Evaluative appraisal of the law and policy on local content: oil and gas in Tanzania

This study provides a review and evaluative analysis of the local content policy and law, its implementation channels and institutional setup. It takes into consideration the local content provisions in the Petroleum Act, the Local Content Regulations and the Production Sharing Agreements (PSAs). The study also reflects on the obligations of Tanzania as a member of the World Trade Organisation (WTO) and the EAC Common market. It further examines the possibility of the enforcement of Local Content obligations in the existing PSAs. The major findings of this study are that; the definition of the word “local” does not consider the sub-national stakeholders, that there is an overlap of functions between regulatory institutions while TPDC, the national oil company does not have clearly defined commercial functions. It is found that the implementation tools do not provide for incentives for the IOCs in the implementation of the LCPs. Further, there are chances that LCPs may conflict with Tanzania’s obligation under the WTO and the East African Community Common Market. While evaluating LCPs in the manner specified above, the work points out the challenges and recommends inclusion of sub-national stakeholders in the definition of the term “local”, that there should be encouragement of the competitiveness of the local suppliers, encouraging transparency in the formulation of the LCPs and its implementation tools, and that the roles of TPDC as a commercial company should be made clear. Areas for further research are also suggested.