Timber scam:
BARAMA FINED $96.4M
- Forestry staffers dismissed, sanctions imposed on three local firms
Guyana Chronicle, 23 October 2007
THE country’s largest exporter of logs, Barama Company Limited, has
been fined G$96.4M and ordered to immediately suspend sub-contractual
operations with three local firms for breaching stiff forestry
regulations, the Guyana Forestry Commission (GFC) announced yesterday.
The commission said Barama and three other forest concession owners and
operators were found guilty in a scam to defraud the government of
revenue.
The Ministry of Agriculture and the commission on September 25
announced the launch of a probe under suspicion that several companies
deliberately under-declared what they were producing. In addition,
there were indications that logs belonging to one concession were being
passed off as belonging to another, the commission had reported.
It yesterday announced that after its month-long investigations into
these suspected breaches in log declarations Barama along with A.
Mazaharally & Sons, N. Sukul & Sons, and Barakat Timbers Limited have
all been found culpable of breaches.
As such, the sub-contractual operations of all four logging companies
were suspended with immediate effect.
The GFC said it has also been identified that ineffective monitoring of
the concession areas by two of its Field Officers resident at that
location contributed to the breaches of procedures by these companies
and have been dismissed.
The GFC, the Government of Guyana agency responsible for the management
of the State Forest Resources of about 13.8 million hectares, said the
probe, which had the full backing of President Bharrat Jagdeo, was into
suspected cases of “under declaration of forest produce harvested to
the GFC; and giving false declaration as to the origin of forest
produce harvested”.
President Jagdeo earlier this month issued a stern warning that action
will be taken against those found guilty.
Mr. Jagdeo said some concession owners had allowed Barama to move into
their concessions, take out the logs, and sit doing nothing collecting
the money, while some have left their concessions sitting for years.
He said levying on export of logs would not serve the purpose in this
case, since Barama’s 1991 agreement with the government enjoys
exemption.
Contacted yesterday for a comment, Chief Executive Officer of Barama
Mr. Girwar Lallaram said Barama will issue “an appropriate response…not
later than Wednesday.”
He, however, indicated that Barama has been in operation in Guyana for
the past 15 years and during that period “not a single report emanated
from the GFC” indicating that it was in breach of anything.
Lallaram argued that given the size of the company and the fact that it
is operating in a large geographical area, “there will be situations of
paper trail problems and there will be errors, but these were not
considered (by the GFC).”
FINDINGS of INVESTIGATIONS:
GFC said that among the findings of the investigations are:
** In July 2007, Barama transported a quantity of logs harvested from
ESS 10/92 issued to Barakat Timbers Limited, to Buck Hall. The
quantity of logs declared to the GFC in July 2007, however, was below
the harvested amount.
** Barama Company Limited harvested and removed without GFC’s
permission, a large quantity of logs from the concession 2/90 issued to
A. Mazaharally and Sons Limited. Tags issued to Barama Company Limited
and Barakat Timbers Limited were used on stumps located within the
concession issued to A. Mazaharally and Sons.
** Barama Company Limited removed a quantity of logs from WCL 05/93
issued to N. Sukul and Sons without approval from the GFC. This is
evidence of unauthorized harvesting and extraction of forest produce.
** The harvesting operations on the ground were not conducted in a
manner that had serious negative environmental implications.
SANCTIONS
The GFC said Forest Regulations were made under Section 42 of the
Forests Act, and those that were breached include:
**Evasion of Payment of Royalty (Regulation 20)
** Removal Permits Fourth Schedule (Regulation 21(1); Regulation 22(1)
and (2))
** Unlawful declaration of Removal of Forest Produce (Regulation 23)
** Removal permit to be endorsed before sale and purchase (Regulation
24)
The GFC yesterday said it had communicated the findings of the
investigation to the Minister of Agriculture who directed that these be
shared with the four companies for written responses to the identified
breach of procedures.
The Forestry Commission said “all four companies submitted responses,
but did not adequately address the concerns outlined by the GFC”.
It said the Agriculture Minister has further directed that “all the
prescribed sanctions be imposed, immediately”.
GFC said the Forest Act allows for the breaches to be penalized through
the payment of a compensatory mechanism (Section 29 of the Forests Act
Chapter 67:01). According to the GFC, the compensation for these
breaches is equivalent to 35% of the market value of the produce
harvested.
Based on the breaches, and its own calculations, the GFC said the
amount of Guyana dollars payable by Barama Company Limited for the
breaches as compensation (fine) to be approximately $96.5M.
The breakdown is as follows:
** Breach in Concession issued to A. Mazaharally & Sons - G$78,081,800
** Breach in Concession issued to N. Sukul & Sons -
G$12,419,244
** Breach in Concession issued to Barakat Timbers Limited - G$15,982,104
The commission assured local and international stakeholders that it is
committed to ensuring that all forest operations are conducted in a
responsible manner and in compliance with its approved guidelines and
procedures.
“The effectiveness of our auditing and internal control procedures is
demonstrated by the fact that these breaches were detected at a very
early stage.”
&#We commit to further improvement on these systems, and also to
greater accountability and transparency in the execution of the
Commission’s mandate working with all relevant stakeholders,” the GFC
posited.
BARAMA FINED $96.4M
- Forestry staffers dismissed, sanctions imposed on three local firms
Guyana Chronicle, 23 October 2007
THE country’s largest exporter of logs, Barama Company Limited, has
been fined G$96.4M and ordered to immediately suspend sub-contractual
operations with three local firms for breaching stiff forestry
regulations, the Guyana Forestry Commission (GFC) announced yesterday.
The commission said Barama and three other forest concession owners and
operators were found guilty in a scam to defraud the government of
revenue.
The Ministry of Agriculture and the commission on September 25
announced the launch of a probe under suspicion that several companies
deliberately under-declared what they were producing. In addition,
there were indications that logs belonging to one concession were being
passed off as belonging to another, the commission had reported.
It yesterday announced that after its month-long investigations into
these suspected breaches in log declarations Barama along with A.
Mazaharally & Sons, N. Sukul & Sons, and Barakat Timbers Limited have
all been found culpable of breaches.
As such, the sub-contractual operations of all four logging companies
were suspended with immediate effect.
The GFC said it has also been identified that ineffective monitoring of
the concession areas by two of its Field Officers resident at that
location contributed to the breaches of procedures by these companies
and have been dismissed.
The GFC, the Government of Guyana agency responsible for the management
of the State Forest Resources of about 13.8 million hectares, said the
probe, which had the full backing of President Bharrat Jagdeo, was into
suspected cases of “under declaration of forest produce harvested to
the GFC; and giving false declaration as to the origin of forest
produce harvested”.
President Jagdeo earlier this month issued a stern warning that action
will be taken against those found guilty.
Mr. Jagdeo said some concession owners had allowed Barama to move into
their concessions, take out the logs, and sit doing nothing collecting
the money, while some have left their concessions sitting for years.
He said levying on export of logs would not serve the purpose in this
case, since Barama’s 1991 agreement with the government enjoys
exemption.
Contacted yesterday for a comment, Chief Executive Officer of Barama
Mr. Girwar Lallaram said Barama will issue “an appropriate response…not
later than Wednesday.”
He, however, indicated that Barama has been in operation in Guyana for
the past 15 years and during that period “not a single report emanated
from the GFC” indicating that it was in breach of anything.
Lallaram argued that given the size of the company and the fact that it
is operating in a large geographical area, “there will be situations of
paper trail problems and there will be errors, but these were not
considered (by the GFC).”
FINDINGS of INVESTIGATIONS:
GFC said that among the findings of the investigations are:
** In July 2007, Barama transported a quantity of logs harvested from
ESS 10/92 issued to Barakat Timbers Limited, to Buck Hall. The
quantity of logs declared to the GFC in July 2007, however, was below
the harvested amount.
** Barama Company Limited harvested and removed without GFC’s
permission, a large quantity of logs from the concession 2/90 issued to
A. Mazaharally and Sons Limited. Tags issued to Barama Company Limited
and Barakat Timbers Limited were used on stumps located within the
concession issued to A. Mazaharally and Sons.
** Barama Company Limited removed a quantity of logs from WCL 05/93
issued to N. Sukul and Sons without approval from the GFC. This is
evidence of unauthorized harvesting and extraction of forest produce.
** The harvesting operations on the ground were not conducted in a
manner that had serious negative environmental implications.
SANCTIONS
The GFC said Forest Regulations were made under Section 42 of the
Forests Act, and those that were breached include:
**Evasion of Payment of Royalty (Regulation 20)
** Removal Permits Fourth Schedule (Regulation 21(1); Regulation 22(1)
and (2))
** Unlawful declaration of Removal of Forest Produce (Regulation 23)
** Removal permit to be endorsed before sale and purchase (Regulation
24)
The GFC yesterday said it had communicated the findings of the
investigation to the Minister of Agriculture who directed that these be
shared with the four companies for written responses to the identified
breach of procedures.
The Forestry Commission said “all four companies submitted responses,
but did not adequately address the concerns outlined by the GFC”.
It said the Agriculture Minister has further directed that “all the
prescribed sanctions be imposed, immediately”.
GFC said the Forest Act allows for the breaches to be penalized through
the payment of a compensatory mechanism (Section 29 of the Forests Act
Chapter 67:01). According to the GFC, the compensation for these
breaches is equivalent to 35% of the market value of the produce
harvested.
Based on the breaches, and its own calculations, the GFC said the
amount of Guyana dollars payable by Barama Company Limited for the
breaches as compensation (fine) to be approximately $96.5M.
The breakdown is as follows:
** Breach in Concession issued to A. Mazaharally & Sons - G$78,081,800
** Breach in Concession issued to N. Sukul & Sons -
G$12,419,244
** Breach in Concession issued to Barakat Timbers Limited - G$15,982,104
The commission assured local and international stakeholders that it is
committed to ensuring that all forest operations are conducted in a
responsible manner and in compliance with its approved guidelines and
procedures.
“The effectiveness of our auditing and internal control procedures is
demonstrated by the fact that these breaches were detected at a very
early stage.”
&#We commit to further improvement on these systems, and also to
greater accountability and transparency in the execution of the
Commission’s mandate working with all relevant stakeholders,” the GFC
posited.
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