Under scrutiny over a number of issues including the awarding of mining properties intended exclusively for Guyanese to a Chinese company, the Mines Commission yesterday said that a report on these matters contained “glaring inaccuracies” and a Baishanlin director who holds vast acreage of land had become a naturalized Guyanese citizen.
The Guyana Geology and Mines Commission (GGMC) also declared that at least 50% of shares of Bai Shan Lin Mining Development Company Limited are owned by Guyanese. The firm is part of a group of 11 companies operating in Guyana which are all part of the China Forest Industry Group (Hong Kong). The majority of the other companies under the group in Guyana including Baishanlin International Forest Development Inc. engage in logging and have attracted controversy on several fronts.
It was not previously known that half of Bai Shan Lin Mining Development Company Limited was held by Guyanese nor that Baishanlin director Chu Hongbo had become a Guyanese citizen. It is not clear if the reference to 50% of Bai Shan Lin Mining Development Company Limited being held by Guyanese was a reference to him.
Stabroek News has been reporting on the inception report of a Management and Systems Review of various divisions in the GGMC that was compiled earlier this year. The report, which was obtained by Stabroek News, was authored by Dr Grantley Walrond, L. Heesterman and J. Goolsarran. Among other things, it revealed that with 109 medium-scale mining properties, Hongbo is the third largest holder of medium-scale mining permits in Guyana.
The report had also highlighted Baishanlin’s 72 mining claims, since the claim system was intended exclusively for Guyanese and it was never the intention of the Mining Act to allow non-Guyanese persons and corporations to operate in the small-scale or medium-scale mining systems. At the end of 2013, the list of claims in existence on the GGMC website showed 72 claims held by Baishanlin though they are shown as abandoned on a March 31, 2014 list. However, in the current claims list, there are new claims registered to Baishanlin, according to the report.
“How Baishanlin, a Chinese corporation with non-Guyanese owning the beneficial interest in the company, qualified to so operate, is indeed a mystery. This goes to the heart of a non-appreciation of the intent and fact of the law and is indeed worrying,” the report declared. “If the state of landlordism which was evident in the small-scale system was to be frowned on, then the state of ownership of Prospecting Permits (Medium Scale) and Mining Permits (Medium Scale) could only be described as scandalous,” the report added. It pointed out that one medium-scale mining permit caters for up to 1,200 acres.
“Yet in this format, there are persons holding in excess of 500 Prospecting Permits Medium Scale and 100 Mining Permits Medium Scale,” the report asserted. Hongbo is one of the four persons who hold over 100 medium-scale mining permits.
Yesterday, the GGMC defended the allotment of mining properties to Hongbo who it referred to as “Honbo Chu.” The statement said that there were “glaring inaccuracies” contained in the report about the businessman.
“The report states that the company is non-Guyanese owned and should not be allowed into the small and medium-scale sector. The GGMC can assert that at least 50% shares of Bai Shan Lin Mining Development are owned by Guyanese; the company purchased 77 small claims from a Guyanese,” the GGMC said while adding that Hongbo is a naturalized Guyanese and thus entitled to acquire the properties via the relevant systems under the Mining Act and Regulations.
Auctions
“In fact, 98 of his Mining Permits listed were won via an open competitive bidding process at last year’s auction. Several other miners listed for holding large acres of mineral properties were also accumulated through auctions managed by the Ministerial Committee (Closed Area Committee),” the statement declared.
It also emphasised that the GGMC does not “give out” claims, properties and other mining concessions but mining lands can be acquired through the agency via several methods including the claims system, via a mining lottery, an annual auction for mining properties or persons can apply for open lands which are available for prospecting licences, prospecting permits or mining permits. All of the land management processes in the large and medium scale are conducted under the ISO system. The ISO process is certified and the GGMC maintains regular audits and reviews, the statement asserted.
The report had also expressed alarm at landlordism in the mining sector. It had noted that there is a tendency to “landlordism,” which has taken over the mining industry.
The GGMC statement said that it is strange that the consultants have “rehashed the issue of capping” since the law does not provide any mechanism for capping of land tenure.
“The consultants, who are no doubt experienced and versed in the Mining laws, should be very aware of this and ought not to promote the view that GGMC’s actions, amount to non-compliance with the law. One has to obviously question this motive since the terms of reference for the review did not specifically identify capping as an issue for review. Mining properties are dealt with on a “first come first served” basis and most operators and reviewers of the system agree that this process has been functioning within acceptable parameters. There are obviously those who would seek to circumvent the system but the GGMC cannot allow this, as such actions would cause a collapse of an entire, well established mechanism,” the agency declared.
Credibility
The GGMC also questioned the credibility of the consultants. “The GGMC, from the beginning, was skeptical about the choice of consultants since, at least one, has a significant conflict of interest with the agency and access to confidential materials.
Certain information housed within the GGMC is confidential. Unfair access could gift an advantage to one company or another. Therefore, private consultants whose living is made largely from the use of information ought not to be “gifted” via preferential access,” the statement asserted.
It said that the GGMC took a “conscious decision” to restrict access to a few documents and assured that all documentation about the agency’s operation, properties, prospecting surveys and other valuable assets were intact and available for scrutiny providing confidentiality was guaranteed and the information used solely for the review process. It noted that an incident occurred in 2014 where the data from several Geochemical Projects – Upper Potaro Phases 1 & 2 – were utilized without being available to the public. “This was a worrying development since this would affect the areas to be identified for future auctions that form a significant part of the revenue base. This data is also sold for interested companies/individuals,” the GGMC declared.
The statement noted that the report submitted for consideration by the Management of GGMC and selected stakeholders was an Inception Report and due to the “obvious perceptions, opinions and biases observed in the report as well as several inaccuracies,” the report’s status was reverted to that of a draft by the Chairman of the meeting, Clinton Williams and the authors of the document. It said that unfounded and sensational claims have been made public but the consultants working on the review have not taken care to adequately clarify many of the claims.
The statement also stressed that the GGMC is a semi-autonomous state agency which operates within the confines of the relevant legislation in the sector. “Despite the wishes and dictates of those who would seek to circumvent and vilify the processes, the agency cannot operate outside of its lawful mandate,” it said.
“While there is always room for systems to be improved, the agency’s actions must always be congruent with the law. The current report appears to question this fundamental and paints an unkind image of the agency through its reliance on perception, bias and hearsay rather than facts,” the GGMC declared.
