Dear Editor,
The Guyana Forestry Commission (GFC) refers to a letter published in the Tuesday, May 7 edition of Stabroek News under the caption, ‘Clarification needed of Minister Persaud’s evasive responses to questions about Bai Shan Lin,’ by Ms Janette Bulkan.
It is indeed unfortunate that Ms Bulkan chose this medium to seek simple clarifications, when she could have easily sought same directly from the GFC as has been stated publicly on several occasions.
GFC nevertheless, outlines the following factual information, the accuracy of which can be easily verified by Ms Bulkan and others.
Fact # 1:
The GFC commenced a case by case review and approval/rejection of Joint Ventures (JV’s) in the early 2000 period. There was no legal forestry requirement prior to this for same, and to ensure greater transparency and accountability, the GFC went this additional step to put this guideline in place.
Applicants were required to write to the GFC outlining their reasons for wishing to enter into such an arrangement and to provide the GFC with all relevant information eg, whether there be any change in company name, structure; the amount of the capital being proposed for investment and the source (evidence) of same; employment and training profiles; and corporate social responsibility, amongst others.
Noteworthy is the fact that the GFC was requested to facilitate these arrangements since the local companies complained bitterly that they were unable to engage in Sustainable Forest Management (SFM) harvesting activities due to lack of financial and technical resources, and an inability to source low cost financing for same.
Additionally, the sector also requested that they be allowed to enter into approved subcontracting activities, if they were unable to source acceptable partners for JV’s. This arrangement was with the intention of using the cash flows generated to retool and reinvest.
Unfortunately, this subcontracting arrangement was abused and GFC terminated same a few years later.
However, several local companies did enter into Board approved JV’s which as stated before, was done very thoroughly and transparently. GFC invites Ms Bulkan again, as well as other stakeholders, to visit the GFC Head Office for perusal of the relevant documentation.
Bai Shan Lin has GFC approved JV’s with WAICO, Haimorakabra, for forest concessions, and with Sherwood Forrest Inc for a State Forest Exploratory Permit (SFEP).
Fact # 2 – Foreign Direct Investment:
BSL has committed to investing over US$40M in the harvesting phase of operations.
The company already has a large fleet of skidders, log-loaders, bulldozers, logging trucks, generators, etc. Most of this is new equipment, well suited for Guyana’s terrain and conditions.
BSL has acquired 200 acres of swamp land at Conception, Region 10 on which to build a Wood Processing Facility (WPF). It has commenced the process of site clearing, site filling, and access road construction. Before the end of 2013, it will commence the construction of the WRF.
BSL already has the following machinery for WPF construction on the ground and operational: 7 dump trucks, 1 skidder, 5 bulldozers, 3 loaders, 2 cranes, 2 excavators. They are also renting additional machinery/equipment in the short term. Within the next 2-3 months, the following machinery will arrive in Guyana: 20 trucks, 3 compactors, 2 motor graders.
By July 2013, construction machinery/materials such as concrete mixers and steel framing for the factory will be in Guyana. Construction is scheduled for completion in 2015.
Funding secured for this WPF is US$60M.
Fact # 3:
The WPF will be an integrated factory, beginning with log/lumber intake and resulting in the large scale production of high-end furniture, flooring (parquet, multiple layered, outdoor quality), veneers, doors, mouldings, finger jointing, lumber, etc. Based on the results of research already being done on the Lesser Used Species (LUS), additional products can also be produced. Value added equipment already in Guyana includes dryers and planers. The WPF is intended to do in-country processing of over 80% of BSL’s leased concessions.
Fact # 4:
BSL is already in discussion with the Board of Industrial Training (BIT), the Government Technical Institutes, Forestry Training Centre Inc (FTCI), the Guyana School of Agriculture (GSA), the GFC and the University of Guyana (UG) to embark on comprehensive training of current and potential employees at the vocational, technical, and professional levels. Additionally, BSL has committed to establishing a “Training Facility” inside the WPF. This facility will have technical staff from China who will do training for BSL’s employees, as well as the sector.
The company has 180 local staff employed as chainsaw operators, machine operators, in forest inventory, forest management, business management, including senior management. The ratio to Chinese is currently high because of the need for critical expertise in this start-up phase. However, the company has committed to employing an additional 200 Guyanese by the end of 2013, which would further increase the percentage of Guyanese employed to 74 %.
By 2017, the ratio of Guyanese to Chinese will be 85:15.
Fact # 5:
The MOU (Guyana-Norway) actually refers to an interim group of indicators which will be phased out by 2014 when the national scale MRVS becomes fully operational; BSL will certainly not achieve a harvesting intensity of 300,000 m3 by then. It is therefore incorrect to state that the MOU will be breached.
The above facts clearly outline a very important fact: it is absolutely vital that these types of sound investment be encouraged for the accelerated development of the forest sector. Ms Bulkan and others have been constantly bemoaning the fact that little is being done by the GFC to reduce log exports, stimulate the manufacture of added-value forest products, and generate employment opportunities/training opportunities for Guyanese, and encourage mechanisms for the transfer of appropriate technology. However, when this is actually being done in a very open, transparent and legally allowable manner, these individuals try to create the impression that something is amiss; this has been especially so in relation to the “Asian” managed companies.
In closing, GFC reiterates that it is an organization that operates in keeping with the relevant legislation and guidelines and welcomes the opportunity to meet with stakeholders directly, to provide any relevant clarifications.
Yours faithfully,
James Singh
Commissioner of Forests
