Local forestry operators have called for a level playing field for all firms in the sector and say that foreign timber companies should be more involved in downstream operations and value-added production rather than in the exportation of logs.
“The foreign companies are allowed duty free importation of large quantities of machinery and equipment while most local companies get no such benefit,” the Forest Products Association (FPA) of Guyana said in a statement over the weekend.
“We welcome Foreign Direct Investment in the forest sector but do not support the plundering of the forests. Rather, foreign timber companies should be more involved in downstream operations and value added production than in the exportation of logs,” President of the FPA Khallawan was quoted as saying in the statement. While the Association is aware that some of its members and other operators have benefitted immensely from selling logs, trade in logs adds no value to the sector, the FPA asserted.
The operations of Chinese logging company Bai Shan Lin as well as Indian logging company Vaitarna Holdings Private Inc (VHPI) have been in the spotlight recently and it has been revealed that years after they entered the sector, they have not lived up to commitments to process logs here.
In light of the revelations, the FPA expressed concern about the damage that is being done to the image of the sector and called for a level playing field for all operators. The statement said that at a special executive meeting last Thursday, operators expressed these sentiments.
The statement noted that the FPA fought for, and obtained several wide-ranging provisions for the forest sector. Two such provisions are: that there should be no ban in log exports; and, that forest operators should be free to enter joint ventures with other parties.
“However, some foreign companies have been abusing the policy and the provisions by having multiple joint ventures, thus effectively monopolizing the market,” the FPA declared. No names were called but this declaration seems to be a reference to Chinese company Bai Shan Lin.
The statement said that at the meeting, an association member from Berbice noted that there must be a level playing field in which local forest producers are given similar concessions as foreign companies. The foreign companies are allowed duty free importation of large quantities of machinery and equipment while most local companies get no such benefit, the statement said.
“How can a foreign company be given duty free concession and all it does is export logs while local sawmills that add some amount of value to the raw material are not given concessions?” the statement quoted one member as saying.
Another member pointed out that some of the foreign companies do elaborate business plans, outlining massive projects to use Guyana woods for furniture, building components and other things but the plans do not materialise. “The FPA calls on the Government and the Forestry Commission to monitor the companies and bring them into accountability as Guyana’s natural patrimony and the image of the industry locally, regionally and internationally are at stake,” the statement said.
The FPA also called for an “even application” of the regulations, procedures, and concessions to all operators, both local and foreign. “It is incomprehensible how some companies are allowed to operate when the forest sector is highly regulated,” the association asserted.
The FPA said that logging companies must follow officially established guidelines and procedures set by the Forestry Commission or face sanctions. For example, there are guidelines for the issuance of State Forest Exploratory Permits, for Timber Sales Agreements (TSAs) and for the acquisition of Log Export Licences. Companies applying for permits or licences are required to meet the set criteria and also comply with regulations that govern their operations, the association noted.
Further, it said, the GFC Codes of Practice for Timber Production and Forest Operations dictate the parameters within which companies must operate in the forest. In following the guidelines of the codes and the scientifically calculated Annual Allowable Cut, the forests will remain sustainable for centuries to come, the FPA noted saying that this means that the rate at which logs are cut from the forests will not affect the forests’ ability to replenish itself.
“However, this should not be an encouragement for foreign companies to plunder Guyana’s rich forest resources and exporting without adding value,” the foresters body declared.