Many of the timber deals made with foreign investors were not in the interest of Guyana

Saturday, November 25th 2006
Stabroek News

Dear Editor

We do appreciate the Commissioner of Forests, Mr. James Singh, giving us a detailed account of what the Guyana Forestry Commission (GFC) is doing in his letter captioned "The figure quoted as being earned by the country from forestry investors does not take into account the employment provided and other important spin-off activities" (06.11.17). For now, I shall let the local forestry and industry experts comment on the various points raised in the letter.

However, knowingly or unknowingly, Mr. James Singh gave the impression that poor and unfavourable contracts were only awarded prior to Oct, 1992. His statement was: "Some of the companies being referred to were given concessions prior to October 1992: Barama Company Limited, Demerara Timbers Limited, and UNAMCO. These companies have investment contracts which were favorable and not changeable."

Dr Marcus Colchester (Guyana - Fragile Frontier, Loggers, Miners and Forest People, 1997, London, New York, Jamaica) writes: "As in most tropical countries, political patronage has to a large extent determined who gains large concessions in Guyana. Most of the large concessions given out to Guyanese nationals between 1985 and1991 were to ministers, members of parliament and supporters of the PNC which ruled until 1992. Moreover, in the five years preceding 1989, seven companies absorbed 94 % of foreign assistance given to the sector, with two companies alone, Guyana Timbers and Demerara Woods getting 75%." (page 101)

"With authority to hand out concessions vested in a small, barely accountable government office directly under Presidential control, the opportunities for favouritism, and malpractice abound. In practice timber deals are rarely transparent. As the World Bank has observed and confirmed…" That was the PNC era.

This is the PPP era: Colchester continues - "During the early 1990s, obscurity (secrecy?) concerning the Forestry Commission's operations has increased. The (expatriate) Commissioner for Forests resigned and was not replaced. The Commission began to be effectively run by the Chairman of the Board, who happened to be President Jagan's brother-in-law. Beyond his brief and without even the deputy Commissioner's knowledge, he was single-handedly negotiating logging concessions with foreign companies. The World Bank concluded that the Guyanese Forestry Commission was a perfect example of the "capture theory of regulation", whereby the regulatory body is controlled by the industry it is supposed to regulate."…. ( page 102-103).

"Led by Britain's Overseas Developmental Administration (ODA) and supported by the World Bank officials, donors informally agreed to express concerns to the Government about the handout of logging concessions, while the ODA made its proposed aid project to strengthen the Forestry Commission conditional on a concession freeze."

"Upset by the bad image it was getting abroad. The Government agreed and the President's brother-in-law was removed from his position as Chairman of the Board of the Forestry Commission. Some four million hectares of Guyana's forests had been temporarily at least, saved from the chainsaws."

"A study carried out for the World Bank in late 1995 showed that loggers were getting their timber in Guyana extraordinarily cheaply; royalties, taxes, and forest fees being paid by loggers in Guyana were some of the lowest in the tropics, less than a tenth of those paid in African and Asian countries. Moreover, since 1988 fees had been falling in real terms. Royalties' rates were at 30% of their former value, while customs duties and acreage fees had fallen by more than ninety per cent in the past decade. On top of this, foreign companies enjoyed 'generous tax breaks and other incentives creating conditions of unfair competition (for local producers): 'This kind of forest mining entails a boom-and- bust pattern of development that can be highly disruptive to employment levels, trade balances, and other factors of macroeconomic stability'."(page 113-114).

The British NGO's of ODA, Greenpeace, World Rainforest Movement, and other Environmental groups have been very active in the protecting the interests of the Guyanese people. Unfortunately, the same cannot be said of the corrupt, ineffective, and incompetent PNC and PPP Govts.. Their stewardships (giveaway deals, handouts, etc) in favour of the foreign multinationals (mostly) makes one asks why these giveaways were done?

Lastly, to have the PNC and PPP representatives on the Guyana Forestry Commission is like asking the same organizations who caused the problems to oversee their 'handout -works'. Is this not analogous to the UG Council? How can we have confidence that they will now act in the interests of the people and not in their own selfish schemes?

The effect of these 'deals' will be felt for decades compliments of the PNC and PPP. The young people (including those of the GYSM and PYO) of Guyana must ask why their heritage has been squandered yet again by the inept and/or corrupt Govt./party leaders and/or officials? If the Guyanese people do not demand answers from these parties, then we would be condoning gross misconduct.

Yours faithfully,

Seelochan Beharry