What commitments were made by VHPI?

Dear Editor,

With reference to the information from the press conference held by Minister Robert Persaud on April 12 about VHPI and reported variously in all three daily newspapers on April 13, perhaps you could jog the memory of Minister Robert Persaud about the wording of the National Forest Policy and the procedures of the Guyana Forestry Commission for handling applications for logging concessions?  Perhaps the Minister could be more explicit about the findings of the due diligence carried out to check the applications from VHPI for areas previously held by Simon & Shock under a State Forest Exploratory Permit (SFEP) and by Caribbean Resources Ltd as Timber Sales Agreement 04/89?  The Minister may not recall why the Forests Act was amended in 1996 to provide for SFEPs during a moratorium on logging concessions.  SFEPs were introduced precisely to stop the carpet-bagging exemplified by transnational loggers Barama and Berjaya from Malaysia (and a queue of others behind them), to require detailed presentation and demonstration of competence, and to allow bidders to estimate the premium which they would pay over and above the resource access fees (area rent and timber volume royalties) for the right to exclusive access to a defined area.

SFEPs provide for up to three years for forest inventory, topographic surveys, environmental and social impact assessment (ESIA), and development of the forest management plan (not mentioned by the Minister).  The applicant (VHPI) should have posted a security bond (not mentioned by the Minister) and should have been able to demonstrate its competence in forest management and harvesting – how was that possible for a coffee retailer? – if equivalent competence is required to be demonstrated by the suppliers of One Laptop Per Family, why should not loggers provide the same kind of detail in the public domain?  The applicant should have included in his application his policy on indigenous peoples (not mentioned by the Minister); given the geographic proximity of the SFEP, how was the North Rupununi District Development Board involved in the VHPI application?  And what commitments have been made for employment and training of Guyanese citizens? – another requirement for a SFEP application.

Minister Persaud appears to accept that the foreign direct investment arrangement written by Samling and agreed by the Government of Guyana in 1991 is of a carpet-bagging nature.

That agreement (which long pre-dates SFEPs and so cannot be directly compared with them) does not commit Barama to any specific investments over any specific time period, does not set objective progress indicators, does not require recognition of Amerindian rights and claims, does not provide for a security deposit nor a resource access premium.  Learning from the weaknesses of the Barama FDI arrangement, will the Minister now publish the details of the commitments made by VHPI, which the GFC’s manual of procedures on SFEPs requires the GFC to check.  The reason for setting the application fee for the SFEP in US dollars and at the level of US$20,000 was precisely to allow the GFC to commission due diligence checks on potential foreign investors, and the GFC manual lists contact details for international investigation agencies performing such services.

I am not aware that the GFC has the in-house capability to verify claims in a SFEP application emanating from a potential investor previously operating in an entirely different area of business and only in India.  Will the Minister please explain? At the same time, will the Minister disclose what are the time-bound investment commitments made by VHPI, with objective progress indicators, for both the Simon & Shock SFEP area and the CRL TSA? – to contrast with the absence of such details in the Barama FDI arrangement.

Yours faithfully,
Janette Bulkan