Though legal counsel for the Ministry of Foreign Affairs is analysing a claim by the Chinese logging firm Baishanlin that its investment here is being crippled, Foreign Minister Carl Greenidge says that he believes that the company is confused about government’s responsibility in this matter.
“I can say that we have received two items of communications from Baishanlin. One set is from their lawyers and another set that came directly to us. We are having our lawyers look at it,” Greenidge told Stabroek News yesterday
Further, he posited “Although I am not a lawyer, the experience I have had, as regards to fiscal concessions, suggests to me that in any country, the management and implementation and utilisation of concessions is a matter for an executing authority, such as the GRA or agents of the Ministry of Finance or even the police. The suggestion that an international agreement would preclude the police, law enforcement and the national law I believe is indeed mistaken.”
Baishanlin has accused the David Granger administration of seeking to “cripple” its investment in Guyana and said its actions were “unlawful.” Baishanlin wants Georgetown and Beijing to open discussions with a view to resolving the issue under the ‘Agreement between the Government of the Republic of Guyana and the Government of China on the Promotion and Protection of Investments’ which was inked between the two countries in March 2003.
Attorneys for the controversial firm have written to the Guyana Revenue Authority (GRA), seeking the return of vehicles seized in April and have accused Georgetown of breaching treaty obligations with China.
The company, via its lawyers Satram & Satram, altogether wrote four letters to complain of the actions being undertaken by the government. It wrote to the GRA Commissioner-General Ingrid Griffith, the Minister of Foreign Affairs, and the Ambassador of China to Guyana, Zhang Limin and UN Secretary General Ban Ki-moon. The letters were copied to President David Granger.
The letters asserted that the seizure of Baishanlin’s property, which the GRA has undertaken to enforce a disputed tax liability, is unlawful and the imposition of it triggered a dispute between Baishanlin and the Government of Guyana (GoG) which is to be dealt with under the March 2003 agreement between Guyana and China.
In the letters to Greenidge and Limin, Baishanlin called upon the officials to commence diplomatic consultations to resolve all disputes between the company and the GoG.
It said that a dispute has arisen between Baishanlin International Forest Development Inc. and the GoG and there are treaty obligations between China and Guyana under the March 2003 promotion and protection of investments agreement, which have been triggered by the dispute.
“This is a matter of concern not only to the company but to all investors who wish to undertake investment in Guyana but the concern of the company in particular is heightened because it has invested heavily in Guyana in reliance on the agreement which in the absence of diplomatic resolution allows the disputes to be settled by an arbitral Tribunal under Article 9 of the Agreement,” the letter said.
“The company hereby requests pursuant to Article 8 of the Agreement that diplomatic channels be opened to allow for consultation in the hope that a resolution of the dispute between Guyana and the company may be resolved within six (6) months of the date hereof,” it said.
But the Foreign Affairs Minister said that although it might be the company’s belief that any agreement they have supersedes the law, there are mechanisms available for the resolution of such disputes.
“Those mechanisms would be contained in the agreement signed, as in the case with GGMC, in the case of Guyana as well as government and I do not believe that the mechanisms would refute the responsibilities of the legally authorized agencies for enforcing the law,” Greenidge said.
“So it appears to me that is the first set of things that the company and the legal representatives should appreciate. It does not appear to me, that it is appreciated,” he added.
And on the company’s request for diplomatic intervention, the Foreign Minister said “I am not aware of a state-to-state agreement between Bai Shan Lin and the Government of Guyana. I am aware of a state-to-state agreement between Guyana and the People’s Republic of China and a sectorial agreement between Bai Shan Lin and bodies such as the GFC and so forth.”
Nonetheless, he said that he leaves the final decision on the way forward, with the foreign ministry’s legal team.
Meanwhile, also weighing in on the issue was former President Bharrat Jagdeo who said at a press conference yesterday at Freedom House that Baishanlin must ensure that it complies with stipulations of the agreements it signed. “Baishanlin must comply with the agreements it has with the state. That is all I am going to say about Baishanlin,” Jagdeo said.
The former President said that he doesn’t recall or know the dates of agreements with the company but the core of the issue was that they must comply and for government’s part, if those requirements are met, they should be treated equally. “I don’t recall or know the dates of the agreements and their obligations under the agreements, but I can assure you, that under their agreements they have to comply. (For example) If they were in the forestry; with the forestry commission (there are) rigid codes for cutting trees and logs (with which) they had to comply and with the Norwegian agreement too. On the financial side and the concession side, these things are governed by the agreement. If they comply with the agreement they must be treated fairly,” Jagdeo asserted.
The Baishanlin agreement would have been drawn up under the Jagdeo presidency.
Baishanlin has long been under the spotlight for exporting vast quantities of logs and benefitting from concessions despite its failure to fulfill its obligations including setting up a wood processing plant. It has been accused of focusing only on the export of logs while making lofty promises of value-added production. The previous PPP/C government had been accused of facilitating this.
This year, Baishanlin was at the centre of a scandal surrounding Minister of State Joseph Harmon who had intervened on behalf of the firm to halt the seizure of two luxury vehicles by GRA which was seeking to do so because the company failed to pay import taxes on the two vehicles. Baishanlin remains under investigation for tax evasion. Further, the company is set to be taken over by the Long Jiang Forest Industries Group, a state-owned company that had acquired 55 percent of the shares in Baishanlin and which, Harmon had said, intends to fully take over the company this year.
It is not clear what impact Baishanlin’s actions will have on the proposed takeover.