The forestry commission should focus on the huge losses suffered from
log exports
Stabroek News, Tuesday, February 19th 2008
Dear Editor,
It is just a year since 350 stakeholders at the public consultation on
a log export policy convened by the Guyana Forestry Commission (GFC)
endorsed overwhelmingly the replacement of log exports by local timber
processing.
This agreement tallies with the national development strategy
2001-2010, national forest policy (1997), national forest plan (2001)
and PPP pre-election manifesto (2006). Since that public consultation
on February 17, 2007, the GFC has made no public move to phase in bans
on exports of any logs, despite assurances given by Minister Robert
Persaud that "within 4 weeks the policy recommendation [would] be
tabled at Cabinet for members' consideration" (GFC. National Log Export
Policy. Post Consultation Summary, March 2007). Instead, the GFC is
chasing mills and lumber yards over matters for which it appears to
have neither full legal mandate nor legitimate means of effective
enforcement ("The Forestry Commission seems to be making a long overdue
attempt to restore its operational mandate", SN letter, February 8,
2008). And the GFC has yet to publish a technical justification for its
detailed specification to mills and lumber yards.
Meanwhile, what has Guyana been losing through this persistent failure
to implement national policy? According to the GFC's own figures,
157,000 m3 of logs were exported in calendar year 2007 with a declared
FOB value of US$ 20.8 million. Almost one-third of the logs were
greenheart: 46,000 m3, mostly to India at an average declared FOB value
of US$ 110 per m3. If the 2 per cent export commission had been paid on
all that greenheart, Guyana would have gained US$ 102,000. But as
Barama is by far the largest log exporter, in its own name and through
subsidiaries, Guyana loses the 2 per cent export commission because
Barama through its secret Foreign Direct Investment agreement is exempt
from this tax. By way of comparison, the export commission on logs in
Suriname is 20 per cent.
In addition, 14,000 m3 of greenheart piles were exported mainly to the
USA with FOB value of US$ 2.7 million, at an average of US$ 193 per m3.
Those piles made up 30 per cent of the exported greenheart log volumes,
but have earned Guyana US$55,000 in export commission mostly through
locally-owned producer companies, versus zero on the logs shipped by
and through Barama to India and China.
Using the value multipliers for furniture from the log price at mill
gate, which I estimated last year ("New colonial masters, Malaysian
loggers in South America: how under-valuation of forest resources
exposes Guyana to unscrupulous exploitation". CFA News (Commonwealth
Forestry Association) 9 (3) issue 38:1-2,11-13), the 157,000 m3 of
exported logs could have produced furniture with FOB export prices
ranging from US$125.1 million (multiplier 9.0) up to US$203.0 million
(multiplier 14.6), a ten-fold improvement over the declared log export
values. Instead of which, it is likely that the 95 per cent of logs
exported to China and India will have generated illegal and undeclared
profits of around US$47.8 million (at US$ 320 per m3 in "Available data
strongly suggest that the invoice prices for logs don't reflect market
value" (SN letter November 30, 2006).
Mr Editor, would it not be better if the GFC focused its attention
where Guyana is losing serious money, through the uncontrolled log
exports which are against all national policies, instead of chasing
lumber yards and small-scale loggers?
Yours faithfully, Janette Bulkan
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