Regulation
When drafting Local Content public policy and regulation, it is critical that the articles  and instruments align closely with the size and maturity of Local Content opportunities in-country.
 
As companies, when reviewing draft or new legislation, do not over-react .   Systematically assess each Article to determine what you already do; what can be resolved creatively; what you can live with; and what you regard as your red lines.
 
 
Regulation Optimization
Factors to Consider when Drafting Local Content Regulations
  • Is there a single clear public policy statement articulating the direction for Local Content specific aligned with the social and economic aspirations of the government

 

  • Are the draft regulations in alignment with the stated public policy on Local Content, or are they simply a duplicate of regulations from another country

 

  • Are the proposed regulations consistent with the state’s obligations under WTO and other trade agreements

 

  • Would a voluntary set of common standards adopted across the industry be more effective than new regulation and the threat of legal sanctions
  • Do the proposed regulations provide clear, unambiguous, metrics and definitions for Local Content

 

  • Are the regulations designed to match to the capacity of government authorities to handle the resulting bureaucracy, eg state certification of made-in-country goods vs company self-certification

 

  • How will potential conflicts between the new regulations and the prior legal framework for Local Content in concessions or contractual agreements be resolved

 

  • Will the different instruments within the regulations be phased in to allow for quick wins
Today companies are under considerable cost pressures  Yet many governments have set policies or passed regulation transforming Local Content into a compliance requirement, with mandated targets that risk exacerbating these pressures.
 
LCS has developed modelling tools to assist regulators set realistic Local Content targets, and to help companies identify which job positions and procurement categories can be streched most cost-effectively to meet these targets.
Local Content Targets
LCS Local Content Target Optimisation Model