Use and Application of Local Content Policies to Pursue Equitable Petroleum Resource Management: Lessons from Other Producer Countries

This chapter covers the critical role of resource management law that outlines the acceptable standards with respect to the exploitation of resources or particular forms and methods of exploitation. Specifically, the chapter narrows down to the use and application of local content policies to pursue equitable petroleum resource management in the petroleum sector. Discussions around the lessons from new African oil exploring countries—Uganda, Tanzania and Kenya—and other petroleum-producing countries are covered to draw out lessons comparable to Ghana’s. Similarly, the article reviews and compares the regulatory agents and bodies responsible for implementing the local content policies in these selected countries. We show that despite these intentional yet ambitious local content policies and regulations fostering noticeable returns, they nonetheless, remain unfavourable by developing conditions that frequently diminish their benefits. The implementation of these policies establishes periodic duplicity and overlap, particularly regarding the roles of the institutions set up to implement local content. These adverse effects certainly make implementing local content regulations tedious and hinder the objective of local content as a tool in implementing resource management or as an objective in obtaining value additions principles. One way of addressing this is for responsible ministries/agencies to develop pre-qualified lists indicating both favourable/appropriate local and local companies for the identified projects and the oil and gas sectors. Overall, local content is not sufficient in achieving all-inclusive resource management objectives, but it can be complementary to other tools. Therefore, governments may consider developing unified/standard units for measuring natural resource management outcomes whilst successfully making local content long term and sustainable.