When will Iwokrama deliver?
Dear Editor,
A few days ago, Mr. Jerry Gouveia and Mr. Brian James were discussing tourism, and how Iwokrama fits into this. The press also reported Iwokrama signing a co-management agreement with a neighbouring community.
The question which comes to mind is when will the Iwokrama model be realised? Iwokrama has been in existence for over ten years now, and to date, I am certain that the revenues generated cover below 50% of their operating cost.
Iwokrama has spent significant amounts of donor monies and our own tax payers' monies; in my estimation, in excess of US$50M over its life so far, and yet it cannot be financially sustainable. Iwokrama gets into everything, except real, viable, economic, financial, and sustainable activities.
Well over a year ago, the press reported Iwokrama and DTL inking a timber harvesting agreement. Why is it that, to date, not a single tree has been cut? Why does Iwokrama, in all of its financial difficulties, continue to pay super salaries to employees, employ high priced consultants to do nothing, and get involved in a host of non-economic activities?
All of Iwokrama's business plans are on paper but hardly anything gets implemented. Iwokrama needs fresh blood of business oriented managers, who know how to manage a forestry operation to gain economic benefits, while at the same time maintaining its conservation objectives. These small activities here and there will never make Iwokrama sustainable.
I read, with great interest, about the failure to implement their business proposals of some of our foreign investors in the forestry sector. The same set of writers and commentators need to be fair in their judgement and scrutinize Iwokrama in like manner.
But, of course, we know that some of those authors are either employed by Iwokrama as consultants, or were previously employed by Iwokrama, and hence they owe allegiance. Integrity is what should matter, and not allegiance.
Preamnarine Karan
Kaieteur News
Monday, January 15, 2007
Saturday, January 13, 2007
Where is the inquiry into timber pricing as promised?
There should be an inquiry into timber pricing as Minister Robert Persaud had promised
Saturday, January 13th 2007
Dear Editor,
Vivek Persaud writes in his letter captioned "There is ansolutely no evidence of transfer pricing of timber" (07.01.11) in terms which are eerily reminiscent of the export log industry in Papua New Guinea (PNG) at the time of the judicial inquiry (Supreme Court Judge Tos Barnett's 1987-9 "Commission of Inquiry into Aspects of the Timber Industry in Papua New Guinea"). Transfer pricing was a major issue in that inquiry. The lawyers focused on the unexplained discrepancies between declared export prices (FOB) and the recorded prices landed in the importing countries, and demonstrated that transfer pricing had indeed occurred over a long period and on a massive scale. The deputy Prime Minster was found guilty on 76 counts for his dealings with expatriate logging companies while he was Minister for Forests. Other politicians and civil servants were also indicted on many counts.
Here, as in PNG, an apologist for the timber industry seeks to distract by offering non-comparable data concerning timbers which are less likely to be subject to transfer pricing. Mr Persaud refers to his "solid presentation" and "extensive analyses" but unfortunately those have not been published. My analyses published by Stabroek News and other papers have concentrated on purpleheart, the fine furniture and flooring timber which is being overcut and exported massively as unprocessed logs. Although purpleheart generally comprises less than 1 per cent of the standing volume in Guyana's forests, it comprised 12 per cent of the log volume produced during January-October 2006 (41,000 cubic metres out of 331,181 cubic metres total) and of that 41,000 cubic metres no less than 87 per cent was exported as unprocessed logs. The numbers and proportions were very similar for all of 2005. These are data from the Guyana Forestry Commission.
The Minister for Forestry promised at his press conference on 8 December to institute an inquiry into log exports, although not a judicial inquiry as in PNG. Minister Robert Persaud also promised to make data available for this inquiry. Almost immediately, that promise was countermanded by the Commissioner of Forests, in his refusal "GFC not releasing cargo details" Stabroek News January 3, 2007, page 12. Vivek Persaud appears also to seek to prevent debate, on a matter which may involve monthly losses to Guyana of US$ 3-5 million in transfer pricing. Over 10,000 cubic metres of prime logs left just one log pond of one Asian-owned logging company in December 2006; landed in China, those logs would be worth about US$ 5.25 million.
This is a matter for public concern.
Why is Vivek Persaud so anxious to forestall a national enquiry into transfer pricing of timber logs? Anyone who is truly interested in the national public good would welcome Minister Persaud's stated commitment to launch a full impartial enquiry into transfer pricing. I await the announcement of Minister Persaud's enquiry.
Yours faithfully,
Mahadeo Kowlessar
StabroekNews
Saturday, January 13th 2007
Dear Editor,
Vivek Persaud writes in his letter captioned "There is ansolutely no evidence of transfer pricing of timber" (07.01.11) in terms which are eerily reminiscent of the export log industry in Papua New Guinea (PNG) at the time of the judicial inquiry (Supreme Court Judge Tos Barnett's 1987-9 "Commission of Inquiry into Aspects of the Timber Industry in Papua New Guinea"). Transfer pricing was a major issue in that inquiry. The lawyers focused on the unexplained discrepancies between declared export prices (FOB) and the recorded prices landed in the importing countries, and demonstrated that transfer pricing had indeed occurred over a long period and on a massive scale. The deputy Prime Minster was found guilty on 76 counts for his dealings with expatriate logging companies while he was Minister for Forests. Other politicians and civil servants were also indicted on many counts.
Here, as in PNG, an apologist for the timber industry seeks to distract by offering non-comparable data concerning timbers which are less likely to be subject to transfer pricing. Mr Persaud refers to his "solid presentation" and "extensive analyses" but unfortunately those have not been published. My analyses published by Stabroek News and other papers have concentrated on purpleheart, the fine furniture and flooring timber which is being overcut and exported massively as unprocessed logs. Although purpleheart generally comprises less than 1 per cent of the standing volume in Guyana's forests, it comprised 12 per cent of the log volume produced during January-October 2006 (41,000 cubic metres out of 331,181 cubic metres total) and of that 41,000 cubic metres no less than 87 per cent was exported as unprocessed logs. The numbers and proportions were very similar for all of 2005. These are data from the Guyana Forestry Commission.
The Minister for Forestry promised at his press conference on 8 December to institute an inquiry into log exports, although not a judicial inquiry as in PNG. Minister Robert Persaud also promised to make data available for this inquiry. Almost immediately, that promise was countermanded by the Commissioner of Forests, in his refusal "GFC not releasing cargo details" Stabroek News January 3, 2007, page 12. Vivek Persaud appears also to seek to prevent debate, on a matter which may involve monthly losses to Guyana of US$ 3-5 million in transfer pricing. Over 10,000 cubic metres of prime logs left just one log pond of one Asian-owned logging company in December 2006; landed in China, those logs would be worth about US$ 5.25 million.
This is a matter for public concern.
Why is Vivek Persaud so anxious to forestall a national enquiry into transfer pricing of timber logs? Anyone who is truly interested in the national public good would welcome Minister Persaud's stated commitment to launch a full impartial enquiry into transfer pricing. I await the announcement of Minister Persaud's enquiry.
Yours faithfully,
Mahadeo Kowlessar
StabroekNews
Thursday, January 11, 2007
Guyana - Great New Blog, check it out
http://theoverstream-guyana.blogspot.com/
THE OVERSTREAM - GUYANA
A wave of Common - Sensical Thinking
THE OVERSTREAM - GUYANA
A wave of Common - Sensical Thinking
Monday, January 8, 2007
Independent inquiry needed into transfer pricing.
Why we need an independent inquiry into transfer pricing
Dear Editor,
One of the most encouraging aspects of the 2006 pre-election PPP/C manifesto was the four mentions of “value-added” products and industries for forestry (page 15).
Implementing the National Forest Plan of 2002 in this way obviously requires knowledge of the potential of Guyana 's timbers.
Contrary to the assertion in Samantha Griffith's (or is the real name the original Vivek Persaud in Guyana Chronicle of December 21?) letter in SN of December 30, much is known about Guyana's approximately 1000 types of timber. Identification and testing of Guyanese timber characteristics were undertaken at the Imperial Institute in London from c.1910.
The great collection of world woods by Samuel Record at Yale University includes a large number of samples from Guyana from the 1930s, which were used with Venezuelan timbers for descriptions in the classic text “Timbers of the New World ” (Record & Hess 1943, facsimile reprint 1972). Properties of the main commercial Guyanese timbers are available in public-domain comparative databases such as PROSPECT (www.plants.ox.ac.uk/ofi/prospect), of which both Indian and Chinese log importers are aware.
In the ten months from January-October 2006, the Guyana Forestry Commission (GFC) recorded names of 125 timbers produced as logs, of which 60 timbers were exported. Fourteen of those were exported in volumes greater than 1000 cubic metres (m3) and three of those in
volumes greater than 10,000 m3.
The GFC recorded, for the same period, 93 timbers produced as chainsawn lumber, of which 51 chainsawn and millsawn timbers were exported. There are considerable errors in volumes, and confusion about names in the GFC data, but Samantha Griffith is simply wrong in saying that “Guyana is not . . . well established in the timber market”, at least in qualitative terms.
My clarification in SN of December 25 concerned the fine furniture and flooring timbers, which constitute only a small proportion of Guyana 's forest growing stock, but which are of such intrinsic value that they are always in danger of being over-harvested. This point was either
missed or obscured by the Commissioner of Forests in the press conference which SN reported on December 9.
The Commissioner was adamant that Guyana 's forests are being harvested at an average rate of 5m3/hectare, only one quarter of the average sustainable level estimated by the GFC. I am not concerned about the average overall commercial timbers, but about the over-cutting, lack of field monitoring by the GFC, under-valuation and under-declaration, and transfer pricing associated with those few fine timbers which are so much in market demand.
Eighty-seven per cent of the recorded 41,000 m3 of purpleheart — the fine timber which I used in my example —- produced in January/October 2006, was exported as unprocessed logs, while local value-adding industries are short of this timber. This is not a case for an export ban, because the modern flooring mills in China can obtain a higher intensity of utilisation of logs than Guyana 's under-capitalised and relatively crude timber industries (see www.gtisproject.com).
It is a case for a thorough investigation of transfer pricing, and the persistent under-valuation of fine timbers and under-taxation of exports of unprocessed logs and squared timbers. The GFC is clearly not briefing the Minister for Forestry correctly, to judge from the recorded statements by both Minister and GFC Commissioner at the December 8 press conference.
Again I call for Government to bring in independent expertise to study transfer pricing, as the GFC seems not to understand either the gravity of losing US$3-5 million per month, or how to set about such a study.
Mahadeo Kowlessar
Dear Editor,
One of the most encouraging aspects of the 2006 pre-election PPP/C manifesto was the four mentions of “value-added” products and industries for forestry (page 15).
Implementing the National Forest Plan of 2002 in this way obviously requires knowledge of the potential of Guyana 's timbers.
Contrary to the assertion in Samantha Griffith's (or is the real name the original Vivek Persaud in Guyana Chronicle of December 21?) letter in SN of December 30, much is known about Guyana's approximately 1000 types of timber. Identification and testing of Guyanese timber characteristics were undertaken at the Imperial Institute in London from c.1910.
The great collection of world woods by Samuel Record at Yale University includes a large number of samples from Guyana from the 1930s, which were used with Venezuelan timbers for descriptions in the classic text “Timbers of the New World ” (Record & Hess 1943, facsimile reprint 1972). Properties of the main commercial Guyanese timbers are available in public-domain comparative databases such as PROSPECT (www.plants.ox.ac.uk/ofi/prospect), of which both Indian and Chinese log importers are aware.
In the ten months from January-October 2006, the Guyana Forestry Commission (GFC) recorded names of 125 timbers produced as logs, of which 60 timbers were exported. Fourteen of those were exported in volumes greater than 1000 cubic metres (m3) and three of those in
volumes greater than 10,000 m3.
The GFC recorded, for the same period, 93 timbers produced as chainsawn lumber, of which 51 chainsawn and millsawn timbers were exported. There are considerable errors in volumes, and confusion about names in the GFC data, but Samantha Griffith is simply wrong in saying that “Guyana is not . . . well established in the timber market”, at least in qualitative terms.
My clarification in SN of December 25 concerned the fine furniture and flooring timbers, which constitute only a small proportion of Guyana 's forest growing stock, but which are of such intrinsic value that they are always in danger of being over-harvested. This point was either
missed or obscured by the Commissioner of Forests in the press conference which SN reported on December 9.
The Commissioner was adamant that Guyana 's forests are being harvested at an average rate of 5m3/hectare, only one quarter of the average sustainable level estimated by the GFC. I am not concerned about the average overall commercial timbers, but about the over-cutting, lack of field monitoring by the GFC, under-valuation and under-declaration, and transfer pricing associated with those few fine timbers which are so much in market demand.
Eighty-seven per cent of the recorded 41,000 m3 of purpleheart — the fine timber which I used in my example —- produced in January/October 2006, was exported as unprocessed logs, while local value-adding industries are short of this timber. This is not a case for an export ban, because the modern flooring mills in China can obtain a higher intensity of utilisation of logs than Guyana 's under-capitalised and relatively crude timber industries (see www.gtisproject.com).
It is a case for a thorough investigation of transfer pricing, and the persistent under-valuation of fine timbers and under-taxation of exports of unprocessed logs and squared timbers. The GFC is clearly not briefing the Minister for Forestry correctly, to judge from the recorded statements by both Minister and GFC Commissioner at the December 8 press conference.
Again I call for Government to bring in independent expertise to study transfer pricing, as the GFC seems not to understand either the gravity of losing US$3-5 million per month, or how to set about such a study.
Mahadeo Kowlessar
Rong Cheng info needed -Wrong or Right to ask?
Dear Editor,
In her letter published in SN December 30 2006 (‘Some of Guyana's timber is now gaining international recognition'), Ms Samantha Griffith refers to, “my previous letter published in the Guyana Chronicle on December 21”. Unfortunately, no letter by Samantha Griffith was published in the Guyana Chronicle on December 21; only one by Vivek Persaud in response to Mahadeo Kowlessar's charge of transfer pricing on logs shipped from Guyana to China. Will the real Vivek Persaud / Samantha Griffith please stand up?
What concerns me, however, is the substantive matter of transfer pricing; not the pseudonyms used by Vivek Persaud/Samantha Griffith. I look forward to the GFC/GRA/Government of Guyana announcing the launch of an independent investigation of transfer pricing in log exports from Guyana, carried out by a reputable expert in the field (also suggested by an anonymous writer in SN December 12).
Through your newspaper, may I repeat my request of December 25 to the Commissioner of Forests for information on the name of the timber exporter(s) with cargo on the ship “Rong Cheng”? What timber species/volumes/values of logs were being exported, and who are the
consignees?
Minister Robert Persaud, at his press conference on December 8, urged stakeholders to use “correct information,” and assured that the Guyana Forestry Commission would provide. Why is the Commissioner not complying with this assurance?
The widely distributed CD of consultants' reports prepared during the UK-funded GFC Support Project includes one on forest revenue systems in Guyana (1996). Section 3.24, page 26, of that report stated, “The GFC's ability to block or delay exports is the subject of bitter complaint by
the forest products industry. The GFC claims that the veto is necessary to discourage transfer pricing”. So this pricing is not a new issue for Guyana.
Considering the pressure on government's finances (support to complete the construction of Buddy's hotel, unbudgeted costs of holding a general election), the sums of money potentially involved in transfer pricing of timber logs are so large as surely to attract the scrutiny of the Minister of Finance. Think of all the luxury BMW cars one could buy with US$3-5 million per month.
Patrick Jackson
http://www.kaieteurnews.com/
P.S Will the real Vivek Persaud/Samantha Griffith please stand up?
In her letter published in SN December 30 2006 (‘Some of Guyana's timber is now gaining international recognition'), Ms Samantha Griffith refers to, “my previous letter published in the Guyana Chronicle on December 21”. Unfortunately, no letter by Samantha Griffith was published in the Guyana Chronicle on December 21; only one by Vivek Persaud in response to Mahadeo Kowlessar's charge of transfer pricing on logs shipped from Guyana to China. Will the real Vivek Persaud / Samantha Griffith please stand up?
What concerns me, however, is the substantive matter of transfer pricing; not the pseudonyms used by Vivek Persaud/Samantha Griffith. I look forward to the GFC/GRA/Government of Guyana announcing the launch of an independent investigation of transfer pricing in log exports from Guyana, carried out by a reputable expert in the field (also suggested by an anonymous writer in SN December 12).
Through your newspaper, may I repeat my request of December 25 to the Commissioner of Forests for information on the name of the timber exporter(s) with cargo on the ship “Rong Cheng”? What timber species/volumes/values of logs were being exported, and who are the
consignees?
Minister Robert Persaud, at his press conference on December 8, urged stakeholders to use “correct information,” and assured that the Guyana Forestry Commission would provide. Why is the Commissioner not complying with this assurance?
The widely distributed CD of consultants' reports prepared during the UK-funded GFC Support Project includes one on forest revenue systems in Guyana (1996). Section 3.24, page 26, of that report stated, “The GFC's ability to block or delay exports is the subject of bitter complaint by
the forest products industry. The GFC claims that the veto is necessary to discourage transfer pricing”. So this pricing is not a new issue for Guyana.
Considering the pressure on government's finances (support to complete the construction of Buddy's hotel, unbudgeted costs of holding a general election), the sums of money potentially involved in transfer pricing of timber logs are so large as surely to attract the scrutiny of the Minister of Finance. Think of all the luxury BMW cars one could buy with US$3-5 million per month.
Patrick Jackson
http://www.kaieteurnews.com/
P.S Will the real Vivek Persaud/Samantha Griffith please stand up?
Sunday, January 7, 2007
Wal-Mart buys illegal logs
Wal-mart Destroying Rainforests
Now that K-mart has announced an end to the sales of outdoor furniture made of nyatoh, logged from the old growth rainforests of Indonesia, it's time to turn our attention to the really big guys. Wal-mart stores carries three lines of outdoor furniture made of nyatoh.
Logging for nyatoh and other high-value woods is driving Indonesia's rainforests to extinction. Logging is the largest cause of destruction of rainforests in Southeast Asia, with the wood going to everything from plywood to pencils.
With teak supplies dwindling and prices for that wood rising, everyone is trying to get into the game of supplying outdoor furniture retailers with tropical hardwood patio and garden furniture.
Woods such as nyatoh, balau and kapur are now being heavily targeted in Indonesia and Malaysia and jatoba and garapera in Brazil, as replacements for teak. These products should be avoided by the consumer and the retailer.Illegal logging in rampant in Indonesia, estimated at between 75 – 90% of exports.
Illegally-procured logs are laundered through the mills. Even the Indonesian government admits that illegal logging is out of control. One government official was prompted to call on other countries for help in stemming the flow of illegal wood by not buying wood from Indonesia.
Send a message to Wal-mart to ask them to stop selling nyatoh outdoor furniture and other wood products from old growth rainforests.
http://www.rainforestrelief.org/
Now that K-mart has announced an end to the sales of outdoor furniture made of nyatoh, logged from the old growth rainforests of Indonesia, it's time to turn our attention to the really big guys. Wal-mart stores carries three lines of outdoor furniture made of nyatoh.
Logging for nyatoh and other high-value woods is driving Indonesia's rainforests to extinction. Logging is the largest cause of destruction of rainforests in Southeast Asia, with the wood going to everything from plywood to pencils.
With teak supplies dwindling and prices for that wood rising, everyone is trying to get into the game of supplying outdoor furniture retailers with tropical hardwood patio and garden furniture.
Woods such as nyatoh, balau and kapur are now being heavily targeted in Indonesia and Malaysia and jatoba and garapera in Brazil, as replacements for teak. These products should be avoided by the consumer and the retailer.Illegal logging in rampant in Indonesia, estimated at between 75 – 90% of exports.
Illegally-procured logs are laundered through the mills. Even the Indonesian government admits that illegal logging is out of control. One government official was prompted to call on other countries for help in stemming the flow of illegal wood by not buying wood from Indonesia.
Send a message to Wal-mart to ask them to stop selling nyatoh outdoor furniture and other wood products from old growth rainforests.
http://www.rainforestrelief.org/
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