Barama’s Inaction Caused Shortage of Supply of Materials for Land of Canaan Plywood Mill

 The Minister of Agriculture with responsibility for Forestry, Hon. Robert M. Persaud has taken note of a media release by Barama Company Limited on the closure of its plywood mill at Land of Canaan purportedly due to the shortfall of raw materials.

Subsequently, the Minister of Agriculture with responsibility for Forestry, Hon Robert M. Persaud met with Mr. G. Lalaram, Chairman, Barama Company Limited, Mr. Peter Hoe, Chief Executive Officer, Barama Company Limited and the General Secretary of the Guyana Labour Union, Mr. Carvil Duncan. The Minister was accompanied by Mr. James Singh, Commissioner, Guyana Forestry Commission to discuss this unfortunate action taken by the Company.

At the meeting the Minister reported that the Guyana Forestry Commission has advised all stakeholders, especially the affected employees of Barama Company Limited (BCL) of the following facts:

• In October 2007, BCL was given a cease order to harvest in some third party concessions because of breaches of the GFC’s procedures. Shortly afterward, the Ministry of Agriculture indicated in a press statement: “that in the interest of the workers, it is prepared to facilitate access to raw materials for the plywood factory, but only as part of a transition process that will eliminate any approved sub-contractual arrangement by December 31, 2007.”

The GFC then requested BCL to send appropriate staff members to meet with the GFC in an effort to work out the conditions and logistics of such an arrangement. To date the GFC has had no positive response to this request by BCL.

As part of the Government’s social commitment, the GFC is still willing to facilitate such a process, but in accordance with very clearly defined conditions which can only be arrived at on the basis of meetings with the technical staff of

GFC and BCL.

• It was later verified that BCL had committed additional breaches of procedure in the forest concession leased to Guyana Sawmills Inc. (GSM). GFC indicated that it would allow BCL to remove and utilize the peeler species already harvested in GSM, on condition that BCL formally communicate its commitment to pay the required compensation in accordance with the GFC procedures. This stipulation was necessary because once the logs were utilized; GFC would have no evidence in the event that BCL refused to pay the necessary compensation. Despite repeated requests by the GFC, BCL has sent no formal commitment.

• GFC has held several meetings with senior staff of BCL to express concern that the forest concession of one million, six hundred and twelve thousand (1,612,000) hectares was being significantly under-utilized. The GFC mandated BCL to pursue increased beneficial utilization of the forest concession within the GFC’s allowable limits. BCL at a meeting on October 31, 2006 gave a commitment to increase the utilization of the area issued to it.

Currently, BCL’s utilization of its concession is about 20 % of its allowable harvest. For the period 1998-2006, the total cumulative allowable production was 3,382,470 cubic metres, or an annual allowable cut of 375,830 cubic metres. The actual production for the period 1998-2006 is 676,372 cubic metres, or an annual average of 75,152 cubic metres. This corresponds to a level of utilization that is approximately 20 %. These figures illustrate the point that BCL is under utilizing its concession, even though it gave a commitment in 2006 to improve productivity in accordance with the limits established by the GFC.

As a consequence, a substantial number of felled peeler logs are on the ground in the concession leased to GSM. Another quantity of felled peeler logs are also currently on the ground in a concession leased to Toolsie Persaud Limited. The GFC has informed BCL that it can access these logs if certain requirements are met.

 The stated “severe supply shortfall of peeler logs” is therefore as a direct consequence of inaction on BCL’s part.

This was not disputed by the management representatives who attended the meeting

Finally, it is expected that BCL will significantly increase the magnitude of operations in its own leased concession area beginning in 2008 since it is only utilizing about 20 percent of its allocated extraction level.

 The Ministry expects that the Company will review its position and take a more compassionate stand regarding the future of the employees of the Land of Canaan Plywood Mill.

December 5, 2007

 

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