China company banned from log exports

http://www.stabroeknews.com/index.pl/article?id=56518583
Stabroek News

Saturday, April 21st 2007

Bai Shan Lin International Forest Development Inc, which announced its US$4.5M investment plan for wood processing earlier this year, has been banned from exporting round logs. An Agriculture Ministry press release yesterday said the Chinese-owned company, registered in Guyana, "was prevented from exporting round logs," since it was a move contrary to earlier commitments given by the company to the government. The release said that unfortunately, Bai Shan Lin did not comply with its commitment and after observing requests for the export of logs, the company was advised that it was in breach of its commitment. The release said no further export of round logs would be allowed by the company and all relevant agencies have been advised. The number of logs Bai Shan Lin exported contrary to its commitments was not stated nor the types of logs exported. Bai Shan Lin has been advertising heavily for the supply of logs to it. The company had appealed to Agriculture Minister Robert Persaud to allow a grace period of 12 months during which the export of round logs would be allowed, but this was denied by the minister. "The minister with responsibility for forestry has declined to grant this request," the release said, adding that the minister has reminded the company of the commitment it had expressed to become engaged immediately in value-added activities and encouraged it to move in this direction. The ministry release said that during the past six months, senior personnel of Bai Shan Lin held several discussions with government representatives including Prime Minister Samuel Hinds, Minister Persaud, the Guyana Forestry Commission (GFC) and the Guyana Office for Investment (Go-Invest). At these meetings, the management of Bai Shan Lin repeatedly emphasized that its interest was in the promotion of value-added activities in the forestry sector. A commitment was said to be given that the company would not engage in the export of round logs. Based on these commitments, the government continued to have dialogue with officials of Bai Shan Lin on the procedures to be followed such as re-acquisition of land suitable for the establishment of value-added facilities, and to access forest resources. Earlier this year when it was reported that Bai Shan Lin intended to focus on "finished" lumber and was investing US$4.5 million in a wood-processing plant to process logs cut from the Jaling concession, the partnership of these two companies had been viewed somewhat warily by some stakeholders since Jaling had been in trouble last year for exporting logs rather then complying with its wood processing investment commitments. Bai Shan Lin, it had seemed, had acquired a percentage of the interests of Jaling and would have been investing in lumber processing on behalf of Jaling. Bai Shan Lin International has the rights to 400,000 hectares of forest for a period of 20 years, the company website had said. Officials of the company in Guyana were reluctant to speak to the press. The website had noted that the company would be processing logs harvested from the Jaling Forest Industries Inc concession. A source from Bai Shan Lin had said that in addition to this, the company would be purchasing lumber for processing and resale both locally and overseas. According to advertisements in the press earlier this year, the company had invited local companies to submit proposals to supply it with lumber for processing. The company's website had noted as well that it would be making flooring, multi-layer and multi-wood parquet surface materials, furniture and solid doors. The ministry announcement comes amid an intense local debate on log exports - mainly in the letter pages of the Stabroek News. The government has been severely criticized for allowing foreign-owned companies such as Barama Company Limited, Demerara Timbers Limited, Jaling and Bai Shan Lin to export logs and to breach value-added provisions of their management plans among other transgressions. Several of the letter writers have complained that there has been transfer pricing in relation to the export of timber and the government has promised to investigate. The administration has also come under pressure to ban the export of logs. The government is expected to release its policy on log exports shortly and is currently looking at recommendations from a consultation on log exports. The recommendation that the ministry is considering has three options: A: A full ban of the export of 15 species of logs with two already having restrictions placed on them i.e. Locust and Crabwood from March 1, 2007. (The 15 species would be Purpleheart, Locust, Crabwood, Red Cedar, Washiba, Tonika Bean, Letterwood, Bulletwood, Cow wood, Tatabu, Kabu-kalli, Shibadan, Tauroniro, Hububalli, and Darina). B - The banning of ten species of logs under square dimensions (dimension 8"x 8" and greater) commencing January 2008. (These species would be Purpleheart, Red Cedar, Letterwood, Crabwood, Locust, Kabukalli, Shibaban, Washiba, Hububalli, Tonka Bean). C - A 50% ban on 12 species of logs in 2008; a 75% ban in 2009 and a 100% ban in 2010. (The species here would be Greenheart, Brown Silverballi, Itikiboroballi, Determa, Wamara, Hakia, Mora, Dukali, Kereti, Silverballi, Wallaba, Fukadi, Futui). Over the years, the local wood processing sector has suffered as a result of large-scale log exports, leaving some furniture makers to import woods like Locust from Brazil to fulfil export quotas, owing to its unavailability on the local market.