficial ownership lie with the enterprise seeking to apply for the Certificate. This will act as a layer of protection against those seeking to operate in this unethical and unpatriotic manner.”
The GCCI encouraged the Local Content Secretariat to continue its vetting of companies applying for a local content certificate in a thorough fashion while reminding companies of their obligation to comply with the laws of Guyana.
Ramps describes itself as a leading provider of freight forwarding and supply chain management services.
“For over 30 years we have been offering transportation and logistics solutions. Our customized technology and solutions support the way our customers want to do business, wherever they are in the world”, it said on its website.
