Ghana: Local Content Compliance: Employment And Training Of Non Skilled Ghanaians In The Upstream Industry.

Last Updated: 8 October 2018
Article by David Yaw Danquah

Local Content is an obligation recognized in any exploration and production contract (such as concession agreement, petroleum agreement) or by law or regulation and enjoining companies to procure a minimum percentage of goods, equipment and services from local suppliers.

The object behind Ghana's local content requirement is to ensure the involvement of Ghana's own industry including its national oil company (i.e Ghana National Petroleum Corporation) in the development of the exploration, production and decommissioning value and supply chain.

One of the most significant key objectives sought to be actualized under the local content platform is the maximization of the benefits of oil and gas industry wealth generation on a comprehensive local content platform by maximizing the use of

  1. local expertise,
  2. goods and services,
  3. job creation for the people, businesses and
  4. financing in all aspect of the oil and gas industry value chain and the retention of the benefit within Ghana.

Regulatory Authorities

  • The Petroleum Commission

The Petroleum Commission created by Petroleum Commission Act, 2011 (Act 821) was established for the purpose of overseeing activities in the country's petroleum industry and its functions extend to promoting local content and local participation in petroleum activities as prescribed in the Petroleum (Exploration and Production) Act, 2016 (919) and other applicable laws and regulations to strengthen national development.

The Minister of Energy (MoE) is empowered under Act 821 to come up with a Legislative Instrument which among others shall promote local content and local participation of Ghanaians in the upstream petroleum value chain. This lead to the promulgation of Ghana's Local Content and Local Participation Regulations. The Regulation which came into force on the 20th day of November, 2013 is known as Petroleum (Local Content and local Participation) Regulations, 2013 L.I 2204. Despite establishing the Local Content Committee, the Commission still retained its duty of promoting local content and local participation in the petroleum activities and shared the responsibility of implementing the provisions of the Regulations with the Local Content Committee.

  • Local Content Committee

The Local Content Committee was established by Regulation 5 of L.I 2204 and is saddled with the duty of overseeing the implementation of the Regulations. The duties of the Committee extend to:

  1. Overseeing, coordinating and managing the development of local content;
  2. Preparing guidelines to include targets and formats for local content plans and reporting;
  3. Making appropriate recommendations to the Commission for smooth implementation of the Regulations;
  4. Setting minimum standard requirements for local content in local content plans where applicable;
  5. Undertaking public education;
  6. Undertaking local content monitoring and audit; and
  7. Performing other functions conferred on the Committee by the Commission in accordance with the provisions of applicable laws.

The Committee is further required to submit quarterly reports of its activities to the Commission.

Local Content Defined

Regulation 49 of L.I 2204 defines Local Content as: -

"the quantum or percentage of locally produced materials, personnel, financing, good and services rendered in the petroleum industry value chain and which can be measured in monetary terms".

Ghana's Local Content laws have been perceived as a barrier for foreign investors, international oil and gas operators and international oil services companies seeking to do business in Ghana. However, the Local Content policies were not created to be inflexible protectionist barriers that discourage competitiveness.

Instead they are meant to simulate growth in the upstream industry and ensure that Ghanaian citizens profit from the rich oil and gas resources.

Employment and Training of Ghanaian Citizens

The petroleum laws of Ghana require petroleum players in the industry, be it Contractors, Sub-contractors, Licensees and other allied entity engaged in petroleum activities to as far as possible offer employment opportunities to Ghanaians with the requisite skills, expertise and experience.

Regulation 17 of L.I 2204 provides a comprehensive approach to opening up employment opportunities to Ghanaians with the requisite skills and expertise by the industry players.

More importantly, Section 60 (1) of Ghana's Petroleum (Exploration and Production) Act, 2016 Act 919 provides in clear and unequivocal words that, a Licensee, Contractor, Sub-contractor or the Corporation shall ensure that Ghanaian citizens who have the requisite expertise or qualifications in various levels of activities are employed in accordance with applicable enactments, the terms and conditions of the license, petroleum agreement or petroleum sub-contract.

Section 60 (2) of Act 919 further states that, a person carrying on petroleum activities shall be required to employ Ghanaian citizens in categories and functions as prescribed.

Regulation 19 of L.I 2204 even makes it more compelling by requiring upstream petroleum industry players to employ Ghanaians in junior or middle level positions.

For the purposes of definition, Regulation 19 (2) of L.I 2204 defines junior or middle level positions to include the position of foreman, supervisor or any corresponding position designated as such.

It is therefore imperative for industry players to note that, when it comes to junior or middle level positions in Ghana's petroleum upstream industry, only Ghanaians are required to be engaged and or employed by the industry players.

Situations where Ghanaians lack the required skills and expertise needed for a position (a position other than junior or middle level position).

Regulation 18 of L.I 2204 enjoins a contractor, subcontractor, licensee or other allied entity engaged in upstream petroleum industry to as part of its employment and training sub-plan to submit to the Commission a succession plan for any employment position occupied by a non-Ghanaian to ensure that the minimum local content level required by L.I 2204 is met. The succession plan shall make provision for and require Ghanaians to understudy the requirements of the position held by a non- Ghanaian for a period determined by the Commission on a case-by-case basis after which the position occupied by the non-Ghanaian shall be assumed by the Ghanaian.

More importantly, in situations where Ghanaians are not capable of being employed because of lack of expertise, and or skills, Regulation 17 (5) of L.I 2204 provides for what steps ought to be taken in such circumstances. It provides as follows; "where Ghanaians are not employed because of lack of expertise, the Contractor, Sub-contractor, Licensee or other allied entity shall ensure to the satisfaction of the Commission that every reasonable effort is made to provide training to Ghanaians in that field locally or elsewhere'.

It is relevant for players in the industry to note that, the provisions stated above gives the Commission so much powers, more so, the parameters within which the succession plan shall be implemented is not set out in L.I 2204. Therefore, its likely that its application in cases of breach could lead to absurdity and stifle the operations of industry players.

More so, Section 60 (9) of Act 919 provides as follows; "a person carrying out petroleum activities shall in consultation with the Commission prepare and implement plans and programs to train citizens in all aspects of petroleum activities in accordance with the Regulations and the terms of the license petroleum agreement or petroleum sub-contract".

Clearly it is worth noting that, every plan prepared and activated by an industry player in the upstream oil and gas industry to train Ghanaian citizens shall be with the consultation of the Commission.

One will therefore be right to conclude that, to bring about certainty for the training and passing on of expertise to Ghanaians in situations where they lack, there is the need for the Commission pursuance to its powers under Act 919 and L.I 2204 to make uniform guidelines and procedures for the training of Ghanaians who lack the required skills and expertise for certain positions.

The Commission is empowered under Regulation 43 (1) of L.I 2204 to establish and constantly review the guidelines and procedures for the effective implementation of L.I 2204. Regulation 43 (2) of L.I 2204 provides comprehensively the limits for compliance by the industry players for the issued guidelines.

Reproduced below is Regulation 43 (2) of L.I 2204,

"Without limiting Subregulation (1), the Commission shall, in consultation with relevant institutions, issue guidelines for compliance by a contractor, subcontractor, licensee and other allied entity in respect of the following:

(a) requirements and targets for the growth of research and development of the petroleum industry of the country;

(b) minimum standards, facilities, personnel and technology for training in the petroleum industry of the country;

(c) investment in or setting up a facility, factory, production unit or other operation in the country to carry out any production or manufacturing or to provide any petroleum related service specified in Part Two of the First Schedule otherwise imported into the country; and

(d) generally for the implementation of these Regulations."

Regulation 44 of L.I 2204 further empowers the Commission to ensure compliance through effective monitory of every guideline issued pursuance the its rights reserved under Regulation 43 (1) of L.I 2204. Regulation 44 provides that, the Commission shall monitor and investigate the activities of each contractor, subcontractor, licensee and other allied entity to ensure the achievement of the purpose of these Regulations within the frame-work of the national policy on local content.

Based on the strength of the provisions listed above, the Commission have issued guidelines for employment training and succession plan in the upstream petroleum industry in Ghana. This uniform rules issued are expected to bring about certainty in the employment and training of Ghanaians and succession plans for expatriate positions in the upstream petroleum industry.

The document titled "GUIDELINES ON EMPLOYMENT AND TRAINING OF GHANAIANS, AND SUCCESSION PLANS FOR EXPATRIATE POSITIONS IN THE UPSTREAM PETROLEUM INDUSTRY– NO. LC002/03, 2018" which came into effect on the 2nd day of June, 2018 is reproduced without modifications seriatim.

"Further to its mandate as provided at Section 60(4) of the Petroleum (Exploration and Production) Act, 2016 (Act 919) and Regulations 17(5), 19(2), 43(1) and 44 of the Petroleum (Local Content & Local Participation) Regulations, 2013 (L.I. 2204), these guidelines are hereby...

A Contractor, subcontractor, licensee or other allied entity engaged in petroleum activities shall:

  1. To all extents possible, give employment opportunities to Ghanaians with the requisite expertise, skills and experience.
  1. Employ only Ghanaians in junior level or middle level positions, which positions include the positions of Foreman, Supervisor or any corresponding position designated as such.
  1. Submit each vacant position with job description, qualifications and certification requirements of the position to the Petroleum Commission (Commission) at least three (3) clear months before the intended start date of the recruitment process.
  1. Search for qualified Ghanaians through advertisements run for a minimum of one (1) week period in at least two (2) national newspapers with nationwide circulation. For the avoidance of doubt, online and any other media of advertisement are optional.
  1. Notify the Commission of each interview it seeks to conduct and the Commission may where it deems necessary sit in recruitment interview(s), as an observer(s).
  1. Where a technically competent and experienced Ghanaian is not found through the prescribed advertisement, submit the search results with photocopies of the advertisement plus CVs and interview transcripts of Ghanaian applicants to the Commission for review. After the review, the Commission shall communicate to the company if it qualifies to apply for work permit(s) for an expatriate worker for the particular role.
  1. Submit each application for employment/engagement of a non-Ghanaian citizen to work in the upstream petroleum sector in Ghana in writing to the Petroleum Commission at least three (3) months before the assumption of duty of the non-Ghanaian citizen.
  1. Apply to the Commission for a waiver of the three (3) months notification requirement specified in Guideline 7 above, where there is an emergency or any other justifiable need. The Commission shall consider the application on its merit and make an appropriate decision based on national and business interests. Each application to employ/engage a non-Ghanaian citizen shall state:
  1. The name of the company seeking to employ/engage the non-Ghanaian citizen;
  2. The project/programme the non-Ghanaian citizen is to work on.
  3. The specific role the non-Ghanaian citizen sought to be employed/engaged is to take up.
  4. The specific qualification required for the role the non-Ghanaian citizen is to take up.
  5. The number of years of experience required for the role the non-Ghanaian citizen is to take up.
  6. The duration of the employment/engagement.
  7. Whether the position in respect of which the application to employ/engage a non-Ghanaian citizen is a junior, middle level position, management, senior management, executive or advisory/consultant position.
  8. Why a Ghanaian is not qualified to be employed/engaged to assume that role.

9.Where approval is granted by the Commission to apply for work permit for an expatriate, engage a Ghanaian successor(s) with similar professional background to be trained and coached by the hired expatriate until such time (localisation period) the Ghanaian successor becomes capable to take over from the expatriate. The localisation period for individual applications shall be on case-by-case basis and shall be reviewed by both the applicant company and the Commission to agree on the specific time frame for localisation.

10.Communicate the bona fides, the date of arrival and commencement of duty of an employed/engaged expatriate to the Commission.

11. Prior to the date of commencement of duty by the expatriate as specified in Guideline 7 above, engage a Ghanaian successor(s) and ensure to the satisfaction of the Commission that best efforts are used to provide the appropriate training to the Ghanaians successor(s) in the relevant field(s) locally or abroad.

12. Submit Succession Plan(s), including the training programme(s) for the duration of the contract period, to ensure that the minimum local content levels specified in the First Schedule 1 of L.I. 2204 are met. It must be noted that with regards to succession, focus is placed on the position and not the expatriate. The Succession Plan for a particular role must state clearly:

i. The name(s) of a Ghanaian citizen(s) who is being trained by the applicant company to take up that role in Ghana and where he/she is being trained;

ii. The duration of the training programme which shall include the start and end date;

iii. The certification and qualification to be obtained by the Ghanaian on successful completion of the training programme;

iv. The anticipated date the Ghanaian successor is to take over from the expatriate;

13. Allocate a dedicated Training Budget for the implementation of the Succession Plan and the training programme as referred to in Guideline 12 above.

14. Upon the submission of the Succession Plan(s), submit quarterly appraisal reports signed by both the expatriate and the designated Ghanaian successor(s) to the Commission at the end of every quarter for review, approval, and monitoring and evaluation.

15. Request for approval in the case where there is a justifiable need to alter an agreed succession plan by the change of the Ghanaian successor(s) or extension of localisation period. Where the necessary approval is not sought, renewal of application may be refused.

16. Submit annual renewal of the work permit three (3) months prior to the expiration of the work permit based on the Commission's assessment and satisfaction with their implementation of their Succession and Training Plans, as well as the proper utilisation of the allocated Training Budget.

17. Pursuant to Section 60(4) of Act 919, prepare and submit to the Commission for its written approval, a training plan/programme for Ghanaian citizens in its employment and qualified Ghanaian citizens who are not in its employment for an ensuing year by the 1st day of October each year.

18. The training plan/programme referred to in Guideline 17 above shall state the following:

* The names of the Ghanaian citizens to benefit from the training plan/programme;

* Whether the Ghanaian citizen(s) proposed for the training plan/programme is in the employment of the company;

* If the Ghanaian citizen(s) selected is not in the employment of the company, a justification for the basis of selection, which may include educational qualification, gender etc.

* If the Ghanaian citizen(s) selected is not in the employment of the company, whether he or she shall be employed by the company on completion of the training programme;

* The duration of the training/programme;

* The place and institution where the training programme will take place;

*The competences expected to be gained from the training programme;

* The cost of the training programme per beneficiary;

19. Pursuant to Regulation 17(5) of L.I. 2204, where an applicant company fails to satisfy the Commission that every reasonable effort is being made to provide training to Ghanaians in the field in respect of which an approval is being sought for the employment/engagement of a non-Ghanaian citizen, the Commission may refuse the application.

20. Furnish the Commission with any further information it may consider necessary for the successful implementation of the L.I. 2204 and these guidelines".

* Conclusion

It is reasonably expected that, these guidelines reproduced above shall ensure seamless processes and bring about the needed certainty when it comes to the training of Ghanaian citizens and the development of succession plans for expatriate positions in the upstream petroleum industry in Ghana.

View the full article here: https://legalstonesolicitorsllp.com/2018/10/06/local-content-compliance-employment-and-training-of-non-skilled-ghanaians-in-the-upstream-industry/

LEGAL NOTICE

The contents of this publication, current at the date of publication set out above, are for reference purposes only. They do not constitute legal advice and should not be relied upon as such. Specific legal advice about your specific circumstances should always be sought separately before taking any action based on this publication.

© Legalstone Solicitors LLP

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Similar Articles
Relevancy Powered by MondaqAI
 
In association with
Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
 
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions