-process to close loopholes for abuse, lead to revised Fees and Fines Structure
In order for there to be improved governance and the development of a sustainable
extractive sector, Minister of Natural Resources, Raphael Trotman asserts that a clear and effective legislative regime is necessary.
He reminded that last year, the Ministry of Natural Resources tasked its regulatory agencies with identifying their strategic priorities, legislative gaps in their existing Act and Regulations, and more recently, a review of the Fees and Fines that are stipulated by their legislation.
Following the reviews, Trotman said that it was deemed that the Acts and Regulations were outdated. Many loopholes for abuse were identified and as such, there was a need for the revision of the legislative framework that governs the extractive sector.
The Natural Resources Minister said that it is envisioned that the Ministry of Natural Resources for this year will table revised Fees and Fines Structure for its regulatory agencies, legislative changes to the Guyana Gold Board Act, table new Forestry Regulations, new Mining Regulations and a Revised Petroleum Act and Regulations.
Minister Trotman said that the Mining Policy and Forestry Policy will inform the revisions of the Forestry and Mining Acts.
With respect to the Mining Policy, Trotman said, “We cannot underestimate the role that mining plays in the nation’s social and economic development. Mining generates jobs and significant revenues. With improved governance, the sector can advance economic diversification and the creation of jobs and enhance sustainable investments in health, education and infrastructure.”
The Leader of the Alliance For Change (AFC) stated that these positive benefits are difficult to achieve in the absence of a strong policy framework. He said that it is for this reason that the Ministry of Natural Resources through the Guyana Geology and Mines Commission will have a completed draft of the Mining Policy in 2017.
As for the Forestry Policy, Trotman said that the Ministry of Natural Resources will continue to update and/or create policies and laws relating to the conservation, management, protection and sustainable development of the nation’s patrimony, its forest resources.
He said that there have been changes in Guyana’s economic, social and political landscape over the last six years since the previous forest policy was crafted. In this regard, he noted that an updated forest policy will mark a significant shift in emphasis from the development of the timber potential of forests to management of the forests’ multiple down-stream goods and services for national benefit.
The Minister also spoke about the revision of National Log Export Policy. The politician said that in the interest of strategically enhancing the competitiveness of Guyana’s Forestry Sector in 2017, the Government has commenced the review of the National Log Export Policy to develop a new policy for immediate implementation.
He said that the current policy of 2009, aims at dissuading the export of logs while encouraging value added manufacturing of forest products.
Trotman asserted, “It is obvious that this policy was honoured more in the breach than the observance. In this regard, large scale forest companies and operators must begin to increase value added production and harvesting.”
Furthermore, a forensic audit report on the Guyana Office for Investment (Go-Invest) revealed how several logging companies breached their Investment Agreements, failed to honour their promise of value added production and breached forestry regulations.
With this in mind, Forensic auditors cited the case of BaiShanLin Forest Development Inc. which was incorporated in Guyana in 2006.
According to its business plan, BaiShanLin’s main objective was to ensure the commercial use of Guyana’s forest resources through the processing of a wide range of finished products.
The forensic audit report said that during the period 2007 to 2012, BaiShan Lin was cutting and exporting raw lumber without processing it or creating value added products.
This was a complete contradiction of its Investment Agreement. The forensic auditors said that it is evident that BaiShan Lin’s real objective was to export raw lumber. Nevertheless, BaiShan Lin still benefited from concessions totaling $1.8B during the period under review 2011-2015.
In another instance, the forensic auditors flagged the operations of Diamond Tropical Wood Products Inc. which was incorporated in 2011 to establish a wood processing operation at Diamond East Bank Demerara.
The auditors said that the company was granted concessions in August 2012 but has since failed to honour its part of the Investment Agreement signed in July 2012 which was to establish and operate a wood processing facility. The concessions granted to Diamond Tropical Wood Products Inc.; was over $60M.
Forensic auditors also found that Vaitarna Holding Private Incorporated (VHPI) was in breach of its Investment Agreement. They said that according to the agreement, the company committed to setting up a wood processing facility at Wineperu, Potaro, Siparuni in Region Eight.
As at July 31, last year, the wood processing facility was not engaged in any significant production of wood products.
Furthermore, the forensic audits said that an examination of the files of just those few investors revealed that Guyana did not benefit from concessions granted to these Investors since they all breached their Investment Agreements without any sanctions.
The concessions for those investors are worth more than $2 billion.
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