Barama Company Limited says that even though it has not turned a profit in its 15 years of operation here it still contributes to Guyana's economy and aims to do more of this with the export of its products now that its forests have been certified as sustainably managed.
This statement was made during a press conference yesterday at the Cara Lodge when the company hosted a function in honour of its achieving the Forest Stewardship Certification (FSC). The company received the certification on February 17, 2006.
In a letter to Stabroek News recently, the company was accused of logging beyond its formal holdings through subsidiaries or indirect contracts and it was argued that the FSC certification would benefit the overseas backers of the company. The writer had two major concerns, one is the illegal trading of forest concessions; the other is the consolidation of State Production Forests in the hands of a few large forestry companies.
The company is cited as being a major employer with about 1,700 employees whose earnings benefit a total of about 5,000 family members.
Managing Director of Barama, Girwar Lalaram said that the company will further contribute to the economy through the sale of its certified forest products through easier accessibility to demanding foreign markets. "We are now testing those markets to see if we will get a premium for the certified products, as was the case in the past," Lalaram said.
When questions were asked about the tax concessions that the company got in accordance with the Income Tax (In Aid of Industry) Act, Commissioner of Forests James Singh, also present at the press conference, said that this has to be asked of the Guyana Revenue Authority (GRA).
Lalaram said that the third party arrangements that Barama has with small concessionaires is of mutual benefit. He said that to build the road at Buck Hall in Essequibo the company would have had to pass through a number of concessions. "We are putting in infrastructure," he said, adding that it was very costly to build roads through the various concessions.
Questioned about the preponderance of log exports by Barama as against downstream activities, Lalaram said that the company concentrated first on lesser known species and it was only because they found new markets. He said that the development of Buck Hall is expected to utilize many of the logs harvested in the newly certified compartments four and five of the company's giant concession.
On maintaining the certification, Corris van den Berg, representative of SGS Qualifor - the certification company on behalf of the FSC - said that the certification is for a period of five years and will be annually audited for compliance. If any problems are found then there will be a follow up audit and necessary corrective action.
One letter writer said that in addition to the massive grant of forest harvesting rights, Samling of Malaysia and Sunkyong of South Korea, Barama's original parent companies, were given a 25-year option to renew the lease, fixed royalties denominated in Guyana dollars and not adjustable for inflation or any other economic change, and a range of freedoms from taxes and import duties. Samling is now the main stakeholder.
The letter writer said that the direct and indirect concessions add up to a total of 1,993,627 hectares and that GFC's 2005 figures give the total amount of State Production Forests allocated for commercial use as 5,789,000 hectares.
Lalaram took umbrage at the assertion that the company repatriates funds to its parent companies overseas to the disadvantage of the country's economy. He said that this is not the case and that nothing is repatriated. One observer pointed out that repatriation does not only have to take the form of funds.
According to one observer, the company does not make information about tax concessions available to the public as stipulated by the laws of this country.
Singh said that the Government is furnishing a response to issues raised in letters to this newspaper as they relate to Barama and the large tract of land that is being certified and the fact that the company still harvests from other concessions.
Lalaram said that compartments four and five, where the company would be operating for the next ten to 15 years, cover a total forest area of 570,000 hectares and this has been certified by the FSC. "This is the single largest block of natural tropical forests in the world certified by the FSC," he said.
According to the Managing Director, the Chain of Custody Certification for the company's downstream manufacturing will soon follow, as this is an advanced stage of progress and development expected to be completed in June this year.
Speaking at the press conference, Permanent Secretary in the Ministry of Agriculture Dindyal Permaul urged other forest companies to address the question of low value added, low productivity and inefficiency in the sector. He said that the GFC will not tolerate complacency in the sector and said that the Board of the GFC urges that the certification of Barama be a catalyst for others to get their houses in order.Stabroek News
