Dear Editor,
We respond below to statements of the Guyana Forestry Commission published in the Guyana Chronicle on May 9, 2015 (‘GFC clarifies non-factual statements in Stabroek News article’) and in letter format in the Guyana Times on May 11, 2015 as ‘BSL log exports are in keeping with GFC, National Log Export Policy.’
We have placed the GFC statements in quotation marks. Our responses immediately follow these.
“The Guyana Forestry Commission (GFC) refers to an article in the Friday 8th May 2015 edition of Stabroek News captioned: ‘Bai Shan Lin has most certainly contravened laws, regulations and approved policies – Janette Bulkan and John Palmer.’ GFC is alarmed that these two writers continue to regurgitate incorrect and non-factual statements on the forest sector in Guyana, even when their inaccuracies have been publicly pointed out on numerous occasions.”
Response
*The GFC has never answered any of the specific points and questions raised in our letters and articles, preferring vague statements and assurances which cannot be verified.
“The continuing false allegations are even more disturbing when one considers that the GFC has invited both individuals to visit the GFC to be fully apprised on the real undisputable facts.”
Response
*The mandate of the GFC to manage the State Forests of Guyana on behalf of the people does not oblige citizens to visit the GFC HQ. Implementation of the National Constitution’s Article 13 on government as a joint exercise of state agencies and civil society, and Article 146 on freedom of information, requires government agencies to place information into the public domain. The restrictions on privileged information (undefined) in new Section 13 of the Guyana Forestry Commission Act when revised in 2007 correspondingly place an obligation on the senior management of GFC to ensure that full and free flow of information about Guyana’s forests; the forests that belong to its citizens, not the private forests of the GFC.
“Since this misinformation is conveniently being circulated close to Election Day 2015, GFC will once again present the public with the accurate information which dispels the notion that Bai Shan Lin (BSL) is involved in some form of illegality and is benefiting from preferential treatment by the GFC or the Government of Guyana.
“Fact 1: BSL has always exported logs in keeping with the GFC and the National Log Export Policy. The GFC records can prove this and it will indeed be very informative for these writers to show the records that they are basing this misinformation on.”
Response
*(Illegalities 2 and 3) Bai Shan Lin (BSL) entered Guyana in 2005/6 with explicit statements about creating value-adding forest industries and about not exporting logs. Assurances have been repeated at least up to November 2012 (the Taicang exhibition in China). We understand that its extensive FDI arrangements including freedom from import duties on vehicles, equipment, spares and fuel were given by the Government of Guyana to support the value-adding industries. Since abandoning the taken-over sawmill at Coomacka in 2007/8, and securing operational control of a number of logging concessions, Bai Shan Lin has become one of the largest exporters of unprocessed logs from these concessions and from purchases. At least in some cases, Bai Shan Lin exports logs under the names of the original concession holders after having paid in cash for the logs and after having rented the concession documents of the original owners. In addition to the false declarations of value (for which we have copies of documents), the false naming of the real owner on export documents is Customs fraud.
*Compliance or not with the National Log Export Policy (which has not been debated or endorsed by the National Assembly, and so can hardly be a national policy as opposed to a GFC policy) is not the issue in question.
“Additionally, information on all of BSL’s joint ventures (JV’s) were made public; not once, but on multiple occasions. The allegation of ‘transfer of operational control’ or ‘landlording’ is baseless – it is a GFC Board approved joint venture as was pointed out in detail in the public media (and certainly not a “rentier” agreement as is so maliciously speculated).
Fact 5: This is a non-issue. GFC has publicly stated that DTL is not under BSL management- either through a JV or under a rental agreement. Additionally, the writers are simply being mischievous when they state that “GFC said that this was not a takeover, merely a transfer of shares…” – GFC never made such a false statement!’
Response
*(Illegality 1) The GFC may have overlooked its ghostwriter’s letter ‘No transfer from Demerara Timbers to Bai Shan Lin’ in the government-owned Guyana Chronicle, 29 August 2007, over the name of ‘Preamnarine Karan’ – ‘I sought clarification from the Commission and was informed that no such thing [transfer of operational control] had happened. I was also told that the procedure that Bulkan was referring to was really in respect to the transfer of a concession from one company to another (involving also a name change), and did not cover the movement of shares within a specific company’. This GFC ghostwritten statement thus confirms that there was a violation of Condition 13 of the Timber Sales Agreement – ‘The grantee shall not transfer, sublet, mortgage or otherwise dispose of any interest arising under this agreement except in accordance with the Forest Regulations and any purported disposition made except in accordance with such regulations shall be null and void.’ As shown by its sign board at DTL’s Mabura Hill camp and sawmill, and by word of the workers there, Bai Shan Lin has operational control of this company and its c.522,000 ha of logging concessions.
“Fact 2: All exports of forest produce follow the GFC and other relevant Government of Guyana Agency guidelines. These systems have been fully examined by credible independent and objective auditors and they have all concluded that the systems are adequate, appropriate and functional. A few minor recommendations for improving the systems have been proposed and these are currently being reviewed. To allege that there is customs fraud without providing factual evidence is unacceptable and in fact, potentially damaging to the forestry sector export markets and the livelihoods of many. The writers should consider these implications before making unsubstantiated statements.
“Fact 3: As mentioned above, there is no evidence of customs fraud; similarly, there is absolutely no evidence to show “false values”. Prices are declared by species, volumes and by grades contrary to the writers’ false allegations. A simple check with the GFC could have clarified this.”
Response
*Our points (Illegalities 2 and 3) were not about deficient export procedures but about the failure to apply those procedures consistently and objectively to Bai Shan Lin, thus allowing frauds under Customs law. Both we and independent newspapers have copies of documents to show fraudulent valuation of log exports. The independent forest monitoring by the GFA Consulting Group concentrated on the existence or not of procedures, and did not carry out detailed checks on the operation of those procedures. There is no mention of Bai Shan Lin in any of the three reports by the GFA Consulting Group.
“Fact 4: GFC accepts that the level of implementation of health and safety guidelines needs to be improved; however, this is indeed applicable to many companies in the sector. GFC is continuously working with the entire sector to promote better compliance of these important aspects. All companies, inclusive of BSL, pay wages and salaries in accordance with the GoG guidelines.”
Response
*(Illegalities 4 and 8) Complaints about poor and unsafe working practices, and about delayed and partial payments, continue to be made about BSL and its contractors. Some of those complaints were raised again during the series of Press articles and letters during July-September 2014.
“Fact 6: Again, this is a thoroughly ventilated issue- the undisputed and well publicized fact is that BSL has legal access to 627,072 ha as shown below:
344,849 ha as State Forest Exploratory Permits (SFEP’s) – an Environmental and Social Impact Assessment (ESIA); a Forest Inventory (FI), and a Business Plan have to be submitted to the satisfaction of the Environmental Protection Agency (EPA) and GFC before a Timber Sales Agreement (TSA) is granted which allows for full scale harvesting in accordance with GFC guidelines
274,053 ha as Timber Sales Agreement -Joint Venture Agreements
8,170 ha as State Forest Permissions
The estimate of 1.4 million hectares is simply ridiculous to put it extremely mildly.”
Response
*(Illegality 6). The GFC continues to fail to answer about who has operational control of the companies mentioned in BSL’s presentation at Taicang (China) in November 2012 and at several times in the press during July-September 2014. Tabulations showing the origin of our information, usually BSL or the GFC itself, were included in our feature article ‘How Bai Shan Lin acquired the several areas of State Forest which are now in its 1.3+ million hectares empire’ published by Stabroek News on August 28, 2014, and in a letter ‘Would the GFC place documents related to joint ventures with Bai Shan Lin in public domain?’ (Stabroek News, January 17, 2015).
“BSL has also corrected the figure on its website and publicly clarified this figure.”
Response
*The pages of BSL’s website – http://www.baishanlin.com/en/abouts1.html – are mostly empty. There is no information on the names, numbers or areas of companies operationally controlled by BSL.
“Fact 7: Some issues re non-payment of workers were brought to GFC’s attention. Following investigations, GFC found that it was really the Company(s) contracted by BSL to do specific work that defaulted in making payments to their workers. Nevertheless, GFC was able to work with BSL to satisfactorily resolve these issues.”
Response
*Our point (Illegality 7) was that Bai Shan Lin does not always fulfil its contractual obligations in relation to purchased logs, thus violating commercial law on contracts. One would expect that BSL, as a subsidiary of the partly-State-Owned-Enterprise BUCC, would ensure legal compliance by its contractors.
“Contrary to the writers, GFC is not in receipt of reports by Amerindian Communities, claiming non-payment for logs received by BSL.”
Response
*The GFC has not read carefully. We have not suggested that Amerindian communities were sending reports to the GFC.
“Fact 10: BSL is complying satisfactorily with the TSA conditions. If they were not, then the several independent objective audits done by qualified auditors would have identified same.”
Response
*(Illegality 10) As noted above, there is no evidence in the public domain that there have been “several independent objective audits done by qualified auditors” of logging concessions operationally controlled by Bai Shan Lin; or even one such audit. An ISO14000-type audit of the existence of an environmental management system is not at all the same as an audit of actual field performance, as would be required for certification of the quality of forest management against a standard of the Forest Stewardship Council. Slide number 8 displayed at the GFC press conference on 18 August 2014 showed remarkable year-to-year variation of production in BSL-controlled TSAs, incompatible with sustainable forest management. The GFC offered no explanation then or subsequently for this variation.
“GFC asserts further, that there is no circumventing of Guyana’s logging laws by any logging company, or any other forestry sector based company.
“The GFC has very robust and functional systems, procedures and guidelines which all forest sector companies are audited against; if there are any breaches to these, appropriate action is taken based on the findings of a thorough investigation and in accordance with the forest law.”
Response
*(Illegality 10) There are no reports in the public domain about the breaches from which the GFC derives large income from penalties administered by its abuse of the “compounding” procedure. Compounding was devised to prevent courts being blocked by cases of minor misdemeanours, but the GFC has levied hundreds of thousands of US dollars of penalties (for example, on Barama). No GFC case has been tested for many years by prosecution and cross-examination in open court. The GFC’s assertions thus lack credibility.
*Missions from the Norwegian International Climate and Forest Initiative, and some of NICFI’s consultants, have noted that some stakeholders in Guyana are reluctant to speak, even under anonymity, for fear of retribution by Guyana government agencies.
*Given that the GFC makes great assertions internationally about the quality and effectiveness of its forest management, one might imagine that the GFC would be willing to have these claims properly verified through unconstrained access to, and a forensic audit of, the raw data in all GFC systems and through extensive field checks.
“It is true that only a limited number of species are being harvested by the entire forest sector concessionaires. But in the same breath, it must be mentioned that the current logging intensity of Guyana is only about 30 % of the Annual Allowable Harvest- as such there is no current threat of over-harvesting to any commercial species. Also, as stated before, the GFC, the Forest Products Development and Marketing Council (FPDMC), the Forest Products Association (FPA) and other stakeholders are aggressively trying to promote the local and export uptake of the lesser used species (LUS).
“Already we are seeing positive indications of more LUS log and lumber exports; as well as increased LUS use in the local construction and manufacturing industry. This is, however, a market penetration process and not something that happens overnight.
“Additionally, GFC is finalising work on implementing a ‘harvesting by species quota,’ based on the inventory data. Pilot inventories in concessions are enumerating trees using the GPS, and accurate geo-referenced species stock maps are being generated. This will allow for the phased introduction of a harvesting regime that is based on species quota.”
Response
*(Illegality 10) A simple comparison between the proportions of volumes of preferred commercial timbers harvested and exported to total all-species volumes harvested and exported and the proportions of volumes of preferred commercial timbers standing in the forest to the volumes of all timbers standing in the forest shows that there remains a huge bias in favour of stripping out the preferred timbers. These slow-growing species do not grow fast enough in natural regeneration to replace the current rates of extracted volumes. The GFC conducts no post-harvest silviculture to increase the growth rates of the next cohort of crop trees of these species, and there is no research anyway which suggests that silvicultural treatment would be effective at financially reasonable cost. Nor does the GFC practise restoration by planting these preferred timbers. Currently, therefore, the GFC’s own data indicate that the preferred species are heading towards commercial extinction through massive over-harvesting. Even the GFC should be able to appreciate that this is not sustainable forest management as understood in any text book.
*Implementation of the National Forest Policy and the Code of Practice therefore requires a rationing of the harvest of such timbers. The “harvesting by species quota,” to which the GFC refers, is implicit in the National Forest Policy and was explicit in the second edition of the Code of Practice for Timber Harvesting (2002, section 2.3 yield regulation, page 8) so the GFC has only taken 13 years to begin to think about implementation. The GFC has had forest inventories, stock maps, yield plot data and growth-and-yield models from the 1990s, so it has no excuse for such tardiness.
*During the late 1960s/early 1970s, under the UNDP/SF FIDS project, the then Forest Department successfully demonstrated the techniques for using lesser used species (LUS) as replacements for the commercially preferred timbers. That knowledge was largely lost during the years of siege economy. Instead of using students at the University of Guyana to recover the easily-accessible information about Guyana’s timbers from European and US laboratories, the GFC has used ITTO projects to recover some of that information. Still the GNBS national building code has not been revised to make use of that information, and hence (in part) the protests by local house builders and construction companies at the shortage of our preferred timbers which are disappearing into Chinese furniture and flooring factories. Again we emphasise that this export of unprocessed logs of preferred timbers is facilitated by the Guyanese taxpayer subsidising the Chinese logger. How can the GFC say that this is not preferential treatment of the Asian ‘investor’?
*It is surprising that the website of the GFC does not publicise the ‘GFC’s Home Owners/Builders Handbook. A guide to alternate lesser used species of tropical hardwoods in Guyana’. Nor does the GFC publicise the very attractive video ‘Guyana forestry sector investment opportunity’ (21:30 minutes on https://www.youtube.com/watch?v=c2117qBwsNs). This video, with beautiful pictures of beautiful timbers of Guyana, was prepared for the GFC’s subsidiary Forest Products Development and Marketing Council with part-funding from the Caribbean Export Development Agency and published on 11 September 2013, but remains little known.
“With respect to the investment promises not implemented: BSL had a guarantee from their financiers that the company would access the necessary funding for their forest harvesting and proposed wood processing activities.
“However, this funding was not to be accessible in a lump sum total amount; rather it was to be disbursed in tranches based on BSL meeting agreed deliverables. This is the norm for the phased disbursement of large scale loans.
“Unfortunately, BSL has not been able to meet all the requirements of the financiers; essentially this was due to a necessary BSL submission not meeting the GoG’s expected standard.
“GoG then made it absolutely clear to BSL that since their submission was not of an acceptable quality, it had to be revised thoroughly. BSL has since re-submitted the required documentation for review by the GoG. This is undisputable hard evidence that the GoG has not given any preferential treatment to BSL, contrary to the false claims of some media.
“If this new examination shows that the revised BSL submission is of the quality required by GoG, only then will it be approved. This will then pave the way for further release of funds for BSL to accelerate work on the wood processing facility as their priority activity.
“Once funding is released, the GoG and BSL will agree on a detailed time-bound roadmap for this wood processing facility. The Government has however, already emphasized to BSL its disappointment and alarm that the construction and operationalisation of this wood processing facility has been unduly delayed.”
Response
*Consider that Bai Shan Lin has been promising to construct advanced wood processing factories in Guyana since 2007, has generated enormous income through exports to Asia of unprocessed logs since then, has received large subsidies from the Guyanese taxpayer by Cabinet decision, has been a keen player in casinos, and has recently expanded its interests in development of real estates with houses costing up to US$ 500,000; see Kaieteur News, ‘East Bank lands gobbled up by “private developers”’, May 10, 2015. The BSL protests about being short of money for wood processing are as unbelievable as the GFC assertions about sustainable forest management.
Yours faithfully,
Janette Bulkan
John Palmer
Editor’s note
Stabroek News was not sent the Guyana Forestry Commission press release to which the above letter refers, and our efforts to secure a copy from the GFC for publication before printing Ms Bulkan and Mr Palmer’s response proved fruitless.