Dear Editor,
The report of statements by the Minister for Natural Resources and the Environment, Raphael Trotman, does not make clear that the Government of Guyana awarded to companies in the Bai Shan Lin group two kinds of concession (‘New BaiShanLin owners should not expect concessions- Trotman’, Kaieteur News, 03 July 2016). There were tax concessions under a succession of investment agreements for the duty-free import of equipment (such as trucks and excavators) and materials such as cement, paint and steel. Quite differently there were concessions for logging licences and mining licences. In addition, one company in the group – Bai Shan Lin International Forest Development Inc. (BIFDI) – took over illegally the long-term logging licences of at least four Guyanese companies, with the full knowledge and connivance of the Guyana Forestry Commission. These illegal acquisitions were in addition to at least one legal takeover (of Sherwood Forrest Inc, the holder of State Forest Exploratory Permit (SFEP) 01/2007) and the award of two further SFEPs 01/2011 and 01/2013. Bai Shan Lin should not have been allowed to acquire any one of these logging operations because it would have failed any properly conducted due diligence audit, as it lacked the skills and experience demanded by the formal requirements of the GFC. It appears that the GFC did not apply its own due diligence rules, either at all or applied incorrectly. This failure is confirmed by the inability of BIFDI to convert either SFEP into a Timber Sales Agreement long-term logging concession.
In spite of claims by Bai Shan Lin to access to financial credit of almost US$200 million, and in spite of the fraudulent exports of unprocessed timber logs worth tens of millions of US dollars, Bai Shan Lin allegedly sold 55 per cent of its shares to the Long Jiang Forest Industries Group, another State-Owned Enterprise (SOE) of the Government of China. There is nothing wrong under the laws of Guyana in one company acquiring another company. The crime is in the acquisition of the logging licences without prior written approval by the President of Guyana, according to Forest Regulation 12 (1954/1982) and condition 13 of the Timber Sales Agreements, as well as Article 16 of the Forests Act 2009 with respect to the SFEPs. There is no evidence in the public domain that any President of Guyana has given such prior written approval. Moreover, since current President Granger embraces a green economy and good governance, and is on record as being against corruption, it is unclear why the SOE Long Jiang Forest Industries Group would be interested in acquiring Bai Shan Lin. Surely it is not simply because of the tax concessions under the various investment agreements, super-generous though those concessions have been, as KN has repeatedly pointed out?
I wonder if Minister Trotman is fully appraised of the many technical failures and illegalities of the Bai Shan Lin group of companies, aided and abetted by the Guyana Forestry Commission (GFC) and Guyana Revenue Authority? I wonder what due diligence checks have been carried out by the Government of Guyana on the SOE Long Jiang? I wonder if the specialists in FraudNet who may be aiding the State Assets Recovery Unit could also focus on the Bai Shan Lin group, the GFC and the GRA (‘Int’l fraud experts willing to assist Guyana with Forensic Audits – SARU Head’, KN, 04 July 2016)?
Yours faithfully,
Janette Bulkan
