Time for AG to pronounce on the renting of other forest concessions

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Time for AG to pronounce on the renting of other forest concessions
Kaieteur News, 11 July 2007

DEAR EDITOR,

I am happy to agree with the Commissioner of Forests, as reported in
Sunday SN, captioned “Barama harvesting legally outside its concession”
Commissioner of Forests, (2007.07.08).

In one respect, my previous estimates of Barama's illegal renting of
other forest logging concessions are apparently an under-estimate. I
had calculated partly from the Initial

Public Offering (IPO) prospectus of the parent company, Samling Global
Ltd., March 2007 that about 408,000 ha were illegally managed by
Barama. The conformity assessment body, SGS Qualifor, has at last put
on its website the public summary of the report of its surveillance
mission of November 2006 (url
=http://www.forestry.sgs.com/forestry_services_index_v2/
mini_site_forestry_certification/forest_management_reports/
qualifor_fmr_guyana.htm).

This shows that the Amerindian areas under bad faith logging agreements
(illegal under the Amerindian Act 2006, Article 55 (1) (d)) cover
72,000 hectares, instead of my previous estimate of 7,978 ha. So Barama
is even more illegal than I had suggested, and even more than is
revealed in its IPO prospectus.

The SGS report is explicit on the matter of Barama's control over
harvesting in the landlorded areas: BCL has a few other areas in Guyana
(through joint ventures or own) where it has control over its
management. (page 63 in SGS document AD 36-A-01). Barama's IPO confirms
that Barama has no interest in sustainable management of these
landlorded concessions (VI-68 and VI-69 in the IPO prospectus).

Let us recapitulate the legal and policy requirements of Guyana which
Barama is infringing through these illegal acquisitions.

Barama illegally rents three classes of forest harvesting concessions:
three long-term, supposedly sustainable Timber Sales Agreements; one
Wood Cutting Lease and at least two short-term State Forest Permissions
(VI-68 in the IPO prospectus). Only the President can approve
sub-letting of long-term harvesting concessions. There is no public
domain evidence that such approval has been formally requested or
formally granted, or was debated by the GFC Board of Directors.

“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 -
“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 three thousand acres or is for
an unexpired period exceeding three years”.

Landlording is illegal under Condition 13 of Timber Sales Agreements -
“The grantee shall not transfer, sublet, 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.”

Landlording is also illegal under Condition 2 of 16 of State Forest
Permissions - “This Permit is not transferable without the prior
consent in writing of the Commissioner. It may not be assigned or
sublet nor may the grantee allow any person to work under it on payment
to the Grantee of any consideration whatsoever”.

Landlording can be permitted only with express residential authority
(the President being the Minister of Forestry, as opposed to the
quotidian control by the Minister for Forestry, who is usually also the
Minister of Agriculture).

Landlording is differentiated from “sprinting,” which was a long
standing 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 do not positively market Guyana's wonderful timbers. “Sprinting”
in Timber Sales Agreements is covered by Condition 14.

The grantee [that is, the holder of the TSA concession] shall inform
the Grantor [the Guyana Forestry Commission] in writing immediately
upon engagement of the names of the agents and contractors who are and
the dates when they cease, to carry out its operations in the Area.

There is provision for suspension or cancellation of WCLs or TSAs in
the Forest (Miscellaneous Provisions) Act 1982, Section 11.

Policies

The April 1993 statement on forest concessions by the Guyana Forestry
Commission and the associated procedural manual cover the transparent
and competitive process by which private enterprises and individuals
can secure forest concessions. This bidding process is referenced in
Section 4 of the National Forest Policy of 1997 and Section NFP 300 of
the National Forest Plan of 2001.

It makes no sense to have an open bidding process involving the
submission of competitive price premia to acquire concessions, and at
the same time to allow Barama to bypass these national policies by
non-transparent dealings and non-payment of additional price premia.
Concession holders who cannot operate their forests according to the
terms of their concessions should have their licences withdrawn in
accordance with GFC procedures, and the areas returned to the strategic
pool for re-bidding through State Forestry Exploratory Permits (SFEPs).

Barama is obviously attractive as a partner for failing concessionaires
because of its lower costs which are achieved through abuse of its
Foreign Direct Investment (FDI) tax concessions, compared with national
enterprises.

If the Commissioner's position were to be carried to the logical end,
Barama could absorb all other concessions beyond its current 33+
percent of State Production Forests. So we would have moved from
British Guiana through Bookers Guiana to Barama Guyana. This is hardly
compatible with the National Competitiveness Strategy formulated under
the present Administration in 2006.

This debate has been playing out in the newspapers for over a year, Mr
Editor, beginning with the Commissioner of Forests' assertions reported
in the Guyana Chronicle of 2006.04.01 (Forestry Commission rejects
half-truths).

It is extraordinary that the GFC is still not able to provide an
accurate estimate of the areas illegally sub-let to Barama and those
held under “bad faith” agreements. Surely, it is the task of the Forest
Products Association (FPA) to argue the case for special treatment for
its members while the Commissioner of Forests should be defending and
promoting the national interest. Your report suggests that the
Commissioner is more interested in supporting the illegal harvest by
the largest operator in Guyana than in forest stewardship in the
national interest.

Three other Asian-owned loggers manage illegally sub-let concessions.

Surely it is past time for the Attorney General to intervene and
provide a definitive, complete, and fully referenced public statement
on this matter, for each one of the illegally managed concessions?

Janette Bulkan