La Pampa local content: 80% to local suppliers

What changed

Article 12 obliges the holders of provincial permits, concessions or works-and-services contracts to contract at least 80% of labour, suppliers and services from La Pampa, and extends the same requirement «to subcontractors, and/or any other person or company that on any basis is carrying out tasks in provincial hydrocarbon areas» — meaning it runs down the whole chain and does not stop at the title holder. Article 13 defines both categories by a local-roots test: La Pampa labour is that of workers with «at least three (3) years of domicile and minimum establishment in the province», and a La Pampa supplier or service requires legal domicile and head office in the province plus three years of established presence evidenced by municipal licence and tax registration. The Enforcement Authority —the Undersecretariat of Hydrocarbons and Mining, art. 24— «shall oversee compliance with this provision and shall apply the sanctions that the contracts impose for its breach»: the penalty is not tariffed in the law, each contract sets it. Article 2 declares the «prospecting, exploration, production, industrialisation, transport and marketing» of hydrocarbons to be of provincial public interest. verif · Oct 18, 2012 ↗

In force

In force since its enactment in 2012. The regime does not depend on later implementing rules for the 80% floor: art. 12 is self-executing and enforcement rests with the Enforcement Authority. prob · Oct 18, 2012 ↗

Are you in or out?

On whoever already holds the provincial permit or concession it sets the highest floor in the country, and it cannot be shed by subcontracting: the same requirement runs down to subcontractors and to any company working in provincial hydrocarbon areas. On the outside supplier it puts a local-roots barrier, not a price one: legal domicile, head office and three years of established presence evidenced by municipal licence and tax registration — which means moving in today does not count until three years from now. And to the La Pampa SME it reserves eight of every ten pesos, but only inside provincial areas. verif · Oct 18, 2012 ↗

The norm

Law 2675, enacted on 18 October 2012. No amendments appear in the text consulted in the provincial digest. verif · Oct 18, 2012 ↗

It is the highest local content floor in the whole series the observatory measures, and by a wide margin: 80% in La Pampa against 70% in Salta and Jujuy, 60% in Neuquén, 50% in Buenos Aires and 20% in the national RIGI. And it is the only one tying the condition to three years of prior establishment, which makes it a local-roots barrier rather than a price one: a company that moves in today does not count until 2029. ⛔ What cannot be asserted yet, and is precisely what would be worth most: whether article 12 reaches a gas transport system of national jurisdiction. The Gasoducto Perito Moreno puts its three new compressor stations in La Pampa, and its owner publishes where its suppliers come from —the metropolitan area, Buenos Aires, Neuquén, Río Negro, Chubut and Santa Cruz— without naming La Pampa in any of its three lists. The law names transport among the activities of provincial public interest, but art. 12 binds the holders of provincial permits, concessions and contracts, and an ENARGAS licence is not one. Until an act settles it, the gap stays declared and not asserted. thesis

La Pampa local content: the highest 80% in the country, and it reaches subcontractors

What changed and who it applies to

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Where it lands, province by province1

The other rules on this subject31

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