Transfer of assets between forest companies must meet approvals -Jagdeo

http://www.stabroeknews.com/index.pl/article?id=56527724

Transfer of assets between forest companies must meet approvals -Jagdeo
Stabroek News,
Tuesday, August 28th 2007

President Bharrat Jagdeo says that the transfer of any assets of
Demerara Timbers Limited (DTL) to Chinese forest company Bai Shan Lin
has to meet strict due diligence before garnering approval and this he
made clear to the Guyana Forestry Commission (GFC).

"I made it clear that the GFC [must] be involved…this is not an
automatic process," he said yesterday at a press conference at the
Office of the President. He added that the GFC would have to establish
the track record of the companies and do the necessary due diligence
before deciding on anything final. He said that the issue was discussed
in Cabinet.

Forest researcher Janette Bulkan stated in a letter 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
licensees should be rescinded by the GFC (Forest (Miscellaneous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.

According to President Jagdeo, he didn't think the Government still
owned shares in DTL, but he said that he needed to check on this. He
said that in the past the company was sold without any public tender
and people involved were paid monies improperly.

In a statement recently, DTL CEO S.K. Chan said that DTL was in "full
control of the company" and that the two entities have entered into a
management partnership that will add processing equipment to its
existing mills at Mabura to produce a wider range of value added timber
products.

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. Further, the company was also recently found
non-compliant with basic safety and labour laws and regulations on a
recent visit to its Coomacka operations.