The Forest Products Association (FPA) yesterday expressed alarm at the closure of Toolsie Persaud Limited’s (TPL) timber operations and blamed the forestry commission which last evening denied responsibility and rejected a series of charges by the foresters.
The Guyana Forestry Commission (GFC) in a press release last evening said that the FPA is deliberately manipulating the facts and has presented non-factual information.
The FPA in a statement yesterday asserted that the industry is in crisis. “Timber is in short supply. Millers are closing and wood manufacturers unable to get product(s). The industry’s earnings are falling dramatically. It is the mal-administration and recalcitrance of GFC that must be held accountable”, the association declared. It called for an investigation into the functioning of the forest regulatory body and operations of the industry and said that it is committed to full collaboration with such an investigation. The body stated that it viewed with “the gravest concern”, TPL’s announcement of the closure of its forestry operations as a result of the GFC’s refusal to facilitate the company’s operation of its concession under its TSA, in spite of a Court Order prohibiting the Commission from closing the company’s harvesting operations.
TPL had announced the closure of its Georgetown sawmill and Manaka logging operations through a notice in the press. A number of persons had been left jobless. The FPA declared yesterday that it has learnt that in spite of the court’s ruling, the Commissioner of Forests, has prevented the company from resuming harvesting of its concession by delaying inspection of the company’s inventory enumeration for over a week. It said that this had forced the company to demobilize over 150 of its workers, close its operations and shut down its sawmilling facilities.
However, the GFC said that court order had “several defects rendering it un-enforceable”. The GFC had closed the harvesting operations of TPL on April 23 for breaches, which, it said; the company had accepted liability for.
TPL had moved to the court on April 29, to stop the GFC from enforcing the stop order on its Timber Sales Agreement (TSA) and from collecting a fine of over $80 million for the alleged breaches in harvesting regulations and had obtained a temporary order. Chief Justice Ian Chang, who heard the matter, had then ordered the GFC to withdraw its closure notice directed to TPL and quash its decision to close that company’s harvesting operations.
The GFC then appealed the decision and noted its disapproval in a press statement, saying that TPL was allowed to amend its initial court application for an order of mandamus despite strenuous objections from the commission and was eventually granted an order nisi by the court. The commission had further stated that it had issued a closure order on a state forest concession leased to TPL for verified and admitted breaches of procedure.
Quashing
A second order quashing the GFC closure of the harvesting operations of TPL was handed down on July 8. The GFC said that after receiving the second order, the commission immediately commenced discussions with TPL’s management in an effort to comply with the court order. It said that the commission requested the company to provide certain specific production related information, which TPL agreed to provide in a timely manner and also agreed to immediately pay all outstanding amounts due to the commission for this year. The commission said that those requirements are still to be met in full but nevertheless, the GFC has finalized arrangements for the verification of pre-harvest inventory which would commence tomorrow. “If the verification confirms that the pre-harvest inventory satisfies the GFC standards, this will allow for TPL to commence harvesting operations. TPL has acknowledged that before harvesting operations can commence, GFC must execute consistency verification of pre-harvest inventory submitted”, the commission said. It denied being responsible for the closure of the company’s operations.
The FPA statement yesterday said that it was found that where the GFC had accused the company of being in breach of its harvesting agreement for harvesting without prior submission of inventories, the Commission had, in fact, permitted the removal of the alleged illegal timber, collected fees and royalties and had authorized all the required documentation, including issuing export certification for shipment of the timber alleged to have been illegally harvested.
“More importantly, the GFC carried out regular field inspections throughout the year observing the companies’ harvesting locations and practices without indicating any objections. In any event, even where the company’s annual plan had been presented; it has been the GFC’s practice to seldom give formal approval to commence harvesting, in spite of the fact that the GFC was aware of the company’s activities on the ground. The company was not, therefore, found to be in breach of the conditions of its agreement”, the statement declared.
The GFC responded that those breaches were discovered during a routine post harvest audit of TPL’s operations in 2007. It said that similar exercises are continuously carried out countrywide as part of GFC’s routine forest monitoring operations and pointed out that TPL was fully sensitized since 2005 on all applicable GFC guidelines, and on the company’s direct responsibility for ensuring daily compliance with these.
Meanwhile the FPA said that it was found that the GFC had no jurisdiction, power or authority to suspend the TPL’s TSA and the GFC, in violation of the requirements of the Forestry Act, had refused to give the company any reasonable opportunity to state its case before the Commission acted.
The association expressed concern commenting that “it has been the consistent complaint of the FPA that the GFC has been generally acting in the same arbitrary and capricious manner towards all of the TSA holders who have been accused of breaching their agreements and, in general, with regard to the administration of the Forestry Act and has been improperly advising the Minister with regard to the Commission’s and Minister’s powers under the Act”.
Expired
The forestry commission said that the TPL’s TSA had expired on December 31 last year and the company has not been formally issued with a renewed TSA “by the appropriate authority in accordance with the law”. It said that after the breaches were discovered, discussions were held with the company and correspondences sent in an effort to amicably resolve the issue. “The GFC has a policy of constant dialogue with all stakeholders including all concessionaires; at no time has any company indicated that it is in the process of closure or retrenchment because of a deliberate and malicious act on the part of the GFC. This allegation in the FPA release is totally baseless and irresponsible”, the commission declared.
Meanwhile, the FPA noted that it had cause to express its concern earlier this year about the “unprofessional and erratic advice” being given by the GFC to the Minister of Agriculture with regard to the “wrongful and illegal imposition of exceedingly punitive fines and procedures on forestry concession holders”. The statement declared that a number of other TSA holders have been threatened with immediate closure of their operations or refusal to renew their TSAs if they seek to challenge the allegations made by the GFC against them for breach of harvesting procedures through the Courts. In the case of TPL, these allegations have proved to be unfounded and the GFC’s action against the company unlawful, the forest association asserted.
It further charged that 10 major concessionaires in the industry have been faced with closure or refusal to renew their concessions resulting in loss of export clients and markets and retrenchment of hundreds of employees and substantial loss of revenue to the industry and the country. The statement said that, fearful of losing markets and the financial consequences of extended closure, some TSA holders, agreed to pay substantial sums of compensation “under duress” and asserted that it is regrettable that the Minister of Agriculture was “persuaded to endorse the GFC’s attempt to deny these concessionaires their fundamental rights of protection under the law.”
The Association recalled that earlier in the year, it had cause to complain to the Minister regarding the imposition by the GFC of “a series of ill conceived, poorly researched and unrealistic set of standards for chainsaw operations with regard to recovery rates and moisture content of sawn lumber based on a set of idealistic conditions imported into the
industry”. It said that in spite of promises that the GFC would sit with the industry and review these directives, a number of sawmills are now threatened with “extinction”.
GFC said that those statements were “simply ridiculous” and pointed to several joint meetings held, which resulted in an agreed set of standards to be implemented by the industry in 2008. “The FPA’s comment shows a clear misunderstanding of the GFC’s mandate which includes forest industry development, quality control and marketing. The GFC cannot shirk any of these responsibilities to accommodate stakeholders who continue to display inefficiency, lack of standards and poor market practices” the forestry commission declared.
The FPA had said that while it supports, in principle, the need to upgrade the local industry to a level comparable with more advanced industries in other countries, it believes that product standards, value and marketability must be dictated by the domestic and international markets and not by a regulator. “Market forces, ultimately, will determine the production and milling standards required to deliver a reasonable return to the investor. The market, not the regulator, must decide who remains in business”, it said.
The association appealed to the Minister to examine the performance of the industry prior to the imposition of “thoughtless regulations”. It asserted that up to 2007, the forest industry was earning over US$60M annually, contributing some G$12B to GDP last year and employing 20,000 people, which, according to the statement, matched and even surpassed the fishing and rice industries. It said that this year, the industry is in a “crisis” and called on the Minister to seek the advice of international organizations such as the International Timber Trade Organisation (ITTO) to conduct a full investigation into the functioning of the GFC and operations of the industry stating that it remains committed to fully collaborating with such an investigation.
It noted that the Forest Products Marketing Council, financed by the industry but administered by the GFC, has ceased to function. “A joint proposal from the FPA and GMSA to reorganize the Council in accordance with recommendations made by the ITTO has so far fallen on deaf ears”, the statement said. The GFC in its statement said that the council was financed by the government since its formation.