Barama: Fines will send workers home Continued investment at risk

http://www.stabroeknews.com/index.pl/article?id=56531743

Barama: Fines will send workers home
Continued investment at risk
Stabroek News, Thursday, October 25th 2007

Barama Company Limited yesterday dubbed the $96.4M in fines imposed by
the forestry commission as "severe, unclear and… arbitrary" and
warned that it will lead to the sending home of workers and have a
detrimental impact on the company's continued investment here.

The company was this week slapped with $96.4M in fines for breaches in
three concessions. The GFC dismissed two field officers resident at the
locations for ineffective monitoring and all three sub-contractual
operations with the three companies holding the concessions have been
suspended.

On September 25, Minister of Agriculture Robert Persaud announced that
the GFC had launched an investigation into suspected cases of under
declaration of forest produce harvested, and false declarations about
the origin of forest produce harvested. This announcement followed on
the heels of a revelation in July that the GFC discovered that there
were procedural breaches with regard to the under declaration of forest
produce harvested and false declarations with respect to the origins of
forest produce involving A Mazaharally and Sons Limited, Barakat
Timbers and Trading Company Limited, Barama and N. Sukul and Sons.

According to a GFC press release, 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."

Barama in its press statement yesterday 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 Girwar
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 company's internal investigations had found some mistakes
including the unintentional mixing of tree tags between areas, and
harvesting in areas where permits were still being processed. However,
at the end of the day, all logs were openly declared to the GFC and
signed off by officers," Lalaram's statement said.

"There is definite room for improvement," said Peter Ho, Barama's
recently appointed CEO. "We will develop a working group that will look
into the matter and revamp the administrative and operational
procedures so that mistakes and miscommunication are minimized. We aim
to continue developing our working relationship with the GFC so that we
can better understand each other's needs and constraints."

Ho said too that the latest penalties will impact upon current business
as well as investment plans, which need to be shelved until the current
issues are resolved.

The statement said that Barama, which currently operates a plywood
mill, would have to cut production even further as a result of the
latest suspensions from third-party concessions, which contribute the
bulk of the peeler log species for plywood.

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.