BaiShanLin ordered to stop selling logs on local market

Sep 06, 2015 News

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In a bid to stop Chinese logging company BaiShanLin’s encroachment on the local market, the Guyana Forestry Commission (GFC) entered into an agreement with the company to prohibit them from direct competition with local loggers.
This agreement was inked on 20th April, 2015 and was meant to cover a six-month period, but the Government mandate was reportedly not enough to deter the Chinese company from continuing its sale of logs on the local market.
In the document, seen by Kaieteur News, the “numerous complaints from various stakeholders within the forestry sector” was cited as the principal reason for the agreement. The contract also noted that BaiShanLin was selling logs at reduced prices, thereby affecting the “livelihood of various companies, communities and associations in Guyana”.
BaiShanLin has come under much fire in recent times with the company being accused of expanding out of the logging sector by diverting funds and equipment originally intended for logging purposes to gain footholds in industries such as mining, housing and commercial river transportation.

There have also been protestations from local loggers who have found it impossible to compete with BaiShanLin, since the tax breaks and duty free concessions granted to the Chinese company for their logging operations, gave them a distinct advantage and allowed them to charge prices far below what the locals could offer.
According to the agreement between Commissioner of GFC James Singh (acting on behalf of Government) and Managing Director of BaiShanLin, Chu Hongbo, the Chinese company was ordered to halt its sale of logs on the local market from April 2015 until the six month period ends, in October.
The terms of the agreement stated that, “The Company shall desist from selling logs locally until the conclusion of this agreement.”
The agreement also specified, “The Company, recognizing the concerns raised by the Government of Guyana and acting in good faith, is willing to purchase logs locally from stakeholders at an agreed price during the life of this agreement.”
However, at least one major logging company has indicated that efforts to solicit BaiShanLin to purchase logs from its stockpile have not even been acknowledged.
The agreement also went on to mandate that the Government of Guyana, in consideration of the agreement, would not “publish or re-open the issue concerning the sale of logs locally by the company”.

In closing, the final term of the agreement stated, “Nothing in this contract shall be construed as preventing the parties from re-entering into a fresh agreement, after the conclusion of this agreement, concerning the subject matter contained here.”
BaiShanLin is already under the microscope after years of failing to produce any value added goods from its forestry operations. Its failure to implement wood processing facilities has been criticized by the A Partnership for National Unity/Alliance for Change (APNU+AFC) administration.
The company was under investigation by the last Parliamentary Opposition for its logging and mining practices.
Under the Bharrat Jagdeo and Donald Ramotar administrations, the company was granted billions of dollars in tax breaks and duty free concessions, and was allowed to import scores of trucks and other pieces of heavy equipment. Specifically, the tax breaks and duty free concessions were for them to use in their logging operations and eventually, for value added operations.
Reportedly, they have also been granted concessions and license on fuel imports, giving them a clear edge in not only the logging and mining sectors, but the river transportation arena.
BaiShanLin has reportedly been using its barge to fetch logs of private operators along the Berbice River.
The previous PPP/C administrations, led by Jagdeo and Ramotar, have been consistently secretive about the details of the investment agreement with BaiShanLin. In addition, the GFC has stolidly defended BaiShanLin’s operations, at one point stating that there were no violations.
The details of the investment agreement between BaiShanLin and the Government of Guyana are yet to be revealed.
The company has, however, been blamed for a major spike in wood exports in recent years.
Last year, a flyover of the Berbice River area saw huge areas of cleared lands with piles of logs as far as the eye can see.
Recently, Minister of Governance, Raphael Trotman revealed that Government has met with BaiShanLin and Indian company Vaitarna Holdings Private Incorporated. During the meeting, the companies had promised to get their wood processing facilities up and running within months.
Trotman had noted that the companies will not escape sanctions should they fail to make good on their promise. He had indicated that their contracts would be reviewed if these further promises were reneged on.

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