Why the National Assembly should hold public hearings on the Guyana Forestry Commission

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In November 2013, Guyanese government agencies released 41 reports to the National Assembly. Several of these were overdue, including a series of annual reports from the Guyana Forestry Commission from 2005 to 2012.

Janette Bulkan and John Palmer have written a series of five articles for the Stabroek News reviewing the Guyana Forestry Commission’s annual reports. The articles are posted below, in full.

According to Guyana’s forestry laws, the annual reports should be tabled each year at the National Assembly. Bulkan and Palmer argue that the National Assembly should hold public hearings on the Guyana Forestry Commission to scrutinise the GFC’s activities, and to verify that tax money has been spent in accordance with budgets. This is important in itself, but it is particularly important given the international processes in which Guyana’s forestry sector is involved (including the World Bank’s Forest Carbon Partnership Facility and the commitments under Guyana’s REDD deal with Norway).

The annual reports show that the GFC is “seriously deficient in its communication with stakeholders and in the discharge of its legal responsibilities”, Bulkan and Palmer write.

Why the National Assembly should hold public hearings on the Guyana Forestry Commission

By Janette Bulkan and John Palmer

Part 1, Stabroek News, 22 January 2014

This commentary is a partial analysis of the annual reports for years 2005-2012 from the Guyana Forestry Commission tabled in the National Assembly on 07 November 2013, at the same time as some of the backlog of reports from other government agencies. It is a requirement of the Guyana Forestry Commission Acts 1979 and 2007 for annual reports and audited accounts to be tabled by the appropriate Minister yearly at the National Assembly.[1] So far as we know, the Assembly has received no apology from the Minister for his failure to comply with this legal requirement.

Why is it important for the National Assembly to hold public hearings into the operation of the Guyana Forestry Commission (GFC) based on these eight annual reports (ARs)? There are two main reasons. Firstly, in a democracy, it is a duty of the National Assembly (the legislative branch of government) to scrutinize the activities of the agencies of the Executive branch of government on behalf of the citizens, to demand explanations and justifications, and to verify that tax monies have been spent in accordance with the approved budgets. Secondly, because the GFC is inscribed in international processes which require a high level of transparency in governance, objectivity in reporting, and verification of performance; such as the REDD Readiness Preparation Planning (R-PP) of the Forest Carbon Partnership Facility coordinated by the World Bank; the Voluntary Partnership Agreement under the EU Forest Law Enforcement, Governance and Trade (EU-FLEGT) process, and the associated Legality Verification System.

These are in addition to the commitments in the REDD+ Governance Development Plan (June 2011) under the Norway-Guyana MoU (November 2009). And in future we can hope that Guyana will follow the lead of Liberia and place both mining and forest sectors under the Extractive Industries Transparency Initiative (EITI, mentioned in the Joint Concept Note under the Norway-Guyana MoU).

These eight annual reports indicate that the GFC is seriously deficient in its communication with stakeholders and in the discharge of its legal responsibilities.

Support for an analytical capacity in the National Assembly – conventionally, in other Westminster-type parliaments, such annual reports are analysed thoroughly by the technical secretariats serving the relevant Select Committees.  The Natural Resources Sectoral Committee of the National Assembly of Guyana has no such secretariat, notwithstanding offers by some bilateral doors (EU and UNDP and USA (via USAID), possibly also UK through the Commonwealth Secretariat?) to support such normal appurtenances of democracy.

These eight annual reports indicate that the GFC is seriously deficient in its communication with stakeholders and in the discharge of its legal responsibilities.

Support for an analytical capacity in the National Assembly – conventionally, in other Westminster-type parliaments, such annual reports are analysed thoroughly by the technical secretariats serving the relevant Select Committees. The Natural Resources Sectoral Committee of the National Assembly of Guyana has no such secretariat, notwithstanding offers by some bilateral doors (EU and UNDP and USA (via USAID), possibly also UK through the Commonwealth Secretariat?) to support such normal appurtenances of democracy.

The work of analyzing the bundle of 41 timely and overdue reports which were submitted all at once by the government agencies to the National Assembly on 07 November 2013 cannot be undertaken by the current Sectoral Committees without additional support. This support is especially important if the other agencies are, like the GFC, producing incomplete and inconsistent reports. The delivery of this bundle provides a good reason for the National Assembly and/or its Sectoral Committees to take up the donor offers to support the parliamentary process. In this respect, the USAID-funded non-partisan Leadership and Democracy (LEAD) project is most timely; some details of this project are in ‘Legal drafting among scope of activities on offer under snubbed democracy project’ (Stabroek News, 22 December 2013).

General points common to several or all years of these seven GFC reports

The general points are organized in three groups: A – comments on the summary accounts and audits; B – general principles of annual reports; and C – specific topics. Salient points from individual annual reports are perhaps too detailed for a newspaper readership but have been sent to the editor and to the Speaker and Clerk of the National Assembly for members of the relevant Sectoral Committees. In the next article we will present points on or arising from the summary accounts and audits.


[1] Extracts from the Guyana Forestry Commission Act (cap. 67:02, 2007) –

Section 14 (1) The funds of the Commission comprise –

Money appropriated by Parliament and paid to the Commission for the purposes of the Commission;

Other money or property lawfully received by the Commission for the purposes of the Commission; and

Income derived from any money or property of the Commission.

Section 14 (3) The Commission shall keep proper records of the general fund maintained under section 15, the reserve fund maintained under section 16, and the special funds maintained under section 17.

Section 15 (1) The Commission shall maintain a general fund and pay into it all money paid to the Commission for the Commission’s purposes and all income except money kept in the reserve fund maintained under section 16 or in a special fund maintained under section 17.

Section 24 (1) The Commission shall keep accounts of its transactions to the satisfaction of the Minister and the Auditor General shall audit these accounts annually.

Section 25 (1) No later than six months after the end of each financial year, the Commission shall submit to the Minister a report containing –

An account of its activities during the financial year in the detail directed by the Minister; and

A statement of the Commission’s accounts audited under section 24 (1).

Section 25 (2) The Minister shall as soon as practicable, and in any event no later than eight months after the end of the financial year, cause to be laid before the National Assembly the report referred to in subsection (1) together with a copy of the auditor’s report on the Commission’s accounts following the audit under section 24 (1).


Part 2: Stabroek News, 23 January 2014

In the first article in this series, we gave reasons why the National Assembly should be scrutinizing, and be helped to scrutinize, the annual reports and audits of finances of government agencies as a routine function of parliament acting on behalf of the citizens of Guyana. In this second article, we offer comments on the summary accounts from eight years (2005-2012) from the Guyana Forestry Commission.

A. Summary accounts and audits -

A1. Validity of the signatures of the Commissioner of the GFC – the National Assembly may wish to note and to query why the signature of the Commissioner of the GFC differs greatly in all reports between the main text and the sign-off of the accounts.

A2. Inconsistency in wording by the Auditor General on GFC accounts – the Auditor General’s covering letter also does not use consistent wording between the GFC annual reports. No explanation is given for the variance. Is this due to inaccurate copy typing?  Or do the omissions indicate that the Auditor General has doubts about the quality of the GFC accounting and its legal compliance as a corporate body but is reluctant to go into detail? There was mostly a space of several years between the year of accounts and the date of the Auditor General’s audit statement, with no explanation for the gap even though the Guyana Forestry Commission Act (2007) is specific about timing.

A3. Extraordinary inter-year variation in GFC account details – the accounts attached to these GFC annual reports are not in an entirely consistent format, and no explanation is offered for the variance.   The most serious problem with these accounts and associated annual reports is that there has been apparently no attempt to link the accounts with the GFC activities.  The summary accounts are not accompanied by a ‘management discussion and analysis’ which conventionally would associate the line items with activities in the forest sector.



Note: entries for 2011 from GFC/FSIR (Forest Sector Information Report) whole year 2011, sawnwood exports for 2006 from GFC/FSIR 2006 (missing from GFC annual report for 2006)

Large amounts of monies, and large variations from year to year between line items, appear to have been unquestioned by the Auditor General. The table above shows that forest production and export figures are fairly stable from year to year but there are large variations in the line items in the accounts. No explanation is offered why the GFC should be holding over US$4 million in cash each year, why transfers are made to the Environmental Protection Agency (EPA) and to the National Industrial & Commercial Investments Ltd. (NICIL) but none to the Consolidated Fund, why the GFC is acquiring and disposing of fixed assets, why the GFC has current tax liabilities of up to US$10 million in a year – dwarfing other line items. There is a legal requirement for the GFC to make transfers to the Consolidated Fund (Section 16 (2) in the GFC Act 2007), but no requirement to send money to the EPA or NICIL.

A4. Improper merging of line items in GFC accounts – it is not conventional anyway in accounts to have a combined line item for licences and penalties; they should be separate because they clearly have quite different origins and purposes.

A5. Claims by the GFC of high levels of compliance by concession holders are incompatible with the high levels of penalties – most of the annual reports state that monitoring has shown that there is a high level of compliance with law and procedures by holders of logging concessions. Given that GFC licence fees are low by world standards holders, and that at most G$12 million has been raised in any one year from the application fees for three State Forest Exploratory Permissions (see page 30 in AR 2012, 3 x US$ 20,000 fee), the large fluctuation from year to year for ‘licences and penalties’ should be explained. If compliance has been so good, how has the GFC levied over US$0.9 million for this line item (in 2008)? As Press reports in 2007 indicated that the GFC had levied large fines against Barama alone (at least G$96 million and 50 million), why is there not a closer match between the figure in the annual accounts and the Press reports?

A6. Inadequate transparency in GFC procedures – why, indeed, does the GFC never take any alleged offender to Court, and on what bases are GFC penalties levied? Why is there no explanatory document on the GFC website or in GFC outstations, to explain the compounding procedure, the bases for the penalties, and the penalties per offence, cross-referenced to the exact Section of law and exact Regulations in subsidiary legislation?

A7. Lack of clarity in dating of information – in several tables in various ARs, it is unclear whether the data refer to the state on 01 January or on 31 December. Every table should be checked for clarity.

In the third article in this series, we will offer comments on the general principles for annual reports from government agencies and note peculiarities common in the eight reports from the Guyana Forestry Commission.


Part 3: Stabroek News, 24 January 2014

In the second article in this series, we offered comments on the summary accounts of the Guyana Forestry Commission for the eight years 2005-2012 and the associated statements by the Auditor General often several years later. In this third article, we offer comments on the general principles for annual reports (ARs) from government agencies and note peculiarities common in the eight reports from the Guyana Forestry Commission (GFC).

B. General principles of annual reports -

B1. Standard structure and format for annual reports – it is conventional for annual reports to follow a standard format from year to year, to facilitate study of trends. The GFC has not consistently followed this convention as regards either sequence of structure or contents.

B2. GFC annual reports apparently written long after the events – it is clear that at least some parts of these reports have been written long after the nominal year of report. For example, the reports for years 2005 and 2006 refer to the Low Carbon Development Strategy although the LCDS was not first issued until mid-2009.

B3. GFC Board of Directors not compliant – it is for the GFC Board of Directors to present ARs to the appropriate Minister and for the Minister to present the ARs to the National Assembly. Only for the draft report for 2012 is there inclusion of a foreword by the chair of the GFC Board and even that is not explicitly for or on behalf of the Board. Perhaps this is because the membership of the Board does not comply fully with the qualifications listed in the GFC Act (Section 7 (3))? Lack of compliance with legal procedure suggests a culture of disrespect for the National Assembly’s role in oversight of government agencies.  The ARs are notably silent on what the GFC Board itself achieves each year.

B4. Failures to address implementation of national policies and strategies – this failure to present the most basic characteristics conventional in reports of government agencies – that is, the reporting on performance against national policies and strategies approved by the National Assembly – is a serious deficiency in the direction and management of the GFC, and makes it unnecessarily difficult to trace trends in performance. The Sectoral Committee on Natural Resources should demand that the GFC (and Environmental Protection Agency, Guyana Geology and Mines Commission, and Guyana Lands & Surveys Commission) report on their performance against policies.

B5. Failures to report on performance of the forest sector – annual reports should tell what actually happened in relation to what was planned, and to explain the differences. Apart from congratulating itself in most years on achieving more than 90 per cent of its plans, the GFC makes almost no attempt to show its plans or to comment on what actually happened in relation to those plans. The ARs mostly concentrate on process, not on performance, yet at the same time fail to situate the activities within the national forest policy process – as noted below. Explanations are almost conspicuous by their absence. There has been no attempt in these eight reports to compare progress against the national forest policy (1997) and national forest plan (2001) or, for the AR 2012, against the revisions of policy and plan made in 2011; there is a brief reference on page 13 of AR 2007. In spite of all the many references to training courses, almost nothing is reported on how these capacity buildings have affected the performance of the GFC staff.

B6. Failures to explain effects of drivers of change – an important function of ARs is to explain (or suggest) how external drivers affect sector performance. For example, the transfer of areas of peri-urban land from government control to private land developers for housing estates appears to have affected the market for domestic sawnwood, with unnecessary demand for prime commercial timbers to be used in mundane structures which could have been perfectly well served by lesser-known species with equivalent or adequate technical performance.  No such analysis is presented. So far, the GFC does not appear to have translated laboratory data on timber properties into leaflets and guides suitable for semi-literate builders and contractors. It is not reported that the GFC has communicated laboratory data to the Guyana National Bureau of Standards, for updating the relevant national standards for construction/house-building.

B7. Implications of large numbers of external projects, including training – the GFC operates a relatively large number of externally-funded projects. These include several capacity-building/training projects during 2005-2012. Certainly it is important to say how many GFC staff went for what kind of training, where and when. But it is also important to indicate what lasting benefits have been obtained from this training, how GFC procedures and practices have changed as a result of the training, how national policies and strategies are better addressed by better-trained staff, and how overall and specific performances have improved. The audited accounts make no explicit mention of the sub-accounts for the numerous projects; who has been undertaking the external audits of these projects, and with what results?

B8. Consequences of continued high turnover of staff – while these external projects bring in useful income as overheads and administration fees (not explained or differentiated in the annual accounts), the projects also impose a considerable load on GFC HQ in reporting requirements. The high turnover of staff is shown in the ARs but the reasons are explained only in relation to junior staff, no counter-measures are suggested, and the effects on performance are not indicated.

B9. Focus on technical projects – there does not seem to be a GFC analysis to show that technical issues are critical in the forest sector, so why are almost all the projects of a technical nature? Why is there not more attention to institutional and business development, enterprise financing, and to the REDD+ Governance Development Plan published in June 2011 under the Norway-Guyana MoU of November 2009? – the RGDP is not mentioned in AR 2012. More generally, why are the numerous projects listed by the GFC and by Departments within the GFC not situated within the contexts of the national forest policy and national forest plan? Failure to provide context suggests that projects are ad hoc in nature and are not responding to any set of national priorities approved by the National Assembly. And in passing it should be noted that the 2011 revision of the national forest policy has not been presented for approval by the National Assembly.

B10. Nonsensical additions – most of the ARs contain summations of annual production as logs + roundwood + sawnwood + plywood + splitwood. This makes no sense. The international convention is to convert all processed wood to roundwood equivalents, which can then be summed reasonably to show total forest production on the same basis. For example, the volume of sawnwood should be divided by 0.4, the conversion ratio adopted by the GFC to indicate the average efficiency of sawmilling, to arrive at the volume of logs from which the primary (chainsawn) sawnwood was cut. Clearly, instead of adding plywood to the production total, the GFC should instead be noting the estimated volume of logs from which Barama produces plywood (divide ply production by 0.46, Barama’s conversion ratio stated in the Samling Global Initial Public Offering on the Hong Kong Stock Exchange in 2007), in order to avoid double counting, because Barama’s logs for ply production were already included in overall log production. This is the correct way of estimating the volume of logs used by fixed (urban-based) sawmills to produce sawnwood (lumber) and hence the size of the domestic market for sawnwood (mill-sawn and chain-sawn), after subtracting volumes of sawnwood exported.

B11. National Integrated Land use Planning – there is no mention in these ARs about lack of progress in national integrated land use planning (ILUP). Such planning had been demonstrated in a pilot project in Region 10 in 1997. ILUP has been national policy since the drafts of the National Development Strategy in 1997. Concern about the increasing wastage of commercial timber in artisanal (small- and medium-scale) gold mining through failure to coordinate licensing of mining by GGMC and of logging by GFC was one stimulus for the Special Land Use Committee appointed by former President Jagdeo in 2009, with no apparent changes being seen in national policies or practices. Revival of ILUP is indicated in the strategic plan for the Ministry of Natural Resources and the Environment in January-April 2013, but no progress has been announced in the National Assembly.

In the fourth article in this series, we will address some specific topics raised in these eight GFC annual reports.


Part 4: Stabroek News, 30 January 2014

In the third article in this series, we offered comments on the general principles for annual reports (ARs) from government agencies and noted peculiarities common in the eight reports from the Guyana Forestry Commission (GFC). In the fourth article in this series, we address some specific topics raised in the eight GFC annual reports (2005-2012) which were tabled in the National Assembly on 07 November 2013.

C. specific topics -

C1. Inadequate timber tagging and legality verification – during 2005-2012, the GFC has had a number of externally funded projects on timber tracking and tagging. It is unclear why this task, started in 1999, is still far from complete; see the Efeca report in May 2011 ‘Review of Guyana’s legality assurance system’ which has not been posted to the GFC website but can be obtained from USAID which funded the study. One reason appears to be the desire of the GFC senior staff to retain the ability to edit data and codes, instead of having the bar-coded data transmitted to externally held database(s) and thus proof against politically- or corruptly-directed tampering with data inside Guyana. Relevant reports from Liberia are available in summary from the Chatham House website on illegal logging.

C2. Inadequacies in support for community forestry associations – also with external funding, the GFC has had projects for community forestry associations. By 2012, there were 68 such associations. The table published in the second article in this series reveals no significant changes from year to year in production of chainsawn lumber (primary lumber in GFC tables). It is not clear how the formation of these associations has changed rural livelihoods or national timber supply but it is alleged that the formation of the associations, and GFC interference in their composition and operation, has exacerbated intra-community relations. The GFC is not staffed to provide training on association formation and management (for Friendly Societies), business development, money management or product marketing and, with a few exceptions, does not appear to have arranged for other agencies to provide such essential training and mentoring.

C3. Missing publications – nearly all the several externally-funded projects listed in the later ARs would have required specific reports to be prepared, but very few such reports have been published on the GFC website or otherwise made available to stakeholders in Guyana. Why not? For example, the case study on log tracking contributed to a FAO report on ‘Search for sustainable forest management: exemplary cases in Latin America and the Caribbean’ (AR 2009, page 29). It might be excused that so many years have passed since the GFC last tabled a formal AR at the National Assembly that the defects briefly noted here and in the previous three articles in this series, which are by no means exhaustive, should be ignored. However, the GFC likes to present itself as internationally renowned and knowledgeable, in which case it would be aware of international norms for annual reporting and communications. Such norms are not reflected in this set of ARs. Better to have some ARs than none but better still to have punctually-produced, conventionally-structured and more complete reports which reflect the widening range of GFC activities and increasing forest sector impacts, set in the context of parliamentary-approved national policies and strategies.
In the fifth article in this series, we will draw attention to a major omission in the GFC annual reports.


Part 5: Stabroek News, 31 January 2014

In the fourth article in this series, we addressed some specific topics raised in the eight GFC annual reports (2005-2012) which were tabled at the National Assembly on 07 November 2013. In this fifth article, we draw attention to a major omission in these annual reports from the Guyana Forestry Commission.

It is conventional for national forest services, which do not manage State Forests themselves but licence the field work to third parties, to provide information in their annual reports about the licensing process and its functionality. During 2009, Guyana began informal contacts with the European Commission about the process for a Voluntary Partnership Agreement (VPA) under the European Union’s Forest Law Enforcement, Governance and Trade programme (EU-FLEGT, 2003). Participation in this process is one of the requirements in the Joint Concept Note under the Norway-Guyana MoU of November 2009. Guyana made its formal application to join the VPA development process during 2012.

A VPA includes a legality assurance system as one component, and the first element of such a system is a legality definition – what is meant by ‘legal timber’ in Guyana? – see also EU-FLEGT Briefing Note number 02, September 2007 edition, ‘What is legal timber’.

In its report ‘Review of Guyana’s Legality Assurance System (GLAS)’, the consultancy, Efeca, pointed out in May 2011 that the draft GLAS did not match requirements of EU-FLEGT. Efeca offered, in its annex 4, an alternative scheme. There is no evidence that the GFC has addressed the points raised by Efeca in a public document. A GLAS acceptable to the EU will be necessary before certificates of verified legality can be issued for forest products to be exported to and admitted under the EU Timber Regulation.

It is surprising, therefore, that the GFC annual report for 2012 does not address the following essential features of a legality definition and show how the process has been applied to logging concessions issued in 2012 –

a. the GFC (or Ministry of Natural Resources and the Environment) had the legal right to issue logging concessions.

b. the GFC has and has applied due process to allocate logging concessions in accordance with the 1993 forest concessions policy and the strategic plan mentioned in section NFP 200 in the National Forest Plan (2001, revised 2011) and Part III (A) (4) Forest Allocation Regulation and Agreement in the National Forest Policy (1997, revised 2011). It should be noted that the 2011 version of the National Forest Policy refers to a law which currently lacks validity. The reference should have been to the Forests Act 1953/1997.

c. the GFC advertised concession areas nationally and internationally (when, for how many days and where advertised; newspapers, etc. named).

d. the GFC conducted due diligence to confirm the eligibility of applicants for logging concessions in accordance with the 1993 manual of procedure and the 1999 manual in respect of State Forest Exploratory Permissions (SFEPs).

e. the GFC contracted specialist accountants to check the eligibility of international applicants, such as Vaitarna Holdings Private Inc. (India) and Bai Shan Lin (China) in previous years – that is why the application fee for SFEPs is US$20,000 in US dollars, to pay for such specialist checks.

f. the GFC auctioned the concessions according to best international practice.

g. the GFC published the results of the auctions, including the winning premia which were bid over and above the standard area fees (concession rental).

h. the GFC placed each concession licence in the public domain and drew attention to any special or non-standard features of the licence (TSA/WCL/SFEP/SFP) and to the associated foreign direct investment (FDI) tax incentives agreed by Cabinet and operated by the Guyana Revenue Authority.

i. the Auditor General confirmed that the applicable fees and premia were paid in accordance with due process and that the monies were placed in the appropriate funds.

The GFC did not publish such information in its annual reports for 2005-2012. The GFC will need to do so, and/or to be able to demonstrate that it has and applies such process, for a EU-FLEGT Voluntary Partnership Agreement. The documents available on the VPA sections of the GFC website also do not show that the GFC is making such information available.

The GFC has had a good opportunity to demonstrate its claimed best practice in respect of the concessions issued in 2010 to the newly created local subsidiary of the Indian coffee retailer Café Coffee Day. This subsidiary was first called Dark Forest Company (S) Pte. Ltd. but is now called Vaitarna Holdings Private Inc. (VHPI). VHPI has two concessions.

Using the legality definition checklist mentioned above, and applying it to the two concessions of VHPI, we find the following non-compliances:


  • Authority to issue concessions? – YES, the GFC and its predecessor the Forest Department of Guyana has had legal authority since 1953 in the Forests Act and associated Forest Regulations (1954).

  • Due process used to allocate concessions? – NO, the GFC has not demonstrated that it followed national policies and its own procedures in issuing the concessions. I analysed the several errors in a six-part series entitled ‘Through a glass, darkly – what’s wrong with an Indian coffee retailer exporting logs of prime furniture and flooring timber from Guyana instead of local processing for added value?’ which was published by Stabroek News during April and May 2012. [This series has been re-published in the Guyana section of www.redd-monitor.org]

  • Were the concessions advertised nationally and internationally? – the original two areas bordering the Rewa River were advertised only in Guyana in December 2005, contrary to the policy intention of international advertisement for such large areas allocated under State Forest Exploratory Permit (SFEPs). The Forests Act 1953/1997 Section 6 (12) does not require re-advertising when a SFEP is transferred to a new holder with the written consent of the GFC. In this case, SFEP 03/2007 (392,000 ha) was suspended correctly by the GFC in 2009 for continued non-payment of area fees and inaction over the preparatory works required by the terms of the licence. The SFEP had been transferred to VHPI some time in 2010, and VHPI paid a premium of US$245,000 which was the outstanding sum due to the GFC from the original holder Simon & Shock International Logging Inc. However, it is not obvious that the GFC applied the requirement of the National Forest Policy 1997 that ‘Concessions shall be transferrable to new concessionaires provided that qualifying standards are satisfied’ (Part III (A) (4) (d). No such standards have ever been published. The rewording in the 2011 revision of the National Forest Policy refers instead to the Forests Act 2009 which is currently not valid. SFEP 03/2007 should have expired in 2013 or been converted to a Timber Sales Agreement, but the GFC Forest Resources Allocation map of April 2013 still shows the two areas as under SFEP.

    The case of the former Caribbean Resources Ltd. concession TSA 04/1989, now 01/2010 (345,000 ha) is a lot more complicated and was described in the second part of my series, published by SN on 24 April 2012. The GFC has claimed that it did advertise locally in 2010 the rescinded CRL concession. The GFC was unable to produce a copy of the advertisement in 2012. It did not advertise internationally for open, competitive bidding. The non-competitive bid by Café Coffee Day of India did not involve a transfer of ownership as CRL’s holding had been rescinded. Therefore this huge area should have been treated as a new concession, not a transfer, and should have been advertised as a SFEP. Moreover, as with the Rewa River areas, Café Coffee Day/VHPI had no prior experience of sustainable management of tropical forest and should have been disqualified in accordance with GFC procedures. The wholly improper bypass developed by the GFC to circumvent these requirements was described in the third part of my series, published by SN on 08 May 2012.

  • Did the GFC conduct due diligence checks on VHPI? – apparently NOT. The GFC and Go-Invest spent many months during 2006-2008 on such checks for the predecessor Simon & Shock, much to the annoyance of the then proprietors who complained publicly about the poor service from these government agencies. In a news bulletin from the Ministry of Agriculture on 20 April 2011, item 16, in respect of VHPI the Ministry claimed that ‘a comprehensive due diligence was done … the company has sufficient financial resources, and has a track record of carrying out harvesting and processing operation efficiently’. How remarkable for a High Street coffee retailer in India!

    It is not clear that the GFC applied similar checks to VHPI, even though it obviously lacked requisite experience. Furthermore, VHPI has claimed that it will develop added-value on-shore processing of timber in Guyana and also, in contradiction, that it will export logs for processing at the Café Coffee Day furniture factory. In practice, as Stabroek News has reported, VHPI is simply exporting unprocessed logs, contrary to the assurances given by the Ministry of Agriculture in April 2011.

  • Due diligence checks by international accountants? – although the GFC failed to advertise internationally, there should still have been international due diligence checking on the financial state and resources of Café Coffee Day in India. That is what the high application fee for SFEPs is intended to fund. It is not clear that either GFC or GO-Invest had the skills for this work.

  • Auctioning of the concessions? – as the GFC failed to advertise properly in accordance with national policy, there was no competition for the logging areas and thus no basis for auction.

  • Publication in the public domain of concession licences and FDI arrangement? – not done by the GFC or Go-Invest.

  • Checks by Auditor General? – not reported in the GFC annual report for 2012.
    In summary, the government agencies have performed poorly in relation to the concession licences acquired by VHPI. Substantial improvement will be needed in the process towards reaching a FLEGT Voluntary Partnership Agreement with the European Union.
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One Comment

  1. As usual, World Bank neglects national sovereignty of the country. I believe Guyana Forest Commission is doing well and is fully supported by forest stakeholders. Just donor group lead by World Bank diffusing a bad image of GFC on purpose.
    Be strong our friend, Guyana!!!

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