Approximately 180 workers have been retrenched by Barama Company Limited, according to General Manager Mohindra Chand, who says that a drastic slowdown in the market is largely to blame but the government’s protracted review of the company’s contract for renewal has also contributed.
The Malaysian-owned company has been laying off workers since July, Chand said. “They have been going in phases and in total it has been approximately 180 persons that have been laid off from different departments across the board,” Chand told Stabroek News yesterday.
He pointed out that the retrenchment is directly linked to the market slowing down and the company’s production vastly exceeding its sales. “All markets have slowed down and our parent company has been unable to provide any financial support to us and we currently have stocks of plywood, lumber and logs, valued at more than $1B, that the market is not taking at this time,” Chand pointed out, while noting that the company did indicate the market slowdown to government and signalled that it would affect the company and staff.
“We stated that as a result we have no option but to cut production throughout our operation by 50% and this will result in the retrenching of our employees in the months of July to October,” Chand said. He added that they also informed the Chief Labour Officer and the workers’ union and have been working closely with them to ensure that the company is in full compliance.
Currently, the company still has approximately 700 employees but has no intention of laying off anyone. “No decision has been made to lay off more staff,” he said.
However, while the company’s economic slowdown is the main reason for the retrenchment, Chand said the delay in the renewal of its contract has also impacted negatively on the investors’ confidence.
The 25-year contract between the Government of Guyana (GoG) and the company is slated to end on October 15, while the Natural Resources Ministry last week said that a Cabinet-appointed Task Force, which was set up to examine the request for renewal, is to present a final proposal before the end of the month.
Chand pointed out that even with a renewal of its contract, the company cannot guarantee that it would be able to immediately rehire workers. “A renewal doesn’t impact the economy. We have to bring the stock down before we go back into full production and with a renewal you have something to work with,” he said.
He noted that the company would have indicated its desire to renew the contract to the previous government on June 2, 2014. “We would’ve stated our intentions since then to renew, given that it was such a large company. Once there is no material breach, and there was no material breach from the company, from either side then the contract could’ve been automatically renewed,” Chand said, while noting that the company had presented its intentions early because it was looking forward to additional investments in its forest operations.
However, he said progress was halted after Parliament was prorogued by the former government, ahead of an announcement of new elections. “Elec-tions came and so we lost a lot of time there and after elections we decided to give the new government some time to settle in,” Chand pointed out.
After some time, he said the company was engaged by Minister of State Joseph Harmon and Minister of Natural Resources Raphael Trotman in August, 2015, and it restated its desire for the renewal of the contract.
According to Chand, the government had indicated to the company that a memorandum for commencement for the talks was before Cabinet and would’ve been completed in October, 2015. How-ever, after the year ended, he said, the company had not received any indication from the government. “On January 11, we wrote and asked again and he [Trotman] said it will happen on February 10,” Chand pointed out.
He stated that it was decided that the company and government would have six other meetings and one site visit within the following three months. However, they were only able to have one meeting and the site visit. At the meeting, the company and government agreed that certain documents needed to be submitted, which the company presented on March 8.
On April 5, he added, there was a follow-up meeting with the minister, where certain agreements were made. “We did indicate to the minister that we are having some difficulties with our stakeholders. Everyone is aware that the agreement is coming to an end, the bankers are aware, the suppliers are aware, our investors are aware, the union is aware, the buyers and we have nothing substantial to provide to our stakeholders about the renewal,” he said.
Chand noted that on May 11, the company was told that the negotiations should conclude by August. However, August has ended and the government has since indicated to the company that the new deadline would be at the end of September.
Chand indicated that he is positive that the government will renew the contract as it will be beneficial to all of Guyana. “From all indications we have had very good engagements and both parties [government and investors] seem very interested in the renewal. At the end of the day, it’s been more than one year and we have to move from saying that hey we want to renew to the stage of providing the terms and conditions. Barama itself sees the importance of the renewal for Guyana,” Chand said.
In relation to discussions with the workers’ union, Chand explained that it has been “very supportive and understanding” and has been cooperating with the company. “They have even been exploring options of how we could turn around the situation in terms of managing against the economic slowdown,” he said, while stating that the talks have been very balanced and it has not been just about the workers but making the company sustainable for the long term.
The Natural Resources Ministry, in a statement issued last Friday, said the convening of a Task Force to examine the request was seen as necessary given the “rapacious activities” of some foreign companies operating in the forests of Guyana, and “some not so positive observations that had been expressed about Barama in particular.”
The statement declared that the government takes the “responsibility of workers’ welfare and rights very seriously and asks for their understanding and forbearance whilst the matter is being addressed.”
