Dear Editor,
Exporting Guyana’s timbers to create wealth in India: I refer to your article ‘Indian company controls 1.82M acres of forest -plans to export logs for furniture manufacture’ (SN, April 9).
This article extracts from a statement reputedly made by Minister for Forestry Robert Persaud (according to Demerara Waves internet radio) about the acquisition of logging concessions totalling nearly 738,000 ha by Vaitarna Holdings Private Inc (VHPI), a subsidiary of Coffee Day Limited of India, which is a coffee shop chain of the Starbucks type. Coffee Day Limited formed a subsidiary enterprise to make all kinds of domestic and commercial office furniture to satisfy the booming market in India. Minister Persaud’s reputed statement was not on the Ministry of Agriculture’s website on April 8.
According to this reputed statement, the State Forest Exploratory Permit (SFEP) issued in 2007 to Simon & Shock Inc was suspended in 2009 and transferred to VHPI. In the same year, the Timber Sales Agreement (TSA) of Carib-bean Resources Ltd, a subsidiary of CLICO insurance company in Trinidad, was rescinded by the Guyana Forestry Commission. However, having been allocated in 1989 for 15 years, the TSA had been incorrectly extended year by year since 2004. This TSA was awarded non-competitively in 2010 also to VHPI.
According to Article 5A of the Forests Act, “No exploratory permit with respect to any forest produce shall be granted to an applicant unless the [Guyana Fores-try] Commission is satisfied that – (d) his [the applicant’s] objectives are compatible with national development objectives.” Now we have two quite different versions of what are the applicant’s objectives. In your report ‘Simon and Shock aiming for $19M Rupununi forestry investment – lumber to be exported to India’ (SN, January 15, 2011) is the statement, “The main purpose of the logging operation within the concession is to secure raw materials needed for the sawmilling operation and other downstream processing plants in the manufacture of high quality tropical hardwood furniture.
This project is designed to produce top quality air and kiln-dried and dressed lumber for world class furniture manufacturing and building construction projects. The main goal is to revolutionize the local lumber market by providing dimensional wood stock ready for the production line. The bulk of the production, initially, will be exported to India, other Asian countries and Caribbean markets, the summary says.” However, on April 8, 2011, The Times of India (as reproduced by Demerara Waves internet radio) said that “the idea is to transport cut logs from the Guyanese capital Georgetown… to the Coffee Day Group’s furniture plant in Chikmagalur.”
The January statement accords partly with National Forest Policy 1997, section IV A 3 (A), “Priority areas for foreign investment shall be the more capital intensive, higher technology projects, and those that are linked to an overseas marketing network.” However, the proposed sophistication of processing is no greater than that already used by Guyanese-owned loggers and millers which do not enjoy FDI tax concessions from the government and which do have overseas marketing networks. Section IV A 5 (A) of the National Forest Policy, “Measures shall be taken to maximize in-country returns on exports” is not satisfied by the proposed simple processing apparently proposed by VHPI. Clearly, the April 8 statement from India, about exporting unprocessed logs, is incompatible with the National Forest Policy.
Could Minister Persaud say which is the real objective of VHPI, from the due diligence checks carried out by the Guyana Forestry Commission and funded by the USD 20,000 application fee for a SFEP?
Another question arises from Article 5A (a) of the Forests Act. This sub-article requires that the SFEP applicant “has financial resources, technical competence, and experience to carry on effective exploratory operations.” No evidence has been given in the public domain that this coffee retailer has any competence in or experience of conducting natural resource inventories, preparing environmental and social impact assessments, or preparing a forest management plan. What were the due diligence findings about these competencies?
I turn now to the non-competitive award to VHPI of the CRL concession (TSA 04/89). After being rescinded by the GFC in 2009, the GFC should have followed section II A 4 of the National Forest Policy 1997: sub-section (a) “Concession licences and permits shall be allocated through a process of advertisement and bidding or tendering.” This clearly did not happen. Perhaps the GFC was relying instead on sub-section (d) “Concessions shall be transferable to new concessionaires provided that qualifying standards are satisfied.”
But VHPI has no qualifications or experience of tropical rainforest logging, so how could it satisfy GFC standards?
Moreover, the entire concession allocation process should have been in the context of the strategic plan for forest allocation called for in sections NFP 200/210 (forest zoning and classification) and NFP 300/320 (forest resource planning and allocation) of the National Forest Plan 2001. These NFP sections respond to section III A 3 (a) of the National Forest Policy 1997 – “The Guyana Forestry Commission shall develop a fair and transparent framework for the allocation, revocation, renewal and re-negotiation of forest concessions.” But this strategic plan has yet to be prepared by the GFC.
The arrival of VHPI hardly seems to comply with the election manifesto of the People’s Progressive Party in 2006, page 15 – “Implementation of a National Forests Plan will focus primarily on:
“● Promotion of value-added products and value-added industries, such as kiln dried lumber and furniture manufacturing industries.
“● Increasing direct and indirect employment through value—added industries and new investments.”
If The Times of India report is correct, then the VHPI is another Asian scam like Barama, where the plywood mill has an installed capacity of 108,000 m3 per year but Minister Persaud is apparently overjoyed that Barama will re-start plywood production in June this year at 27 per cent of capacity. Meanwhile, Barama continues to draw down tax rebates as if it was in full plywood production, while actually exporting the bulk of its logs unprocessed to Asia.
What is the point, Editor, of the Norway-Guyana MoU calling for a REDD-plus Governance Development Plan if that is just an unused paper process, and what is the point of Norwegian Minister Erik Solheim calling for transparency when Minister Persaud is applauding the above-mentioned non-compliances with national policies and law?
Yours faithfully,
Janette Bulkan
