The State Forest Exploratory Permit (SFEP) granted to Simon and Shock International Logging Inc (SSI) in 2007 expired last December, according to documents released by the government last evening on a much-questioned forest deal.
Last year, Vaitarna Holdings Private Inc. (VHPI) bought out SSI, thereby acquiring the permit but it is not clear from the document if the SFEP had been extended. Agriculture Minister Robert Persaud did not immediately respond last evening to a request for clarification on this.
Following an outcry over the process in awarding 1.82 million acres of forest to VHPI, the Ministry of Agriculture last evening released the SFEP and the Timber Sales Agreement (TSA) for another concession leased to VHPI. “While it is not the practice of the Guyana Forestry Commission to publicize SFEP and TSA, unless otherwise requested, the Minister of Agriculture with responsibility for Forestry has directed that the agreements related to the investment in the forestry sector by Vaitarna Holding PVT Limited be made public,” said a brief statement from the Ministry.
“It must be noted that no request was made to the GFC for these documents although if such a request was made for this or any other agreement the government would be willing to provide same in the interest of transparency”, the statement said adding that the GFC’s website advises stakeholders that they can make request for such information, if they are interested.
VHPI, a subsidiary of Coffee Day Limited of India, last year acquired the SFEP for 391,853 hectares of forest originally awarded in 2007 to US-based SSI, after buying out the company, transferring the shares to a new subsidiary, Dark Forest Company (S) Pte Ltd. (DFCPL). Subsequently, the company acquired the 345,961 hectares concession which was originally awarded to Caribbean Resources Limited (CRL). The government accepted an offer of $600 million by VHPI for the TSA which had been terminated and re-possessed by the government in 2010 from CRL, because of continuous non-compliance with the terms and conditions of the TSA.
The total area now held by VHPI is 737,814 hectares of forest, around 1.822M acres.
The SFEP, issued on December 19, 2007 by Commissioner of Forests, James Singh, granted permission to SSI to occupy and commence exploratory operations within the area of state forest outlined.
The permit only gave the right to carry out the exploratory operations specified in its Application 03/2007 and (no other rights whatsoever) in accordance with internationally accepted standards and practices for such operations and the Commission’s Code of practice for Forest Operations as revised from time to time of payment of the prescribed fees and charges.
The company could not fell any tree or remove any forest product construct any roadway or cart path, bridge, building or any permanent structure without the prior written consent of the Commissioner but, subject to conditions, could apply to the commissioner for permission to fell and remove a specified volume of timber or a specified quantity of other forest produce for the purposes of research and investigation, including the investigations of markets.
“The rights and privileges granted by this permit are not exclusive and the Commission reserves the right to allow more than one holder of an exploratory permit to occupy the same area”, says the Permit. “The permit issued is hereby not transferable and, where the holder of the permit is a body corporate, if there is any change in control of the corporation, the Commissioner reserves the right to revoke or re-negotiate the terms of the permit,” it says.
Further, it stated that the permit is issued without any obligation on the Commission to grant a wood cutting permission, licence or lease, a timber sales agreement, or any other concession for forest operation in respect of the exploratory area or any other area of State Forests or State lands. The permit may be suspended or withdrawn if any laws of Guyana or terms are breached provided the holder of the permit is given an opportunity to state his case, the Agreement says.
Meantime, the TSA, which came into force on September 7, 2010 grants VHPI exclusive rights for 25 years to occupy the area to cut and remove timber on payment of fees and royalties in accordance with the Forests Act. The company is required to work the area to the satisfaction of the Commissioner in accordance with the terms of the TSA and only in accordance with the Forest Management Plan as approved by the Commissioner. The company is required to keep records of all timber cut and removed and required to allow monitoring of its operations. The agreement is subject to the provisions of the Forests Act.
There is no bond figure set in the agreement although it says that “the Grantee (VHPI) shall execute a bond for a sum of US$……at the time of approval of the Management Plan for the performance and observance by the Grantee of the conditions of this Agreement and shall make arrangements satisfactory to the Commissioner to replenish the bond from time to time where it, or any part of it, has been forfeited to pay penalties, fines or compensation, or to remedy damages”. Attempts to clarify this with Persaud last evening were unsuccessful.
The Agreement outlines what size of trees can be felled and what trees cannot be felled without permission. The parties can from time to time substitute, cancel or vary the terms for the purpose of more sufficiently implementing the Agreement. It could be terminated if the company goes into liquidation or if the company makes a written statement with regards to the TSA knowing that it was false.
The company was required to submit within six months a Forest Management Plan and Annual Operational Plan prepared in accordance with the GFC Code of Practice for Timber Harvesting. The Forest Management Plan will be revised every five years or more frequently. It is required to undertake all reasonable care in the operations to limit or prevent the degradation of the environment and if this occurs as a result of the company’s negligence, it is required to undertake remedial works and could also be fined.
The company is duly bound to respect the legal customary and individual rights of the Amerindian people. The TSA expires on September 6, 2035 and the company can apply for an extension.
