The three local content provisions above have sustainability implications, for instance, employment and training serve both the social and economic sustainability, procurement and contracts serve economic sustainability, and technology transfer serves environmental sustainability. The above analysis has therefore shown more emphasis on the social and economic sustainability. Similarly, the accounting and financial implications of the above provisions are discussed in section 3.15. The three local content provisions also attract other fiscal incentives such as favourable tax rates for IOCs that establish facilities for local manufacturing or servicing in Nigeria (S. 48 NOGICD Act). These are some of the reasons why petroleum contracts often
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This is basically where local content oversight functions are critical due to the challenges involved in verifying and comparing actual performance against the reported. It was observed that (Alba, 2009: 11)
Internationally accepted accounting and reporting standards have been developed to deal with key financial accounting and reporting issues unique to the extractive industries. It is common practice for producing countries to refer to such standards in sector laws, contracts, and licenses. Special accounting procedures are also generally annexed to the relevant contract or license. Ideally, accounting procedures are standardized and apply (sic) to all projects in a country.
This section has conducted a little survey around some contract documents in order to locate such accounting provisions as they relate to local content. For example, the Brazilian Concession model contract of 2008 provided as follows: …show more content…
60. Within sixty days of the beginning of each year, each operator shall submit to the Board their annual Nigerian Content Performance Report covering all its projects and activities for the year under review.
S. 61. Subject to section 60, the report shall specify by category of expenditure the Nigerian content on both a current and cumulative cost basis and shall set out- (a) employment achievement in terms of hours or days worked by Nigerian and foreign workers and their status; and (b) procurement achievement in terms of quantity, tonnage of locally manufactured materials and materials of foreign origin.
62. The Board shall undertake regular assessment and verification of the Nigerian Content Performance Report filed by all operators in compliance with the provisions of this Act as may be considered appropriate by the Board.
63. The Board shall issue directives to operators, contractors and other entities or persons in order to develop a process to facilitate reporting of activities relating to any aspect of this
This is basically where local content oversight functions are critical due to the challenges involved in verifying and comparing actual performance against the reported. It was observed that (Alba, 2009: 11)
Internationally accepted accounting and reporting standards have been developed to deal with key financial accounting and reporting issues unique to the extractive industries. It is common practice for producing countries to refer to such standards in sector laws, contracts, and licenses. Special accounting procedures are also generally annexed to the relevant contract or license. Ideally, accounting procedures are standardized and apply (sic) to all projects in a country.
This section has conducted a little survey around some contract documents in order to locate such accounting provisions as they relate to local content. For example, the Brazilian Concession model contract of 2008 provided as follows: …show more content…
60. Within sixty days of the beginning of each year, each operator shall submit to the Board their annual Nigerian Content Performance Report covering all its projects and activities for the year under review.
S. 61. Subject to section 60, the report shall specify by category of expenditure the Nigerian content on both a current and cumulative cost basis and shall set out- (a) employment achievement in terms of hours or days worked by Nigerian and foreign workers and their status; and (b) procurement achievement in terms of quantity, tonnage of locally manufactured materials and materials of foreign origin.
62. The Board shall undertake regular assessment and verification of the Nigerian Content Performance Report filed by all operators in compliance with the provisions of this Act as may be considered appropriate by the Board.
63. The Board shall issue directives to operators, contractors and other entities or persons in order to develop a process to facilitate reporting of activities relating to any aspect of this