Guyana loses $$$millions annually on log exports while Chinese manufacturers gain

Nov 27, 2021 News

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…as GFC misrepresents data to disguise overharvesting—Dr. Bulkan

Kaieteur News – The Guyana Forestry Commission (GFC) is allegedly deliberately misrepresenting its data in order to present a glossy image of its management of Guyana’s forests and the export of logs. Additionally, the country is losing hundreds of millions through ‘transfer pricing’ involving Chinese operators locally.

This is according to British Colombia University’s Associate Professor, Dr. Janette Bulkan who, in response to GFC’s condemnation of civil society group, Article 13’s call for an immediate ban on the export of logs, adumbrated that not only is there unsustainable forestry practices taking place in Guyana, but that the regulatory body appears to be deliberately misrepresenting the figures.
Compounding the situation, the Guyanese born Professor of the University’s Department of Forest Resources Management said that the cumulative misrepresentation of figures and disproportionate export of certain types of lumber have also led to local shortages.
Dr. Bulkan—in a recent public missive—explained the way Guyana loses millions annually in the manner logs are exported by Chinese companies, locally, through a practice commonly referred to loosely as ‘transfer pricing.’
She elucidated that during the period January to July 2020, the average declared FOB (Freight on Board) value of a cubic metre of log was US$172 or G$34,401 and that 31,435 m3 of ‘logs’ were exported with a declared value of US$5,407,066.
To this end, the Professor reconciled the export value placed on the item when it leaves Guyana with the cost on arrival in China.
According to Dr. Bulkan, the Cost Insurance Freight (CIF), “at a Chinese port is generally three or four times higher.” As such, “Chinese manufacturers gain, Guyana loses.”
The Professor has since also accused the GFC of using “the same grossed-up treatment of data in its statements about the forest management.”
Growing Worse
Regarding the export of logs, Professor Bulkan noted that while the GFC criticizes the call for an immediate ban on log exports as ‘misinformed, emotional and nonfactual,’ “local sawmills and lumber yards have had increasing difficulties in procuring logs of their preferred timbers.”
She cited as examples, Greenheart, Purpleheart and Kabukalli and questioned rhetorically, “if the GFC is managing the State Forests as sustainably as it claims; why is the shortage of preferred timbers becoming more obvious locally?”
Moreover, she expounded that while the GFC claims that only 20 percent of logs are exported and 80 percent processed locally, the “overall quantities would not prevent a high proportion of the Purpleheart, Kabukalli, Tatabu, Shibadan, Darina and Locust from being exported, and only species like Keriti that are not desired by log traders being easily available locally.”
She accused the Forestry Commission of allowing Barama, in the past, to move from a focus on plywood production, to being the main exporter of raw logs to China, concentrating on just a few species, “and so, heavily exceeding the sustainable rates for Purpleheart.”
We know this, she said, not because GFC released the information, but because Barama’s parent company, SamLing Global Ltd., disclosed the information in its Initial Public Offering on the Hong Kong Stock Exchange in 2007.
According to Professor Bulkan, “this selective over-harvesting was continued by Bai Shan Lin, the company partly owned by the Government of China, and contrary to the guidelines on forestry issued by the Chinese Ministry of Commerce.”
She has since opined, that the consequence of this continued and unsustainable drain on the best timbers of Guyana is evident in the local shortages “which have been growing worse.”
Come Clean
Dr. Bulkan has since publicly challenged the commission to defend against her allegations saying, “if the GFC disagrees with this evidence and reasoning, it should disclose the timber-specific volume and price data for each species and logging/exporting company in its return for the Third Annual Report to the Extractive Industries Transparency Initiative (EITI), with independent audit verification.”
She further said to the GFC that it should return to publishing data each month, even while cautioning, “we should note the unreliability of export data, as shown in the first annual EITI report for Guyana for the year 2017, which included reports of timbers known to grow only in West Africa being exported as logs from Guyana.”
According to Professor Bulkan, “if the GFC will not publish accurate and verified supporting data, it cannot expect that the people in Guyana will believe its claims.”
Relative to the GFC’s release of forestry, logging and export data, the Professor outlined that from 2005 up to 2018 the GFC’s Forest Sector Information Report—half-yearly or annually, and the GFC’s own Annual Report up to 2017—were publicly available.
Between the periods 2007 up to April 2019, “for most months, we could also read a monthly report for forest products.”
She laments, however, that “…these sets of reports became briefer and less informative over time, with less and less information about individual timbers.”
Compounding the situation, Dr. Bulkan pointed out that some data on production and export of the more popular timbers could only be had some two to three years later, when published by International Tropical Timber Organization.
Therefore, she posits, “evidently, the GFC is happy to see our prime timbers exported unprocessed to China and India, rather than implement the National Forest Strategy and Plan, which call for greater in-country processing.”

 

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