Abstract

The article applies doctrinal methodology to evaluate Kenya's and Norway's LC requirements. It highlights how both countries pursue(d) LC requirements and focus on the individual efforts placed by each government in making markets work for locals. The work does not engage in the traditional comparative analysis of these countries legal frameworks. Instead, it categorises the different regulatory modes applied by these countries based on rules and principles. It argues that Kenya's LC requirements is a rules-based system mainly because of the systematic outline of prescriptive rules to secure local participation objectives. It recognises the Norwegian LC requirements as principles-based regulation centred on flexible principles in combination with contractual-based obligations to implement successful LC requirements. Thus, in reviewing these LC interventions - rules and principles, the article addresses the eternal question on what can be done or what needs to be done to make governments and markets work better for local companies amidst the challenges of the upstream petroleum sectors. The work recognises that these two elements of law, and their relative benefits and drawbacks, have been debated throughout the years, however, their application in the upstream petroleum sectors with regards to implementing suitable LC requirements is limited. For this reason, the work reviews the merits and limitations of these regulatory models by looking into (1) the command embedded in the regulation (2) the target of the regulation (3) the consequences of compliance or noncompliance with the command and (4) the role of the regulator. Overall the work shows that each of these characteristics influence the choice of a regulatory regime in essential ways. The work concludes that although legal certainty is crucial for most capital-intensive investments such as petroleum operations; nonetheless, to successfully achieve LC requirements that ensure a positive and lasting legacy, then legal flexibility is inevitable.