GFC to take back Baishanlin concessions

-after company fails to introduce new investor, settle debt

The Guyana Forestry Commission yesterday announced that it will be moving to repossess concessions currently being held by Baishanlin International Forest Development Inc. (BIFDI), likely signalling the end of a deal which has been riddled with controversy for a number of years.

The Chinese company is said to control 1.3m hectares of local forests, a major portion of which has been acquired through what has been described as the illegal acquisition of concessions held by others.

In a statement, the GFC noted that BIFDI was incorporated in September 2006 under the Guyana Companies Act 1991 with the main objective of timber harvesting and establishing downstream wood processing operations in Linden.

The GFC said that its decision came after the company failed to deliver on agreed steps to introduce investors to the Commission and having been given time to prove that it had an acceptable plan to clear an approximately $80M debt to the GFC. In an effort to conclude the matter, the GFC said that representatives of the BIFDI were invited to a meeting on April 8, 2016 to provide an update on its plans to clear the debts.

“During the meeting, representatives noted that the BIFDI had suffered financial constraints which affected the establishing of the wood processing facility and that the company was engaging a new partner that would contribute significantly to their investment in Guyana. The GFC Board was assured of the financial strength of the new partner who had committed to pay off the debt owed by the company to GFC.

The GRA seizing Baishanlin vehicles earlier this year
The GRA seizing Baishanlin vehicles earlier this year

“The BIFDI was requested to submit information about its operations in Guyana, settle its arrears and submit a letter of commitment from the new partner.

“To date, the BIFDI has failed to fulfill any of its commitments to the Government of Guyana; effectively failing on the obligations it made, which were accepted in good faith”, the GFC said.

In keeping with Forest Governance Practices, the GFC said it will be formally repossessing the concessions owned by the company and accelerating efforts to recover the debt owed.

Having established a presence here in 2006, Baishanlin has been accused of making big promises to add value to forestry but failing to do so. Instead, it kept on gathering forests and increasing the export of logs all the while gaining huge fiscal concessions under the former PPP/C government.

During 2012-2015, the PPP/C government granted Baishanlin concessions amounting to $1.8 billion despite its failure to fulfill obligations under its investment agreements.

Forensic auditor Anand Goolsarran who made the finding recommended that the Government of Guyana consider terminating the investment agreements with the company and recover the value of the fiscal concessions granted to it.

Many of the items for which tax waivers were granted were either unrelated to, or significantly more than the requirements for the company’s project, the report on the forensic audit and review of the operations of the Guyana Forestry Commission said.

Baishanlin also became a source of embarrassment for the current APNU+AFC government when Minister of State Joseph Harmon interfered with the Guyana Revenue Authority’s seizure of its assets in settlement of a tax liability. Shortly after, Harmon proceeded on a mystery trip to Chine where he was photographed with Baishanlin officials. Amid the controversy that swirled over his trip, Harmon would later say that another Chinese company, the China-owned Longjiang had acquired 55% of Baishanlin and would be taking over the company’s operations here. Lonjiang never showed up.

 

 

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