Weighing Benefits and Risks

Local Procurement and Local Content Policies

The Issue

BAs can include sections that detail a community’s expectations around how benefits can be structured through local content or procurement requirements. Local content is the value that an extraction project brings to the local, regional or national economy beyond the resource revenues. Whereas local procurement refers to the purchase of goods and services from suppliers within the region(s) close to a company’s operations.

In BC, the LNG industry spends billions of dollars on goods and services. This purchasing power can be used to reinforce economic development for First Nations and support strong communities if it is spent with local suppliers.

Throughout the life-cycle of an LNG project, opportunities exist for First Nations to engage in providing a wide range of goods and services required such as: project design, financial management, site clearing, site design and engineering, employee housing and food services, traffic control and transportation, infrastructure development, first-aid, communications, bookkeeping, environmental monitoring and human resources management – (Vickers et al., 2021).

The First Nations’ Major Projects Coalition notes that the main benefits for First Nations governments taking advantage of contracting and procurement opportunities are the resulting jobs and income for community members, developing long-term capacity to participate in the economy and building the skills, capacity and experience for First Nation’s enterprises to service other clients over the long term (Vickers et al., 2021).


Although strong local content and local procurement clauses should deliver benefits to First Nations-owned and operated enterprises, there are a number of systemic barriers such companies face such as a lack of prior experience with complex bidding processes or procurement requirements (Gibson and O’Faircheallaigh, 2015, 164-166). Another systemic barrier is ensuring a skills capacity and training pipeline within First Nations’ communities that can service the areas of LNG operations whether they are specific to the parent company or subcontracted out.

BAs should be seen as a nested governance tool that should plug into integrated resource planning and long-term community and/or local policy-planning processes. Long-term community planning and monitoring is significant because resource-dependent economies are particularly sensitive to boom-bust cycles, which can dramatically affect the implementation of local content and local procurement clauses.

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