Minister of Natural Resources and the Environment, Raphael Trotman yesterday said that the government will not be “lectured” to in the press on the issue of forestry concessions, while announcing that the arrival of officials from a company in China that may take over the operations of the controversial Baishanlin is being awaited.
The minister was at the time being questioned on the operations of Baishanlin by Chairman of the Parliamentary Committee on Natural Resources, PPP/C MP Odinga Lumumba.
Trotman said there “seems to be quite an obsession with Baishanlin” but reiterated that as of December last year the ministry through the Guyana Forestry Commission had placed a restriction on the export of crabwood logs following a complaint by local furniture producers that they were unable to get the wood to use.
“So I think by a combination of poor demand in Asia; international, perhaps administrative issues with the company and the restrictions; the company’s operations are at a standstill right now,” the minister said.
He added that while it is too soon to predict the future of the company, the sense is that it would be totally absorbed by another entity and the government would have to make a decision to allow this or to “kick the investment out” altogether.
“We would not allow ourselves, sir, in the press, being lectured to, being told what to do or what not to do.
At the end of the day we have got to act in Guyana’s best interests and we have got to give the potential investors the right to be heard,” the minister stated emphatically.
Baishanlin has failed to fulfil several commitments made under its investment agreement here and Stabroek News had previously reported that it was to be taken over by Chinese state-owned forestry company Long Jiang Forest Industries Group.
That firm has acquired 55 per cent of the shares in Baishanlin and intends to fully take over the company this year, Minister of State Joseph Harmon had said in April.
Following an uproar over a photo of Harmon and officials of Baishanlin in a private jet in China, Harmon had said that Vice Director of the company Wong Dong Xu, in the presence of officials of Baishanlin, gave the assurance that the company’s officials will be in Guyana by May 2016 to complete due diligence for the takeover, and to satisfy and expand on the obligations of Baishanlin to Guyana.
Some observers have pointed to Number 12 of the Forest Regulations and have said that the President needs to approve the transaction.
The regulation states, “No transfer of any lease or timber sales agreement shall be made by any forest officer without the prior approval of the President where such lease or timber sales agreement grants exclusive rights to any person over an area estimated to exceed three thousand acres or is for an unexpired period exceeding three years.”
Moreover, Condition 13 of Timber Sales Agreements (TSA) states, “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.”
According to Guyana Forestry Commission (GFC) data, Baishanlin’s TSAs include Haimorakabra Logging Co Inc covering 52,896 hectares and Sherwood Forrest Inc covering 167,075 hectares of forest. Further, Baishanlin is the majority shareholder in Kwebanna Wood Products Inc, Puruni Woods and Wood Association Industries Co whose TSAs cover 221,108 hectares of forest in total.
Best interest
However, Trotman yesterday said that the government has to make a decision based on Guyana’s best interest rather than one “based just on a narrow view of getting at the company…”
He said if the company is interested in investing in the country then the rules would be laid out: respect our laws, respect the people, respect the contract that you sign and “if we have commitment that these can be honoured then we are prepared to entertain them.”
The minister restated that as far as he was aware the company’s operations are at a standstill and urged that facts and fiction be separated. He said, “The point I am making, Sir, is that there is nothing happening. There is nothing that is taking place between one and two in the morning.”
He said the GFC Board was reviewing forestry concessions and not just Baishanlin’s as the government is not about targeting any one company.
“The board will respond, but the government is not going to instruct Mr [James] Singh [GFC Commissioner] to penalize this one or favour that one. That is why there is a board and the board is functioning; but my last report is that Baishanlin’s operations at this point and time have come to an end,” the minister stated.
Lumumba commented that Chinese companies are most times owned by the Government of China, which has had a long history with Guyana and has invested heavily in the country; as such “we have to be very careful that the attacks on a Chinese company [are] not interpreted in China as an attack on the Chinese government.”
To this, Trotman said there is great advocacy by the Chinese Ambassador on behalf of Chinese interests generally and Guyana is mindful that this is not just a company but in fact has the “backing of its government and there has been longstanding relationships between the peoples of the Republic of China and the Republic of Guyana.”
He said loggers in Region 10 are crying out because they have no one to buy the logs they have already cut, adding, “Every action has a reaction.”
The minister pointed out that one of the biggest complaints was about the lack of value-added and as such if companies can commit and are prepared to put down factories and use the forest in a responsible and environmentally friendly manner “we are not going to say no…”
