What happened to the votes for a partial ban on log exports?

http://www.stabroeknews.com/index.pl/article?id=56526442

What happened to the votes for a partial ban on log exports?
Stabroek News
Friday, August 10th 2007

Dear Editor,

"Guyana open for business" now seems to mean "Guyana open for
neo-colonial pillage". You reported ("Log exporters, timber products
manufacturers reach 'general consensus'on way forward", SN (07.02.18)
the seminar on timber log exporting on February 17, 2007.

Presumably this was one of the long delayed responses to the National
Development Strategy 2001-2010, the more recent National
Competitiveness Strategy 2006, the 2006 pre-election manifesto of the
PPP (with four explicit endorsements of value adding processing of
forest products) and the enticing concessions which Go-Invest dangles
but does not always deliver.

In March, the GFC posted a 23-page 'Post Consultation Summary -
National Log Export Policy' on its website. I read that 'total
attendees amounted to 350', and that 'forest producers included both
small and large scale operators from all three counties.' Plainly a
cross section of forestry stakeholders willingly gave up a Saturday and
participated in the consultation.

At registration, each participant was assigned arbitrarily to one of 10
working groups. After 'Opening Remarks' and the presentation of the
Discussion Paper by the Commissioner of Forests, the 10 Working Groups
were then given one hour to discuss and deliberate on 3 separate
proposals outlined in the Discussion Paper. The groups then presented
their findings back to the Plenary. A summary of the decisions taken on
the 3 proposals is set out on page 18 of the GFC report.

Proposal 1. The first proposal presented 2 options relating to the
banning of 15 named species in log form. Eighty per cent of
participants (8 of the 10 groups) voted for Option 1 - a full ban from
1 March 2007.

Proposal 2. The second proposal presented 2 options relating to the
banning of 10 named species in log squares. Seventy per cent of
participants (7 of the 10 groups) voted for Option 1 - a full ban from
1 January 2008.

Proposal 3 was a combination of Proposals 1 and 2. The groups seemed to
have had difficulty with this proposal, as it lacked options from which
to choose.

The majority supported the proposal for a phased ban.

Interestingly, 3 groups ignored the request to consider a phased ban,
and repeated the call for 'full ban of all species outlined from
January 2008'.

Six months later, I read in your newspaper that the President is
meeting with the GMSA and other stakeholders on the proposed log
exports policy Eh?

Is the government suffering from collective senility?

Did the government not read the results of the stakeholder process set
out in the GFC 23-page 'Post Consultation Summary - National Log Export
Policy'?

You published my estimates ("Available data strongly suggest that the
invoice prices for logs don't reflect market value" SN (06.11.30) on
undeclared profits on log exports. Since then, the landed CIF price in
China of merbau, a timber technically equivalent to our purpleheart for
fine furniture and flooring, from Malaysia and Indonesia has increased
from US$ 569-594 per m3 to US$ 674-740 per m3 (a rise of US$ 100-140
per m3, data in the fortnightly Timber Trade Market report from the
International Tropical Timber Organization - ITTO). However, the Guyana
Forest Products Marketing Council provides data, apparently the same as
are reported to the Customs Administration of the Guyana Revenue
Authority, indicating that the purpleheart log price FOB Georgetown has
moved only from US$ 130 to a maximum of US$ 150 per m3 in the seven
months to the end of June 2007; although when those same logs are
mentioned in ITTO statistics the FOB value has climbed to US$ 200 per
m3.

Malaysian-owned Barama and Chinese-owned JaLing concur in their IPO
prospectuses on the Hong Kong stock exchange that logging costs in
Malaysia are the same as in Guyana, US$80 per m3. Our own shippers note
that ocean freight to Asia is not more than US$ 120 per m3. So the
undeclared profit on log exports from Guyana to Asia has increased in
seven months from US$ 320 per m3 to US$ 400 per m3 (low range estimated
as merbau CIF Guangzhou City of 674, minus insurance and ocean freight
of 13`0, minus prime sawmill quality logs of purpleheart FOB Georgetown
of 150, = US$ 394 per m3; and high range estimated as merbau CIF
Guangzhou City of 740, minus insurance and ocean freight of 130, minus
purpleheart FOB Georgetown 200, = US$ 410 per m3).

The Forest Products Marketing Council reports that over 70,000 m3 of
our prime timber logs were exported in the first half of 2007, say
12,000 m3 per month.

How do the GFC, FPA and the President Minister of Forestry, not to
mention the Customs Administration in the Guyana Revenue Authority,
explain the increasing price difference between merbau and purpleheart
logs when they are used for the same products in Chinese timber mills?
Surely not a combination of under-measurement, mis-declaration,
under-declaration and transfer pricing in Georgetown?

It is little wonder that Barama is seeking shipping for one thousand
containers per month (@ 12 m3 of logs per 20' container) while the
excess profits are so gigantic (12 m3 x 1000 containers x excess profit
of US$ 400 per m3 = US$ 4.8 million per month).

Coincidentally, this was my estimate for all Guyana's log exports to
Asia last November but is now the aim of Barama alone. Is this what the
Government means by "Guyana is open for business"?

Yours faithfully,

Mahadeo Kowlessar