The Forestry Commission's public consultation on log export policy lacked credibility, the industry is committed to a phased conversion from log expor

http://www.stabroeknews.com/index.pl/article?id=56527180

The Forestry Commission's public consultation on log export policy
lacked credibility, the industry is committed to a phased conversion

from log exports

Stabroek News
Sunday, August 19th 2007

Dear Editor,

The letter from Mr. Mahadeo Kowlessar headlined "What happened to the
votes on the partial ban of log exports" (07.08.10) is sheer humbug.

The Forest Products Association (FPA) which represents over 50
companies in the timber industry participated in the Consultation
conducted by the Guyana Forestry Commission (GFC) held on 17th February
on a National Log Export Policy under protest and with extreme
reluctance. With hindsight, it would have been better for the
Association not to have participated.

As the Association pointed out in a letter to the Minister of
Agriculture prior to the Consultation, the Position Papers presented by
both the (FPA) and Guyana Services & Manufacturing Association (GSMA)
to a Ministerial Committee, on which there was no consensus, had been
ignored and, instead the GFC chose to mount a Consultation at which the
Commission presented a Discussion Paper confining the discussion to two
options, neither of which reflected positions of the FPA or GSMA.

The Consultation was not, therefore, an open discussion allowing for
the views of all of the participants to be fully expressed and
considered. It was, instead, focused on discussion of the two options
presented by the GFC.

While 350 persons attended the Consultation, the actual number of
organizations which participated were 89 and, significantly, only 30
represented the forest producers who are the core of the industry and
whose major investments are at stake. The remainder at the meeting were
academics, representatives of international organizations, public
servants and end product manufacturers.

A consensus as defined in any dictionary is a "general agreement"
representative of a collective opinion. There was certainly no
consensus at the Consultation. The voting, as the attendance at the
Consultation attests, did not represent the collective opinion of the
majority of companies who have invested in excess of $160B in forestry
production.

In fact, on 9th March after the Consultation, the FPA wrote the
Minister of Agriculture pointing out that "the public Consultation
lacked credibility". The FPA has written to your paper before on this
matter and has pointed out that "it is essential for government to take
a balanced approach to sustain timber production and allow the
production of primary and processed products to develop in response to
export and domestic market demand and pricing." We believe that this is
what the government is endeavouring to achieve.

The FPA has also pointed out that "the indiscriminate imposition of
restrictions and or a ban on exporting logs would be counter-productive
and unrewarding for Guyana. It would curtail timber production, cause
the loss of employment, discourage major private investment in the
industry, restrict export markets, result in significant export revenue
loss to the country, disable sound environmental practices which are
being developed and rupture the confidence of present overseas
customers and future investors."

What Mr. Kowlessar and his ilk continue to ignore and refuse to
recognize, is that in 2006, 380.000m³ of logs were harvested. Some 50%
were exported as logs, virtually all hardwood unsuitable for peeling
into plywood. This indicates that some 50% of this production was
processed. These figures demonstrate that the industry is already
finding its own balance between processed timber and log exports
without any form of legislated intervention. This year, some 60% of log
production is now being processed.

The FPA is committed to a phased conversion of the industry from log
exports to processed timber but which must take account of market
demand, adequate milling facilities, and availability of both skilled
and non skilled labour and shipping requirements. The government is,
therefore, well advised to move cautiously and with care.

The FPA has recommended to government the withdrawal of the 2% export
duty currently applied to processed lumber and, in its place, the
application of a levy on log exports and the progressive restriction of
exports.

The removal of the export duty and the application of the levy would
serve as an incentive to producers/millers to add value through
processing.

Mr. Kowlessar devotes considerable space to comparing prices in Asia
for the Merbau timber of Malaysia with those obtained for Purple Heart
from Guyana in a gross attempt to accuse exporters from Guyana of
"under declaration and transfer pricing". We have pointed out before
that Merbau is a well established wood in the global market for which
there is a high demand and which earns premium prices, differs
appreciably from purple heart in a number of specification aspects and
that any comparison between the two in terms of market value and price
is wholly misleading.

Yours faithfully,

David Persaud

President
Forest Products Association of Guyana