In this series of articles, published in the newsletter of the Commonwealth Forestry Association, Janette Bulkan looks at the issue of governance and illegal logging in the forest sector in Guyana, in the context of the REDD agreement with Norway.
The three articles are reproduced here with the permission of the Commonwealth Forestry Association.
The first article (March 2011) looks at the largely unsuccessful attempts since 1994 to address illegal logging in Guyana. One of the conditions to the Memorandum of Understanding between Norway and Guyana signed in November 2009, is that Guyana is to provide “evidence of Guyana entering a formal dialogue with the European Union with the intent of joining its Forest Law Enforcement, Governance and Trade (FLEGT) processes towards a Voluntary Partnership Agreement (VPA)”. A key part of this would be to develop a legal verification system.
Bulkan’s second article (June 2011) looks at the ups and downs in the development of a legal verification system for Guyana. The standard produced for Guyana is “sparse” compared to those produced for Indonesia and Ghana, Bulkan writes. The weakness of the legal verification system was exposed dramatically in March 2011, when customs officers in Jamaica found 122 kilogrammes of cocaine in a shipment of apparently illegally harvested and illegally exported timber from Guyana. Clearly, neither the Guyana Forestry Commission nor the Trade and Customs Department of the Guyana Revenue Authority had inspected the shipment before the container was sealed.
In the third article (September 2011), Bulkan notes that the Guyana Forestry Commission has taken no action about the illegal harvest of the logs or the use of a false name on the shipping documents. Meanwhile, two reports about the legal verification system (one by consulting firm Efeca and one by World Resources Institute) have not been made public. Since February 2008, the Guyana Forestry Commission has stopped publishing the exported volumes by species for any category of wood product. An Access to Information Bill would not force the Guyana Forestry Commission to release this information. Regulations for wood processing operations in Guyana are largely not implemented.
In her next article for the Commonwealth Forestry Association, Bulkan plans to look at the draft of Guyana’s REDD+ Governance Development Plan (pdf file, 351.2 kB).
Challenges for Norwegian financial support to Guyana
CFA Newsletter, March 2011
The Minister of Finance of Guyana is gambling that nine per cent of the national budget for 2011, US$70 million, will be supplied by a donation from Norway related to avoided deforestation. There is negligible threat of significantly increased deforestation – the soils of the Guiana Shield are too naturally infertile to support hinterland agriculture on a commercial scale without unaffordable supplies of artificial fertilizer and pesticides – and Guyana has made no formal commitment to reduce or even stabilize its deforestation rate. The peculiar politics of REDD – the UNFCCC scheme for Reduced Emissions (of forest carbon) from Deforestation and forest Degradation – link Guyana and Norway in an unlikely bond through a Memorandum of Understanding (MoU), signed in November 2009. Is Norway simply paying for ‘hot air’?
Norway has attached several conditions to its proposed five years of annual grants to Guyana. The dangling carrot of Norwegian money is having some effect on the quality of forest management in Guyana in a way that the almost unconditional technical aid supplied by the UK Department for International Development for institutional reform could not during 1995–2002. So the soundly based policy and technical developments in the Guyana Forestry Commission during that period to 2002 have been largely left on the shelf during almost a decade. Those are produced at international conferences and to show visitors but not for general local application against a regime characterized by regulatory capture.
But now comes the offer of Norwegian money, providing a stimulus to apply those technical developments. The incentive also gives meaning to studies which have been undertaken in fits and starts since 2002 with aid from assorted donors and, at last, to advance further. One of the conditions in the MoU is “evidence of Guyana entering a formal dialogue with the European Union with the intent of joining its Forest Law Enforcement, Governance and Trade (FLEGT) processes towards a Voluntary Partnership Agreement (VPA)”. One of the key elements of a VPA is a legality verification system (LVS), to provide assurance that timber imported into the EU from the producer country shall have been produced at least legally if not sustainably.
Guyana has had large-scale illegal logging for years. In spite of recommendations at least since 1994, Guyana has maintained forest resource taxes among the lowest in the world, and then given even further tax benefits in foreign direct investment arrangements. So the Guyana Forestry Commission (GFC) has been, in principle, underfunded and nearly absent from logging areas for a long time. A timber tagging and tracking system was devised by the experienced SGS (Barne 1999) using bar-coded tags, linked to a concession-based yield allocation system being devised in parallel. However, the GFC failed to purchase bar-code readers or to develop a spatially distributed database for timber production data, and naturally the staff were disinclined to copy out the long numbers from tags on logs. Corruption led to uncontrolled distribution of tags, so that they have been used as a kind of currency in the hinterland. USAID funded the Proforest (Oxford) consultancy to review the tagging and tracing system in 2006. ITTO project PD 440/07 Rev.1 (M,I) – “Improving the detection and prevention of illegal logging and illegality in shipment and trade of wood products in Guyana” – funded a second stage of internationally tendered external consultancies to add operational details to the 1999 recommendations.
GFC production data were good enough by late 2007 to support administratively-imposed penalties imposed on major logging concessions for forest offences including logging out of coupe. Further penalties were imposed in early 2008. However, in the absence of the legally mandated annual reports and audited accounts, or of court hearings of the alleged forest offences, the part played by the improved tagging and tracking system cannot be assessed. However, the Norway-Guyana MoU requirement for progress towards a LVS in an EU-FLEGT sense includes public access to information and the implementation of independent forest monitoring. These are new experiences for both Norway and Guyana, so the hesitant process is unsurprising. I will cover this development in my next contribution.
CFA Governing Council
 ^^ Memorandum of Understanding between the Government of the Cooperative Republic of Guyana and the Government of the Kingdom of Norway regarding Cooperation on Issues related to the Fight against Climate Change, the Protection of Biodiversity and the Enhancement of Sustainable Development; with associated Joint Concept Note. Pp.23. http://bit.ly/tT6NJL.
 ^^ State or regulatory capture occurs when a state regulatory agency created to act in the public interest instead acts in favour of the commercial or special interests that dominate in the industry or sector it is charged with regulating (definition from Wikipedia).
 ^^ EU – European Union (2003.) “Forest Law Enforcement, Governance and Trade (FLEGT) – proposal for an EU Action Plan”. Document COM (2003) 251 final. Bruxelles, Belgium;
Commission of the European Communities (now European Union). Pp.32. http://bit.ly/uGX6d8.
 ^^ Bulkan, J. with Palmer, J.R. (2006). Timber tags: the currency of illegal logging and forest corruption in Guiana Shield countries. Interim report to Chatham House (Royal Institute for International Affairs, London, UK) FLEGT 8th update meeting, 20-21 July 2006. Georgetown, Guyana. http://bit.ly/tJbkDX.
Development of a workable LVS in Guyana
CFA Newsletter, June 2011
I am writing these notes in early May, just a few days after the conclusion of the long process for development of a Voluntary Partnership Agreement between Indonesia and the European Union, an agreement which may take another nine months to be ratified to prevent illegally harvested timber being exported to the EU. I mention this because if progress seems slow and hesitant in Guyana it may be slow also in larger and more developed countries.
In these notes I discuss some of the ups and downs in the development of a national Legality Assurance System, the term preferred by the Government of Guyana for what is more generally called a legality verification system (LVS). After the work funded by USAID and ITTO described in the last issue of the CFA Newsletter, the continued absence of the legally required annual reports and audited accounts from the Guyana Forestry Commission (GFC) makes it difficult to assess whether there is any political commitment or practical action to restrain illegal logging. The Norway-Guyana Memorandum of Understanding on avoided deforestation of November 2009 required Guyana to ‘enter a formal dialogue with the European Union with the intent of joining its Forest Law Enforcement, Governance and Trade (FLEGT) processes’. The associated Joint Concept Note associated with the MoU was revised on 31 March 2011 and requires progress on the REDD+ Governance Development Plan including ‘The Government of Guyana and the European Commission will, by September 2011, initiate negotiations on a Forest Law Enforcement, Government and Trade Voluntary Partnership Agreement, in a manner that is consistent with the outcomes of this [national-level] consultation where applicable.’
The Rainforest Alliance verification of progress on the MoU noted that there had been a FLEGT team visit (from the European Forest Institute) in March 2010 and a well-attended workshop in September. However, these events appeared not to lead to government decisions. The Guyana National Bureau of Standards was given the task of developing a national LVS. An undated draft of 16 pages was probably prepared in March 2010 and issued with only minor typing corrections in February 2011 as a formal standard (GYS 496 : 2010, still undated). Compared with the multi-volume LVS prepared in Ghana and Indonesia, the Guyana LVS is sparse. It details some responsibilities for holders of logging concessions: long-term and large-scale Timber Sales Agreements, medium-term and medium-size Wood Cutting Leases, short-term (2-year) and small-scale (<8000 ha) State Forest Permissions, loggers operating on the titled lands of indigenous Amerindian villages, and loggers operating on agricultural and mining leases. The standard also covers briefly the chain of custody. In contrast to the detailed prescriptions in Ghana and Indonesia, the Guyanese standard says nothing at all about the responsibilities of the relevant government agencies, nor how they should coordinate between themselves and with the private sector. A consequence of the lack of attention to detail was the discovery a month later, in mid-March 2011, by Jamaican Customs of 122 kg of cocaine in bags thrown on top of 130 logs of apparently illegally harvested and illegally exported logs from Guyana. A Chinese trader had been using the documents of an association of small-scale loggers to acquire logs of wamara (Swartzia leiocalycina), a hard dark heavy timber which makes strong and easily polished industrial flooring, for export to processors in China. The GFC claimed that it had graded 180 logs a month before for this association/trader, but there was no proof that the 130 logs discovered in Jamaica were from the same batch. The GFC had clearly not implemented the Ministerial promise from December 2006 that 100 per cent of all shipments would be inspected. The Trade and Customs Department of the Guyana Revenue Authority likewise had failed to inspect the shipment before the container was sealed. Somehow, instead of going to China, the sealed container with the cocaine was switched to a different ship and was found in Jamaica. This event showed non-compliance with both forest and Customs laws. It appears from the Government attempts to quash news of this shipment that someone connected to very high levels of the government is involved7]. It is not obvious why the Government of Guyana felt that a weak LVS would satisfy the Norway-Guyana JCN. We are presently anticipating publication of the report on the LVS by the Efeca consultancy for USAID.
CFA Governing Council
[1 ^^] http://bit.ly/tiT6aY.
[2 ^^] Memorandum of Understanding between the Government of the Cooperative Republic of Guyana and the Government of the Kingdom of Norway regarding Cooperation on Issues related to the Fight against Climate Change, the Protection of Biodiversity and the Enhancement of Sustainable Development; with associated Joint Concept Note. Pp.23. http://bit.ly/tT6NJL.
[6 ^^] Stabroek News Letter to the Editor, Tuesday March 22, 2011. Systems failures making possible cocaine in timber exports could be easily closed if government would learn from other countries. http://bit.ly/ruLRE7.
News from Guyana
CFA Newsletter, September 2011
In my contribution for the second quarter of 2011, I reported on the discovery in March 2011 in Jamaica of 122 kg of cocaine in a shipping container with logs of the hard dark heavy flooring timber wamara (Swartzia leiocalycina), sent from Guyana. In early August, the Guyana Revenue Administration reported the dismissal of one customs officer and suspension of three others in relation to this case. No action has been taken by the Guyana Forestry Commission (GFC) on the illegal harvest of the logs or the use of a false name on the shipping documents. The shipment to Jamaica was not reported in the monthly trade statistics issued by the Forest Products Development and Marketing Council of Guyana Inc. (FPDMC).
The report for USAID by the Efeca consultancy on the Guyana national Legality Assurance System, undertaken in March, has not been released. The local speculation is that the report differs from the usual acceptance of government assurances at face value, and that the government agencies are resisting indications that actual practice differs greatly from those assurances. Likewise, a scoping mission in May by the Governance of Forests Initiative of the World Resources Institute in Washington DC has also not released its report, possibly for the same reason.
The GFC has meanwhile claimed that ‘many of Guyana’s lesser used species of lumber continue to catch the attention of the overseas markets in Asia, the Caribbean, Europe and North America’. However, there is no way of verifying this claim because since February 2008 the GFC has ceased to publish the exported volumes by species for any category of wood product. An Access to Information Bill has been sent to a special committee of the National Assembly but enactment of this Bill would not force the GFC to release such data. The Bill has no retroactive force; information might be accessible only from the time of enactment. Civil society has protested about the highly restricted nature of the freedom of information proposed in this Bill but the Government’s Parliamentary majority means that it can force through any wording that it wants on new legislation. The customary Government reluctance to accept even non-partisan amendments from opposition Parties makes a mockery of the parliamentary process.
The GFC continues a slow process of developing formal standards for operation of wood processing facilities, including the lumber yards which transform chainsawn lumber into construction material. Since 1953 the GFC has had the power to regulate the licence conditions for these yards but most of them continue to operate extremely inefficiently with low rates of recovery of usable lumber. The political reluctance to set resource access taxes such as royalties and area fees at an economically rational level, partly because of regulatory capture, means that chainsawn lumber and logs can be purchased relatively cheaply by lumber yards and there is little incentive to function more efficiently. When, as now, the Asian markets for logs of flooring and furniture quality timbers are booming, the sawnwood domestic market in Guyana is being supplied very largely by chainsaw operators because the main loggers and increasing numbers of Chinese log traders are focused on export of unprocessed logs. This is entirely contrary to the national policies for on-shore value addition.
After many months, the GFC has quietly released onto the website of the President’s Low Carbon Development Strategy the draft of Guyana’s REDD+ Governance Development Plan (June 2011, 54 pages). This is a useful compilation of normal government development actions but says very little about REDD+ or forward plans. I hope to comment on this draft in the next quarter’s report.
CFA Governing Council
 ^^ http://bit.ly/uI428r.
 ^^ State or regulatory capture occurs when a government regulatory agency which is supposed to be acting in the public interest becomes dominated by the vested interests of the existing incumbents in the industry that it oversees.