Maggy Shino, Petroleum Commissioner
A definition of local content should be one that the Namibian government and the people have set for themselves.
Local content should be an opportunity or a vehicle created for the Namibian people to develop forward and backward linkages of positive economic growth from the activities happening.
Be it within the fossil fuel, the petroleum sector, or the whole energy sphere, as we put it. So we don’t have a universal set definition, but it is a definition that Namibia should make that definition to speak to us; it must be inclusive of the development of the workforce, it must be inclusive of the provision of Namibian goods and services on the utilisation of Namibian goods and services.
It should include technology transfer, financing, and, by all means, ownership of these assets.
To have that definition of local content and result in tangible results that you can see as Namibian citizens on the ground, you need to ensure that you meet these obligations in these requirements of the petroleum upstream sector.
That being said, we are therefore creating a policy or a tool that needs to be governed, that needs to be adopted, but it should also then provide a means for us to address these challenges or these inhibitors for one to participate so that when we make a clear conduit for all to participate and all to benefit.
In all, we want to create an environment where investment thrives, and they thrive by being provided with efficient services that come from the ground; in a nutshell, that’s what we aim at.
The rationale is that we have been trying to ensure that we grow a skill after the discoveries, even before the discoveries.
We grow a sector within Namibia, and we, therefore, needed to have it enshrined in their law because if it isn’t, it leaves a vacuum in terms of regulation.
Local content development is not merely an aspiration. It is a fundamental imperative to realise the full potential of our petroleum sector and ensure that all Namibians feel its benefits.
It’s about creating opportunities for local businesses to participate meaningfully in the petroleum value chain, from exploration through development to production and the downstream activities as we have them.
We are working tirelessly to create an enabling environment that empowers Namibian companies to compete on a level playing field.
One of our key priorities is to build local capacity and expertise in the petroleum sector. We are equipping Namibians, companies, and individuals with the knowledge, skills, and resources they need to thrive in this upcoming petroleum industry through capacity-building, training programs, and skills development initiatives.
Additionally, we actively promote collaboration and partnerships between government, industry, and civil societies to address the challenges and seize the opportunities facing our petroleum sector.
By working together, we can harness the collective expertise, resources and ingenuity of all stakeholders who drive a positive change and innovation in our industry.
When we speak of petroleum, especially the upstream petroleum sector, we speak of a highly specialised industry.
It’s a high-risk industry requiring specific skills, capital-intensive, and technologically driven. Thus, it has all these elements for one to participate meaningfully.
Provision of goods & services
The local content we are looking for is for you to provide the services required to ensure that these activities and how these work are done effectively but with the participation of the local people.
We should never forget that our oil and gas industry is coupled with prolific energy generations regarding the nature of our land and has also contributed to positive growth regarding climatic conditions.
This means we are constantly working in synergy or with a plan to bring fossil fuel development into line with or coupled with the green energy transition we are pursuing.
In all our plans, we as a ministry are busy drafting or forging forward to developing the field development plans for all the fields we produce.
We aim to ensure that this production, once it’s done, is in line with us being sensitive to our carbon footprint as a country but also sensitive to the contribution that we are making and hence why we are working hand in hand with the renewable energy sector in terms of the energy production with the green hydrogen in terms of making sure that the infrastructure that you use, the yield, value and provide a favourable mileage for the industry both on the fossil fuel production and also on the energy security of the country.
No Regulations, No Implementation
When you have a vacuum in terms of regulation, there will be no implementation, and that’s the reason why a decision was made to ensure we have a policy, not just a policy, but with its monitoring tool and implementation mechanism laid out so that everybody has their responsibility cleared.
The current legislation already provides for local content; however, we think that the prescriptions in the current exploration and production and the model of a petroleum agreement or the petroleum agreement as it has been signed with license holders are not as stringent and robust enough to provide a clear guideline.
For example, if you are a service provider outside the premises of this petroleum agreement, you wouldn’t know what is contained there and wouldn’t know what’s an obligation on you.
Therefore, we stepped out of the current legal instrument to create the local content policy so that you have a precise dialect instrument that speaks directly to you.
With this, we also need to formulate the local content policy. We look at the nation’s development agenda, which we aim to achieve. The local content policy is a tool for us to attain the development agenda that is up in the nation.
These are the tools, provisions or requirements within the vision initiative, the government agenda, the Harambe prosperity plan, the national development plan as we have them and the national energy policy.
With this instrument, they made a requirement or a call for all industries to contribute to economic growth.
Even then, the local content policy answer for the petroleum industry for us is to be that call that is ough those national plans and goals. Within the policy, we have just five policy objectives that we are aiming to achieve.
Specific policies
We are aspiring or mandating the industry to ensure that we have identified specific sectors for developing local capacities.
Here, we mean specific services dedicated to performing within the local sphere. We are also speaking of maximising the employment and development of Namibians.
This ensures that the labour force required for this sector should only be sought from within the local economy. We also aspire to maximise the local suppliers’ participation chain.
This is to say that all the services that can be and that will be provided must come from the Namibian environment and the Namibian service providers.
We are also encouraging or ensuring and obligating the transfer of technology, knowledge and skills. But for these to happen and for somebody to be able to transfer their knowledge and skills, you must be ready to receive these skills and this knowledge. And this is the obligation that comes from both parties.
For these to be met, those who have their skills and require their skills must come to the party. Finally, we are promoting Namibian ownership and ensuring that the petroleum industry is highly capital-intensive; a financing mechanism has been provided to enable you to play. Ladies and gentlemen, those are the objectives that we have set. To achieve those objectives, we have institutional arrangements in place.
For effective governance, the Minister of Mines and Energy is an overarching body regulating the industry.
However, the Namibian government has committed to ensuring that we have capacitated all the existing institutions so they can participate in implementing and regulating the sector.
The key institution that we have currently that is playing in the sector is the Minister of Mines and Energy. It’s a petro fund. We have the Ministry of Environment to safeguard our environmental provisions.
We have the National Planning Commission. We have the country’s academic research and research institutions, national oil companies, the private sector, civil society, the general community, and even the media. Institutions all have a role in meeting local content policy and requirements.
With this in place, we have crafted a means and mechanism to monitor and evaluate the industry’s performance. We are not just leaving it out for self-policing or self-regulatory. Still, it’s going to be a mandating action, not only mandating the license holder but mandating to the last call of the provision of services so that we then ensure that there is room for all to participate, that there is also a means for everybody to be able to meet the obligation of the mandate as they have been set.
Regarding reporting, players must inform the government or have their local content or service procurement plan approved before the work is done.
With that, the government will have an opportunity to look ahead and say what services are coming and have local content incorporated into the provisions of these services.
We also have another requirement that we are going to have: in terms of attaining the objective of the skills and the knowledge transfer, there has to be mandatory training and development for all.
Training and development metrics will be required of all service providers, not only the license holder but all the service providers, to be submitted and approved by the government.
The third layer of monitoring is, therefore, a succession plan. This industry, as we say, is highly specialised.
So, expatriates within the sector will be involved. But we also make it mandatory for Amoebians to ensure that they learn and get the skills from those expatriates so that there is no longer just a continuous provision of expat services. Still, you can also take up that service. And one day, we also want to export these skills elsewhere in the international market.
The Minister of Mines and Energy will be responsible for disseminating the information.
We will also be responsible for administering it. We will also be responsible for taking care of, guiding, and guarding your participation, whether communicating what is required or providing the help the industry needs.
As a service provider, how do you want this policy to be drafted so that you can provide services that leave a meaningful impact on the Namibian ground?
As a Namibian citizen, how do you want the policy to read to provide and protect you and give you the unity to pre-services you want to help grow the industry and the economy?
Maggy Shino delivered this presentation at the Local Content Conference at Luderitz in April 2024.
