As Government continues to vehemently defend the operations of a number of foreign logging companies, there are new
revelations that suggest more wrongdoings in the Upper Berbice, Region 10 area.
Over the weekend, local commentator and Chartered Accountant, Christopher Ram, visited the Bissaruni, Kwakwani and Ituni areas, speaking with loggers and residents alike.
His visit would come over increasing questions regarding the arrangements that Government has with Bai Shan Lin, a Chinese logging company. The situation has also cast a long shadow over the arrangements with other foreign-owned loggers as the indications are that there is no enforcement to ensure that their commitments to establish processing facilities are being honored. These arrangements include seemingly unlimited duty free, fuel and other tax concessions.
Two other entities- Indian-owned Vaitarna Holdings Private Inc. (VHPI) and Jialing, another Chinese company, are also facing fire for failure to invest locally in value-added processing, as promised in their investment agreements.
According to Ram, also a lawyer by profession, there are indications on the ground that Bai Shan Lin is selling the logs to its parent company in China.
“This is what is known as transfer pricing and it should be of grave concern to Guyanese and to the Government if they really care about Guyana.”
The transfer pricing practice allows Bai Shan Lin’s parent company in China to set the price on logs. “In effect, they can set whatever prices they want because nobody does any serious review. At the end of the day, the Government gets lower revenues from its royalties and of course, more importantly, the seller…the poor local loggers…get whatever price is being offered to them.”
The use of imported Chinese labour and the transfer pricing practice also opens a real possibility for Bai Shan Lin to use its proceeds in China to pay workers without local taxes and other commitments like NIS being remitted.
“It is a known fact also both RUSAL and BOSAI which operates bauxite operations in this very region are also practicing transfer pricing policies… of selling to themselves. What price they give to the Government, we have to accept because nobody is checking. This is a public secret in Region 10. The Government can ask too.”
On Sunday, Ram said he saw 11 trucks heading out from Kwakwani. While he was told all belonged to Bai Shan Lin, some were in private vehicles.
“First of all, the road leading to Kwakwani from Linden is not for the faint-hearted. It is nearly impassable at times with mini-buses struggling to make it. Another factor is if we saw 11 trucks and GFC telling us only 375 containers were exported by Bai Shan Lin for the first half, what are we really saying? Something is wrong here.”
Ram, whose newspaper columns and blogs have been critical of Government policies, noted that the situation at Ituni, a community between Linden and Kwakwani, is heartbreaking with infrastructure falling apart and poverty very much evident. “It is a heartbreaking sight. It gives the impression of a region in which Government has largely washed its hands of and have sold large pieces to three foreign companies with very little to show in returns. The region is supposed to receive a percentage of the takings. Yet it suffers the most from exploitation.”
Ram was also harsh on the Opposition, A Partnership For National Unity (APNU) which won the Region in the 2011 General and Regional Elections but has remained largely silent on the exploitation.
“Save for Regional Chairman, Sharma Solomon and Vanessa Kissoon, it seems that APNU has forgotten its people. It will be quite an uphill task for the Region to get what it deserves as the Constitution does not reflect the possibilities of them raising their own revenues and getting a fair share of the bauxite and logging operations.”
The activist believes that from the very stance of the Government on the issue, it is not hard to deduce that there is complicity from also the regulators…the Guyana Forestry Commission. “The resources being taken away are not going to come back in a hurry.”
Ram said it is also known that neither of the two bauxite companies is paying their production taxes as is required because Government has turned a blind eye.
Another major issue is the illegality of having local loggers in the Berbice area fronting for Bai Shan Lin.
“This is a serious situation as Bai Shan Lin is reportedly buying the logs from the local operators and associations and is using them as the exporters. This raises questions as to when monies are passed since ownership changes so it would be against regulations and illegal for the loggers to be exporting the logs in their names when they have already sold to Bai Shan Lin.”
Ram was critical of GFC, which, instead of taking an independent position, has decided to take the position of going all out and defending Bai Shan Lin.
“In whose interest are GFC and Government acting? They should be defending Guyana and its assets and at the very least okay an independent probe.”
Ram said that residents of the Upper Berbice and Linden area have legitimate concerns about jobs and the fact that they have a ready market available from Bai Shan Lin and other operators. “They are concerned about water, the roads, the noise from vehicles and poor social standards coming from the companies.”
Ram believes that Government should have been facilitating the process to link local sawmillers with loggers, developing an efficient and functioning export body and encouraging local sales and exports.
“So what we have is failure to address the opportunities and challenges. We are talking here about two companies from big countries that are exploiting us…we have the mandate to protect ourselves as they came here to feed their appetites for our natural resources. We can have a fantastic life. But our Government just don’t care.”
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