Africa-Press – Mozambique. The Mozambican government intends to move forward with a law requiring oil and gas companies in the country to purchase locally produced goods and services and hire local labour.
“Considering the State’s role in promoting the country’s economic and social development (…) the Local Content Law is proposed to establish standards to be observed in the process of acquiring goods and services, as well as the hiring and training of local labor, in the context of the implementation of projects within Mozambican territory,” reads the rationale for the proposed Local Content Law to be submitted to parliament.
In the proposal consulted today by Lusa, the Mozambican government wants megaprojects to prioritize the acquisition of goods, services, and works produced and provided in the country by Mozambican companies, including the training and development of local businesses.
“The entities covered by this law must, in accordance with the provisions of the petroleum law, concession contracts, and other applicable legislation, “ensure the hiring of Mozambican workers for the purpose of training, transferring knowledge, and appropriate skills to the Petroleum sector,” the proposal states.
Mozambique has three approved development projects to exploit the natural gas reserves of the Rovuma Basin, ranked among the largest in the world, off the coast of Cabo Delgado.
In addition to these, other major coal exploration projects are underway in the central province of Tete and natural gas extraction in the southern province of Inhambane.
Specifically, the draft states that, under the local content law, in the process of evaluating proposals for the supply of goods and services, the response capabilities of national Small and Medium-sized Enterprises (SMEs) to local content requirements will be assessed first, followed by consideration of other evaluation criteria.
“Whenever bids are close to each other, during the evaluation phase, the proposal with the highest percentage of local content should be selected, provided that the acquisition value is up to 20% higher. If it is not possible to acquire goods or services containing the minimum percentages of local content, the proposal should be submitted for verification by the Local Content Agency,” which is proposed to be created under the bill.
The Local Content Agency should be “a legal entity under public law, with administrative, financial, and patrimonial autonomy, overseen by the Ministry overseeing the Petroleum sector.”
According to the draft bill, the Local Content Agency will regulate matters related to local content development, coordinate, manage, and monitor its implementation in the petroleum sector, and promote training institutions for Mozambican SMEs.
This same Local Content Agency will be responsible for proposing policies and regulations regarding local content activities, mapping procurement needs for goods, services, and labour, and publicizing opportunities for the supply of goods and services with local content, song other attributions, the document adds.
The same proposal calls for national goods and services contracted in megaprojects to be subject to certification by entities accredited by the agency.
The same Local Content Agency should “accredit local content certifiers, monitor compliance with the deadline for submitting local content plans and their respective reports, monitor the certification of goods and services with national components, and monitor compliance with other standards related to the supply of local content goods and services”.
In April, the Mozambican private sector had already requested the disclosure of areas that may offer opportunities for SMEs in the new gas platform to be developed by the oil company Eni in the country.
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