GCA postpones competitions -has management pact with Bai Shan Lin

http://www.stabroeknews.com/index.pl/article?id=56527510


GCA postpones competitions
-has management pact with Bai Shan Lin
Stabroek News, Saturday, August 25th 2007

Janette Bulkan

CEO of Demerara Timbers Limited (DTL) S. K. Chan says DTL is in full
control of the company and hence the need for approvals from the
Government and the Guyana Forestry Commission for a partnership with
Bai Shan Lin as outlined by activist Janette Bulkan does not arise.

Chan said in a letter to Stabroek News yesterday that in line with
Government's policy of further downstream processing of timber
products, the company has embarked on a technical assistance management
agreement with Bai Shan Lin "to secure the market linkages in China…"
It did not provide any further details on this agreement.

However, Earl Julien, Site Manager at Bai Shan Lin's Coomacka
operations in Region 10, had earlier told Stabroek News that his
company was in the process of "taking over the operations" at DTL's
Mabura location. This was backed up by Bai Shan Lin's Administrative
Manager Karen Canterbury, who said that the company would have been
providing the details.

In the letter, Chan said that the arrangement with the Chinese-owned
company will add processing equipment to its existing mills at Mabura
to produce a wider range of value added timber products.

He said too that DTL only deals in logs harvested by itself in its
licenced areas of operation under the Forest Management Plan and Annual
Operations Plan as approved by the Guyana Forestry Com-mission.

He said that DTL has a Union Agreement and its categories of workers
are unionized. He said that major changes if any as to the status of
its workforce must be addressed with the union and the Ministry of
Labour.

The statement said that Rich Resources Inc (RRI), an associate company
of DTL does have a partnership agreement with a local concessionaire.

To operate this agreement, the local partner has its own management
staff and field personnel to operate its own equipment fleet to harvest
its production timber.

The statement said too that RRI has a self-owned sawmill for processing
logs into lumber.

Recently Bai Shan Lin was banned from making log exports because it
failed to live up to investment timelines as outlined in its agreement
with the Government. The company was also recently found non-compliant
with basic safety and labour laws and regulations on a recent visit to
its Coomacka operations.

Writing in a letter to the Stabroek News on Thursday, Bulkan stated
that a transfer of ownership of a forest harvesting concession requires
government approval (Timber Sales Agreement, condition 13). She had
asked in her letter when and under what conditions did the Board of
Directors of the Guyana Forestry Commission (GFC) agree to this
transfer.

She also stated that the President, as Minister of Forestry, must give
prior approval to such transfer (Forest Regulations 1953, Clause 12).

According to Bulkan, the implication of the National Forest Policy 1997
(Part III A 4 and Part IV B 3) and of the National Forest Plan 2001
(Section NFP 320) is that concessions which cannot be operated by the
licencees should be rescinded by the GFC (Forest (Miscellaneous
Provisions Act, 1982, Clause 11) and either placed in a strategic
reserve of unallocated forest or advertised publicly for new bidding.
She said too that under the Exploratory Permits amendment to the
Forests Act in 1997, such advertisement should call for the offering of
a price premium for the right to have exclusive access to the forest
timber resources within the concession boundary.

She asked why this procedure was not used by the GFC and what the
details were of the compensatory premium which has been offered by Bai
Shan Lin to balance the cost saving of not having to compete for the
concession or concessions.

She asked, "Given that Bai Shan Lin has agreed not to export
unprocessed logs, what precautions are in place to prevent Bai Shan Lin
from selling logs to front companies for log exports such as Rong-An
Inc., Natural Wealth Development Inc., Demerara Timber Resources Inc.,
Newray Group Guyana Inc. and a host of other newly incorporated
companies?"

"What other elements of a time-bound action plan with progress
indicators associated with the FDI agreement of Bai Shan Lin will apply
to the DTL and landlorded concessions?"

She asked. She added: "The two legal Timber Sales Agreements held by
DTL cover 522,000 ha and its two [rented] concessions cover a further
91,000 ha. Surely it is in the interest of Guyana that over six hundred
thousand hectares of prime public forest assets should be publicly
tendered rather than slipped under the table from one Asian logger to
another?"

Speaking to this newspaper, General Secretary of the Guyana
Agricultural and General Workers Union (GAWU) Seepaul Narine said that
after reading the articles on the relationship between DTL and Bai Shan
Lin, the company had concerns for the DTL workers its represents.
Narine said that after speaking to the companies, it was explained that
it was a management contract and not a takeover that had been reported.

Efforts to reach Minister of Agriculture Robert Persaud and
Commissioner of Forests James Singh on the issue proved futile
yesterday.

Asked for a comment, the Forest Products Association of Guyana (FPA)
said through its Executive Director Mona Bynoe that the body has
consulted with DTL and Bai Shan Lin and has been informed that they
will be making an official statement in due course. "The FPA therefore
prefers not to make any comment at this time on what is an entirely
speculative article," Bynoe said.