http://www.kaieteurnewsgy.com/letters.htm
Illegality of landlording forest concessions equals likelihood of false
declarations for log exports
Kaieteur News, 13 April 2007
Dear Editor,
May I clarify some errors in the letter by Trevor Atkinson captioned
“Patriotism or Hypocrisy?” published in Kaieteur News on 10 April, in
which he refers to some of my notes on the forest sector.
“Landlording” is the practice in which the legal holder of a forest
harvesting concession gives up managerial control and rents it out to
another enterprise. This practice is
Illegal under Forest Regulations 1953, Article 12, which states - “No
transfer of any lease or timber sales agreement shall be made by any
forest officer without the prior approval of the President where such
lease or timber sales agreement grants exclusive rights to any person
over an
area estimated to exceed 3,000 acres or is for an unexpired period
exceeding three years”.
Landlording is illegal under Condition 13 of Timber Sales Agreement
which states - “The grantee shall not transfer, sub-let, mortgage or
otherwise dispose of any interest arising under this agreement, except
in accordance with the Forest Regulations, and any purported
disposition made, except in accordance with such regulations, shall be
null and void.”
Mr. Atkinson and a previous writer, Paul Taylor, claim that Condition
14 of the Timber Sales Agreement allows sub-letting. It does not.
Landlording is differentiated from “sprinting,” which was a
longstanding practice by which concession holders would contract in
labour for specific tasks, but without, in any way, passing on
managerial control. “Sprinting” is a way of keeping recurrent costs low
but being able to respond to specific orders for timber.
Sprinting is useful to companies which have limited marketing skills
and so respond to orders but do not positively market Guyana 's
wonderful timbers.
The recent Initial Public Offering (IPO) on the Hong Kong Stock
Exchange by SamLing Global Limited, the parent company of Barama,
specifically mentions 445,000 hectares of Guyana 's forest over which
it claims to hold timber “rights” in addition to the 1.61 million
hectares of its own concession TSA 04/1991. These 445,000 hectares
include the Amerindian titled Village Lands of Akawini and St Monica,
over which the Guyana Forestry Commission has no mandate and for which
Barama negotiated “in bad faith” agreements. Consequently, under the
Amerindian Act 2006, these two agreements are void, yet the Government
allows logging to continue!
This illegality was one of several which led to the suspension, in
January this year, of the FSC certification of Barama.
Does this distinction between sprinting and landlording matter? Yes,
because Government neglect has allowed Barama to extend its legal
control of 26 per cent of State Production Forest allocated for
harvesting by a further and mostly illegal 7 per cent.
The four largest Asian-owned loggers control legally, and by renting
landlorded concessions, well over half of Guyana 's allocated State
Production Forest .
SamLing's IPO documents show that Barama is preferentially logging
outside its own concession in these landlorded areas. In the last five
years, Barama has drawn 56-72 per cent of its logs from landlorded
areas, and exported almost all of the logs unprocessed to Asia . This
log export is entirely against the spirit of the generous tax
concessions given by our Government, and contrary to the value-added
policies of Guyana and of the PPP/C (in its 2006 election manifesto).
In addition, the IPO documents show that Barama has no intention of
sustainable forest management in these landlorded areas, reckoning to
log them out by 2015.
This diversion of logs to Asia inevitably reduces possibilities for
adding value in Guyana by our nationally-owned companies. So, is Guyana
recovering some value by taxing the excess profit on logs? No, even
though this profit is vast and the Caribbean regional forest officer of
the UN Food and Agriculture Organisation (FAO) has agreed with me that
a variable rate tax is more economically beneficial to Guyana than the
complicated ban proposed by the GFC. And is this booming trade in logs
to Asia being properly recorded, as promised by the Minister for
Forestry at the log export meeting on 17th February 2007?
No, logs are being loaded without GFC or Customs oversight on
unsupervised wharves.
And what is the effect? The discrepancies between Guyana's official
export data and Chinese Customs' import data are so great that our
situation will be exposed as an example of bad export practice at a
meeting in Europe in early May on “Illegal Logging and Related Trade:
Measuring the Local Response.” How shameful that our Government allows
our country to be held up as an international example of bad practice.
Illegality of landlording forest concessions equals likelihood of false
declarations for log exports
Kaieteur News, 13 April 2007
Dear Editor,
May I clarify some errors in the letter by Trevor Atkinson captioned
“Patriotism or Hypocrisy?” published in Kaieteur News on 10 April, in
which he refers to some of my notes on the forest sector.
“Landlording” is the practice in which the legal holder of a forest
harvesting concession gives up managerial control and rents it out to
another enterprise. This practice is
Illegal under Forest Regulations 1953, Article 12, which states - “No
transfer of any lease or timber sales agreement shall be made by any
forest officer without the prior approval of the President where such
lease or timber sales agreement grants exclusive rights to any person
over an
area estimated to exceed 3,000 acres or is for an unexpired period
exceeding three years”.
Landlording is illegal under Condition 13 of Timber Sales Agreement
which states - “The grantee shall not transfer, sub-let, mortgage or
otherwise dispose of any interest arising under this agreement, except
in accordance with the Forest Regulations, and any purported
disposition made, except in accordance with such regulations, shall be
null and void.”
Mr. Atkinson and a previous writer, Paul Taylor, claim that Condition
14 of the Timber Sales Agreement allows sub-letting. It does not.
Landlording is differentiated from “sprinting,” which was a
longstanding practice by which concession holders would contract in
labour for specific tasks, but without, in any way, passing on
managerial control. “Sprinting” is a way of keeping recurrent costs low
but being able to respond to specific orders for timber.
Sprinting is useful to companies which have limited marketing skills
and so respond to orders but do not positively market Guyana 's
wonderful timbers.
The recent Initial Public Offering (IPO) on the Hong Kong Stock
Exchange by SamLing Global Limited, the parent company of Barama,
specifically mentions 445,000 hectares of Guyana 's forest over which
it claims to hold timber “rights” in addition to the 1.61 million
hectares of its own concession TSA 04/1991. These 445,000 hectares
include the Amerindian titled Village Lands of Akawini and St Monica,
over which the Guyana Forestry Commission has no mandate and for which
Barama negotiated “in bad faith” agreements. Consequently, under the
Amerindian Act 2006, these two agreements are void, yet the Government
allows logging to continue!
This illegality was one of several which led to the suspension, in
January this year, of the FSC certification of Barama.
Does this distinction between sprinting and landlording matter? Yes,
because Government neglect has allowed Barama to extend its legal
control of 26 per cent of State Production Forest allocated for
harvesting by a further and mostly illegal 7 per cent.
The four largest Asian-owned loggers control legally, and by renting
landlorded concessions, well over half of Guyana 's allocated State
Production Forest .
SamLing's IPO documents show that Barama is preferentially logging
outside its own concession in these landlorded areas. In the last five
years, Barama has drawn 56-72 per cent of its logs from landlorded
areas, and exported almost all of the logs unprocessed to Asia . This
log export is entirely against the spirit of the generous tax
concessions given by our Government, and contrary to the value-added
policies of Guyana and of the PPP/C (in its 2006 election manifesto).
In addition, the IPO documents show that Barama has no intention of
sustainable forest management in these landlorded areas, reckoning to
log them out by 2015.
This diversion of logs to Asia inevitably reduces possibilities for
adding value in Guyana by our nationally-owned companies. So, is Guyana
recovering some value by taxing the excess profit on logs? No, even
though this profit is vast and the Caribbean regional forest officer of
the UN Food and Agriculture Organisation (FAO) has agreed with me that
a variable rate tax is more economically beneficial to Guyana than the
complicated ban proposed by the GFC. And is this booming trade in logs
to Asia being properly recorded, as promised by the Minister for
Forestry at the log export meeting on 17th February 2007?
No, logs are being loaded without GFC or Customs oversight on
unsupervised wharves.
And what is the effect? The discrepancies between Guyana's official
export data and Chinese Customs' import data are so great that our
situation will be exposed as an example of bad export practice at a
meeting in Europe in early May on “Illegal Logging and Related Trade:
Measuring the Local Response.” How shameful that our Government allows
our country to be held up as an international example of bad practice.
Janette Bulkan
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