10 Local Content Policies in the Energy Transition Era …
325
Malaysia adopted local content policies in the same design, facilitating
economic diversification.
48
b. Provision for Social Welfare Maximization
The oil and gas industry calls for a sophisticated and highly skilled
labour force. Resource-rich countries like Nigeria, Angola, Tanzania and
Uganda do not have the required skills. Local content policies create
mechanisms for indigenous employment. In Brazil, local content policies involved the national oil company Petrobras in skills development.
Petrobras created a human resource programme through the Agencia
Nacional do Petroleo in 1999.
49 The programme encouraged training
courses that met the demands of the oil and gas industry. Local content
policies give international oil companies a social license to operate since
they maximize social services within the host communities.
c. Rent-Seeking
The oil and gas industry creates a large part of a country’s GDP in
resource-rich countries. These policies bring the expectation for indigenous inclusion. Hence the labour force of resource-rich countries seeks
the big proceeds from the industry. Rent-seeking wastes competition for
a given economic opportunity and, in this case, the opportunity is the
oil and gas industry.
d. Redundancy
Hufbauer, Schott and Cimino state that ‘the effect of local content
policies on trade is to discourage foreign imports and to stifle competition between domestic and foreign firms. The impact on trade of local
content policies depends on the percentage of local content required and
48 Rahim, Khalid Abdul, and Audrey Liwan. “Oil and gas trends and implications in Malaysia.”
Energy Policy 50 (2012): 262–271.
49 Mendonça, Roberto Wagner, and Luiz Guilherme de Oliveira. “Local content policy in the
Brazilian oil and gas sectoral system of innovation.” Latin American Business Review 14.3–4
(2013): 271–287.
325
Malaysia adopted local content policies in the same design, facilitating
economic diversification.
48
b. Provision for Social Welfare Maximization
The oil and gas industry calls for a sophisticated and highly skilled
labour force. Resource-rich countries like Nigeria, Angola, Tanzania and
Uganda do not have the required skills. Local content policies create
mechanisms for indigenous employment. In Brazil, local content policies involved the national oil company Petrobras in skills development.
Petrobras created a human resource programme through the Agencia
Nacional do Petroleo in 1999.
49 The programme encouraged training
courses that met the demands of the oil and gas industry. Local content
policies give international oil companies a social license to operate since
they maximize social services within the host communities.
c. Rent-Seeking
The oil and gas industry creates a large part of a country’s GDP in
resource-rich countries. These policies bring the expectation for indigenous inclusion. Hence the labour force of resource-rich countries seeks
the big proceeds from the industry. Rent-seeking wastes competition for
a given economic opportunity and, in this case, the opportunity is the
oil and gas industry.
d. Redundancy
Hufbauer, Schott and Cimino state that ‘the effect of local content
policies on trade is to discourage foreign imports and to stifle competition between domestic and foreign firms. The impact on trade of local
content policies depends on the percentage of local content required and
48 Rahim, Khalid Abdul, and Audrey Liwan. “Oil and gas trends and implications in Malaysia.”
Energy Policy 50 (2012): 262–271.
49 Mendonça, Roberto Wagner, and Luiz Guilherme de Oliveira. “Local content policy in the
Brazilian oil and gas sectoral system of innovation.” Latin American Business Review 14.3–4
(2013): 271–287.