6.3.5 Interlinks
At the strategic level, local content activities led by the government are part of the country’s 2020 Vision. The vision complements LCPs with educational and industrial policies, aimed at building local capabilities and developing an industrial base for export. But some of these policies appear to be at odds with existing international treaties. For instance, the 1994 Treaty between T&T and the Government of the United States of America concerning the Encouragement and Reciprocal Protection of Investment should be renegotiated to address the significant barrier presented by certain clauses of this Treaty. The treaty mandates T&T to accord treatment to U.S. companies that is not less favorable than what is accorded to local companies (Governments of T&T and United States 1994). Another issue is raised by the Caribbean Community90 (CARICOM) treaty, which would require the inclusion of CARICOM nationals in LCPs. It must be noted that T&T has been a member of the World Trade Organization (WTO) since 1995 and grants most favored nation (MFN) treatment to all its trading partners. The country has to incorporate the WTO Agreements into its law to make it legally binding (WTO 2012b). 6.3.6 Monitoring and Measuring Tools
While the government has laid out a policy framework in 2006, implementation remains piecemeal. As stated by the MEEA, the main challenges at this stage are:
The absence of regulatory measures to ensure mandatory compliance with objectives local participation in the energy sector The development of institutional capacity for the implementation, monitoring and auditing of local content targets State support for programs to encourage research and development, technology transfer, skills development and business incubation in the energy sector Mobilization of local financing to support the services sector The existence of bilateral treaties with other states, which seek to discourage the implementation of local content program (MEEA 2006).
Overall, LCPs are not integrated in the government’s regulatory activities of the sector. More specifically, there is absence of a well-defined monitoring and measurement system. For instance, more recent PSAs include a provision mandating:
Operators to maintain records to facilitate the determination of the local content of expenditure incurred for petroleum operations; these records shall include supporting documentation certifying the cost of local goods, labor, and services used and shall be subject to audit by minister Operators to report on their local content activities to the MEEA on a quarterly basis Training and development programs to be approved by the MEEA and progress to be reported quarterly Monitoring of the transfer of knowledge and expertise to the appointed local successor, when an expatriate is appointed.
But no guidance on certification of local content or reporting is outlined. 6.3.7 Policy Impact on Local Content Levels
Within the regulatory context discussed above, most local content activities have been driven by the private sector. In fact, a survey was recently carried out to evaluate the satisfaction of T&T’s oil and gas service companies with LCPs. Results show that 51 percent of local companies are somewhat satisfied with the government LCPs, and 44 percent are not satisfied. Local companies showed higher satisfaction rates with multinationals efforts (Figure 6.11). The results were driven by the absence of a well-articulated policy and a
90
Includes 15 Caribbean nations.
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