Wednesday, July 25, 2007

Newspapers must seek answers to troubling issues

http://www.stabroeknews.com/index.pl/article?id=56524958

Newspapers must seek answers to troubling issues
Friday, July 20th 2007

Dear Editor,
Although, Stabroek News may not always be right, one thing is clear and that
is at least one paper must constantly question what is happening in Guyana.
We may argue about accuracy but not about seeking answers to troubling
situations.
SN is right to raise questions about the timber industry, the status of a
new saw milling project and whether Miss Janette Bulkan can be seen as
helpful instead of a distraction.
Too many projects seem to be taking too long to be implemented. We need a
project management office to make sure that unnecessary hindrances are not
placed in front of major investments before we lose some of them. We also
need satisfactory, full and timely responses from the proper authorities to
questions raised in the press or by others about these projects and other
important issues, such as crime and corruption in our police and public
services.
Yours faithfully,
(name and address
provided)

Friday, July 20, 2007

Minister Webster urges participants to examine climate change issues

http://www.guyanachronicle.com/news.html#Anchor---------7948

Guyana Chronicle: July 19th, 2007
Minister Webster urges participants to examine climate change issues


Participants at the civil society consultation on the special theme of the
Commonwealth Finance Ministers' Meeting were yesterday urged to ensure that
they fully examine and consider all issues relating to climate change and
its effect on poverty reduction.

Minister within the Ministry of Finance Jennifer Webster, in the feature
address extended a warm welcome, on behalf of Government, and urged
participants from overseas to take time to enjoy the land of many waters
during their stay.

The event attracted participants from 14 Commonwealth nations, including
Africa, Asia, Europe, Jamaica, Canada and Australia. Also at the meeting was
Director General at the Ministry of Foreign Affairs Ms. Elisabeth Harper.

The Minister pointed out that the effects of climate change are visible
worldwide, with changes in weather patterns, torrential rains and flooding.
She noted that Guyana's case is peculiar, since 90 percent of the population
have settled along the Coast which is below sea level.

Minister Webster pointed out that Guyana in 2005 experienced widespread
flooding along the Coast as a result of torrential rainfall and this caused
huge losses.

The Minister stated that the objective of the civil society consultation is
to identify consensual Commonwealth civil society priorities, issues and
recommendations on developing an agenda for growth and livelihoods for
presentation to the Commonwealth Finance Ministers' Meeting (CFMM) which
will be held in Georgetown from October 15 - 17, 2007.

Representatives of civil society have made valuable inputs in the
deliberations of the annual Commonwealth Finance Ministers' Meetings since
2002. Civil society statements to the CFMM provided Ministers with
additional perspectives on the issues they discuss. They have also been used
to foster dialogue between government and civil society on issues related to
the CFMM Special Theme.

The Minister stated that Guyana has been a member of the Commonwealth since
1966 and has been highly committed to and involved in the organisation. She
pointed out that Government continually strives to promote and maintain the
values and principles of the Commonwealth in its efforts to fashion a
Commonwealth society.

She noted that the Commonwealth has been in the forefront in promoting
respect and understanding in matters dealing with culture and ethnic
diversity, and pointed out that the work of the organisation is inexplicably
linked to the achievement of the Millennium Development Goals.

Deputy Director of the Commonwealth Foundation Vijay Krishnarayan, in
providing a brief history of the organisation, stated that it was
established in 1969 and has been working to facilitate discussions between
various Governments and civil society.

He pointed out that the Commonwealth Foundation focuses on several areas
including Governance and Democracy, Sustainable Development and Culture and
Diversity. He further stated that it is necessary for Governments and civil
society to collaborate to address issues affecting them.

Coordinator for Women Across Differences, Clonel Samuels said the civil
society organisation operates in Guyana in partnership with others,
including Oxfam, the United Nations Development Programme and the Canadian
International Development Agency (CIDA) Gender Equality Programme.

She pointed out that the organisation is fully aware of the effects of
climate change on small nations and welcomed the opportunity to be part of
the organisation of such an event.

The Commonwealth Foundation, in collaboration with Women Across Differences,
is hosting the three-day the consultation which is being held at the Regency
Suites Hotel, Hadfield Street, Georgetown.

Commonwealth Finance Ministers usually meet annually immediately preceding
the autumn meetings of the World Bank and the International Monetary Fund.
The CFMM seeks to build consensus on key economic and finance issues and
concerns of member states, and gives the mandate for the economic
development work of the Commonwealth Secretariat. (GINA)

Only President can approve forest subletting - Bulkan

http://www.stabroeknews.com/index.pl/article?id=56524854

Only President can approve forest subletting - Bulkan
Stabroek News
Thursday, July 19th 2007

Forest researcher Janette Bulkan says there is no evidence in the
public domain suggesting that Barama Company Limited has formally
requested or has been granted Presidential approval for subletting of
long-term concessions and that there should be a competitive bidding
process to dispose of concessions whose holders cannot afford to work
them.

In a letter in the Stabroek News on July 10 she said also that there is
no evidence that such privileges were debated by the Guyana Forestry
Commission's (GFC) Board of Directors.

She pointed out that only the President of Guyana can approve the
subletting of long-term concessions. Repeated attempts by Stabroek News
to contact the Commissioner of Forests, James Singh on this point were
futile.

Bulkan pointed out that Barama "illegally" rents three classes of
forest harvesting concession: three long-term, "supposedly" sustainable
Timber Sales Agreements, one Wood Cutting Lease and at least two
short-term State Forest Permissions (VI-68 in the IPO prospectus).

Bulkan reminded that the post-audit SGS-Qualifor report is explicit on
the matter of Barama's control over harvesting in the landlorded areas:
"BCL has a few other areas in Guyana where it has control over its
management" (page 63 in SGS document AD 36-A-01). Barama's IPO confirms
that Barama has no interest in sustainable management of these
landlorded concessions (VI-68 and VI-69 in the IPO prospectus).

She said that "Landlording" is the practice in which the legal holder
of a forest harvesting concession gives up managerial control and rents
it out to another enterprise. "This practice is illegal under Forest
Regulations 1953, Article 12 - 'No transfer of any lease or timber
sales agreement shall be made by any forest officer without the prior
approval of the President where such lease or timber sales agreement
grants exclusive rights to any person over an area estimated to exceed
three thousand acres or is for an unexpired period exceeding three
years'.

Bulkan also contended that landlording is illegal under Condition 13 of
the Timber Sales Agreement which states "The grantee shall not
transfer, sublet, mortgage or otherwise dispose of any interest arising
under this agreement except in accordance with the Forest Regulations
and any purported disposition made except in accordance with such
regulations shall be null and void."

Landlording, she wrote, is also illegal under Condition 2 of 16 of the
State Forest Permissions. This states: "This Permit is not transferable
without the prior consent in writing of the Commissioner. It may not be
assigned or sublet nor may the grantee allow any person to work under
it on payment to the Grantee of any consideration whatsoever."

Bulkan said that landlording can be permitted only with express
presidential authority. She said in this case, the President being the
Minister of Forestry, "as opposed to the quotidian control by the
Minister for Forestry, who is usually also the Minister of
Agriculture."

She explained that landlording is differentiated from "sprinting" which
was a long-standing practice by which concession holders would contract
labour for specific tasks, but without in any way passing on managerial
control. She said that "sprinting" is a way of keeping recurrent costs
low while being able to respond to specific orders for timber.
Sprinting, she said, is useful to companies, which do not positively
market Guyana's timbers.

On the competitive bidding process, she said that the April 1993
statement on forest concessions by the GFC, and the associated
procedural manual, cover the transparent and competitive process by
which private enterprises and individuals can secure forest
concessions.

This bidding process is referenced in Section 4 of the National Forest
Policy of 1997 and Section NFP 300 of the National Forest Plan of 2001.
"It makes no sense to have an open bidding process involving the
submission of competitive price premia to acquire concessions, and at
the same time to allow Barama to by-pass these national policies by
non-transparent dealings and non-payment of additional price premia,"
Bulkan said. She added that concession holders, who cannot operate
their forests according to the terms of their concessions, should have
their licences withdrawn in accordance with GFC procedures and the
areas returned to the strategic pool for re-bidding through State
Forestry Exploratory Permits (SFEPs).

Bulkan is of the view that Barama is "obviously attractive" as a
partner for failing concessionaires because of its lower costs which
are achieved "through abuse of its Foreign Direct Investment (FDI) tax
concessions, compared with national enterprises." It has also been
pointed out that Barama was engaged in subletting when huge parts of
its own concession have not been utilised.

Further, she stated that her previous estimates of Barama's renting of
other forest logging concessions represented a lower figure than what
is taking place. "I had calculated partly from the Initial Public
Offering (IPO) prospectus of the parent company, Samling Global Ltd.,
in March 2007 that about 408,000 ha were illegally managed by Barama.
The conformity assessment body, SGS Qualifor, has at last put on its
website the public summary of the report of its surveillance mission of
November 2006.

This shows that the Amerindian areas under "bad faith" logging
agreements (illegal under the Amerindian Act 2006, Article 55 (1) (d)
cover 72,000 hectares, instead of my previous estimate of 7,978 ha. So
Barama is even more illegal than I had suggested and even more than is
revealed in its IPO prospectus," she wrote.

Thursday, July 19, 2007

Amerindian Affairs Ministry to launch website

http://www.kaieteurnewsgy.com/news.htm

Amerindian Affairs Ministry to launch website
Kaieteur News, 18 July 2007

The Ministry of Amerindian Affairs will later this month launch a
website to ensure that information on issues pertaining to Amerindians
and their rights are more readily accessible.

While making the disclosure, Minister Carolyn Rodrigues said the
development follows government's recognition of the growing need for
information on existing services, entitlements and opportunities
available to Amerindians.

The Minister assured that information has been garnered from all
required sources and persons utilising the site will have access to
information pertaining to land rights, the Amerindian Act, the
hinterland scholarship programme and a variety of other social services
provided by the Ministry.

She explained that candidates for the scholarship programme would have
access to features such as online application forms, entry requirements
and the list of academic and technical-vocational programmes
facilitated through the Ministry.

Persons will have greater awareness of activities conducted in
Amerindian villages as well as policies by the government to enhance
and promote them.

Extended infrastructural facilities such as electricity in some
hinterland areas have facilitated access to implements which were
previously inaccessible such as internet access.

This has opened up avenues for information sharing, educational
research and existing opportunities on the coastland.

It is hoped also that the new initiative would encourage increased use
of the internet for data retrieval by Amerindians. (GINA)

Is the GFC usurping the President's authority on sub-letting forest concessions?

http://www.kaieteurnewsgy.com/letters.htm

Is the GFC usurping the President's authority on sub-letting forest
concessions?
Kaieteur News, 18 July 2007

Dear Editor,

The statement on forest concession sub-letting, issued by the Guyana
Forestry Commission (GFC) and published in the Kaieteur News
(2007-07-13), seems to confuse what should be a simple matter.

Operators of forest concessions who cannot work them should have them
rescinded and returned to a strategic pool for re-bidding by eligible,
qualified, financed and capable operators, according to the 1993 policy
and GFC's own procedures (including Section 11 in the Forests
(Miscellaneous Provisions) Act of 1982).

The National Development Strategy 2001-2010 requires allocation of
forest areas for harvesting to be through a competitive, fair and
transparent manner.

These Barama deals recently revealed to the public are not competitive
or transparent. And the Commissioner of Forests did indicate, in
Kaieteur News (2006-12-11) under the caption “Forestry Commission to
repossess unutilised concessions,” that the GFC would indeed take back
such licences.

At least one letter in Kaieteur News (by Patrick Jackson on 2006-12-13,
captioned “Re-possessing forest harvesting concessions – why delay?”)
asked why this process was being delayed when policy and law were
clear.

Conditions in the concession agreements (Timber Sales Agreements and
Wood Cutting Leases) prohibit sub-letting except with the prior written
permission of the President. Although the Commissioner uses vague
wording in his recent statement, his claim that sub-contracting is
allowed is not sustained by Condition 13 where, “The grantee shall not
transfer, sublet, mortgage or otherwise dispose of any interest arising
under this agreement except in accordance with the Forest Regulations
and any purported disposition made except in accordance with such
regulations shall be null and void”.

It is clear that sub-contracting could not be covered by this
condition. Sub-contracting is not equivalent to “sprinting”
(sub-contracted labour only) which is the intention in Condition 14 of
the TSA agreement.

The Commissioner claims that he can authorise sub-letting, but the
Forest Regulations say that this is the job of the President, as
Minister of Forestry.

The 1993 policy also does not allow TSA holders to acquire extra forest
unless they have demonstrated that they can work a concession at
maximum sustainable yield. Barama has repeatedly stated, and the GFC
has confirmed, that Barama is extracting well below that level
(although other information suggests that Barama is wasting and
damaging far more timber than it is harvesting; another good reason to
refuse to allow it to rent more acreage).

The GFC statement says that “this sub-contracting was also intended to
improve the ability of the contracting company eventually to a point
where it no longer had to engage in sub-contracting”. But if the
contracted Asian-owned logger is taking the effective forest management
decisions and using his/her own equipment and labour, how is the
improvement going to happen?

It is not in accordance with any policy to allow an incompetent or
under-financed operator to hold onto a forest concession and then rent
it out to another operator. That is such a contradiction to the
supposedly fair and transparent GFC process for acquiring concessions
in the first place.

And in what ways is the Asian-owned logger a model for a Guyanese
company? Taking the main culprit as an example, the Barama Company
Limited (source information in brackets) –

º% is in violation of the GFC concession policy of 1993 by not having a
current management plan (ASI and SGS Qualifor), and so should not be
holding a TSA;

º% operated its plywood mill at 25 per cent capacity and its sawmills
at 6-7 per cent capacity in financial year 2005-6 (Samling's IPO
prospectus) yet exported 80 per cent of all logs shipped from Guyana in
that year;

º% promised in 1999 to invest a further US$ 32 million but has failed
to complete that investment, thus incurring public censure from the
Minister for Forestry on December 8, 2006;

º% claims to have been unprofitable during its entire residence in
Guyana since 1991, and so not subject to income tax (Barama's own
statements and IPO prospectus), and thus hardly a good business model
for the under-capitalised local enterprises;

º% through its foreign direct investment agreement, took 87 per cent of
all Guyana Government fiscal incentives for the forestry sector in 2005
(Guyana Revenue Authority);

º% has questionable accounting practices (Christopher Ram in SN
Business News);

º% has poor employment and labour practices (CARICAD);

º% sends its Malaysian and Indonesian loggers for training at Guyana's
Forestry Training Centre but will not train Guyanese staff there
(Samling's IPO prospectus).

Through the Editor, I call on the President to exert his legal
authority as Minister of Forestry and not allow his powers to be
usurped by the Commissioner of Forests.

Mahadeo Kowlessar

GFC's policy statement on concessions is explicit about under-performing and inactive concessions

GFC's policy statement on concessions is explicit about
under-performing and inactive concessions
Kaieteur News, 17 July 2007

Dear Editor,

I am sorry that the technical forestry expertise of Samantha Griffith
is weak, in her letter captioned “Large concessions are managed on the
principle of cyclic rotation” (Kaieteur News, 2007.07.12).

Responding to some of Ms Griffith's technical points - purpleheart –
reliable data on forest frequency, the Guyana Forestry Commissiom (GFC)
manual on Guyana strategic forest resource appraisals indicates “a
wealth of data” on forest composition. Inventories have been made of
the forests of Guyana since 1908. Reconnaissance-level studies were
carried out especially in the late 1960s in the FAO-assisted Forest

Industries Development Surveys, ecological studies have been boosted in
the 1980s/90s in the Tropenbos-Guyana programme, and the GFC currently
accumulates management-level data.

In a compilation covering the forest regions of Guyana in 1998, Hanster
Steege of the Tropenbos Guyana Programme summarised data from 16 widely
distributed plots covering 50 hectares in the central wet forest, with
an average of 4,101 trees per 100 hectares, of which 26 were
purpleheart. In the northwest wet region, from 14 plots covering 24
hectares, with an average of 4,824 trees per 100 hectares, 25 were
purpleheart.

Occurrences in these two main regions of 0.6 and 0.5 per cent of the
tree population (counting trees more than 30 cm in diameter at breast
height) mean an average of one purpleheart tree every four hectares.

However, purpleheart is not uniformly distributed through the forest,
and sometimes the loggers encounter “reefs” or groups of trees. It is
precisely in these reefs that the GFC minimum inter-tree felling
distance of 10 metres should be obeyed by loggers.

Chapter 14 of the National Development Strategy 2001-2010 says that the
regenerative capacities of identified forest types and species will be
conservatively estimated (section 14.IV.2.11). In contrast, there are
reports of groups of giant purpleheart trees in a TSA in Essequibo ,
logged destructively by the illegally sub-contracting Asian-owned
company, not in accordance with the specifications cited by Ms.
Griffith.

[In a background paper for the meeting on log export policy in February
2007, the GFC provided forest inventory data from 7 representative
current logging operations (numbers of plots and areas were not
mentioned). Purpleheart trees of 40 cm diameter or larger in these
areas ranged from 0.9 to 6.1 per cent, with an average of 2.3 per
cent.]

Landlording or sub-letting under-performing forest harvesting
concessions is not a matter of short-term contracts between large-scale
holders of forest harvesting concessions (like Barama) and large-scale
but inactive concession holders; Ms. Griffith implies that such
contracts are of one-year duration, which is not correct.

The Initial Public Offering prospectus of Samling Global Limited, the
parent company of Barama, in March 2007 clearly indicated that Barama's
renting arrangements (called “harvesting rights”) are for the remaining
multi-year durations of these concessions. Samling notes that these

concessions expire in the period up to 2016 (having started from 1985
onwards and having 25-year durations). Samling believes that the
remaining periods are too short to justify sustainable forest
management (IPO prospectus pages VI-68 and VI-69; URL =

http://www.hkex.com.hk/listedco/listconews/sehk/20070223/
LTN20070223016.htm ).

In the January 2007 public summary of the report of the monitoring by
ASI of the surveillance mission by SGS Qualifor, Accreditation Services
International GmbH notes that [Barama's] “areas visited by the audit
team outside the compartments under evaluation were not managed in the
spirit of the Forest Stewardship Council's principles and criteria and
major nonconformities could be witnessed by the ASI audit team” (major
corrective action request number CAR.SGS.FM.2006.04, URL =
http://www.accreditation-services.com/res/PublicSummaries/ asiforest
managementauditg uyanasgs2006.pdf ).

The GFC policy statement on concessions of April 1993 is explicit about
under-performing and inactive concessions. Failure to work a concession
over a two-year period (to the satisfaction of the Minister) in
accordance with the terms of and schedules to the concession agreement,
or failure to extract timber at a volume which produces royalty in
excess of the minimum royalty over a three-year period may lead to
cancellation of the concession.

I have quoted in recent letters to the Editor the exact sections of the
Forests Act and Forest Regulations concerning subletting of
concessions, and I note again here that Condition 13 of Timber Sales
Agreements makes explicit prohibition except with the prior written
permission of the President – not, as claimed by the GFC, the
permission of the Commissioner of Forests.

In any case, Barama is not a TSA holder which should be allowed to take
over any concession. The 1993 policy is also explicit that “No
additional areas will be granted to TSA holders until they have
demonstrated their ability to work existing concessions for maximum
sustained yield”.

Barama has repeatedly noted that it is harvesting less than one third
of that level, so it could not be eligible for more areas.

And in addition, the National Forest Plan of February 2001 specifies
that “Allocation of the resource is made in a competitive, fair and
transparent manner” (NFP 300), which the sub-letting to Barama (and
other Asian-owned loggers) is clearly not.

Specialisms in timber use; it is normal for specialist timber-using
operations to concentrate on those species which best serve technically
and economically the objectives of the enterprise.

It would not be sensible to use low-density, rot-susceptible timbers
for garden furniture, but these semi-soft timbers may be quite suitable
for core veneers of utility-grade plywood at Land of Canaan . It is
surely in the interests of Guyana , with over one thousand timber
types, to have a variety of industries capable of using appropriately
this variety of timbers.

Consultant reports have repeatedly advised Guyana to develop and
promote niche markets, because its location off the main shipping
routes and its relative industrial inefficiencies make it difficult to
compete in mass markets; see for example the diagnostic mission of the
International Tropical Timber Organisation published in 2003, and the
support of the USAID-funded Guyana Trade and Investment Support
Programme for penetration of new markets.

The Guyana Revenue Authority (GRA) records that 76 percent of tax
incentives in 2004 in the forest sector went to Barama, and 87 per cent
in 2005.

Later data are not yet available. This great preponderance allowed to
one single foreign-owned company is questionable when that company is
exporting unprocessed logs instead of processing them in-country, the
latter being a major intention (from the Guyanese side) of the foreign

direct investment arrangements of 1991, 2001 and 2004. Barama exported
at least 119,000 m3 of logs (almost 80 per cent out of a GFC-recorded
national total of 150,000 m3) in 2005-6 but processed only 63,000 m3 of
logs in its plywood mill (running at 25 per cent capacity) and only

14,000 m3 of logs in its two sawmills (running at 6-7 per cent
capacity, data from Samling's IPO prospectus).

GFC Board papers have been quoted before in public domain publications,
including those in SN's, ‘History This Week' columns of 29 January, 5
February and 12 February 2004 which featured the Guyana Forestry
Commission. A GFC Board Member has publicly expressed fears about the
link between narcotics and forestry concessions in Guyana (see letter
in SN titled ‘The drug cartel has already penetrated our timber
industry and has much bigger plans', 16 March 2005) and about forestry
practices more generally (see, for example, ‘Indiscriminate log exports
a creation of Forestry Commission … PNCR' in Kaieteur News, 27 November
2006).

This is what democracy is about. The democracy we all enjoy today is
the result of a long struggle by many Guyanese. That democracy permits
any citizen the freedom to comment on any aspect of our national life.

Our National Constitution enshrines this right, for example, in Article
13: “The principal objective of the political system of the State is to
establish an inclusionary democracy by providing increasing
opportunities for the participation of citizens, and their
organisations in the management and decision-making processes of the
State, with particular emphasis on those areas of decision-making that
directly affect their well-being.”

Section 2.3 on page 8 of the GFC code of practice on timber harvesting
(November 2002) includes a note that “sustained yields can only be
ensured if a minimum stocking is retained after logging for each
individual (emphasised in the GFC code) desirable species . . . This
means that individual tree-marking rules need to be developed for each
particular forest type under different stand conditions. Yield
regulation is an area of active GFC policy and research.”

So, nearly five years later, we can be sure that the GFC has such
individual rules and that they are being applied? Especially when the
production and export of a relatively rare but valuable timber such as
purpleheart is comprising an increasing proportion of the outturn? As
noted above, purpleheart is generally uncommon tree yet in 2005 it
comprised 31 per cent of total log exports and 42 per cent of sawn
lumber exports.

The reports to Barama by its technical consultant ECTF during 1992-2000
indicate how easily degraded is this forest resource by careless
logging. Barama wastes and damages much more timber than it extracts.

Barama's piratical and self-acknowledged unsustainable logging should
give every ground for caution by the GFC when the proportion of
purpleheart to all other timbers in log production and log exports is
so much higher than the proportion in the standing forest.

Appeal to the national laws, regulations and policies

My analyses and observations on the forest sector have been referenced
invariably against our published laws, regulations and procedures. My
main and repeated observation is not that these documents are
inappropriate but that they are not properly or equitably applied; this
is hardly the “misinformed, hypocritical and anti-Guyanese” stance
which Ms Griffith alleges.

Evolution of these documents took place vigorously during 1993-2002 but
little has been visible since then.

The revised forest law of 1995-1996 still has not reached the National
Assembly, and the draft is now well behind best international practice.
Of course it would be desirable to follow the practice of many other
countries and to have an open and participatory forest forum for sector
debates in which the GFC is just one among the stakeholders and without
a dominant and domineering voice, although obviously a key player.

We are not seeing those wide stakeholder consultations which Ms
Griffith advocates, only GFC-controlled admissions and GFC-commanded
attendances. I am sure that governance problems in Guyana are not
confined to the forestry sector, but it would be a start to clean up
governance in this area.

Janette Bulkan

Wednesday, July 18, 2007

Govt.'s forest policy must be supported by incentives

http://www.kaieteurnewsgy.com/letters.htm

Govt.'s forest policy must be
supported by incentives
Kaieteur News, 17 July 2007

Dear Editor,

The Forest Products Association (FPA) continues to note with concern
the publication in the SN of persistent negative criticisms of the
operations of the forest industry leveled by a small group of persons
who have no direct stake in the industry.

The criticisms, in the view of the FPA, promote a narrow-minded
advocacy of imposing an immediate restriction on log exports and attack
productive partnerships between foreign and local investors. These
criticisms are less than helpful, appear to be entirely destructive in
intent, and offer no constructive alternative proposals.

The Forest Products Association, in correspondence to the Minister of
Agriculture and the Guyana Forestry Commission, and reflected in the
Association's Press Release recently published in the SN and other
media, has very clearly set out the Association's position on a
national policy for forestry development.

The FPA has always welcomed and is committed to adding value to timber
production through the manufacture of finished product in the country.
The FPA has, however, cautioned in favour of a phased approach which
takes account of the actual availability of adequate milling, labour
and skills, markets, and other essential logistics like shipping and
internal transport.

The FPA's position is that the government's forest policy must, of
necessity, be supported by incentives which will promote investment and
drive the industry to achieve the aspirations of all of the stake
holders.

The FPA represents 58 of the major companies in the timber industry,
both producers and millers, both local and foreign investors, who from
their collective experience, over many years of building and keeping
the industry afloat at their own financial risk, can speak with
authority on matters such as recovery rates and milling capacity.

For Guyana 's forestry sector to be modernised, developed and
sustained, it will take substantial new financial investments,
international market linkages, technical skills and managerial
resources, which are today not readily available in Guyana . Government
policy must therefore create the climate essential to attract this
investment.

The FPA is dedicated to working with the government to develop a
comprehensive and substantive forest policy which will include
incentives to attract further foreign and local investors to install
new and modern milling facilities for downstream processing.

Government's forestry policy, contrary to the purveyors of doom and
gloom, should in fact encourage business synergies, joint ventures and
approved partnerships between foreign investors and local forestry
industrialists operating in a regulated environment, effectively
administered by the Guyana Forestry Commission (GFC).

In contrast, any policy centered, as the critics continue to advocate,
on log restriction alone will not spur increased milling and
manufacturing, but, instead, shrink the industry.

The constant criticisms offered by Ms. Janette Bulkan regarding
partnerships between foreign and local concessionaires and the labeling
of these partnerships as “landlordism” and “illegal” and “variant
colonialism” are not only narrow minded, but also misconceived and
anachronistic.

Ms. Bulkan would prefer that local industrialists, who have invested
their hearts and souls in their concessions, simply abandon them,
rather than resolve their difficulties through partnerships with
investors having the financial and managerial resources to put them to
productive use to create employment and revenue generation for the
country. This makes no sense from any angle that you look at it.

In so far as the legality of these partnerships is concerned, the GFC
has already publicly declared them as legal. The GFC has the statutory
responsibility for and is perfectly capable of providing the regulatory
oversight to ensure that they are so.

If the forestry sector is to have any hope of advancing, Guyana should
welcome business partnerships such as joint ventures, mergers and
takeovers in this sector.

As Guyana has opened its doors to welcome foreign private investment to
develop its gold, diamond and mineral mining and fishing industries,
manage and modernise its sugar industry, explore and drill for oil,
expand and develop its telecommunications and banking capacity and
generally meets its development needs, the forest industry should be no
exception.

No progressive country in the world would seek to impose the kind of
restrictions advocated by Bulkan and Kowlessar.

The FPA has recommended that the GFC consider withdrawing the 2% export
duty on processed lumber and, instead, apply a levy to log exports as a
more practical and much better alternative to restricting log exports.
The levy will serve as an incentive to producers/millers to add value
through processing.

The FPA completely rejects the half-baked notions advanced by another
armchair critic of the industry, Mr. Mahadeo Kowlessar, repeating
specious and unfounded claims that producers are destroying the
patrimony of our forests and are only interested in exporting logs. The
Minister has himself publicly rejected this foolishness when he pointed
out that “notions that we are over-foresting, overexploiting and
chopping down logs…is just a myth”.

Theoretical studies of potential recovery rates and aggregate milling
capacities offered by Mr. Kowlessar, in isolation of practical
application and untested on the ground in Guyana under our conditions,
are hardly a basis for assessing the current conditions in the industry
and its market potential.

Mr. Kowlessar, while enthusiastically supporting furniture manufacture
as the sole alternative to log exports, fails to acknowledge that this
industry utilises only limited species, grades and volumes of timber.
What do we do with the rest of the species, grades and volumes when
there are hardly markets for them internationally and virtually no
domestic markets? Mr. Kowlessar should know that, even as he writes,
the furniture industry faces its own challenge in attracting markets
and that some have been offered for sale.

The FPA has continued to point out that any sensible, businesslike
forest policy directed by Government must respond to commercial market
demand. The armchair critics prefer to distort the market realities.

The facts speak for themselves. In 2006, 380,000m3 of logs were
harvested. Some 50% were exported as logs, virtually all hardwood
unsuitable for peeling into plywood. This indicates that some 50% of
this production was processed. These figures demonstrate that the
industry is already finding its own balance between processed timber
and log exports without any form of legislated intervention.

Further, 23 percent or 45,728m3 of these exports were purpleheart. If
these purpleheart logs were to be converted to sawn lumber by the
immediate imposition of a ban on log exports, advocated by Mr.
Kowlessar, using a 40% recovery rate, never mind the 70% recovery rate
Mr. Kowlessar believes is possible, it would result in 18,291m3 of
different grades and sizes of sawn purpleheart immediately coming onto
the local and international markets.

Anyone in the trade will tell you that even the local door and
furniture manufacturers want A grade lumber only.

For our forest industry to convert from log exports and expand into
processed timber, it is essential for our Government to first accept
and address the realities of the industry as they are and not as they
might ideally wish them to be. It is essential that both local and
export market demands are assessed and valued and serious incentives
offered to encourage producers to retool and modernise these mills.
Quite the opposite has taken place.

The recent introduction of VAT, for instance, being applied to the sale
of logs domestically to saw mills for processing, is a direct
disincentive to adding value to the industry. The FPA has written the
Minister of Finance on this matter and has recently met with officials
of the Guyana Revenue Authority (GRA) to point this out.

The FPA has also pointed out to the Minister and GRA that VAT is now
applied to a range of industry equipment which hitherto did not attract
consumption tax before.

Forest Products Association of Guyana