Forestry probe completed…Government slaps $96M penalty on Barama

Forestry probe completed…
Government slaps $96M penalty
on Barama
- three other companies sanctioned;
GFC staffers sacked
Kaieteur News, 23 October 2007
Less than a month after investigations were launched into an apparent
collusion between Barama Company Limited and Guyana Forestry Commission
(GFC) officials to defraud the state of revenue, the suspicions were
confirmed when the results of the investigation were revealed
yesterday.

Also implicated in the multi-million dollar racket are A. Mazaharally
and Sons Limited, Barakat Timbers Limited, and N. Sukul and Sons.

The company was found culpable of under declaration of forest produce
harvested as well as the false declaration with respect to the origin
of forest produce harvested.

Minister of Agriculture Robert Persaud, whose portfolio encompasses
forestry, has directed that all the prescribed sanctions be imposed
immediately.

The breached legislation, specifically Section 29 of the Forests Act,
Chapter 67:01, prescribes that the culpable party be penalised through
the payment of a compensatory mechanism equivalent to 35 per cent of
the market value of the produce harvested.

Based on GFC's calculations, the amount of money payable by Barama is a
whopping $96,412,148 for illegally logging in the other concessions
without permission from GFC.

The penalty amount was derived from each of the offences committed at
the various concessions: $78,081,800 for the breach in concession
issued to A. Mazaharally & Sons; $12,419,244 was attributed for the
breach involving N. Sukul & Sons, and the remaining $15,982,104 was
credited to the breach in concession issued to Barakat Timbers Limited.

According to the GFC, in July 2007, Barama transported a quantity of
logs harvested from a concession issued to Barakat Timbers Limited to
Buck Hall, and the quantity of logs declared to the GFC was below the
harvested amount.

The findings of the investigation also revealed that Barama harvested
and removed, without GFC's permission, a large quantity of logs from a
concession issued to A. Mazaharally and Sons Limited. Further, tags
issued to Barama and Barakat Timbers Limited, were used on stumps
located within the concession issued to A. Mazaharally and Sons.

Barama was also found guilty of removing a quantity of logs from
concessions issued to N. Sukul and Sons without approval from the GFC.

Further, all sub-contractual operations of Barama with involved
companies will be suspended.

Additionally, the two GFC officers cited for ineffective monitoring of
the concession that resulted in the breaches being possible have been
dismissed.

During the course of the investigations, GFC conducted analysis of
records, including comparisons of the documentation supplied to the GFC
by the companies with the internal records of the companies.

GFC Monitoring Teams also went into the concession areas to quantify
the extent of the breaches and to determine if there were additional
breaches.

Earlier in the month, when President Bharrat Jagdeo had announced that
the preliminary results of the investigations had implicated Barama,
the company immediately held a press conference where Chief Executive
Officer Peter Ho said, “Under no instance has the company intentionally
breached any procedures.”

He confidently expressed intention to meet with the GFC to resolve what
it called a concern and find an amicable solution.

The local logging giant had also announced that it was willing to hire
an independent audit team to probe its own records when the accusations
were made public.

The investigations have proved to be contrary to the CEO's initial
claims that mistakes were possible since it was people dealing with
documents.

When contacted yesterday, Barama's Chairman Girwar Lalaram confirmed
that he had seen aspects of the findings and reserved his comments for
a press conference to be held tomorrow.

He did say, however, that as far as he was aware it was a matter of
procedural issues and human error.

Recently, an Assistant Commissioner and another high ranking official
of the GFC were also disciplined following revelations that they
allegedly manipulated internal procedures.

Action was also taken against a local business which allegedly
collaborated with the two officials.

The action against the two officials came in the wake of recent
announcements of management shake-ups within the army and prison system
and is being viewed by many as government's growing intolerance for
indiscipline and corruption within the public service and governmental
agencies.

A former manager of a top sawmill also recently disclosed that
wrongdoing is widespread within the forestry sector.

He levelled several charges, claiming that Guyana was losing the lion's
share of the royalties due on timber and accusing GFC rangers of
colluding with exporters to defraud the government.