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Evidence of forest damage by Barama -Persaud
Posted By Stabroek staff On August 25, 2010 @ 5:20 am In Local News |
Agriculture Minister Robert Persaud yesterday rejected a Norwegian government report that Barama Company Limited (BCL) has contributed to illegal logging and severe environmental damage here.
BCL’s parent company, Samling Global has also denied any involvement in illegal logging, stressing that its logging operations comply with government requirements but it was cited for failing to offer sufficient information to indicate that the conclusion was based on a faulty foundation.
On Monday, Norway’s Ministry of Finance announced that it has excluded two Israeli companies, Africa Israel Investments Limited and Danya Cebus Limited; and Malaysian company, Samling, from the portfolio of the Government Pension Fund Global (GPFG). “The decision to exclude these companies from the GPFG is based on the Council on Ethics assessment that they are contributing to or are themselves responsible for grossly unethical activity,” Minister of Finance Sigbjorn Johnsen said in a statement.
The GPFG is a continuation of Norway’s Petroleum Fund and revenues consist of the Government’s total income from petroleum activities, and the return on the Fund’s investments. The purpose of the Government Pension Fund is to facilitate government savings necessary to meet the rapid rise in public pension expenditures in the coming years, and to support a long-term management of petroleum revenues. Ethical directives from the government bar the fund from investing in manufacturers of weapons considered “particularly inhumane” and in companies known to be involved in large-scale human rights violations, corruption, the tobacco industry or environmental pollution. At the end of last year, the GPFG owned shares worth NOK 8.1 million in Samling Global Ltd but has since sold these shares.
“The Council on Ethics has assessed Samling Global, and concluded that the company’s forest operations in the rainforests of Sarawak and Guyana contribute to illegal logging and severe environmental damage. I have therefore chosen to follow the recommendation of the Council on Ethics and exclude the company from the GPFG’s investment portfolio,” said Johnsen.
In the statement from the Ministry, it was said that the Council on Ethics’ investigations have documented what seems to be extensive and repeated breaches of the licence requirements, regulations and other directives governing the company’s forest operations in Sarawak, Malaysia and Guyana. The recommendation of the Council on Ethics is based on field surveys, satellite image analysis, and evaluation of publicly available documentation. In its assessment, the Council on Ethics has placed particular emphasis on the extent of illegal logging and the environmental damage that occurs when laws and regulations are not being observed, the statement points out.
However, Persaud, who has responsibility for forestry, denied that BCL operations have resulted in serious damage to the environment. In a statement yesterday, he said that the Guyana Forestry Commission (GFC), which monitors BCL’s operations continuously “has found little evidence to substantiate such a position.” However, he admitted that “some deficiencies” were identified in Barama’s operations.
BCL was established in 1991 and granted a natural forest logging concession here the same year. Located in the North-West District, the concession covers 1.611 million hectares and is the largest in the country. It runs until 2016 being renewable for a further 25 years until 2041. The company has been found guilty of forestry breaches in the past.
Annual plan
Persaud, in outlining the procedures before BCL can engage in harvesting, said that an Annual Operational Plan (AOP), which has to be prepared in accordance with GFC guidelines, has to be submitted to the GFC for its approval. This AOP gives a concise but thorough summary of the previous year’s operation; in addition, it provides the 100% pre-harvest inventory of all commercial stems present in the 100 hectare blocks to be harvested in the calendar year, he said.
The minister further said that the harvesting quota is strictly monitored to ensure that it is within the Annual Allowable Cut, and also extracted from within the Annual Allowable Area. He pointed out that Barama has complied with an obligation to set aside 4.5% of the total concession area as a biodiversity reserves.
Actual harvesting, he said, must be compliant with the GFC guidelines for sustainable forest management as established in the Code of Practice (CoP) for forest operations. This CoP outlines the environmental and social best practices that companies must practice in the course of the extraction activities. Persaud said that Barama has taken advantage of training opportunities over the years.
The minister pointed out that monitoring of the operations is done by a core team of ten full time GFC officers who are based at the concession and are rotated on a regular basis. Apart from this team, he said, there are at least two other levels of monitoring checks: firstly, by the GFC Legality, Monitoring and Extension Unit; and secondly, by the GFC Internal Audit Unit. GFC’s records show that these second and third levels of audits were recently carried out on BCL during the periods 8- 12 June 2010, 12-19 October 2009, 22- 27 June 2009 and 16-20 February 2009 and at regular intervals prior to this, Persaud said.
He stressed that in every instance the inspections revealed that the harvesting activities were conducted in blocks approved by the GFC; the log tagging and log tracking system was functional and compliance with the CoP was satisfactory.
The minister admitted that some deficiencies were identified including “poor sanitation in some areas of the operation; a few skid trails were poorly planned; the use of safety gears in some areas of operation needed to be improved; housing facilities for GFC officers needed to be improved; there were a few instances of proximity trees being felled closer than was allowable.” In all cases, he said, the company was written to and required to address the aspects within a specified time. Follow up visits were conducted to ensure that these matters were speedily addressed. The company was also required to address the environmental breaches such as felling of proximity trees by the payment of compensation, he said.
Persaud recalled that in 2007, BCL had harvested several blocks in accordance with the environmental requirements of the CoP, but without obtaining the required GFC approvals prior to harvesting. In this instance they had to pay compensation in excess of US$500,000 to the GFC for breaches of procedure as distinct from environmental breaches, he said.
“It is heartening to note that since then, the company has tried its best to comply with the required conditions for the various aspects of the operation from harvesting, conversion to local/export sales. The above can be verified via the GFC documentation, as well as by field checks. I therefore, wish to respectfully differ with the statement which implies that the operations of BCL in Guyana have caused a negative impact on the environment,” the Minister said.
He did not respond to additional questions from this newspaper and officials at Barama Company Limited and the GFC were not available for comment.
Lack of transparency
Meantime, the report from the Council on Ethics said that although Samling denied any involvement in illegal logging, it also failed to offer sufficient information to indicate that the Council’s recommendation is based on a faulty foundation.
Regarding forest management in Guyana, it says that the GFC is responsible for the administration and management of all Guyana’s state forest land, including developing and enforcing standards for forest sector operations and developing and implementing forest protection and conservation strategies but as in Sarawak, there is little information available about which requirements the logging companies have to comply with. The report pointed out that Barama’s website says that its timber operations are in compliance with the Guyana Code of Practice for Timber Harvesting, but the actual requirements are not further detailed. “The Code of Practice sets guidelines and standards for the logging operations, but is apparently not obligatory for the company,” says the report.
It recounted that in early 2006 Barama was awarded certification by the Forest Stewardship Council (FSC) for two ‘forest management units’ within its concession in Guyana according to FSC criteria for sustainable forest management but in November the same year an independent audit confirmed numerous serious breaches of FSC’s criteria resulting in the FSC suspending its criteria. The report recounted the results of the audit including that no measures were put in place to prevent erosion and protect water sources during the construction of logging roads; the company had failed to carry out Environmental Impact Assessments prior to major activities, resulting in significant environmental impacts; and the company was unable to provide evidence that harvesting rates were not exceeding sustainable supply, among other breaches. Barama’s FSC certificate was withdrawn in January 2007 and has still not been reinstated.
In responding to the council, Samling accused it of not attaching importance to its efforts in improving the forestry operations, something that is necessary in order to be recertified. The company informed that it has sought the assistance of the WWF and the GFC, but the report pointed out that in January 2009 the WWF made an official statement saying that the organization had cancelled the agreement with Barama, and that this had happened some time ago. “…the Council finds it misleading that Samling refers to a cooperation which was ended more than a year ago, and where it seems evident that it is the company’s insufficient capability or determination to improve the forestry operations that has been decisive for its termination,” the report says.
It also mentions the fines incurred by BCL for illegal logging (2007) while in January 2008, it was reported that Barama had been issued with two more fines with the first fine of $50M said to be for breaches in third party concessions while the second, (in which 11 other companies also were fined) were for logging in concession blocks without approved annual harvesting plans. The fines issued totalled $275 million but the share of these fines issued to Barama has not been made public, nor have specific details of Barama’s failures, the report said. The report also mentions sub-contracting issues, pointing out that according to Guyana’s laws, subcontracting forest concessions belonging to other concessionaires is not permitted, unless it is specifically approved by the President and the Forestry Commissioner. “The Commissioner has argued that Barama is acting in the confines of the law when it harvests timber from outside its own concession. To the Council’s knowledge, however, no such permission from the President and Commissioner for these subcontractual agreements (under which Barama harvests 72 per cent of its logs) has ever been made public,” the report says.
After Barama was fined in 2007, it was also instructed to immediately stop all forestry operations in concession areas of third parties and Samling told the council that all subcontractual agreements were terminated by the end of 2007, due to a “change in policy of the Government of Guyana. Prior to that, all subcontractual arrangements were undertaken with the full knowledge and support of the GFC…” Samling did not provide information as to whether it has had the necessary presidential approval for renting concessions, the report pointed out. It is, however, not clear whether Barama continues to be involved in illegal subcontracting of concessions,” it adds. It pointed out that in 2008, Barama paid a fine imposed on Toolsie Persaud since that company refused to pay and … it seems likely that Barama was renting this concession.
Export tax
Barama is said to also have failed in the past to pay a two per cent export tax on logs harvested in third party concessions. It is thought that the company’s initial 1991 agreement with the Guyanese government exempted it from paying these taxes, but that this exemption does not cover logs harvested outside its own concession. Reports from the Commissioner of Forests to the Board of Directors of the Forestry Commission apparently stated that such taxes were outstanding, the report says. Samling had denied the council’s request for copies of the timber licences and forest management plans for the concessions in Malaysia and Guyana, citing the “highly confidential” nature and saying that it was not in the company’s or its shareholders interest. “We also fully understand that it is likely that not being able to obtain the documents and information asked for, you would not be able to comply with those guidelines and would have to divest yourselves of your holdings in our securities. We would regard such divestment as being inevitable in the circumstances which we understand but regrettably have to regard as inevitable,” the company said.
The company was provided with the council’s draft recommendations and offered an opportunity to comment and in response, Samling said that the recommendations do not provide a correct picture of the circumstances since it was drafted without input from the company. “Samling thus questions the integrity of the Draft Recommendation about the company’s conduct and practices produced entirely from outside sources, some of which are far from credible or accurate. We are of the view that the Council’s approach does not meet the requisite standard of fair play nor satisfy the basic principles of natural justice,” it said.
It added that the company complies with all requirements and regulations in its forestry operations: “The company takes the stand that it conducts harvesting operations in accordance with the rules and regulations as set by the relevant forestry authorities. All logs harvested are legal and endorsed as such by the relevant governmental agencies.” Samling also said that it takes the accusations of severe environmental damage caused by the company very seriously, because it goes against the company’s corporate practice of sustainable forestry operations. Samling criticized the council’s methods in producing the report including the use of satellite imagery and also accused the Council on Ethics of having illegally obtained confidential documents but did not specify the documents it referred to. The company also claimed that the Council’s consultants had violated security regulations by entering the concession areas, which are private property, and by trespassing on the company’s timber camps. Samling also accused the Council on Ethics of not being up-to-date on which government requirements are in force, arguing that the forestry sector is constantly subject to alterations in policy and requirements from the authorities. It mentioned the questions of re-entry logging without Environmental Impact Assessments and illegal concession subcontracting in Guyana.
The report says, however, that Samling had the chance to transmit input and documentation which are relevant to the matters discussed in the recommendation but the Council has not received any documentation from the company that substantiates its points of view or indicates that the council’s assessments are based on faulty grounds. “The recommendation has been adjusted vis-à-vis the draft that Samling received for review, and an element that Samling also comments on in its letter has been removed because the Council discovered that it lacked a sound foundation,” the council report says.
It points out that the council has assessed whether the company’s unacceptable practice may be expected to continue in the future, saying that Samling will be logging for many years to come in both Sarawak and Guyana. It also says that the company provides little information about its concessions and forest operations and forest management plans and legal requirements that the company has to comply with are regarded as confidential information in Sarawak and in Guyana.
“In the Council’s view, this lack of transparency regarding Samling’s operations, in addition to weak law enforcement generally, provides little incentive for the company to change its practices. The consequences of noncompliance are minor and appear to be of little significance to the company. Samling’s belief that its forestry operations are sustainable and carried out in a lawful manner indicates that from the point of view of the company, there is no need for change. The Council therefore deems it probable that the company’s unacceptable practice will continue,” the report says.
“The Council recommends the exclusion of Samling Global Ltd from the investment universe of the Government Pension Fund Global due to an unacceptable risk of contributing to current and future severe environmental damage,” it said.
Norway has signed a forest protection deal with Guyana worth potentially US$250m over five years. It is unclear whether this report by the fund’s Council on Ethics will have any impact on the terms of the deal.
Territorios estos sobre los cuales el gobierno Venezolano en representación de la Nación venezolana se reservo sus derechos sobre los territorios de la Guayana Esequiba en su nota del 26 de mayo de 1966 al reconocerse al nuevo Estado de Guyana .
“...por lo tanto, Venezuela reconoce como territorio del nuevo Estado, el que se sitúa al este de la margen derecha del río Esequibo y reitera ante la comunidad internacional, que se reserva expresamente sus derechos de soberanía territorial sobre la zona que se encuentra en la margen izquierda del precitado río; en consecuencia, el territorio de la Guayana Esequiba sobre el cual Venezuela se reserva expresamente sus derechos soberanos, limita al Este con el nuevo Estado de Guyana, a través de la línea del río Esequibo, tomando éste desde su nacimiento hasta su desembocadura en el Océano Atlántico...”
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