DearEditor,
Presumably the Barama Company Limited will now be sending home the same proportion of its expatriate work force as the proportion of its Guyanese staff who are being made redundant?
(“Barama plywood mill to shut temporarily over supply,” SN December 05, 2007). This would be necessary to avoid exceeding its permitted 15 per cent expatriate workforce, allowed by the government in the foreign direct investment (FDI) arrangement of 1991 and confirmed by the Minister of Forestry at his press conference on December 8, 2006 (“Forestry transfer pricing probe on – Commissioner Singh – Barama, Jialing to come under closer scrutiny”, SN, Saturday, December 09 2006).
Perhaps you could confirm, Mr Editor, with the Ministry of Labour that the Asian forest workers are indeed being repatriated in the correct numbers? The FDI arrangement extols the intended Barama investments in local processing of timber. If the Land of Canaan plywood mill is being shut down, the continued flow of tax-free concessions from the government to Barama should also be reduced. It is contrary to the intentions of the FDI arrangement for Barama to receive tax incentives (around US$800,000 per year) when it has been increasing its log exports for the last several years and running down its plywood mill to 25 per cent of its designed capacity. That is also directly contrary to the National Development Strategy 2001-2010, the National Forest Policy 1997, the National Forest Plan 2001, and the PPP pre-election manifesto on value-added forest industry.
The CEO of Barama is reported as intending to build up its stock of baromalli peeler logs in order to re-start the mill. If Barama had paid more attention to its FDI promises, and if the Government (Guyana Forestry Commission and Go-Invest) had monitored Barama as Minister Robert Persaud promised a year ago, those stocks would have been processed locally and not exported. It is absurd to imply that its huge logging concession of 1.6 million hectares needs to be supplemented by logs from illegally-rented neighbouring concessions. The CEO of Barama now proposes to purchase logs. From whom? Barama is the de facto manager of at least six concessions, which no longer have their own capacity to log and supply timber. Loggers such as Jailin have their own FDI arrangements which commit them to local processing, also confirmed by the Minister for Forestry in December 2006, so they could not properly be suppliers to Barama.
I hope that the current focus at the apex of government on the forests of Guyana as a source of global environmental services does not distract officials and politicians from correct valuation and appropriate taxation of FDI — benefiting logging companies. Perhaps the Ministry of Finance should take a more strategic interest in the workings of the Board of Directors of the Guyana Forestry Commission. I note that the nominal fines imposed on Barama for under-declaration of log volumes extracted and for illegal logging outside of its concession boundaries in October 2007 do not seem to be associated with any requirement for Barama to cease its illegal logging.
Yours faithfully,
Janette Bulkan
