Local Content and CSR 

MAXIMIZING PARTICIPATION

EXCERPTS FROM THE LOCAL CONTENT & LOCAL PARTICIPATION POLICY & FRAMEWORK FOR THE REPUBLIC OF TRINIDAD AND TOBAGO ENERGY SECTOR

 

In its 2004 Policy Framework, the Government of the Republic of Trinidad and Tobago outlined the major mechanisms for local content, participation and capability development – i.e. where, how and by whom these will be delivered; the performance measurement, assurance and reporting processes to be used; and some key areas for priority focus.

 

The objective as articulated in this document, stated that “the country will maximize the level of participation of its national people, enterprises, technology and capital through the development and increasing use of locally owned businesses, local financing and human capabilities in the conduct of all activities connected with the energy sector, along its entire value chain, at home and abroad.”

 

Definitions

The Government shall consistently define local content in terms of the level of ownership, control and financing by citizens of Trinidad and Tobago, in conformity with internationally accepted norms and the key tenets of international conventions, such as General Agreement on Trade in Services (GATS). In order to achieve the goal of maximum local content and participation, the Government shall ensure that all participants in the energy sector are selected, engaged and managed in a manner that:

  1. Identifies WHERE local value-added opportunity capture exists from the sector by:
  • Selecting, from time to time, specific goods or services for focusing the local content, participation and supply capability development efforts;
  1. Determines HOW to enable delivery of maximum local value-added by:
  • managing the programme of activities in the sector as a portfolio, so that project pace and scheduling enable the maximum opportunity for development of local capabilities and their sustainable utilisation;
  • targeting local capability development by increasing the amount, depth and breadth of ”in country“ activities, so as to enable fuller participation of nationals and enterprises in the value chain;
  • giving preference, firstly, to locally owned, controlled and financed enterprises, then to those that demonstrate a clear culture, commitment and capacity for maximising local value-added, participation and capability development, consistent with the country’s aspirations and vision;
  • focusing on improving local skills, business know-how, technology, financing, capital market development, and wealth capture and distribution;
  1. Ensures DELIVERY of maximum local value-added by:
  • aggressively promoting and rigorously applying this policy wherever State controlled resources are involved;
  • facilitating the development of local capability to enable local value-added;
  • removing barriers for local participation;
  • setting targets of local content and participation that will be assigned to individual projects, operations and/or operators and supporting these targets with appropriate contract terms;
  • measuring and reporting on the performance of operators in the sector;
  • periodically comparing the local content and participation performance amongst operators, between projects and operations and with other countries, to establish benchmarks, targets and opportunities for improvement and for the transfer of best practices.

 

Vision and Policy

The Vision and Policy sets out “to achieve the goal of maximising value for the country from its assets, the Government and people of Trinidad and Tobago shall participate in the business of oil and gas and engage external participants in a manner that captures value.” This is on two fronts:-

  1. Fiscal measures – through the use of
    1. taxation and royalty policies and
    2. government expenditure to capture value from the sector and to extend it by building local capabilities that support the sector’s growth.
  2. Non-Fiscal measures – through
    1. Local Participation – maximising the depth and breadth of local ownership, control and financing, in order to increase local value- capture from all parts of the value chain created from the resource, including those activities in which nationals, local business and capital are not currently engaged, at home and abroad;
    2. Local Content – maximising the level of usage of local goods and services, people, businesses and financing.
    3. Local Capability Development – maximising the impact of the ongoing sector activities, through the transfer of technology and know-how to; a) enhance, deepen and broaden the capability and international competitiveness of our people and businesses within the sector; b) create and enhance capabilities that are transferable to other sectors within Trinidad and Tobago; and c) create and support cluster developments with other industries that have a natural synergy with the energy sector and which may have the capacity to diversify and/or sustain the economy after the resource is depleted.

 

“Local Content and Participation” – collectively referred to as “local value-added” – will be defined in terms of ownership, control and financing by citizens of Trinidad and Tobago. While, typically, the themes of “local content and participation” have focussed primarily on the aspects of “in country” activity, Trinidad and Tobago recognises that the energy sector has tremendous potential to develop local capabilities that are essential for the capture of further opportunities outside of the country. This potential is not achieved unless there are specific strategies to do so. This policy framework addresses local content and local participation in a manner that:-

  1. will maximise utilisation and development of Trinidad and Tobago nationals, businesses owned by nationals and the domestic capital market in every aspect of the activities conducted in the sector.

 

Ii. recognises the impact of other mechanisms for maximising local value-added in the short term, while building capability for increased value capture now and in the future.

 

Iii. seeks to ensure that Trinidad and Tobago does not overlook opportunities provided by activities in and, in support, of the sector so that:- (i) supporting energy sector policies and strategies on human and enterprise development will be consistent with this policy framework, (ii) all Government and State- agencies, regulations, strategies and contracts are aligned with these policies, and (iii) all policies will be rigorously applied to ongoing, proposed and future individual projects, operations and suppliers of goods and services in the energy sector.