Multi-million logging fine…Barama says sanctions will cost jobs,

Multi-million logging fine…Barama says sanctions will cost jobs,
threaten investments
By Leonard Gildarie
Kaieteur News, 25 October 2007

Guyana 's largest logging company, slapped with a massive $96 million
fine earlier this week, says that the sanctions will cost jobs and
threaten its investments in this country.

In the first response since the decisions were announced three days
ago, Chairman of Barama Company Limited, Girwar Lalaram, disclosed that
“such a sudden suspension means there will be workers without jobs
immediately. Our preferred choice is to come to a swift resolution to
save jobs as soon as possible.”

On Monday, the Guyana Forestry Commission (GFC) announced that
following an audit it found Barama at fault for under-declaring logs
harvested and falsifying the origin of logs harvested.

GFC, through Minister of Agriculture with responsibility for Forestry,
Robert Persaud, immediately ordered that all sub-contractual operations
of Barama Company Limited be suspended with A. Mazaharally and Sons, N.
Sukul and Sons and Barakat Timbers Limited.

There were no other immediate measures of punishment meted out to the
three companies. Assessing the alleged harvested logs at 35 per cent of
the market value, as stipulated by regulations, GFC ordered that Barama
pay G$96.4 million.

“The penalties imposed by GFC are severe, unclear, and in our opinion,
arbitrary,” Barama stated yesterday. “Barama, in its request for a fair
process, is prepared to engage internationally-recognised auditors,
forestry consultants and other experts to investigate the issues, with
the involvement and cooperation of GFC.”

Barama signaled its intentions to appeal the sanctions and called for a
fair process in determining the breaches, fines and suspension, where
the company acted as contractor in third-party concessions.

“Furthermore, Barama is deeply concerned that the penalties will cost
jobs and have a detrimental impact on Barama's continued investment in
the country.”

Barama stressed that any anomalies discovered were unintentional and
the result of “operational realities and practices.” It is part and
parcel of operating in any dynamic and geographically challenging
industry, the company said.

Over the past 15 years of its operations in Guyana , Barama said that
it has tried its best to operate strictly within the jurisdiction and
confines of Guyanese laws and regulations.

“As Guyana 's largest foreign investor, it is in the company's best
interest to adhere to the GFC forestry practices to ensure the
company's long-term presence in Guyana . As an open and transparent
company, any discrepancy discovered is easily highlighted and the
proper checks and balances can rectify the situation,” said Lalaram.

The company said it conducted an internal investigation and found “some
mistakes, including the unintentional mixing of tree tags between
areas, and harvesting in areas where permits were still being
processed.”

However, at the end of the day, all logs were openly declared to the
GFC and signed off by officers, the company maintained.

According to Chief Executive Officer, Peter Ho, Barama acknowledged
that “there is definitely room for improvement. We will develop a
working group that will look into the matter and revamp the
administrative and operational procedures so that mistakes and
miscommunication are minimised.

“We aim to continue developing our working relationship with the GFC so
that we can better understand each other's needs and constraints.”

The company claimed that the latest penalties will impact upon business
as well as investment plans, which need to be shelved till the current
issues are resolved.

Barama, which operates a plywood mill, would have to cut production
even further as a result of the latest suspensions from third-party
concessions, which contribute the bulk of the peeler log species for
plywood.

“Moving forward, Barama will immediately engage with GFC to seek a fair
process to clarify the breaches and penalties,” Barama assured.

Meanwhile, a spokesman of Barakat Timbers Ltd, said although the
company received correspondence from GFC asking for a response to an
audit findings by the regulatory body, Barakat only learnt of the
sanctions through the newspapers.

According to the spokesman, Barakat has done nothing wrong since it has
a legal arrangement with Barama, and GFC has copies of the agreement.