Dear Editor,
It is just a year since 350 stakeholders at the public consultation on a log export policy convened by the Guyana Forestry Commission (GFC) endorsed overwhelmingly the replacement of log exports by local timber processing.
This agreement tallies with the national development strategy 2001-2010, national forest policy (1997), national forest plan (2001) and PPP pre-election manifesto (2006). Since that public consultation on February 17, 2007, the GFC has made no public move to phase in bans on exports of any logs, despite assurances given by Minister Robert Persaud that “within 4 weeks the policy recommendation [would] be tabled at Cabinet for members’ consideration” (GFC. National Log Export Policy. Post Consultation Summary, March 2007). Instead, the GFC is chasing mills and lumber yards over matters for which it appears to have neither full legal mandate nor legitimate means of effective enforcement (“The Forestry Commission seems to be making a long overdue attempt to restore its operational mandate”, SN letter, February 8, 2008). And the GFC has yet to publish a technical justification for its detailed specification to mills and lumber yards.
Meanwhile, what has Guyana been losing through this persistent failure to implement national policy? According to the GFC’s own figures, 157,000 m3 of logs were exported in calendar year 2007 with a declared FOB value of US$ 20.8 million. Almost one-third of the logs were greenheart: 46,000 m3, mostly to India at an average declared FOB value of US$ 110 per m3. If the 2 per cent export commission had been paid on all that greenheart, Guyana would have gained US$ 102,000. But as Barama is by far the largest log exporter, in its own name and through subsidiaries, Guyana loses the 2 per cent export commission because Barama through its secret Foreign Direct Investment agreement is exempt from this tax. By way of comparison, the export commission on logs in Suriname is 20 per cent.
In addition, 14,000 m3 of greenheart piles were exported mainly to the USA with FOB value of US$ 2.7 million, at an average of US$ 193 per m3. Those piles made up 30 per cent of the exported greenheart log volumes, but have earned Guyana US$55,000 in export commission mostly through locally-owned producer companies, versus zero on the logs shipped by and through Barama to India and China. Using the value multipliers for furniture from the log price at mill gate, which I estimated last year (“New colonial masters, Malaysian loggers in South America: how under-valuation of forest resources exposes Guyana to unscrupulous exploitation”. CFA News (Commonwealth Forestry Association) 9 (3) issue 38:1-2,11-13), the 157,000 m3 of exported logs could have produced furniture with FOB export prices ranging from US$125.1 million (multiplier 9.0) up to US$203.0 million (multiplier 14.6), a ten-fold improvement over the declared log export values. Instead of which, it is likely that the 95 per cent of logs exported to China and India will have generated illegal and undeclared profits of around US$47.8 million (at US$ 320 per m3 in “Available data strongly suggest that the invoice prices for logs don’t reflect market value” (SN letter November 30, 2006). Mr Editor, would it not be better if the GFC focused its attention where Guyana is losing serious money, through the uncontrolled log exports which are against all national policies, instead of chasing lumber yards and small-scale loggers?
Yours faithfully, Janette Bulkan
