Minister Lays Local Content Law
A Legislative Instrument (L.I) intended to promote the maximization of value-addition and job creation through the use of local expertise, goods and services, businesses and financing in the petroleum industry value chain and their retention in the country, has been laid in Parliament.
The LI, which was laid in the House by the Minister for Energy and Petroleum, Emmanuel Armah Kofi Buah last Friday in accordance with Section 22 of the Petroleum Commission Law (Act 821, 2011), will come into effect after 21 parliamentary sitting days.
Under the new regulation, a contractor, sub-contractor, licensee or other allied entity shall prepare and submit a local content plan for approval at the time of submission to the Petroleum Commission before engaging in a petroleum activity.
Again, a contractor, subcontractor, licensee or other allied entity shall submit to the Commission a long-term local content plan which corresponds with the work programme that accompanies the application made by the ‘contractor, subcontractor, licensee or other allied entity to undertake petroleum activities as specified in the regulations.
According to the Regulation presented by Minister for Energy and Petroleum, who is also the MP for Ellembelle, the local content plan submitted to the Commission by those engaged in petroleum activities shall contain detailed provisions to ensure that ‘first consideration is given to services provided within the country and goods manufactured in the country where the goods meet the specifications of the petroleum industry as established by Standards Authority or by other internationally acceptable standards.
It must also ensure that qualified Ghanaians are given first consideration with respect to employment.
Regulation 4 (1) of the L.I indicates that an indigenous Ghanaian company shall be given first preference in the grant of a petroleum agreement or a licence with respect to petroleum activities subject to the fulfillment of the conditions specified in the regulations.
Furthermore, Regulation 4 (2) stipulates that ‘there shall be at least five percent equity participation on an indigenous Ghanaian company other than the Corporation to be qualified to enter into a petroleum agreement or a petroleum licence.
The regulation will, among other things, help develop local capacities in the Petroleum industry value chain through education, skills transfer and expertise development, transfer of technology and know-how and active research and development programmes.
It would help the country to achieve the minimum local employment level.
By Awudu Mahama
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