Barama fines 'Gov't won't be blackmailed'

http://www.stabroeknews.com/index.pl/article?id=56531807

Barama fines
'Gov't won't be blackmailed'
Stabroek News, Friday, October 26th 2007

Hitting back at Barama's announcement that workers would have to be
laid off as a result of heavy fines by the forestry commission, the
government yesterday said it would not be blackmailed and it added that
interim arrangements can be made to ensure the company's plywood
factory is supplied with raw material.

In an increasingly acrimonious stand-off with the largest Asian logging
company here, the government also accused Barama Company Limited (BCL)
of underutilizing its concession while tapping logs in other
concessions.

Speaking at a press conference yesterday in the wake of the contretemps
over $96M in fines levied by the Guyana Forestry Commission (GFC)
against Barama, Minister of Agriculture Robert Persaud said that any
interim supply arrangements for the plywood factory would be predicated
on the ending of sub-contractual arrangements for logs from other
concessions.

"This must however, be done through a process that is based on
constructive engagement rather than manipulation of issues and
processes and the issuance of threats and reckless statements. This is
to ensure that (Barama) is prepared to undertake sufficient extraction
of Baromalli from its own concession or make other arrangements for
sourcing raw materials," the Minister said.

Persaud said too that he has communicated this position to Carvil
Duncan, President of the Guyana Labour Union, which represents workers
at Barama's Land of Canaan plywood factory site. "We want to ensure
that workers don't suffer as a result of the breaches committed by the
companies," Persaud said.

Barama said in a statement on Wednesday that jobs would be threatened
as a result of the fines imposed. The company also had some of its
workers congregate at the Square of the Revolution yesterday morning in
what was said to be a protest against the punitive actions of the GFC
and the Ministry. At the gathering, Barama's Chairman Girwar Lalaram
changed his earlier position and said that the workers would not be
sent home.

Extensive acreage

Persaud said that a total of 1,611,195 hectares (3,981,349 acres) had
been issued to Barama and the level of utilisation of the acreage is
about 20 per cent. "Based on the annual plan inventory data submitted
to the GFC by BCL for 2007, I have been advised that BCL can harvest
about 43,000 cubic metres of Baromalli logs that are 40 cm and above in
diameter (used for plywood production) as opposed to their current
extraction of only 14,585 cubic metres up to September 2007," the
Minister said.

He said that for 2006, Barama harvested a total of 12,319 cubic metres
of Baromalli logs from its concession. "The above figures reflect that
BCL is not making maximum use of its extensive acreage leased to it and
this is an area of great concern to the GFC and my Ministry," Persaud
said.

Asked by Stabroek News whether in light of the underutilization of the
concession it could be repossessed, the Minister said that the GFC has
a number of options open to it.

"I have quoted these figures to emphasise the point that whilst BCL is
claiming that the suspension of sub-contracts with neighbouring
concessions would adversely affect raw material supply (to the mill),
and lead to downsizing of its operation, yet it is under-harvesting
significantly in the concession issued directly to BCL," the Minister
said.

Systematic

On Barama's response to the issue published in yesterday's edition, the
Minister said that the investigation into the breach of procedures
involving Barama and three other companies was done in a systematic,
detailed and objective manner.

The Minister in his statement said that after the investigation was
concluded, the GFC had discussions with the three of the companies to
alert them of the findings relevant to their individual companies. "The
GFC then wrote to three of the companies, clearly outlining the
identified breaches, and requesting the companies to provide a
response. The responses of the companies did not provide a satisfactory
explanation for the breaches identified by the GFC," Persaud said.

He said that contrary to the statement by Barama, the GFC maintains
that the charges instituted were specific and based on concrete
evidence "which is available for scrutiny by all stakeholders,
including internationally recognised auditors, forestry consultants and
other experts." But he added that any such scrutiny must be at the
financial cost of the requesting company and must include oversight by
the GFC.

The Minister in his statement said that threats of protests or other
unbecoming positions will not change the Government's stance on the
matter.

"Companies involved in these breaches can appeal the charges and
sanctions imposed. This must however be done through a proper and
acceptable process and not through the use of coercive tactics that
seek to blackmail the GFC and Government to reverse its position,
whilst downplaying serious breaches of the Government of Guyana
guidelines for sustainable management", Persaud added.

According to a GFC press release on Monday, investigations in September
found that in July Barama transported a quantity of logs harvested from
ESS 10/92, issued to Barakat Timbers Limited, to Buck Hall while the
quantity of logs it declared to the GFC in July was below the harvested
amount. Additionally, the findings show that Barama harvested and
removed, without the GFC's permission, a large quantity of logs from
the concession 2/90 issued to Mazaharally. Also, the tags issued to
Barama and Barakat were used on stumps located within the concession
issued to Mazaharally.

GFC had said in its release that Barama was found to have removed a
quantity of logs from WCL 05/93, issued to N. Sukul, without approval
from the GFC. This, the GFC said, is evidence of unauthorized
harvesting and extraction of forest produce. Plus, the GFC found that
the "harvesting operations on the ground were not conducted in a manner
that had serious negative environmental implications." The GFC said
these findings were made after "a detailed analysis of records was
done, including a comparison of the documentation supplied to the GFC
by the companies with the internal records of the companies."

The GFC monitoring teams were also said to have been deployed to the
concession areas to quantify the extent of the breaches, and to
determine if there were additional breaches.

The results of the investigations, "confirmed the GFC's initial
findings that there was under declaration of forest produce harvested,
as well as false declaration with respect to the origin of the logs
harvested," the GFC had stated in its release. "In addition, it was
verified that Barama was harvesting in the concessions areas issued to
A. Mazaharally and Sons Limited, and N. Sukul and Sons, even though the
GFC has not approved any sub-contractual arrangements for these
companies in 2007."

In its response on Wednesday, Barama said that it was appealing for the
GFC to allow for a fair process in determining the breaches, fines and
suspension, where the company acted as contractor in third party
concessions.

"Barama, in its request for a fair process, is prepared to engage
internationally-recognized auditors, forestry consultants and other
experts to investigate the issues, with the involvement and cooperation
of GFC," the Barama statement said.

"Furthermore, Barama is deeply concerned that the penalties will cost
jobs and have a detrimental impact on Barama's continued investment in
the country" the statement said. "Such a sudden suspension means there
will be workers without jobs immediately," said Barama Chairman
Lalaram. "Our preferred choice is to come to a swift resolution to save
jobs as soon as possible."

The statement said that Barama maintains that any anomalies discovered
were unintentional and were the result of operational realities and
practices and made the point that they were part and parcel of
operating in any dynamic and geographically challenging industry.

"Over the past 15 years of operation in Guyana, Barama has used its
best endeavour to operate strictly within the jurisdiction and confines
of Guyanese laws and regulations. As Guyana's largest foreign investor,
it is in the company's best interest to adhere to the GFC forestry
practices to ensure the company's long-term presence in Guyana," the
statement said.

Lalaram said that as an open and transparent company, any discrepancy
discovered is easily highlighted and the proper checks and balances can
rectify the situation.

The investigation and the fines come after a months-long campaign by
civil society activists and members of the timber industry over various
issues such as illegal subletting and the export of logs by Barama and
other Asian-owned companies.

It also follows a recent announcement by President Bharrat Jagdeo to
the Commonwealth Finance Ministers Meeting that Guyana has offered
almost its entire rainforest in the battle against climate change.

Barama began operating here in the early 1990s co-owned by Sunkyong of
South Korea and Samling of Malaysia. The Malaysian investor later
bought out Sunkyong's shares.