GFC's policy statement on concessions is explicit about
under-performing and inactive concessions
under-performing and inactive concessions
Kaieteur News, 17 July 2007
Dear Editor,
Dear Editor,
I am sorry that the technical forestry expertise of Samantha Griffith
is weak, in her letter captioned “Large concessions are managed on the
principle of cyclic rotation” (Kaieteur News, 2007.07.12).
Responding to some of Ms Griffith's technical points - purpleheart –
reliable data on forest frequency, the Guyana Forestry Commissiom (GFC)
manual on Guyana strategic forest resource appraisals indicates “a
wealth of data” on forest composition. Inventories have been made of
the forests of Guyana since 1908. Reconnaissance-level studies were
carried out especially in the late 1960s in the FAO-assisted Forest
Industries Development Surveys, ecological studies have been boosted in
the 1980s/90s in the Tropenbos-Guyana programme, and the GFC currently
accumulates management-level data.
In a compilation covering the forest regions of Guyana in 1998, Hanster
Steege of the Tropenbos Guyana Programme summarised data from 16 widely
distributed plots covering 50 hectares in the central wet forest, with
an average of 4,101 trees per 100 hectares, of which 26 were
purpleheart. In the northwest wet region, from 14 plots covering 24
hectares, with an average of 4,824 trees per 100 hectares, 25 were
purpleheart.
Occurrences in these two main regions of 0.6 and 0.5 per cent of the
tree population (counting trees more than 30 cm in diameter at breast
height) mean an average of one purpleheart tree every four hectares.
However, purpleheart is not uniformly distributed through the forest,
and sometimes the loggers encounter “reefs” or groups of trees. It is
precisely in these reefs that the GFC minimum inter-tree felling
distance of 10 metres should be obeyed by loggers.
Chapter 14 of the National Development Strategy 2001-2010 says that the
regenerative capacities of identified forest types and species will be
conservatively estimated (section 14.IV.2.11). In contrast, there are
reports of groups of giant purpleheart trees in a TSA in Essequibo ,
logged destructively by the illegally sub-contracting Asian-owned
company, not in accordance with the specifications cited by Ms.
Griffith.
[In a background paper for the meeting on log export policy in February
2007, the GFC provided forest inventory data from 7 representative
current logging operations (numbers of plots and areas were not
mentioned). Purpleheart trees of 40 cm diameter or larger in these
areas ranged from 0.9 to 6.1 per cent, with an average of 2.3 per
cent.]
Landlording or sub-letting under-performing forest harvesting
concessions is not a matter of short-term contracts between large-scale
holders of forest harvesting concessions (like Barama) and large-scale
but inactive concession holders; Ms. Griffith implies that such
contracts are of one-year duration, which is not correct.
The Initial Public Offering prospectus of Samling Global Limited, the
parent company of Barama, in March 2007 clearly indicated that Barama's
renting arrangements (called “harvesting rights”) are for the remaining
multi-year durations of these concessions. Samling notes that these
concessions expire in the period up to 2016 (having started from 1985
onwards and having 25-year durations). Samling believes that the
remaining periods are too short to justify sustainable forest
management (IPO prospectus pages VI-68 and VI-69; URL =
http://www.hkex.com.hk/listedco/listconews/sehk/20070223/
LTN20070223016.htm ).
In the January 2007 public summary of the report of the monitoring by
ASI of the surveillance mission by SGS Qualifor, Accreditation Services
International GmbH notes that [Barama's] “areas visited by the audit
team outside the compartments under evaluation were not managed in the
spirit of the Forest Stewardship Council's principles and criteria and
major nonconformities could be witnessed by the ASI audit team” (major
corrective action request number CAR.SGS.FM.2006.04, URL =
http://www.accreditation-services.com/res/PublicSummaries/ asiforest
managementauditg uyanasgs2006.pdf ).
The GFC policy statement on concessions of April 1993 is explicit about
under-performing and inactive concessions. Failure to work a concession
over a two-year period (to the satisfaction of the Minister) in
accordance with the terms of and schedules to the concession agreement,
or failure to extract timber at a volume which produces royalty in
excess of the minimum royalty over a three-year period may lead to
cancellation of the concession.
I have quoted in recent letters to the Editor the exact sections of the
Forests Act and Forest Regulations concerning subletting of
concessions, and I note again here that Condition 13 of Timber Sales
Agreements makes explicit prohibition except with the prior written
permission of the President – not, as claimed by the GFC, the
permission of the Commissioner of Forests.
In any case, Barama is not a TSA holder which should be allowed to take
over any concession. The 1993 policy is also explicit that “No
additional areas will be granted to TSA holders until they have
demonstrated their ability to work existing concessions for maximum
sustained yield”.
Barama has repeatedly noted that it is harvesting less than one third
of that level, so it could not be eligible for more areas.
And in addition, the National Forest Plan of February 2001 specifies
that “Allocation of the resource is made in a competitive, fair and
transparent manner” (NFP 300), which the sub-letting to Barama (and
other Asian-owned loggers) is clearly not.
Specialisms in timber use; it is normal for specialist timber-using
operations to concentrate on those species which best serve technically
and economically the objectives of the enterprise.
It would not be sensible to use low-density, rot-susceptible timbers
for garden furniture, but these semi-soft timbers may be quite suitable
for core veneers of utility-grade plywood at Land of Canaan . It is
surely in the interests of Guyana , with over one thousand timber
types, to have a variety of industries capable of using appropriately
this variety of timbers.
Consultant reports have repeatedly advised Guyana to develop and
promote niche markets, because its location off the main shipping
routes and its relative industrial inefficiencies make it difficult to
compete in mass markets; see for example the diagnostic mission of the
International Tropical Timber Organisation published in 2003, and the
support of the USAID-funded Guyana Trade and Investment Support
Programme for penetration of new markets.
The Guyana Revenue Authority (GRA) records that 76 percent of tax
incentives in 2004 in the forest sector went to Barama, and 87 per cent
in 2005.
Later data are not yet available. This great preponderance allowed to
one single foreign-owned company is questionable when that company is
exporting unprocessed logs instead of processing them in-country, the
latter being a major intention (from the Guyanese side) of the foreign
direct investment arrangements of 1991, 2001 and 2004. Barama exported
at least 119,000 m3 of logs (almost 80 per cent out of a GFC-recorded
national total of 150,000 m3) in 2005-6 but processed only 63,000 m3 of
logs in its plywood mill (running at 25 per cent capacity) and only
14,000 m3 of logs in its two sawmills (running at 6-7 per cent
capacity, data from Samling's IPO prospectus).
GFC Board papers have been quoted before in public domain publications,
including those in SN's, ‘History This Week' columns of 29 January, 5
February and 12 February 2004 which featured the Guyana Forestry
Commission. A GFC Board Member has publicly expressed fears about the
link between narcotics and forestry concessions in Guyana (see letter
in SN titled ‘The drug cartel has already penetrated our timber
industry and has much bigger plans', 16 March 2005) and about forestry
practices more generally (see, for example, ‘Indiscriminate log exports
a creation of Forestry Commission … PNCR' in Kaieteur News, 27 November
2006).
This is what democracy is about. The democracy we all enjoy today is
the result of a long struggle by many Guyanese. That democracy permits
any citizen the freedom to comment on any aspect of our national life.
Our National Constitution enshrines this right, for example, in Article
13: “The principal objective of the political system of the State is to
establish an inclusionary democracy by providing increasing
opportunities for the participation of citizens, and their
organisations in the management and decision-making processes of the
State, with particular emphasis on those areas of decision-making that
directly affect their well-being.”
Section 2.3 on page 8 of the GFC code of practice on timber harvesting
(November 2002) includes a note that “sustained yields can only be
ensured if a minimum stocking is retained after logging for each
individual (emphasised in the GFC code) desirable species . . . This
means that individual tree-marking rules need to be developed for each
particular forest type under different stand conditions. Yield
regulation is an area of active GFC policy and research.”
So, nearly five years later, we can be sure that the GFC has such
individual rules and that they are being applied? Especially when the
production and export of a relatively rare but valuable timber such as
purpleheart is comprising an increasing proportion of the outturn? As
noted above, purpleheart is generally uncommon tree yet in 2005 it
comprised 31 per cent of total log exports and 42 per cent of sawn
lumber exports.
The reports to Barama by its technical consultant ECTF during 1992-2000
indicate how easily degraded is this forest resource by careless
logging. Barama wastes and damages much more timber than it extracts.
Barama's piratical and self-acknowledged unsustainable logging should
give every ground for caution by the GFC when the proportion of
purpleheart to all other timbers in log production and log exports is
so much higher than the proportion in the standing forest.
Appeal to the national laws, regulations and policies
My analyses and observations on the forest sector have been referenced
invariably against our published laws, regulations and procedures. My
main and repeated observation is not that these documents are
inappropriate but that they are not properly or equitably applied; this
is hardly the “misinformed, hypocritical and anti-Guyanese” stance
which Ms Griffith alleges.
Evolution of these documents took place vigorously during 1993-2002 but
little has been visible since then.
The revised forest law of 1995-1996 still has not reached the National
Assembly, and the draft is now well behind best international practice.
Of course it would be desirable to follow the practice of many other
countries and to have an open and participatory forest forum for sector
debates in which the GFC is just one among the stakeholders and without
a dominant and domineering voice, although obviously a key player.
We are not seeing those wide stakeholder consultations which Ms
Griffith advocates, only GFC-controlled admissions and GFC-commanded
attendances. I am sure that governance problems in Guyana are not
confined to the forestry sector, but it would be a start to clean up
governance in this area.
is weak, in her letter captioned “Large concessions are managed on the
principle of cyclic rotation” (Kaieteur News, 2007.07.12).
Responding to some of Ms Griffith's technical points - purpleheart –
reliable data on forest frequency, the Guyana Forestry Commissiom (GFC)
manual on Guyana strategic forest resource appraisals indicates “a
wealth of data” on forest composition. Inventories have been made of
the forests of Guyana since 1908. Reconnaissance-level studies were
carried out especially in the late 1960s in the FAO-assisted Forest
Industries Development Surveys, ecological studies have been boosted in
the 1980s/90s in the Tropenbos-Guyana programme, and the GFC currently
accumulates management-level data.
In a compilation covering the forest regions of Guyana in 1998, Hanster
Steege of the Tropenbos Guyana Programme summarised data from 16 widely
distributed plots covering 50 hectares in the central wet forest, with
an average of 4,101 trees per 100 hectares, of which 26 were
purpleheart. In the northwest wet region, from 14 plots covering 24
hectares, with an average of 4,824 trees per 100 hectares, 25 were
purpleheart.
Occurrences in these two main regions of 0.6 and 0.5 per cent of the
tree population (counting trees more than 30 cm in diameter at breast
height) mean an average of one purpleheart tree every four hectares.
However, purpleheart is not uniformly distributed through the forest,
and sometimes the loggers encounter “reefs” or groups of trees. It is
precisely in these reefs that the GFC minimum inter-tree felling
distance of 10 metres should be obeyed by loggers.
Chapter 14 of the National Development Strategy 2001-2010 says that the
regenerative capacities of identified forest types and species will be
conservatively estimated (section 14.IV.2.11). In contrast, there are
reports of groups of giant purpleheart trees in a TSA in Essequibo ,
logged destructively by the illegally sub-contracting Asian-owned
company, not in accordance with the specifications cited by Ms.
Griffith.
[In a background paper for the meeting on log export policy in February
2007, the GFC provided forest inventory data from 7 representative
current logging operations (numbers of plots and areas were not
mentioned). Purpleheart trees of 40 cm diameter or larger in these
areas ranged from 0.9 to 6.1 per cent, with an average of 2.3 per
cent.]
Landlording or sub-letting under-performing forest harvesting
concessions is not a matter of short-term contracts between large-scale
holders of forest harvesting concessions (like Barama) and large-scale
but inactive concession holders; Ms. Griffith implies that such
contracts are of one-year duration, which is not correct.
The Initial Public Offering prospectus of Samling Global Limited, the
parent company of Barama, in March 2007 clearly indicated that Barama's
renting arrangements (called “harvesting rights”) are for the remaining
multi-year durations of these concessions. Samling notes that these
concessions expire in the period up to 2016 (having started from 1985
onwards and having 25-year durations). Samling believes that the
remaining periods are too short to justify sustainable forest
management (IPO prospectus pages VI-68 and VI-69; URL =
http://www.hkex.com.hk/listedc
LTN20070223016.htm ).
In the January 2007 public summary of the report of the monitoring by
ASI of the surveillance mission by SGS Qualifor, Accreditation Services
International GmbH notes that [Barama's] “areas visited by the audit
team outside the compartments under evaluation were not managed in the
spirit of the Forest Stewardship Council's principles and criteria and
major nonconformities could be witnessed by the ASI audit team” (major
corrective action request number CAR.SGS.FM.2006.04, URL =
http://www.accreditation
managementauditg uyanasgs2006.pdf ).
The GFC policy statement on concessions of April 1993 is explicit about
under-performing and inactive concessions. Failure to work a concession
over a two-year period (to the satisfaction of the Minister) in
accordance with the terms of and schedules to the concession agreement,
or failure to extract timber at a volume which produces royalty in
excess of the minimum royalty over a three-year period may lead to
cancellation of the concession.
I have quoted in recent letters to the Editor the exact sections of the
Forests Act and Forest Regulations concerning subletting of
concessions, and I note again here that Condition 13 of Timber Sales
Agreements makes explicit prohibition except with the prior written
permission of the President – not, as claimed by the GFC, the
permission of the Commissioner of Forests.
In any case, Barama is not a TSA holder which should be allowed to take
over any concession. The 1993 policy is also explicit that “No
additional areas will be granted to TSA holders until they have
demonstrated their ability to work existing concessions for maximum
sustained yield”.
Barama has repeatedly noted that it is harvesting less than one third
of that level, so it could not be eligible for more areas.
And in addition, the National Forest Plan of February 2001 specifies
that “Allocation of the resource is made in a competitive, fair and
transparent manner” (NFP 300), which the sub-letting to Barama (and
other Asian-owned loggers) is clearly not.
Specialisms in timber use; it is normal for specialist timber-using
operations to concentrate on those species which best serve technically
and economically the objectives of the enterprise.
It would not be sensible to use low-density, rot-susceptible timbers
for garden furniture, but these semi-soft timbers may be quite suitable
for core veneers of utility-grade plywood at Land of Canaan . It is
surely in the interests of Guyana , with over one thousand timber
types, to have a variety of industries capable of using appropriately
this variety of timbers.
Consultant reports have repeatedly advised Guyana to develop and
promote niche markets, because its location off the main shipping
routes and its relative industrial inefficiencies make it difficult to
compete in mass markets; see for example the diagnostic mission of the
International Tropical Timber Organisation published in 2003, and the
support of the USAID-funded Guyana Trade and Investment Support
Programme for penetration of new markets.
The Guyana Revenue Authority (GRA) records that 76 percent of tax
incentives in 2004 in the forest sector went to Barama, and 87 per cent
in 2005.
Later data are not yet available. This great preponderance allowed to
one single foreign-owned company is questionable when that company is
exporting unprocessed logs instead of processing them in-country, the
latter being a major intention (from the Guyanese side) of the foreign
direct investment arrangements of 1991, 2001 and 2004. Barama exported
at least 119,000 m3 of logs (almost 80 per cent out of a GFC-recorded
national total of 150,000 m3) in 2005-6 but processed only 63,000 m3 of
logs in its plywood mill (running at 25 per cent capacity) and only
14,000 m3 of logs in its two sawmills (running at 6-7 per cent
capacity, data from Samling's IPO prospectus).
GFC Board papers have been quoted before in public domain publications,
including those in SN's, ‘History This Week' columns of 29 January, 5
February and 12 February 2004 which featured the Guyana Forestry
Commission. A GFC Board Member has publicly expressed fears about the
link between narcotics and forestry concessions in Guyana (see letter
in SN titled ‘The drug cartel has already penetrated our timber
industry and has much bigger plans', 16 March 2005) and about forestry
practices more generally (see, for example, ‘Indiscriminate log exports
a creation of Forestry Commission … PNCR' in Kaieteur News, 27 November
2006).
This is what democracy is about. The democracy we all enjoy today is
the result of a long struggle by many Guyanese. That democracy permits
any citizen the freedom to comment on any aspect of our national life.
Our National Constitution enshrines this right, for example, in Article
13: “The principal objective of the political system of the State is to
establish an inclusionary democracy by providing increasing
opportunities for the participation of citizens, and their
organisations in the management and decision-making processes of the
State, with particular emphasis on those areas of decision-making that
directly affect their well-being.”
Section 2.3 on page 8 of the GFC code of practice on timber harvesting
(November 2002) includes a note that “sustained yields can only be
ensured if a minimum stocking is retained after logging for each
individual (emphasised in the GFC code) desirable species . . . This
means that individual tree-marking rules need to be developed for each
particular forest type under different stand conditions. Yield
regulation is an area of active GFC policy and research.”
So, nearly five years later, we can be sure that the GFC has such
individual rules and that they are being applied? Especially when the
production and export of a relatively rare but valuable timber such as
purpleheart is comprising an increasing proportion of the outturn? As
noted above, purpleheart is generally uncommon tree yet in 2005 it
comprised 31 per cent of total log exports and 42 per cent of sawn
lumber exports.
The reports to Barama by its technical consultant ECTF during 1992-2000
indicate how easily degraded is this forest resource by careless
logging. Barama wastes and damages much more timber than it extracts.
Barama's piratical and self-acknowledged unsustainable logging should
give every ground for caution by the GFC when the proportion of
purpleheart to all other timbers in log production and log exports is
so much higher than the proportion in the standing forest.
Appeal to the national laws, regulations and policies
My analyses and observations on the forest sector have been referenced
invariably against our published laws, regulations and procedures. My
main and repeated observation is not that these documents are
inappropriate but that they are not properly or equitably applied; this
is hardly the “misinformed, hypocritical and anti-Guyanese” stance
which Ms Griffith alleges.
Evolution of these documents took place vigorously during 1993-2002 but
little has been visible since then.
The revised forest law of 1995-1996 still has not reached the National
Assembly, and the draft is now well behind best international practice.
Of course it would be desirable to follow the practice of many other
countries and to have an open and participatory forest forum for sector
debates in which the GFC is just one among the stakeholders and without
a dominant and domineering voice, although obviously a key player.
We are not seeing those wide stakeholder consultations which Ms
Griffith advocates, only GFC-controlled admissions and GFC-commanded
attendances. I am sure that governance problems in Guyana are not
confined to the forestry sector, but it would be a start to clean up
governance in this area.
Janette Bulkan
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