The Ministry of Agriculture yesterday affirmed that a substantial number felled peeler logs are available to Barama Company Limited (BCL), dismissing its claims on Tuesday that it was forced to close its Land of Canaan, East Bank Demerara plywood mill because of a lack of these.
The ministry also urged the timber firm to significantly increase the magnitude of operations in its concession area from next year, since it is only at 20% of its allocated extraction level at present.
In a statement issued yesterday, the ministry said the Malaysian timber firm had harvested peeler logs on at least two concessions, committing additional breaches of procedures. As a result, the Guyana Forestry Commission (GFC) has since indicated to Barama that if it utilized the timber it would have to pay the required compensation in accordance with the GFC procedures. The company has not responded to the GFC to date.
The timber company, which was recently fined $96 million by the GFC for underreporting its harvest of trees, said in a media statement on Tuesday that it would have to close the factory for a few months to allow time to accumulate and build up stock of Baromalli, the main species of peeler logs used for plywood processing.
The company also said that it would offer staff the option of transferring to the company’s new sawmill at Buck Hall, Essequibo River where it was planning a substantial increase in production. “This is in line with our corporate strategy to increase value-added production in Guyana and to reduce log exports correspondingly. The company will comply with all the existing laws on worker severance and compensate employees accordingly,” BCL said in the statement.
The Ministry of Agriculture said in a statement that subsequent to Barama’s disclosure, Minister of Agriculture Robert Persaud, officials of the GFC and top management of BCL and a representative of the Guyana Labour Union met yesterday.
At that meeting, Persaud reported that the GFC had advised all stakeholders, especially the affected employees of BCL, that in October this year BCL was a given a cease order regarding harvesting in some third-party concessions because of breaches of the GFC’s procedures. Shortly afterward, the Ministry of Agriculture indicated in a press statement “that in the interest of the workers, it is prepared to facilitate access to raw materials for the plywood factory, but only as part of a transition process that will eliminate any approved sub-contractual arrangement by December 31”.
He further noted, according to the statement, that the GFC then requested BCL to send appropriate staff members to meet with the GFC in an effort to work out the conditions and logistics of such an arrangement. To date the GFC has had no positive response to this request. It added that Persaud noted at the meeting that as part of government’s social commitment, the GFC was still willing to facilitate such a process, but in accordance with very clearly defined conditions, which could only be arrived at on the basis of meetings with technical staff of GFC and BCL. The minister pointed out that it was later verified that BCL had committed additional breaches of procedure in the forest concession leased to Guyana Sawmills Inc (GSM). The GFC then indicated that it would allow the company to remove and utilize the peeler species already harvested in GSM, on condition that it will formally communicate its commitment to pay the required compensation in accordance with the GFC procedures. “This stipulation was necessary because once the logs were utilized, GFC would have no evidence in the event that BCL refused to pay the necessary compensation.”
Persaud said despite repeated requests by the GFC, Barama has sent no formal commitment. Further, Persaud told the officials at the meeting yesterday that the GFC had held several meetings with senior staff of the company to express concern that the forest concession of 1,612,000 hectares was being significantly under-utilized.
“The GFC mandated BCL to pursue increased beneficial utilization of the forest concession within the GFC allowable limits,” the ministry’s statement said. According to the Agriculture Ministry, currently BCL’s utilization of its concession is about 20% of its allowable harvest. Further, the minister noted that for the period 1998-2006, the total cumulative allowable production was 3,382,470 cubic metres, or an annual allowable cut of 375,830 cubic metres. The actual production of the company for the period 1998-2006 was 676,372 cubic metres or an annual average of 75,152 cubic metres.
This, the ministry said, corresponds to a level of utilization that is approximately 20%. The minister asserted that the figures illustrate the point that BCL was underutilizing its concessions, even though it gave a commitment last year to improve productivity in accordance with the limits established by the GFC. “As a consequence, a substantial number of felled peeler logs are on the ground in the concession leased to GSM.”
The ministry added that another quantity of felled peeler logs are also currently on the ground in the concession leased to Toolsie Persaud Limited, which the GFC said the BCL could access, providing that certain requirements are met. “The stated ‘severe’ supply shortfall of peeler logs is therefore as a direct consequence of inaction on BCL’s part,” the ministry said, adding that this was not disputed by the managers of the company who attended the meeting.
Barama said on Tuesday that it had started discussions and negotiations with various forestry companies to purchase peeler logs and that these parties would require some time to plan and harvest such logs. “The decision to temporarily close the plywood facility reflects the severe supply shortfall of peeler logs. Our stock of peeler logs has depleted and we will try our best to resume plywood production as soon as we are able to establish sufficient stock. It is very difficult to sustain our business at such low production levels coupled with high operating costs,” the company’s Chief Executive Peter Ho said.
