What is Local Content Certification?
LC: Local Content Certification (LCC) is the process/system in which a company or organization verifies and certifies that a certain percentage of the goods, services, and/or labor used in a particular project or business operation are sourced locally, typically within a specific region or country. The goal of local content certification is to promote economic development, create jobs, address systematic barriers for underrepresented populations while still engineering equity for all communities, and support local industries by encouraging companies to prioritize the use of local resources and talent.
While local content requirements can vary widely depending on the industry, country, or region in which it is implemented; at LocalContent we certify projects within the following local content key performance indicators (KPI), they are:
- Economic Development
- Workforce Development
- Community Benefit Investment
- Stakeholder Engagement
What industries have local content requirements (LCR)?
- Oil and Gas: Many countries with significant oil and gas reserves impose local content requirements on exploration, production, and related activities. These requirements may involve sourcing a certain percentage of goods and services locally, hiring local labor, and using local suppliers.
- Mining: In the mining industry, local content requirements are often applied to encourage the use of local resources, technologies, and labor in extraction, processing, and support activities.
- Renewable Energy: Governments promoting renewable energy development may require a portion of components, such as solar panels or wind turbine parts, to be manufactured locally or installed by local companies.
- Infrastructure and Construction: Local content requirements can be prevalent in infrastructure projects and construction, with governments encouraging the use of domestic materials, labor, and contractors.
- Defense and Aerospace: National security concerns often lead governments to mandate local content in defense and aerospace projects to ensure control over key technologies and capabilities.
- Automotive: Some countries require automobile manufacturers to source a certain percentage of components locally to support domestic automotive industries.
- Telecommunications: In the telecommunications sector, governments may impose local content requirements for the production of equipment, such as phones and networking infrastructure.
- Government Procurement: When governments purchase goods and services for public projects, they may have policies that give preference to local suppliers and contractors, which effectively serves as a local content requirement.
- Agribusiness: In agriculture and food production, some countries may require a certain portion of food products to be domestically sourced or processed.
- Manufacturing: Various manufacturing industries may be subject to local content regulations to support local industrial development.
- Media and Broadcasting: Some countries may require a minimum percentage of locally produced content, such as television shows and films, to promote their own culture and media industry.
What do you certify?
LC: We certify infrastructure development projects, not organizations. Every development project has individual and unique local content requirements. Local Content Certification by projects ensures consistency.
Who is responsible for certifying a project?
LC: While local content requirements (LCR) are mandated by various levels of government and industry, the owner/developer of the project assumes full responsibility for meeting local content compliance utilization, measurements, and reporting to the government agency.
If I am not a project owner/developer, how does Local Content Certification impact me?
LC: In order for project owners/developers to meet and exceed their local content requirements, all of their project stakeholders must report their local content efforts to include in their total local content compliance
- Prime contracts
- Original equipment manufacturers (OEM)