Ms Bulkan should have clarified the position with Demerara Timbers Limited

http://www.stabroeknews.com/index.pl/article?id=56527853

Ms Bulkan should have clarified the position with Demerara Timbers
Limited
Stabroek News
Thursday, August 30th 2007

Dear Editor,

Janette Bulkan is once again exposed as a promoter of rumour rather
than factual information. She should take time off to get the facts
rather than jump to conclusions on the basis of rumour.

Bulkan in her eagerness to attack the Government and the Guyana
Forestry Commission at every angle, does not do the accepted thing and
seek clarification on an issue, instead she lambastes the Government
and Guyana Forestry Commission for not following some procedures in the
"transfer" of a concession by Demerara Timbers Limited to Bai Shan Lin
Limited.

If Bulkan had simply called Demerara Timbers Limited, the Guyana
Forestry Commission or Bai Shan Lin she would have gotten the real
facts and would not have embarrassed herself.

I myself was concerned when I read her letter about the transfer.
However, I sought clarification from the commission and was informed
that no such thing had happened. I was also told that the procedure
that Bulkan was referring to was really in respect to the transfer of a
concession from one company to another (involving also a name change),
and did not cover the movement of shares within a specific company.

I was however pleased to note that the revised forest law which is to
be debated soon in Parliament, and which is being, ironically, opposed
by Bulkan, actually addresses the transfer of shares within a company.
The revised law makes it compulsory for the GFC to be prior informed,
and also to give approval after completing the necessary due diligence.

The existing law of 1953 does not allow for this, and companies are
therefore free to have a change of shares until the revised law is
passed.

How serious are the Bulkans and petitioners of the proposal to block
the new forest law about transparency, and accountability when the
revised law provides for all of these safeguards and the existing law
has all of these glaring loopholes?

The subsequent letter by the CEO of Demerara Timbers Limited refuting
the claims of Bulkan has clarified the matter beyond doubt. It has also
embarrassed Bulkan, because here it is that Demerara Timbers Limited is
actually moving into the welcome area of added value, yet Bulkan in her
eagerness to misinform seizes the opportunity to spread rumour.

It would be good for Bulkan to recognize the tremendous assistance that
the Asian countries are providing to Guyana at the bilateral level.

Guyana needs foreign investors. They must comply with our rules and if
they are guilty of breaches, they must be penalized. However, any
criticism must be justified, it must not be criticism that is seen to
be part of someone's agenda to bring down Asian companies. This can be
construed as an attack to discredit the Asian companies and so reduce
competition with family members who are also in the forestry sector.

Yours faithfully,

Preamnarine Karan

Editor's note

We sent a copy of this letter to Ms Bulkan for her comments and
received the following response:

"The Forests Act of 1953 and the associated Forest Regulations are
quite explicit, as you would hope from the drafting of Conservator of
Forests, W A Gordon, a barrister and later the author of the first
comprehensive text on forest law. The relevant legislation is detailed
below:

"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
Permis-sions -

"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 Presidential 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).

The contention of Preamnarine Karan that the 1953 legislation does not
provide for the GFC to be informed / requested in advance, and for
prior permission to be granted by the President, is thus incorrect. I
appreciate that some people having interests in forest harvesting
concessions may have difficulty in obtaining a sight of the current
(1953) legislation, as amended.

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."

Mr S K Chan of DTL has already clarified that the arrangement between
DTL and Bai Shan Lin is not simply the provision of labour ("Demerara
Timbers only deals with logs harvested by itself in its licensed
areas", SN 07.08.26) but is a Technical Assistance Management
Agreement. As DTL staff have informed Guyanese citizens at Mabura Hill
(allegedly) that some of them are likely to be replaced by Chinese
workers, and that Bai Shan Lin would not continue to subsidize
community services like the Mabura Primary School, and as the new road
sign at Mabura Hill (observed and photographed in early August 2007)
indicates a dominant role for Bai Shan Lin, it was reasonable for a
concerned citizen to question through the columns of Stabroek News if
proper procedure had been followed.

The draft Forest Bill 2007 provides in Section 16 (1) b, c and d for a
variety of kinds of controlling interests in the management of a forest
concession, and the final sentence in Section 16 (1) notes that
transfer covers any form of disposition. That is, not just changes in
name or in share ownership. This sub-section spells out in more detail
and more obscure language what is now contained in the current law.

Over the last year or so I have called in letters and articles in the
press for more attention to the national and PPP policies favouring
added value in relation to forest products. So I am all in favour of
more in-country added value at the Mabura Hill mill and in secondary
mills to which DTL and its associated businesses may sell logs and
lumber.

I am aware of financial assistance given by Guyana to Bai Shan Lin, and
we have some indication from the Hong Kong stock exchange of proposals
for investment in Guyana by Bai Shan Lin. Like the Minister for
Forestry, I am anxious to see these proposals being converted into new
jobs and new skills for Guyanese and more revenue retained in Guyana
from such operations. My calls are not for bringing down Asian
companies but for them to be subject to the same obligations as
Guyanese companies, including full attention to the laws and
regulations.

Four Asian loggers in Guyana legally hold at least 2,746,168 ha or 56
percent of 4.9 million ha allocated under large-scale concessions.
Through their illegal renting of concessions, those four Asian loggers
control at least an additional 524,000 ha, and will no doubt soon have
their other pending State Forest Exploratory Permits (SFEPs) upgraded
to long-term concessions. As a consequence of legal and illegal
holdings, Asian loggers now control the overwhelming majority of the
long-term large-scale forestry concessions. Why should this be a matter
of concern to our Government, and all its citizens?

1. Over 50 percent of allocated State Production Forests are under the
control of four Asian companies under long-term concessions, in spite
of violations of the terms of their FDI awards and non-compliance with
forest law and policy.

2. As far as can be ascertained, only one long-term concession has been
rescinded since 1985. This means that the Asian loggers are secure in
their long-term possession of the best-stocked commercial timber
forests of Guyana.

3. Asian loggers export the best commercial hardwoods suitable for fine
flooring and furniture in log form, and at low declared FOB prices for
comparable species in the international trade.

4. Asian loggers import foreign workers while the rate of unemployment
in Guyana is high and have a poor record of training Guyanese forest
workers. Asian loggers pay Guyanese workers less than the foreign
workers.

Ms Karan is only the most recent letter writer who attacks the
messenger instead of the message. In this climate of mud-slinging and
personal invective, it is little wonder that there are few Guyanese who
will publicly challenge violations of law and policy."