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Four Strategies for
Local Content Success
Wayne Dunn Professor of Practice in CSR (McGill)President & FounderCSR Training Instituteinfo@csrtraininginstitute.comwww.csrtraininginstitute.com
Ghana Oil & Gas SummitWednesday April 22, 2015
Accra, Ghana
Ghana Oil & Gas Summit | Accra, Ghana | April 2015
four strategies for
Local Content Success
Presentation Objective & Outline
• Global perspective on local content pressures
• Local content challenges
• Local content strategies
• Resource Materials
• Discussion
Ghana Oil & Gas Summit | Accra, Ghana | April 2015
four strategies for
Local Content Success
2015 is not an easy time for the petroleum industry
• Bottom of the cycle
• High costs
• Low prices
• Increasing social demands
• Increasing environmental requirements
• Global legacy issues
• Expanding regulatory requirements
• Expanding compliance requirements & expectations
• How to meet social, environmental & shareholder expectations
Need to innovate
Need to collaborate
Ghana Oil & Gas Summit | Accra, Ghana | April 2015
four strategies for
Local Content Success
Social value imperativeapplies across industry, sector & geography
Ghana Oil & Gas Summit | Accra, Ghana | April 2015
four strategies for
Local Content Success
Local Demands/Involvement Growing Social Demands
1. Consultation(formal/informal, history, structure, FPIC, closure)
2. Access to land (who/how approved)
3. Benefit sharing (what’s in it for everyone)
4. Project approval (who approves? when? how?)
5. Environmental monitoring
Ghana Oil & Gas Summit | Accra, Ghana | April 2015
four strategies for
Local Content Success
Local Content Challenges
• Remote locations with little or no experience with industrial employment
• Limited infrastructure to provide training and support to assist potential workers with the transition to industrial employment.
• Limited technical skills and business management skills (employees & suppliers).
Ghana Oil & Gas Summit | Accra, Ghana | April 2015
four strategies for
Local Content Success
Local Content Challenges (continued)
• Unrealistic expectations (government and communities)
• Low literacy and household economies are often subsistence based.
• Hard to make the right hires. Overwhelming response to employment opportunities.
• Programs to facilitate local content development are under-resourced and focus on short-term impacts rather than the structural issues that can create sustainable longer term impacts.
Ghana Oil & Gas Summit | Accra, Ghana | April 2015
four strategies for
Local Content Success
Local Content Challenges (continued)
• There are no economic vehicles in the local economy that can enable effective participation in the larger contracts and opportunities. • Locally owned businesses lack the financial, operational and
management capacity to compete for larger contracts, even with extensive support and assistance from the project/company.
• The bulk of the overall value of contracts for goods and services cannot be broken down to a size that can be digested by local businesses and entrepreneurs.
• This means that by default the local economy is effectively prohibited from participating in the lion’s share of opportunities other than as sub-contractors.
Ghana Oil & Gas Summit | Accra, Ghana | April 2015
four strategies for
Local Content Success
Local Content Strategies
1. Think Cap Ex when budgeting• Life of project benefits
Ghana Oil & Gas Summit | Accra, Ghana | April 2015
four strategies for
Local Content Success
Local Content Strategies (continued)
2. Pre-employment training• Basic skills/orientation to
industry and industrial employment
• Qualified & pre-screened pool for hiring
Ghana Oil & Gas Summit | Accra, Ghana | April 2015
four strategies for
Local Content Success
Local Content Strategies (continued)
3. Invest in education & training institutions• Local training infrastructure
is critical
• Government needs to have capacity to collaborate (may take training)
Ghana Oil & Gas Summit | Accra, Ghana | April 2015
four strategies for
Local Content Success
Local Content Strategies (continued)
4. Development Corporations• Vehicle & strategy to match
capacity to opportunity
• Enable professional management and broad participation
Ghana Oil & Gas Summit | Accra, Ghana | April 2015
four strategies for
Local Content Success
Development Corporation Example
Kitsaki Development Corporation
• Northern Resource Trucking Limited Partnership (trucking and transportation)
• The La Ronge Motor Hotel Limited (Hospitality and accommodation)
• Kitsaki Meats Limited Partnership (specialty food products)
• La Ronge Industries Ltd. (agriculture production
• First Nations Insurance Services Ltd. (insurance and financial services)
• Athabasca Catering Limited Partnership (catering and hospitality)
• Dakota Winds Kitsaki Mechanical Services Ltd. (plumbing, heating, refrigeration, and mechanical services)
• Wapawekka Lumber Limited Partnership (timber and forestry)
• Keewatin/Procon Joint Venture (contract mining, surface and underground)
Ghana Oil & Gas Summit | Accra, Ghana | April 2015
four strategies for
Local Content Success
Some Resource Material• Four Strategies for Local Content
Success
• Cameco Case Study
• Kitsaki Development Corporation Case Study
Email [email protected]
if you want copies
Ghana Oil & Gas Summit | Accra, Ghana | April 2015
four strategies for
Local Content Success
Presentation Objective & Outline
• Global perspective on local content pressures
• Local content challenges
• Local content strategies
• Resource Materials
• Discussion
Ghana Oil & Gas Summit | Accra, Ghana | April 2015
four strategies for
Local Content Success
Discussion, Questions, Debate…
Wayne Dunn Professor of Practice in CSR (McGill)President & FounderCSR Training Instituteinfo@csrtraininginstitute.comwww.csrtraininginstitute.comCanada: +1.250.701.6088Ghana: +233.54.110.7974