Barama should not be short of peeler logs
Stabroek News, Saturday, December 8th 2007
DearEditor,
Presumably the Barama Company Limited will now be sending home the same
proportion of its expatriate work force as the proportion of its
Guyanese staff who are being made redundant?
("Barama plywood mill to shut temporarily over supply," SN December 05,
2007). This would be necessary to avoid exceeding its permitted 15 per
cent expatriate workforce, allowed by the government in the foreign
direct investment (FDI) arrangement of 1991 and confirmed by the
Minister of Forestry at his press conference on December 8, 2006
("Forestry transfer pricing probe on - Commissioner Singh - Barama,
Jialing to come under closer scrutiny", SN, Saturday, December 09
2006).
Perhaps you could confirm, Mr Editor, with the Ministry of Labour that
the Asian forest workers are indeed being repatriated in the correct
numbers? The FDI arrangement extols the intended Barama investments in
local processing of timber. If the Land of Canaan plywood mill is being
shut down, the continued flow of tax-free concessions from the
government to Barama should also be reduced. It is contrary to the
intentions of the FDI arrangement for Barama to receive tax incentives
(around US$800,000 per year) when it has been increasing its log
exports for the last several years and running down its plywood mill to
25 per cent of its designed capacity. That is also directly contrary to
the National Development Strategy 2001-2010, the National Forest Policy
1997, the National Forest Plan 2001, and the PPP pre-election manifesto
on value-added forest industry.
The CEO of Barama is reported as intending to build up its stock of
baromalli peeler logs in order to re-start the mill. If Barama had paid
more attention to its FDI promises, and if the Government (Guyana
Forestry Commission and Go-Invest) had monitored Barama as Minister
Robert Persaud promised a year ago, those stocks would have been
processed locally and not exported. It is absurd to imply that its huge
logging concession of 1.6 million hectares needs to be supplemented by
logs from illegally-rented neighbouring concessions. The CEO of Barama
now proposes to purchase logs. From whom? Barama is the de facto
manager of at least six concessions, which no longer have their own
capacity to log and supply timber. Loggers such as Jailin have their
own FDI arrangements which commit them to local processing, also
confirmed by the Minister for Forestry in December 2006, so they could
not properly be suppliers to Barama.
I hope that the current focus at the apex of government on the forests
of Guyana as a source of global environmental services does not
distract officials and politicians from correct valuation and
appropriate taxation of FDI -- benefiting logging companies. Perhaps
the Ministry of Finance should take a more strategic interest in the
workings of the Board of Directors of the Guyana Forestry Commission. I
note that the nominal fines imposed on Barama for under-declaration of
log volumes extracted and for illegal logging outside of its concession
boundaries in October 2007 do not seem to be associated with any
requirement for Barama to cease its illegal logging.
Yours faithfully,
Janette Bulkan
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