Nov 14, 2015 News
By Kiana Wilburg
Presidential Advisor on Sustainable Development, Dr. Clive Thomas, is of the firm belief that it would be a rather “unwise and reckless” move for Chinese logging company, Bai Shan Lin, to be granted any further extension on the construction of a long awaited wood-processing facility in Guyana.
“I feel it is time that sanctions be imposed,” the economist added.
Word of Bai Shan Lin’s request for a two-year extension to fulfill its promise first came to the forefront during a press conference with Governance Minister, Raphael Trotman last week.
It was there that Trotman was questioned about his threat some months ago to reveal the action to be taken by the end of October, should Bai Shan Lin and others fail to make any moves to add value to Guyana’s lumber exports.
Trotman said, “In terms of Bai Shan Lin, we had met with them on successive occasions and we have had discussions with other foreign companies that have been in the forestry sector. Bai Shan Lin as we know and I don’t think it’s a secret that it has not complied in its entirety. I have met with representatives of the China Development Bank who of course are financing Bai Shan Lin.
“I am led to believe that the company itself is in the process of restructuring. Then it will reengage with the government, but as for now there has been a pause because there has been a process of restructuring its corporate activities and seeking new financing from China Development Bank.”
The Governance Minister also said that when he last spoke with the company (and this was three weeks ago), he was informed that the Chinese logging company was in no position to have the mills that it said it would have imported within the next ten months.
As a result of this sad situation for the company he said, “They have asked for two years and we have had discussions with them about an alternative mill and that is on board. But as I said, much depends on Bai Shan Lin securing the financing.”
Yesterday, Dr. Thomas said that it would be highly “reckless” should Bai Shan Lin’s request be approved.
He said, “Given their horrible track record, as the Presidential Advisor on Sustainable Development, I would deem it unwise to grant them this. They had ten years to get it done. What’s their excuse for not getting it done then?
“It was clear that it was not priority for them and now they cry financial difficulties. I do not agree with any further pardon because they have shown utter disregard over the years for the country’s laws and have benefitted from millions worth in concessions.
“I believe, too, that some amount of order needs to be injected into the logging industry. It is time that companies, whether local or foreign, get the message that value added production is important and that the government will no longer compromise on this.
“Besides, you cannot have a playing field where one company is making efforts to start, as is the case with Vaitarna and then Bai Shan Lin is making requests to get started later. It would not send good signals in that area.”
Mr Thomas had said that the behaviour of the logging companies that have benefitted significantly from Guyana’s forest resources is absolutely “unacceptable”.
He said, too, that he will be recommending to the David Granger-led administration for some of Bai Shan Lin’s concessions to be taken away.
“Guyana cannot continue to be giving out hundreds of millions of dollars worth in these tax breaks or concessions and we aren’t benefitting from value added operations. If companies make a commitment to do so then the ethical thing to do is to deliver what was promised. If not, their concessions should be taken away,” the economist had said.
Bai Shan Lin had given conflicting reasons in the past to justify the delay for establishing this wood-processing facility. In fact, Commissioner of the Guyana Forestry Commission (GFC), James Singh a few months ago had also revealed that the company indicated to him that the current holdup is as a result of “financial difficulties.”
Singh had explained, “They told us that they have been experiencing some financial difficulties in the sense that they were unable to meet some bench marks for certain lending agencies…
“We met with them and they had some concerns. They indicated to us that they met with some government officials and are expected to submit a revised programme in relation to the facility to them and wait for it to be reviewed.”
He had said, too, that a team from the China Development Bank also accompanied the Chinese company to the meeting. The Commissioner said that he told Bai Shan Lin to make the wood processing facility their “priority.”
Singh said that the company promised that once the “financial difficulties” are over, it will also submit the revised programme on the facility to the Commission.
A few months ago, Trotman had told the media that the companies this time around will not escape sanctions for should they fail to make good on their promise then their contracts will be reviewed for termination.
Trotman who is also vested with some responsibility for the natural resources of the nation had explained that Government will be looking at the concessions that have been granted to certain, if not all companies in the forestry sector.
In 2014, BaiShan Lin blamed the Guyana Office for Investment (GO-Invest) for delaying its application for its wood processing factory. 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 no such application. BaiShanLin had nothing to say when this was revealed. This caused many, including the then opposition, to challenge the government to make public the investment agreement it signed onto with the Chinese logging company. This was never done.
In April, the company then blamed the “hostile” media reports during 2014 for dispiriting financiers.
The Chinese company had said that it is concerned about the apparent “misrepresentations and false reports” being carried in some sections of the media on its operations in Guyana. It identified Kaieteur News as the leader of the “hostile” campaign and even cited a KN article with the headline: ‘BaiShanLin delays US$70M wood processing factory for gold, housing, logging.’
But in its statement, it did 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, had 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.”
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