Several logging companies are being collectively fined $275 million for breaches in the Guyana Forestry Commission’s (GFC) regulations based on the findings of a late 2007 audit that revealed delinquencies regarding requisite forest inventories and operation plans.
Fines were imposed on A. Mazaharally and Sons Limited, Barakat Timbers Limited, Barama Company Limited, Caribbean Re-sources Limited, Demerara Timbers Limited, Guyana Sawmills Limited, Kurunduni Logging and Development Company, Nagasar Sawh Limited, Vergenoegen Sawmills, Willems Timber and Trading Company and Wood Associated Industries Limited as well as the Ituni Small Loggers Association, Minister of Agriculture Robert Persaud said yesterday.
Briefing the media on the achievements in the forest sector during last year, he noted that the GFC in the past has made it explicitly clear to forest concessionaries that it would be rigidly enforcing its guidelines requiring the submission of Annual Operation Plans and a 100 per cent inventory of the blocks to be harvested in the calendar year.
The minister said that in the latter part of 2007, a GFC audit identified that several concessionaires were guilty of harvesting in blocks that were not approved for harvesting by the GFC.
Barama had already been fined $96.4M for a number of breaches and a further $50M for other breaches in third-party concessions.
According to the minister, the GFC is in discussion with these companies and all of the fines are expected to be paid by mid-year.
He said that in keeping with the GFC guidelines, all forest concessions in excess of 8097.166 hectares (20,000 acres) must have in place an approved five-year Forest Management Plan (FMP). In addition, concessionaires must submit by November 30, an Annual Operational Plan (AOP) for the following year of operations.
According to Persaud, the FMP outlines the broad business projections over a five-year period, while the AOP gives a detailed outline of the activities to be carried out in the calendar year, inclusive of the specific 100-hectare blocks to be harvested, with the associated 100 per cent inventory information of the commercial species present in each block listed in the AOP.
He said the GFC would review the FMP and AOP and then inform concessionaires whether the plan was acceptable, or whether adjustments would have to be made. Field verification is also carried out to ensure that the inventory information presented is accurate.
“In 2006, the GFC held a series of meetings with concessionaires to remind them that the submission of the AOP with the associated 100 per cent inventory information was compulsory. This was re-emphasized by the sending of individual letters to the concessionaires, and through public notices in the media and at forest stations countrywide. GFC also offered technical inventory assistance on a cost recovery basis to concessionaires based on their request,” the minister said.
“Unfortunately, when an audit was conducted in the latter half of 2007, it was found that almost all of the Timber Sales Agreement (TSA) and Wood-Cutting Lease (WCL) holders had harvested in blocks that were not approved by the GFC, either because they were not listed in the AOP, or because of non-submission of the 100 per cent inventory information.
All of these defaulting companies were penalized in accordance with the GFC Board’s approved procedures,” the minister said.
Persaud added that in September 2007, notices were again sent to concessionaires reminding them of their obligation to submit the AOP for 2008 by November 30, 2007. The companies, he said, were also requested to ensure that they had valid approved FMPs.
He said that for 2008, there are currently 24 active TSAs and WCLs and of these, 17 have submitted the AOP for 2008, representing a 70.8 per cent submission. “Unfortunately the number of companies that have submitted the 100 per cent inventory is only five, representing a 20.8 per cent submission. Further, these five companies should have submitted the 100 per cent inventory for a total of 302 blocks. Inventory information, however, was only submitted for 144 blocks, representing a 47.6 per cent submission for these five companies,” the minister pointed out.
He said what was even more alarming was that of the 144 blocks submitted, 11 or 7.6 per cent were submitted in December 2007, while the remaining 133 or 92.6 per cent were submitted as late as January 2008.
Persaud said the FPA, at a meeting with him and the GFC on January 8, accepted that its members were delinquent in the submission of the required 100 per cent inventory information, and requested that they be given some additional time to submit this information.
The minister and the GFC agreed to facilitate this request on the condition that no harvesting would occur unless the inventory information for the specific bloc was submitted and field verified by the GFC.
“The GFC now awaits the submission of the necessary information by the concessionaires, and give a commitment that it will try to fast track the field verification exercises, without compromising its field procedures,” Persaud said.
The sector in 2007
According to the minister, total export earnings for 2007 were US$61.5 million compared to US$59.5 million in 2006 representing a 3.25 per cent increase.
He said the highest revenue earner for 2007 was sawn wood with US$21.86 million and volume at 43,825m3. This represented 35.56 per cent of export earnings.
The next highest revenue earner was logs at US$20.85 million and volume at 157,097m3, representing 3.91 per cent of export earnings. Plywood export was US$8.88 million and 24,317m3, representing 14.44 per cent of export earnings.
The Minister announced that other value-added products accounted for US$5 million, showing a 17.4 per cent increase from 2006. He said too that export value increased for sawn-wood, round-wood, split-wood, plywood, other value-added products including furniture, building components, and moulding and pre-fabricated houses.
Export volumes, he said, increased for dressed sawn-wood, round-wood, split-wood, and plywood. He said export volumes decreased for logs and undressed sawn-wood. Production of logs decreased in 2007 by 16.14 per cent.
There was an overall increase in export earnings by 3.25 per cent with export earnings in 2007 reaching US$61.475 million.
