Natural Resources Ministry touts level playing fields for logging investors

Apr 22, 2017 News

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…No open ended agreements will be signed- Trotman

By Abena Rockcliffe-Campbell
Investors coming on board Guyana’s logging industry are going to benefit from a level playing field and will only enjoy duty free concessions that are linked directly to their investments. In short, there will be greater scrutiny to the extent

that neither Guyana nor the investors will be shafted. This is according to Minister of Natural Resources, Raphael Trotman.
The Minister indicated yesterday that very soon new companies will man the logging lands that previously belonged to Barama Company Limited.
He recalled what was published to the effect that government will be redistributing the forestry lands which were allocated to Barama. The 1.6M hectares of land will not be redistributed as a single block but rather will be divided into four blocks; one will be held reserved for conservation, one will be held for small loggers and two have been advertised for international companies.
Trotman said that there are about 17 different companies which submitted applications to benefit from the lands. He said, too, that the process of accepting or denying the applications is to be finalized this month by the Board of the Guyana Forestry Commission (GFC).
But the big question is, “What will be the conditions of the agreements that are to be signed and will Guyana’s interest be protected?”
There have been instances where Agreements signed by the People’s Progressive Party/Civic (PPP/C) Government allowed duty free concessions galore to certain foreign companies. Some of the concessions had nothing to do with the projects being carried out and were clearly intended to be used for other purposes.
In all of this, Guyana lost big in terms of duty Customs would have collected and benefitted very little by way of the logs shipped out, Goolsarran said.
Asked if he is looking to make sure that this anomaly is corrected in the future investment agreements, Trotman responded in the positive. He said, “We want to make sure that any company that holds foreign concessions now must be given a level playing field on which to operate.”
He continued, “We will work with GoInvest and GRA (Guyana Revenue Authority) to ensure theses investment agreements are being honored and respected; concessions are not being abused. We will do due diligence of all the companies.”
Trotman said, also, that GRA will take the lead in making sure that duty free concessions are granted moderately and for legitimate reasons.
“There will be no open ended concessions. Concessions will be granted in a transparent manner. Investors can no longer just say they need cement or steel or doors. They have to give a specific number and tie to back to a specific phase of the company’s developmental works or project.
Documents seen by Kaieteur News showed that, under the previous administration, BaiShanLin was scandalously given almost unlimited permission to import vehicles and equipment, including in one case an extraordinary request for one billion tons of cement and two billion pails of paint which is extreme for any conceivable project.
There was also a request for two billion pails of paint. No description was offered of the size of the pail but this amount according to a hardware giant in the city could paint the entire Guyana and its forests 100 times over. Among other things, the company requested one billion meters of electric wires and other items.
According to the list of items for tax exemptions, there were seven categories of exemptions that BaiShanLin wanted. These included motor vehicles, wood processing equipment, shipbuilding equipment, shipping equipment, construction equipment and material, power generation equipment and fuel for generating and production.
With regard to vehicles, BaiShanLin was vague in some areas. For example, it wanted exemptions 100,000 units of spare parts…there was no description of what kind. The company just happens to have registered a spare parts business in Guyana.
It wanted 20 cars, 20 pickups, 20 “jeeps”, 10 of the 30-seater buses and 50 dump trucks, among other things. In all, there were 235 trucks of varying kinds from low-bed to containers trucks that BaiShanLin wanted the Minister to approve.
From indications, very little monitoring took place to assess progress and to conduct compliance to ensure commitments were adhered to with the projects. That company failed to build a wood processing plant, a key commitment it agreed to when Guyana waived billions of dollars in taxes and other concessions. Several of its ambitious projects, from housing to shipbuilding never materialized and the company still owes the government millions.
But despite its problems, the previous Government continued persevering to keep the company around, without any clear indications of what exactly Guyana benefitted.

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