The Institute for Public Policy Research's (IPPR) latest Procurement Tracker edition indicates that the local content policy for the oil and gas industries is likely to result in the revision of the Petroleum Act and its regulations, as well as the model petroleum agreement the Mines and Energy Ministry has with the international oil companies.

The procurement tracker highlighted some of the procurement risks that local policy content carries for Namibia.

IPPR's Executive Director says it is likely that the Petroleum Act and regulations will change to impose rules on petroleum exploration licence holders to meet certain procurement requirements.

Expressing his concerns, Graham Hopwood says the way petroleum exploration licences have been granted has favoured politically connected Namibians.

This, Hopwood says, can worsen the oil production phase, especially through local content.

Another concern is alleged bribes by international companies to local companies to serve as fronts to meet targets for local involvement.

"So, the big fear is that politicians and officials will abuse that power and influence to use local content and procurement requirements to benefit their associates and their family members. There is some precedent for this in the way that we have managed the petroleum exploration licences. Often local content becomes fertile ground for middlemen who contribute nothing of value and are only interested in getting rich quick, and in terms of oil, one can get super rich as well."

The question on many people's lips still remains as to how Namibians will benefit from an industry that will be dominated by international oil companies.

But first, Hopwood says, there is a need to reduce corruption risks in local content, which requires measures to strengthen transparency and accountability.

"We would like to see open contracting, and within those contracts, there should be strong anti-corruption clauses that make it clear that bribery is not acceptable and won't be tolerated. We need independent oversight bodies for local content policies."

The procurement tracker advised that licence holders, including international companies, take a series of actions, including carrying out their own due diligence and risk assessments of the local content.



Celma Ndhikwa