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November 2012www.marinelink.com 75quired are not locally available or do not have the necessary quality standards that the industry demands. Brazil?s National Petroleum Agency (ANP) is responsible, among otherthings, for formulating and overseeing the country?s local content policy in rela- tion to the O&G industry. The ANP has been using local content criterion whenassessing business proposals ever since the first bidding round of blocks for ex- ploration and production, which tookplace in 1999.According to the ANP, up until the fourth bidding round in 2002, local con-tent percentages were free. As of the fifth and sixth rounds in 2003 and 2004 re-spectively, however, ANP has established minimum percentages based on whetherblocks were located onshore, offshore shallow water or offshore deepwater. From the seventh round in 2005 on- wards, contracts have included minimum and maximum percentages of local con-tent for a set of specialized items used inthe exploration and production develop- ment phases.To ensure compliance with the local content policy, ANP monitors local con- tent requirements by quarterly auditinginvestments and operations of each con- cessionaire. The ANP will inspect local content compliance during three phasesof the Exploration and Production cycle: 1) Upon completion of the exploration phase; 2) At the end of the production devel- opment phase. 3) When the exploration block is re- turned and the concession contract isended. Block operators provide ANP with con- tracts and invoices showing their invest- ments on all three phases. The documentation is then audited by theANP and if local content percentagesreach or exceed the set value, the ANP will give its approval and if not the block operator may be penalized by a heftyfine. In 2007, after a protracted and heated process of public consultationsand hearings, ANP finally released the Local Content Certification System (ANP Resolutions 36 through 39/2007),which establishes local content rules forall contracts signed since Round 7.Certification activities involve collect- ing data on the origin of components sup-plied, measuring local content and issu-ing certificates. By attaching these certificates to all invoices, concession- aires will testify to ANP that goods and services have been produced or provided locally. According to this system, ANP accredited independent firms are respon- sible for checking and subsequently cer- tifying the local content of goods andservices in the oil industry based on theLocal Content Primer, which was devel- oped by the Brazil?s Program for Mobi- lization of the Oil and Gas IndustryBasically the Brazilianshipbuilding industry hasgrown from a low of less than 2,000 jobs in theyear 2000 to the current level of around 60,000 jobs.MR#11 (74-81):MR Template 11/6/2012 8:13 AM Page 75