May 05, 2015 News
– As furor against Chinese company continues to rise
A Partnership for National Unity plus Alliance for Change (APNU+AFC)’s Dr. Rupert Roopnaraine and
Khemraj Ramjattan have both condemned the alarming rate at which concessions are being handed to BaiShanLin.
They say that this is being done at the expense of local businessmen. They also point to the company’s failure to honour its commitments to provide Guyanese employment.
These issues recently came to the fore with the revelations of the large tax concessions granted to the Chinese-owned company.
BaiShanLin has been under scrutiny for its large scale extraction and export of Guyana’s timber using a primarily Chinese workforce.
Though the Government of Guyana has protested that BaiShanLin’s export level remains within the parameters of the law, the Chinese company has not created jobs within Guyana’s sector for Guyanese or made any serious attempt to give back to the Guyanese people.
Despite the fact that the company has been in Guyana since 2005, BaiShanLin is yet to honour its commitment to Guyana to establish a wood processing plant, instead exporting all of the extracted timber almost instantaneously.
Roopnaraine expressed his dismay at the entire situation, stating that the local private sector and the small miner and forester were the ones whose livelihood suffered the most, but that Guyana was also deriving no benefit in the entire process.
Roopnaraine stated that it was necessary for the government to implement a more consistent tax regime and to provide more incentives and a level playing field for local miners and foresters, who have long complained of the domination of BaiShanLin on the country’s timber market.
The politician nevertheless noted that the Guyana Revenue Authority (GRA) was just caught up in the imbroglio, being mandated to fulfill the Government’s policies.
Any change in the tax policy towards foreign investors must come from the Government itself, Roopnaraine said.
Ramjattan was critical of the company, noting that the non-implementation of the timber processing plant in Linden, was a fundamental violation of the company’s agreement, when they would have had to lay out a proposal upon approaching the Government of Guyana.
He also cited the huge amounts of logs being exported as another violation that the Guyana Forestry Commission (GFC) was tacitly allowing.
Financial analyst Ramon Gaskin had blasted the government’s “sweetheart deal” with BaiShanLin in the latest Thursday night broadcast of Nation Watch with Christopher Ram.
He stated that the Chinese company’s continued presence in Guyana was doing nothing more than
harm to the economy.
Added to this was the fact that BaiShanLin was in a virtual ‘tax paradise’ not having to pay any royalties or applicable value added taxes (VAT) among other concessions.
Gaskin had described it as Guyana having to subsidize the Chinese economy. China is currently rated as the world’s second largest economy, far ahead of Guyana’s.
The company is reported to have benefitted from billions of dollars worth in tax concessions, remissions and tax holidays, but when enquiries into its failure to honour its commitment to build the wood processing plant started last year, it blamed the Guyana Office for Investment (Go- Invest) for delaying its application for the factory.
Within the last week, however, it has shifted the blame to “hostile” media reports in 2014 for discouraging financers, singling out Kaieteur News as the leader of the “hostile campaign”.
It also claimed that the newspaper had no evidence to support many of its claims.
BaiShanLin, in its statement, insisted that it is a privately-owned company and does not receive capital from the Government of Guyana. Kaieteur News at no time contended that BaiShanLin receives funding from the Government of Guyana. But even in its response to the article, BaiShanLin does not deny that it was approved ‘US$70M’ for certain activities.
With regard to the wood processing plant in the Linden area that was to be constructed, BaiShanLin, one of the largest exporters of the country’s prime species of wood, complained that it has indeed suffered major setbacks in completing its wood processing facility that will create hundreds of jobs for Guyanese.
It claimed that these “setbacks” directly relate to lack of adequate funding from its financiers, who, since last year “when these sustained attacks began,” became concerned about the “soundness of investing further in what appeared to be a hostile environment.”
It would contradict what the company said in August last year when local media reported on the extent of BaiShanLin’s operations in Guyana.
Back then, the company failed to mention in its published advertisements that “financiers” were scared to invest.
Instead, back then BaiShanLin sought to throw the blame on GO-Invest for the delays.
In one of its advertisements, the company stated that in 2008, it applied to the “Government of Guyana through the Guyana Office for Investment (GO-Invest) and other agencies to lease lands to set up a factory to process logs and engage in value-added production, such as the making of furniture, craft and hardwood flooring.”
It had said then that it was experiencing delays.
Kaieteur News later reported that GO-Invest had had no such application. BaiShanLin had nothing to say when this was revealed.
This caused many, including the opposition, to challenge the government to make public the investment agreement it signed on to with the Chinese logging company. To date, this is yet to be done.
Further, on the note of logging, BaiShanLin said that as it relates to operations, it has consistently remained well within the regulations governing the forestry sector.
It has been reported on extensively, by insiders and other well-informed critics, including Dr. Janette Bulkan, a forestry specialist, that BaiShanLin practices landlordism.
The Timber Sales Agreement (TSAs) which governs logging does not allow that.
BaiShanLin also sought to justify its great access to the mining sector. The regulations stipulate that only Guyanese can participate in auctions and bid for mining lands.
It said that the company’s owner in Guyana, Mr. Chu Hongbo is a naturalized Guyanese and that he is entitled to benefit from that clause. He did not say whether all the statutory requirements for naturalisation were met.
BaiShanLin failed to point out that it has been granted hundreds of millions of dollars in duty free concessions and other breaks and therefore has an unfair advantage when it comes to competing with local operators.
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