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WORLDWIDE
FOREST/BIODIVERSITY CAMPAIGN NEWS
Guyana's
Logging Freeze in Question
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Forest
Networking a Project of Ecological Enterprises
3/18/96
OVERVIEW
& SOURCE
The
World Rainforest Movement reports on increased logging and
mining
pressure in Guyana, South America.
Their logging
concession
freeze announced in 1994 is looking like it will end,
as
industrial logging pressures intensify.
Once again, Malaysian
and
Canadian timber companies seeks to export industrial forestry
to one
of the last rainforests--with little rewards for local
peoples,
as royalties, taxes and forest fees being paid by loggers
in
Guyana are some of the lowest in the tropics.
As elsewhere,
"Guyana
is liquidating its forest assets for little national
gain."
g.b.
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/*
Written 5:09 PM Mar 14, 1996 by gn:wrm in igc:rainfor.genera
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/*
---------- "GUYANA: LOGGING FREEZE STARTS TO ME" ---------- */
From:
Forest Peoples Programme <wrm>
Subject:
GUYANA: LOGGING FREEZE STARTS TO MELT, MORE MINING
______________________________________________________________
WORLD RAINFOREST MOVEMENT
_____________________________________________________________
INFORMATION
UPDATE GUYANA 14 MARCH 1996
TIMBER CONCESSION FREEZE FEELS THE
HEAT:
NEW TIMBER PERMITS IMMINENT WHILE MINING
MOVES SOUTH
There
are worrying signs that the freeze in the hand out of
logging
concessions to foreign companies in Guyana is about to
break.
Under heavy pressure from foreign investors, the Guyanese
Government
may be about to offer new permits to foreign companies,
despite
promises made to the aid agencies in 1994 that no new
logging
concessions would be handed out until the moribund
Forestry
Commission was revived and back in control of the
*existing*
timber cutting.
According
to the national newspaper, 'Stabroek News' on 12 March
1996,
the Presidential Adviser for Science, Technology and the
Environment,
Navin Chandarpal has been negotiating with the
Malaysian
company, Solid Timbers Sendirian Berhad, to grant it
a
500,000 hectare timber permit in the Upper Corentyne / New
River
area in the extreme south of the country. This is about
half
the over 1 million hectares the company had originally
sought
even further south in the New River Triangle area - a
territory
disputed with neighbouring Suriname. Both areas are
outside
the jurisdiction of the Forestry Commission and way south
of the
country's existing road network. According to the newspaper
report,
the Government would first pass legislation expanding the
area of
State Forests and then offer the company an exploratory
lease
to the area, under which it would carry out a forest
inventory
and develop a forest management and investment plan. The
same
report also alleges that two other South-East Asian investor
groups
including Alex Ling Lee Soon and and Vincent Tan's Berjaya
Sdn.
Bhd. are still seeking further areas in the south.
Under
its agreement with the aid agencies, the Guyanese Government
has
agreed that - in order to ensure sound forest management and
profitable
returns to the Guyanese Exchequer - no new timber
permits
should be issued for a minimum of three years after May
1995 or
until the Forestry Commission is able to regulate the
industry.
Meanwhile, with the technical and financial support of
the
British Overseas Development Administration, the Forestry
Commission
is attempting to build up the numbers and training of
its
staff and revise forestry regulations and royalties with the
initial
aim of establishing control over the nearly 9 million
hectares
of forests already under concession, while making the
industry
a profitable source of national revenue.
Guyanese
foresters agree that it will be years before this is
achieved
and that meanwhile concessionaires are subject to minimal
supervision.
This is just the kind of situation that logging
companies
thrive on. Poor supervision, low taxes and cheap labour
are
thus attracting investors to the country. Indeed, at present
loggers
get their timber in Guyana extraordinarily cheap. A study
carried
out for the World Bank in late 1995 showed that the
royalties,
taxes and forest fees being paid by loggers in Guyana
are
some of the lowest in the tropics, being less than a tenth of
those
paid in most African and Asian countries. Moreover, since
1988
fees have been falling in real terms. Royalty rates are at
30% of
their former value, while customs duties and acreage fees
have
fallen by more than 90% in the past decade. On top of this,
the
report states, foreign companies enjoy 'generous tax breaks
and
other incentives creating conditions of unfair competition
(for
local producers)'. As a result Guyana is liquidating its
forest
assets for little national gain. Warns the report:
This kind of 'forest mining entails a
boom-and-bust pattern
of development that can be highly
disruptive to employment
levels, trade balances, and other factors
of macro-economic
stability' (1).
To get
around their commitment to the aid agencies not to grant
new
logging licences, the Government seems to have invented the
legal
fiction of 'exploratory leases' - a category of permit which
does
not exist in Guyanese law. By this means the Government hopes
to keep
foreign investors interested and then grant them licences
as soon
as they can get away with it.
Aid
agency officials in Georgetown have been aware of these
negotiations
for some time and are also concerned by rumours that
the
Canadian timber company, Buchanan Forest Products, is seeking
access
to a 400,000 hectare concession on the Middle Mazaruni
river.
This unlogged area was recently relinquished by Mazaruni
Forest
Industries Limited (a consortium formed by members of the
Prime
Group of Singapore) in exchange for the Prime Group's
takeover
of the financially strapped Demerara Timbers Limited
which
is exploiting a 500,000 hectare concession on the Middle
Essequibo.
Buchanan's proposed operations on the Middle Mazaruni
would
bring it into conflict with a number of villages of Akawaio
Indians
who have inhabited the area for centuries. Under pressure
from
Buchanan, which enjoys support from the Canadian Embassy in
Georgetown,
the Government is alleged to be considering also
granting
them a three year 'exploratory permit'.
Buchanan
does not have an untarnished reputation back in its home
province
of Ontario in Canada. A report made for the Canadian
Paperworkers
Union in 1992 notes that Buchanan
'has evolved into a company riddled with
contradictions. On
the one hand, it has a long history of
doing all it can to
avoid forestry, environmental and labour
legislation. On
the other hand, as it has grown, the
Buchanan group of
companies has become more mainstream.'
(2)
The
report details how Buchanan has successfully fought to reduce
labour
costs and has extravagantly logged forests to maximise
profits
with little regard for the damage to residual timber
stands
and little concern for timber wastage. According to the
report,
Buchanan has also used strongarm tactics - threatening
to
close mills - to pressure politicians into granting it access
to
forests. Of particular relevance to Guyana, the report
highlights
how the company thrived on lax government controls,
reaping
financial benefits while passing on the social and
environmental
costs to be borne by others.
The
report alleges that the company was able to avoid prosecution
for
violating environmental and forest management regulations,
due to
close connections with senior politicians in the
environment
ministry. Tracing the company's history, the report
notes
how 'laissez-faire' and political connections allowed
Buchanan
to get away with repeated violations of the Crown Timber
Act,
especially during the 1960s, 70s and early 80s. In recent
years,
however, due to growing public concern for the environment,
supervision
has tightened and compliance has been more carefully
enforced,
obliging Buchanan to toe the line.
Despite
improved compliance with forest management practices,
Buchanan
has nevertheless managed to keep costs low, mainly by
defying
the trades unions and avoiding obligations to its
employees.
Notes the report:
'Buchanan's track record in labour
relations has steadily
deteriorated from the late 1970s and
throughout the 1980s.
Buchanan's defiance of union agreements,
its avoidance of
mandated employee benefits and treatment
of contract labour
in woodlands are notorious.'
Mining
moves south:
Meanwhile
the mining industry in Guyana is also moving south.
Leading
the way, again, is the Malaysian firm, Solid Timbers
Sendirian
Berhad, whose wholly owned local subsidiary, Tanahmas
Gold
Mining Company has just been granted a 7,000 hectare mining
lease
in Camp Jaguar on the New River. The company has also
applied
for a further 14,000 hectares in an adjoining area.
Mining
is also intensifying in other indigenous areas. Carib
Indians
on the Barama river report several new gold mining
operations
on their traditional lands including Citadel Co.,
Sonic
Soil and the Roraima Mining Company.
Refs:
(1).
Lorene Flaming, 'An Economic Analysis of the Timber Industry
in
Guyana: Prospects for Stengthening State Capacity and Private
Incentives
for Sustainable Forest Management'. Environment
Department,
World Bank, Washington, 25 September 1995.
(2).
David Frood and Larry Sanders, 'Lean and Mean: the forest
labyrinth
of Ken Buchanan'. Report for the Canadian Paperworkers
Union,
25 February 1992.
For
more information contact: Forest Peoples Programme, World
Rainforest
Movement, 8 Chapel Row, Chadlington, OX7 3NA, England
Tel:
01608 676691 Fax: + 44 1608 676743 Email: wrm@gn.apc.org
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