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Comments on the Guyana Forestry Commission’s Annual Reports, 2005-2012

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In recent months, the Guyana Forestry Commission has released a series of annual reports, dating from 2005 to 2012. Janette Bulkan and John Palmer wrote a series of five articles for the Stabroek News commenting on the annual reports and recommending that the National Assembly should hold public hearings on the GFC.

In addition to the five articles, Bulkan and Palmer wrote comments on the individual reports. As far as I can tell, the Annual Reports are not available on the Guyana Forestry Commission website – click on the images below to download the reports.

Annual Report (AR) 2005

Comments by Janette Bulkan and John Palmer

Only in this AR is there an indication of production from State Forests as opposed to production from State Lands (administered by the Guyana Lands and Surveys Commission) and from private lands (including Amerindian Village Lands (AVLs) and agricultural properties and leases). In this year, one-third of recorded forest production was from outside State Forests (shown by comparing the data in the table on page 19 with the whole-country data presented in the GFC Forest Sector Information Report for 2005). Given the many informal allegations about the inadequacy of GFC timber tagging and the allegations that much illegal logging is ‘baptised’ through agricultural leases and AVLs, the GFC should have shown the differences between production from these four kinds of land tenures in both ARs and FSIRs.

Page 19 – the table for licences issued is for January or December?
‘Percentage achieved’ appears to represent only the percentage increases since 2004?

Page 24 – the digitization of concessions had been carried out under the GTZ land use planning project and GINRIS in 1996-7. Was the digitization in 2005 an indication that there was no updating between 1997 and 2005?

Numbers of concessions in the table are for January or December? Number of SFEPs includes or excludes the two SFEPs converted to TSAs during 2005 (page 25)?

Page 25 – there is no indication that the Chinese-owned TSA concessions converted from SFEPs had complied fully with the explicit requirements for EIAs, forest inventories and business planning?

Page 26 – there is no indication that the digitizations were compared with the maps and GINRIS held by GLSC, or how corrections were made? It appears that the GFC staff do not understand what ‘demarcation’ means in tenure and mapping.

Annual Report 2006

Comments by Janette Bulkan and John Palmer

Page 11 – heading on Policy Changes appears to refer to changes in procedures, not policies. Any manuals which affect the interaction of GFC staff with other stakeholders should be in the public domain; at the least this should mean the manuals being available without redaction on the GFC website and in every GFC outstation.

Page 14 – the trend table for forest products for 2000-2006 is the kind of table which should be repeated in every AR but extended to ten years (1997-2006, 1998-2007, etc.). This table apparently deals with all sources of forest products, not just the State Forests as in the AR 2005.

Page 24 – the social development programme has not addressed the main deficiencies mentioned in general comment C2 in the fourth article in this series.

Annual Report 2007

Comments by Janette Bulkan and John Palmer

Page 10 – the three-fold increase in licence fees + penalties compared with 2006 is not explained and cannot be related directly to the small increase in number of logging concessions nor the decline in log production.

Page 13 – the explanation of rain and late start in logging as the causes of the 50 per cent fall in plywood production by Barama – the sole producer in Guyana – is simply absurd, when the company was switching massively to log exports while claiming maximum tax concessions for on-shore value-added plywood manufacture.

Barama’s installed capacity is 108,000 m3 of plywood; actual production during 2005-2012 is shown in the table above. It seems ridiculous to pay full FDI concessions when production is only 10 per cent of installed capacity.

Annual Report 2008

Comments by Janette Bulkan and John Palmer

Page 10 – liability to taxation exceeding G$ 1 billion?

Page 11 – licences + penalties almost doubled compared with preceding year 2007, and were 50 per cent greater than 2008 royalties and double the 2008 acreage fees, proportionately much more than the increase in number of forest logging concessions (itself unexplained); 159 State Forest Permissions more than the 299 SFPs in 2007, of which 126 were new in 2008 (page 20). On page 21, the Forest Monitoring Division said that ‘compliance was generally at an acceptable level’. This discrepancy – between compliance and penalties – is not explained.

Page 18 – what were the 36 projects undertaken in 2008 by the Forest Resources Management Division? How did these projects relate to the national forest policy 1997 and the national forest plan 2001?

Page 19 – there is a discrepancy in the number of SFPs between the text (382) and the table (358+21=379).
Page 21 – what were the 30 projects undertaken in 2008 by the Forest Monitoring Division? How did these projects relate to the national forest policy 1997 and the national forest plan 2001?

Pages 25-26 – ITTO-funded project on lesser known timbers. Results were not apparently conveyed to clients such as construction contractors, architectural specifiers, carpenters and builders in culturally appropriate language and formats which were useful and meaningful to them.

Page 28 – although log production fell by 55,000 m3, from 330,000 in 2007 to 275,000 m3 in 2008, employment apparently was stable at 15,000 during these two years. This seems unlikely.
Page 30 – the explanations for the halving of plywood production in 2008 compared with 2007 are ludicrous for a transnational Malaysian company.

Employment in Barama’s plywood mill fell from 650 in 2007 to 500 in 2008 (page 28), but tax concessions granted by the Guyana Revenue Authority did not fall.

Page 31 – explanatory footnotes are missing from the table.

Page 37 (and pages 26-27 in AR 2009) – these are inaccurate accounts of the parliamentary treatment of the Forest Bill 2007. The draft revision of the Forests Act 1953/1997 was indeed widely consulted during 1996-2004 but then abandoned. A quite different draft was prepared in 2007, ignoring best international practice. The 2007 Bill allowed transfer of a range of decisions from the semi-elected Minister to the unelected Commissioner of the GFC, allowed a wide range of administrative discretion in decision-making without published criteria, and provided no appeal against these administrative decisions. A citizens’ petition was presented to the National Assembly in protest against this authoritarian approach, so different from the 1997/2004 draft. The parliamentary process required over 40 amendments but the Bill was still far from best practice, and directly contradicted national policy in some respects (trading logging concessions instead of rescinding, re-advertising, re-auctioning and securing new price premia). It is incorrect to assert that the Forest Bill 2007 had a lengthy period of public consultation with all stakeholder groups (AR 2009). Note that the GFC and Ministry of Natural Resources and the Environment have acknowledged the need for reform of legislation, including in relation to the Voluntary Partnership Agreement process under the EU-Forest Law Enforcement and Governance programme and the re-introduction of national integrated land use planning, respectively, during 2013.

Annual Report 2009

Comments by Janette Bulkan and John Palmer

Page 5 – it is unclear what the Commissioner of the GFC is referring to in reference to the ‘GFC guidelines for Sustainable Forest Management’. No such guidelines can be seen on the GFC website. Was the Commissioner intending to reference the Code of Practice for Timber Harvesting (second edition, November 2002) and/or the Code of Practice for Manicole Harvesting (September 2008)? Or perhaps to the various sets of procedures developed during 1999-2002?

Page 16 – plywood production halved again, compared with 2008, and employment at Barama’s plywood mill fell from 500 in 2008 to 415 in 20009.

Page 23 – the annual table on State Forest allocations (beginning or end of year?) for 2009 omits the count in previous ARs of the short-term unsustainable State Forest Permissions (SFPs) being converted into long-term sustainable Timber Sales Agreements. Numbers of conversion SFPs were 28 in 2005, 30 in 2006, 27 in 2007, 21 in 2008, according to the previous ARs. There is no indication in the text for AR 2009 that these conversions (researched in the late 1990s and confirmed as a correct approach by the GFC Board in 2006) had been completed. On the contrary, the large increase in number of SFPs by 159 from 299 in 2007 to 358 in 2008 was continued with 100 more SFPS (total 458) in 2009.

The GFC manual on logging concessions to accompany the 1993 policy indicates clearly that the purpose of SFPs is for salvage logging of previous poorly managed and heavily damaged forests and to provide opportunities for new entrants into tropical forest logging. There is no indication in the 1993 or 1997 policies that SFPS should be renewed biennium after biennium. However, the response on or about 19 December 2013 from the GFC through the MNRE to a parliamentary question (from Joseph Harmon MP in respect of logging concessions issued for Regions 7, 8 and 9) indicated that some SFPs had been continually rolled over since the mid-1990s, and that new SFPs (including double SFPs) were being issued up to the maximum size of 8,000 ha (2×8,000 ha for doubles) to companies not apparently engaged in sawmilling.

Moreover, there was no evidence that such SFPs are being issued for degraded forest. Instead, it appears that SFPs are being issued in previously unlogged forest which should, according to policy approved by the National Assembly, be advertised and auctioned for State Forest Exploratory Permissions as precursors to sustainably managed concessions (TSAs). Thus, the GFC appears to be violating both national policies and procedures, to enable companies to log virgin forests unsustainably and without prior planning or price premia.
If this is not a correct interpretation, then the GFC should explain publicly and to the National Assembly just what is going on. The appropriate Minister (MNRE) should provide to the National Assembly –

    a. The recorded annual production as logs and chainsawn lumber for each SFP since 2005;
    b. The forest areas in each of those SFPs;
    c. The royalties and area (acreage) fees paid annually by each of those SFPs;
    d. The names of the beneficial (de facto) holders of the SFP logging licences.

The GFC has all these data in databases updated monthly, according to its statements to Efeca and Rainforest Alliance, so there should be no delay in providing the responses to the National Assembly.

Page 25 – ITTO-funded project PD 440/07 continued the process begun in 1999 to detect and prevent illegal logging. The completed ITTO project involved use of satellite imagery and timber tags. The project completion report is not available on the GFC website or the ITTO website. Nor does the project appear to have affected illegal logging and trade in illegally harvested timber – there are continued discrepancies between log exports reported by Guyana and imports from Guyana recorded in Asian countries.

Annual Report 2010

Comments by Janette Bulkan and John Palmer

Page 10 – current liability for tax again over G$ 1 billion, unexplained.

Page 11 – the large increase in export commission, from G$ 224 to G$ 424 million in 2010, is presumably due to the revised rates implemented since 2009 but there is no such explanation in the text.

Pages 11 and 12 – payments to EPA (page 11) and NICIL (page 12) are mentioned although there is no such authorisation in the GFC Act 2007. No mention of transfers to the Consolidated Fund, which is required by the GFC Act (Section 16 (2)).

Page 14 – the assignment of GSA scholarship awardees to hinterland communities is not authorized by either the Amerindian Act 2006 or the GFC Act 2007. Were these transfers in direct response to direct requests, as covered by Sections 54 (2) or 55 (2) or (4) of the Amerindian Act? If not, under what legal cover were these assignments made, as they appear to violate the rights of Amerindian communities to self-government of their natural resources?

Page 18 – the graph of monthly log production shows a large rise in log production in December, when previous ARs show a customary fall in that month as workers go on holiday. The December rise is repeated in years 2011 and 2012. What is the GFC’s explanation for these sharp rises? If GFC staff are on holiday, how is monitoring sustained over Asian-owned loggers or loggers selling to Asian log traders who do not take time off in December?

Page 26 – community forestry initiative – the GFC has continued to focus on technical forestry-related training for the increasing number of community forestry associations (CFAs). It is unclear if the GFC is aware that the problems of the CFAs are mainly to do with governance and finance. In spite of the increasing numbers of CFAs and of the SFPs awarded to them (68 CFAs and 119 in 2012, covering over 460,000 ha, for only 2000 members; page 24 in AR 2012), there has been no notable increase in chainsawn lumber production. There have been some informal suggestions that some of these CFAs are in effect low-cost loggers supplying Asian log traders.

Pages 28 and 29 – the tables are not meaningful without an indication of the areas of each concession. Items within the tables should be listed in some obvious sequence; the date of issue of each concession is a normal basis for sequencing, more meaningful than alphabetic sequence of name of nominal holder. The names in the tables on these two pages are not identical, there is no explanation of the additions/omissions. The differences in entries between the last two right-hand columns on page 29 are unexplained, but the two columns appear to have the same meaning because the column headings mean the same thing – ‘number of blocks’ / ‘total blocks approved’.

Annual Report 2011

– seen much later than the other ARs.
Comments by Janette Bulkan and John Palmer

Pages 3-6 – the chairman of the GFC Board of Directors makes several unsubstantiated claims on behalf of the Board. The GFC cannot claim more than 95 per cent completion of annual work plan activities without showing what were those plans, what were the progress indicators, and how success was determined. Plans for 2012 are shown on page 39 but mostly in terms of process rather than performance. How does the GFC propose to measure improvements in the quality and impact of forest management? The claims to ‘numerous Board/stakeholder engagements held countywide (countrywide?)’ likewise need some evidence of what kinds of engagements on what subjects. The four subjects listed for improvement have been in the National Forest Policy since 1997, so the National Assembly should be asking what the Board and GFC have been doing since then such that after 14 years (1997-2011) these are still waiting for effective action: improved harvesting and greater use of commercially lesser-known timbers, value-added products, reducing log exports and a more strategic approach to marketing. What exactly are the appropriate strategies developed in 2011, as these are not listed in the main text, and why has the GFC not been quick to develop its capacity to deal with these issues, in spite of having a huge cash float? The chair of the Board claims that the answers are in the comprehensive documentation available on the GFC website but does not say what precisely are those documents. He claims also that the GFC did significant work in climate change mitigation and quantification of environmental services, but these all seem to be invisible.

Page 8 – the one-page draft financial statement does not conform to standard accounting practice and is not accompanied by the audit statement from the Auditor General. No explanation is given for the failure to comply with the GFC Act on the late report, inadequate accounts or absence of audit.

Page 10 – what are the environmental services for which the GFC projected an income of G$ 300 million? Why does this income not appear at all in the draft accounts for 2012?

Page 15 – the GFC reports a decline of average FOB price for log exports of 7 per cent but neglects to comment that the prices it reports imply a charge for ocean freight and insurance to Asia of US$ 350+/m3, about three times the actual figure. That is, there appears to be consistent under-valuation of FOB prices, which is an offence against Customs law. Are both the GFC and Guyana Revenue Authority asleep or are they complicit in this persistent offence? It is noted that the GFC claimed to have verified all exports for legality, accuracy of species, grade and quantity but not price (page 34).

Page 19 – as in other recent years, there is no comment on the spike in log production during December, the month when traditionally log production declines as Guyanese take extended holidays. But with 79 per cent of the area of long-term large-scale concessions now in the hands of Asia-based transnational loggers, and they do not take time off in December, perhaps this switch is not a surprise.

Page 20 – although Barama’s plywood production almost doubled in 2011 compared with 2010, it was still only 26 per cent of installed capacity, with Barama continuing to claim 100 per cent of FDI tax concessions.

Pages 26-27 – the GFC should be applauded for providing in tabular form the running 11-year whole-country. However, undressed (rough-sawn) lumber should be kept separate from dressed (profiled) lumber because they serve different markets and have different values (prices).

Page 28 – no explanation is given for the rocketing number of short-term unsustainable State Forest Permissions (SFPs), up by 110 since 2010, a trend contrary to national forest policy. 137 of these SFPs were new in 2011, 101 more than the 36 new SFPs in 2010 (page 32).

Page 32 – the conversion of N Sukul & Sons’ Wood Cutting Licence 05/1993 to a Timber Sales Agreement 04/2009 was recorded as a change in 2001. So why give it a 2009 number? How has a WCL been changed to a TSA when the area is 26,000 ha but the minimum for a TSA is 60,000? The issue of a TSA should in any case be preceded by a State Forest Exploratory Permission phase, to allow for inventory and the development of forest management and business plans. Why was that phase set aside for Chaitram, Parasram Timber Inc. and how has the holding of that TSA now passed to Umraow & Sons?

Similarly, the Haimorakabra areas A and B have passed from SFPs and part of the Unamco TSA 01/1997 to TSA 01/2011 without passing through the SFEP phase. How and why was that phase set aside for Bai Shan Lin, the new concession holder? And these two areas are also below the TSA minimum size. While the GFC has reasonably complained about the low uptake of annual allowable cut, on average only 37 per cent of the inventoried allowable volume (page 6), it would be interesting to see the per-hectare cut attributed to TSA 01/2011; the National Assembly might find that the figures are surprisingly high.

Page 33 – the GFC now ascribes 6 per cent of timber production to illegal logging but claims that ‘appropriate action’ was taken. What were those actions? How much of the G$ 125 million income from Licences and other Fees (page 8) was comprised of penalties and how were those penalties disaggregated against specific forest offences in the Forests Act 1953/1997 and the Forest Regulations?

Annual Report 2012

Comments by Janette Bulkan and John Palmer

Pages 3 and 4 – this kind of forward by the (chair of the) GFC Board of Directors is conventional and should have prefaced each one of the ARs. The forward should have been written as from the whole Board of Directors, not just informally from the chair.

Page 3 – it is unclear how the GFC Board chair estimates that TSAs and SFPs together comprise 64 per cent of the total land allocated. A different percentage is shown from the table on page 27.

Page 3 – it is unclear what is meant by the ‘negative impact of prolonged disturbances in Region 10’ as the GFC has presented no corresponding analysis of impacts on transport of forest products.

Page 4 – the basis is unclear for the assertion that ‘our deforestation rate is … well within the acceptable international limit’, when there is no such international limit.

Page 9 – why is the draft financial statement in a substantially different and much less complete form from that in the other ARs?

Page 24 – ‘The GFC assigned a Community Liaison Officer to the Ministry of Amerindian Affairs for trouble shooting forestry related issues reported by Indigenous communities to MoAA’. What, then, has been the role of the GSA scholarship awardees posted to Amerindian communities and mentioned on page 14 of AR 2010?

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