Recent reports about the forestry industry present a significant problem for this already weakened and increasingly rudderless government. No matter how many assurances emanate from the Office of the President, the Ministry of Natural Resources or the investors themselves about the rectitude of their logging operations, key sections of the Guyanese public and stakeholders will hold firmly to the view that the authorities are simply not to be trusted and that there is logging and export beyond what is legally permissible and sustainable. This view will gain more and more currency to the detriment of the economy and investor confidence unless the government is able to convincingly and transparently present a case to the contrary.
Three key predicaments face the government. The first is that there is little or no confidence in the public about the pronouncements of government officials on forestry. This incredulity wasn’t developed yesterday. It has been nurtured over the lifespan of this government from the early days of the first major forestry investors the PPP/C encountered in 1992, the near award of a forest concession in the south of Guyana to now imprisoned drug lord Roger Khan, stretching all the way to today’s concession holders. It is undergirded by duplicity such as that surrounding Indian forestry company, Vaitarna. Ever since its sudden advent here with little to no forestry background, Stabroek News has tracked its development with the intention of validating official assurances that it wasn’t here for large scale logging and export but for value-added business which would generate badly need jobs and export revenue.
Needless to say, since 2010, information was hard to come by. Many foreign investors who set up here feel no obligation to the public via the established media to report and justify their activities. This was the case with Vaitarna as it is with many of the emerging investors in the forestry and agro sectors. Eventually, in January this year, the Minister of Natural Resources Robert Persaud told Stabroek News that Vaitarna was in an advanced stage of setting up its promised wood processing facility at Wineperu. He said he had been advised by the Guyana Forestry Commission (GFC) that “The facility is being constructed on an area of approximately 30,000 square feet. The land has been cleared; the surveying and design of the structure is in progress; and construction is expected to commence in the first quarter of 2014”.
Except that when Stabroek News tested this assertion last week there was not even a spanner or a lug let alone a pile to indicate that a processing plant was underway. The Minister’s assurance was complete fiction. It would have meant that neither he nor the GFC made any effort to discover for themselves that the company had not lived up to its commitments or they were aware of this but disinclined to level with the public. It meant that neither he nor the GFC held Vaitarna accountable to the promise of downstream processing. This state of affairs underlined the deep skepticism that members of the public have that the government and its regulatory agencies do not hold favoured investors accountable. All the while, however, Vaitarna was busily exporting logs even if not a smidgeon of this energy was being expended on its processing plant. Using Vaitarna as a poster boy/girl for the logging industry which member of the public would believe the Minister, GFC and Vaitarna where a dispute arises?
Following the Stabroek News exposure of its breach, Vaitarna responded within hours, promising that the sawmill would be “near completion” by the end of the year and that the equipment it was already supposed to have acquired for processing would be here once the sawmill was in place. Small comfort for an investment that in 2010 had promised jobs, no widespread exporting of logs and value added capacity.
The dubiety of the government’s pronouncements will be further compounded by the now disputed figures of Finance Minister Dr Ashni Singh on the contribution of logging to the forestry sector expansion this year. His recent figures in the mid-year report on the budget downplayed the role of logs. Figures obtained by Stabroek News, drawn from the GFC, jar breathtakingly with his narrative.
The second dilemma for the government is the well-established voracious appetite of the Chinese market and to a lesser extent India for timber of all sorts. This demand has spawned rapaciousness in the investors who seek to export to the mainland. In a 2011 analysis, William Laurance, a Distinguished Australian Research Professor homed in on the feeding frenzy that had developed. Ironically, while China was increasingly protecting its forests at home there wasn’t similar care shown in forestry on its behalf overseas.
Laurance cited three problems. First, he said the country and its hundreds of wood-products corporations and middlemen have been “remarkably aggressive” in going after timber supplies around the world while generally being hardly concerned with social equity or environmental sustainability. Second, and important in Guyana’s case, was what he said was Beijing’s relentless pursuit of timber, almost exclusively seeking raw logs. As a result, he noted, most of the profits from logging are realized by foreign timber-cutters, shippers, and wood-products manufacturers. Finally, he noted, and just as important for us, China has done little to battle illegal logging in many developing nations.
With the notorious weaknesses in all of the major regulatory systems in this country and the ingrained and deep-seated corruption, the government will have an uphill task convincing the public that forestry officers are diligently logging methods of felling, monitoring culls, ensuring that endangered species are not overharvested, stamping logs, establishing chain of custody etc. Indeed, the manner in which Bai Shan Lin, Vaitarna and others have operated makes it clear that they set the agenda. As in the case with Vaitarna’s unrequited promise of a processing plant there is no evidence of penalties being applied.
The third problem that the government faces has built up over a prolonged period. It is the ambivalence and inconsistency over logging particularly as it relates to grandiose concepts like the Low Carbon Development Strategy (LCDS). When he suddenly developed an environmental and conservationist bent, cynics withheld their praise of former President Jagdeo’s championing of forestry preservation. His sealing of a landmark forest protection deal in 2009 with the Kingdom of Norway and contrivances such as the Office of Climate Change did not dissuade them. If Guyana was genuinely on a LCDS path why wasn’t its forestry policy realigned to reflect more progressive thinking? Why for instance were new concessionaries not restricted from primarily exporting logs? Vaitarna is a classic example. It has done nothing but this in the last few years. Why weren’t investment agreements like those with Bai Shan Lin and the coterie of smaller companies it has taken over crafted around the primacy of valued added. Given the volume of evident log exports there was no such imposition. Ultimately, the value to the Guyanese economy from these Asian investments has to be carefully examined. A handful of jobs and paltry taxes on logs cannot justify the parcelling out of state forests and the serious environmental degradation caused by felling of trees, road carving and destruction of ecosystems. The forestry calculus must show clear and appreciating benefits to the economy over the life of the investment. Just recently Stabroek News reported on what seemed to be a scheme heavily weighted in favour of China Paper for a tree plantation with renewable tax holidays incorporated. China Paper is also keen on logging. What level of expertise is Guyana bringing to these negotiations? Just who are these persons?
On many occasions the government and the GFC point to several mechanisms which are intended to be the eye in the sky over the canopy carpeting the country’s vast forests. Whether it is the nascent Monitor-ing and Reporting Verification System, the commitment to engage with the EU Forest Law Enforcement, Governance and Trade programme as per the agreement with Norway or the Geospatial Information Management Unit at the GFC none of these have thus far provided a credible basis for supporting the declarations that have been made by the government this week in defence of Vaitarna and Bai Shan Lin.
Since deforestation will likely expand this year as a result of the government’s clear commitment to more mineral mining and the unabated logging, the government now has to present credible and convincing evidence that these forestry companies are not despoiling parts of the forest and culling more than they should in this logging syndrome that has held Guyana in its grip.
The government must also shed its defensiveness and animosity towards civil society voices like Janette Bulkan and others who have been doing extensive research work for years on local forests and warning about the dangers that lurk in deals such as the ones with Bai Shan Lin and Vaitarna. It is time for the Ramotar administration to irrefutably assure the public that the cutting of such large amounts of logs is fully above board and that there is a coherent programme towards the LCDS that frowns upon logging and large scale exports. In light of the framework already established with Norway on forest protection, the government can seek expertise on verifying the amount of logs that have been felled and exported by the various concession holders.