Forestry allegations - Barama open to hiring independent audit firm

http://www.stabroeknews.com/index.pl/article?id=56530663

Forestry allegations
Barama open to hiring independent audit firm
Stabroek News, Wednesday, October 10th 2007

Peter Ho

Barama's CEO Peter Ho says he is surprised at President Bharrat
Jagdeo's allegations against the company and assures that he is willing
to meet with Government to resolve any issues and would consider hiring
an independent auditing firm to investigate the matter.

President Jagdeo at a press conference on Monday chastised the company
for alleged breaches of forestry procedures involving collusion among
staff of Barama Company Limited, third party concessionaires and staff
of the GFC. Jagdeo warned that there would be consequences for the
company and the other parties and noted that from preliminary
investigations it seems as though there was a plot to defraud the
Govern-ment. The investigative team found instances of
under-declaration of forest products and false declaration of origins
of those products.

The Ministry of Agricul-ture together with the GFC two weeks ago
launched an investigation and a report is to be handed to Minister of
Agriculture Robert Persaud today.

"Barama Company Limited is deeply concerned about today's news reports
on the company's forestry procedures and its relationship with the
Guyana Forestry Commis-sion (GFC). The news reports come as a surprise
because as a responsible and law-abiding corporate citizen, we operate
within the confines of the law," Ho said in a statement yesterday. He
added that the matter is already a concern to the top management of
Samling Group, Barama's parent company.

He said that based on preliminary investigations, it is his view that
the infractions were minor in nature. "Under no circumstances has the
company intentionally breached any of the procedures. Perhaps it is
just an administrative and reconciliation issue. We are more than
willing to engage with the GFC to resolve this concern and find an
amicable solution," Ho said.

The CEO confirmed that the negative publicity may have implications for
the company's forest certification with the Forest Stewardship Council
(FSC) which was suspended earlier this year.

He said too that if during the course of the investigations intentional
violations are found, the company would not hesitate to take stringent
measures to correct the situation. He said that he would fire persons
from all levels of the company once they are found culpable.

"We are an open and transparent company and we are eager to get to the
bottom of this so that any misunderstanding with the GFC could be
cleared up as soon as possible," the CEO said.

Senior manager at Barama, Neil Chand said that the company has a log
tracking system that is comparable to the one employed by the GFC. He
said that the system is checked daily to ensure that information can be
verified as to volume and species.

According to Chand, the company has third party harvesting arrangements
with five concessionaires but exercises no managerial control on these
concessions. He said that when the news of the Government investigation
broke two weeks ago, the Govern-ment had corresponded with Barama and
asked for information on their operations.

Ho said that Barama is committed to sound forest management practices
and has been operating in Guyana for over 15 years. "Dur-ing this time
of operations, the company has acted in accordance to the law and
worked well with the GFC, without any serious non-conformance issues
raised. We take a long term view on investments, resulting in the
current investment - excluding the road network - of over US$100M," Ho
said.

According to Ho, the company's long term investment strategy includes
reducing log exports, which he said have high shipping costs associated
with it. "At the same time, Barama is continually finding new ways to
market lesser known Guyanese species on the global market to increase
the export of more value-added wood products," Ho said.

He said that Barama continues to export logs to markets like China,
India and Vietnam, as a means to introduce Guyanese species to these
growing markets. He said that when the demand and acceptance levels for
such products on these markets rise, "we can invest in the appropriate
manufacturing facility to produce such wood products from Guyana to the
markets. The entire process takes time to develop."

But he promised that the evidence of additional downstream development
will be seen in six months time.

He said that in the past two years Barama has invested US$27M and
through these investments, the company expects to increase its volume
and variety of exports to the US, Europe, Central America and Caricom
countries and create 200 jobs.

Meanwhile, he said that he is about to make changes to the way the
company operates in terms of policy with a view to becoming more
cost-effective and efficient.