Extraordinary GFC defence of Barama

Jan 23, 2009 Letters

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Dear Editor,
The Commissioner of the Guyana Forestry Commission (GFC) has repeated his endorsement of the Barama logging company, which he made just two years ago (SN, January 17, 2009, “Barama committed to complying with forest guidelines — GFC head”).
On January 11, 2007, the Commissioner issued an open letter stating that “the GFC verifies that the Barama Company Limited (BCL) of Guyana has been performing in compliance with the laws of Guyana, as related to forest operations, and the Code of Practice for Timber Harvesting.  The company is considered an exemplary leader in the forest sector as it relates to responsible forest management…”
This letter was communicated two days after the certificate for quality of forest management was suspended by the conformity assessment body, SGS Qualifor, having regard to major failures by Barama which resulted in the issue of five new Major Corrective Action Requests (CARs), the continuation of two Major Corrective Action Requests not satisfied during the period between February and November 2007, and four new Minor Corrective Action Requests.  These CARs covered a range of environmental and social deficiencies, and collectively indicated that Barama was not operating at anywhere near the requirements of the standard for responsible forest stewardship.  SGS was suspended for FSC certification in Guyana, in January 2007, for failing to follow its own procedures in assessing and monitoring failures which concealed still other faults of Barama.  During early 2008, a second conformity assessment body carried out a scoping visit and also concluded that Barama was far from certification.
WWF Guianas, having already invested some US$160,000 in trying to raise the standard of Barama forest management during 2003-6, expressed disappointment but stood up to encourage better management during 2007-8.  WWF Guianas has now regretfully withdrawn from that effort (SN, January 11, 2009, “WWF has ‘disconnected’ from Barama – does not believe company can regain forest stewardship certificate”).  This is a sad conclusion after the direct investment by WWF-US and other donors channelled through WWF Guianas, and also for the Forest Stewardship Council of which WWF International was an inaugural member in 1993, and has continued to be a staunch supporter.
Later, in 2007, Barama was penalised on the order of the President (the Minister of Forestry), although the administrative penalty imposed by the GFC on Barama and the Guyanese-owned, Barama-rented concessions was far below the value of the logs illegally extracted and exported.  Barama was again penalised in early 2008 for apparently similar offences: felling trees out of the GFC-authorised areas, felling in areas for which pre-harvest tree inventory had not been provided or checked, using timber tags assigned to one concession in other concession(s), under-declarations of volumes felled.  Barama ignores the explicit conditions for sustainable forest management (contravenes Article 7A of the Forests Act 1953 as amended) and illegally rents long-term forest harvesting concessions (contravenes Article 12 of the Forest Regulations 1953).  The rare court case in June 2008 showed that the GFC has been entirely cognisant of and conniving with Barama in illegal renting of forest concessions (Kaieteur News, July 28, 2008, “TPL Timber Sales Agreement suspended for breaching Forestry Act”, and High Court records).  I estimate that Barama paid around US$450,000 in illegal rent plus in-kind log supplies in fiscal year 2005-6, in addition to its logging of Amerindian lands through a front company and an illegal “bad faith” logging agreement — an offence against the Amerindian Act 2006, Article 55 (1) (d).
Now the GFC Commissioner springs to the defence of this Asian logger even before that company itself issues a statement to the press.
The GFC Commissioner asserts that there had been some “minor social issues” to sort out, in order to lift the suspension of the FSC certificate.  This is a misleading statement.  The faults documented by SGS Qualifor and confirmed by Accreditation Services International GmbH are far more extensive and severe.
Barama has an extremely favourable but secret Foreign Direct Investment (FDI) arrangement with the Government.
The resource access tax (area fee) which it is invoiced for its own legal forest concession (TSA 04/91) of 1.61 million ha is US$0.0013 per ha, less than 0.4 per cent of the area fee charged to Guyanese concession holders, and not adjusted for inflation or currency exchange movements.
Barama obtains by far the largest tax subsidy offered by the Guyana Revenue Authority to the forest sector, including provision for duty-free fuel, a subsidy large enough to pay all Barama’s forest taxes.  So it is in effect getting Guyana’s logs for free.  The FDI arrangement is supposed to stimulate inward investment, but the junior Minister for Forestry has noted that Barama fails to develop industry even according to its own vague promises.  Barama’s mill at Land of Canaan should produce 108,000 m3 of plywood, but for several years has run at one quarter capacity.  Meanwhile, Barama is by far the largest exporter of unprocessed logs to Asia, entirely contrary to national policies and the PPP party manifesto on value addition of 2006.
Many of the logs of fine flooring and luxury furniture timbers have been extracted from the illegally rented concessions (54 per cent in FY 2005-6), earning (I estimate) an unreported US$300 profit per m3.  Barama pays no tax, not even the miniscule export commission, on these logs, except two per cent on greenheart.  And Barama has been proud of never reporting taxable profits in Guyana.
This is the company which the GFC Commissioner and the junior Minister for Forestry are so quick to defend.  Why?
Janette Bulkan

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