A friend of mine has been requested to advise a minerals economy on Local Content policy and he asked for my views. Here is my response.
I am afraid my views on the Local Content policy are not very encouraging. In Sierra Leone, the law applies to all sectors – good. For the mining sector my personal view is that it merely facilitates rent-seeking through the imposition of additional layers of compliance measures. I refer to them as additional simply because the labour laws, the main focus of the Local Content operations, are robust enough and should be applied.
For example: Insisting that a certain number or percentage of managerial positions be locked in for nationals is unnecessary; where there are qualified nationals in the market, the company will behave rationally and use them. Why spend more on expatriate salaries? If it doesn’t use nationals, then the relevant labour laws should be enforced. On another note, the notion that just because someone is a national, she will act in the interest of her country is fundamentally flawed as, by the time that person gets to the managerial level, loyalty is to the company rather than to corrupt officials representing the Government. In a post-colonial environment where the tradition has now been established for the private sector either to be in alliance with the elites of the public sector to defraud the state, or there is antagonism between the two, the lines are boldly drawn. A national imposed on a company very quickly becomes a gladiator for that company, ready to conspire or fight in the interest of the company. Instead of the Local Content policy now in vogue in many African countries, for the mining sector, it is better to emphasize and focus on promoting linkages between the mining operations and the rest of the economy.
My humble view is that you should get the authorities to be singing the Linkages song instead.