Last week's column examined the first two causes of poverty according to the PRSP in relation to the forestry sector, namely (i) poor economic policies, and (ii) poor governance. Today's column compares the forestry sector against the fourth cause singled out by the PRSP: "deterioration in the quantum and quality of social services" (PRSP 2001, p 7). This analysis is undertaken in the context of the question: Why is there persistent poverty in the interior alongside the parcelling out of Guyana's best endowed forests in large-scale forestry concessions?

Part IV, A 3 of the National Forest Plan (NFP) states:

(a) Priority areas for foreign investment shall be the more capital intensive, higher technology projects, and those that are linked to an overseas marketing network.

(b) All foreign investors shall recruit and train Guyanese citizens so that national expertise may be developed and employment opportunities maximised at all levels.

Recruitment - In the hinterland where paid jobs are scarce, forestry could offer regular employment, skills development, and enhanced livelihoods. However, forestry jobs are rarely, if ever, advertised through posters in local communities or regional administrative centres. Forestry jobs are infrequently advertised in the press, radio or TV. In expatriate logging companies, skilled jobs in the forestry sector are almost all reserved for foreign contract workers, or local sub-contractors. Guyanese obtain low-level employment at their sawmills and log landings, and they secure interviews for employment by word of mouth. Some workers bitterly described this as 'showcase' employment - African and East Indian workers on display for visiting delegations to observe, while foreign contract workers are out of sight in the forest.

Training - In reality, logging and milling companies provide no career in a conventional sense - no promotion, no in-service training, and incentives only as overtime pay. The number of Guyanese staff sent by expatriate and local forestry companies to the Guyana Forestry Training Centre Inc for training is low. In order to be internationally competitive, Guyana has to invest in a 'knowledge economy.' Surely it must be skills and ingenuity which should be fostered - and in what better area than in the forestry and forest products' sectors in which Guyana possesses a comparative advantage?

Salaries - Guyanese employed at expatriate logging companies generally work 12-hour shifts, 27 days on, 4 days off. Both foreign and Guyanese workers are said to be on one-year contracts, if any, renewable at the discretion of expatriate management, without any assurance of annual increment or cost-of-living increase. Many contracts with Guyanese workers are unwritten in the case of some expatriate companies that have FDI concessionary arrangements. Guyanese allegedly are paid much less than the foreign workers for the same kind of job. Wage labour rates seem to start at G$ 26,000 per month (US$130) for Guyanese. In spite of the pool of skills available from experience in the bauxite and forestry industries, almost all the logging machinery in expatriate companies (bulldozers, graders, skidders, loaders, trucks) continues to be operated by Malaysians, Indonesians, Chinese and Filipinos. Foreign workers are paid in US dollars, generally deposited in their bank accounts in their home country. It is not known whether these foreign workers pay PAYE or any form of income taxes while in Guyana. There is no study of the contribution of the forestry sector to employment, as measured by NIS or PAYE payments.

Food - The dismal social services at logging camps are contrary to the GFC Code of Practice for Timber Harvesting, and letters to Stabroek News have complained frequently about employment practices and living conditions. Guyanese workers employed by a large expatriate company have expressed strong feelings about the sub-standard living accommodation and company food. In one expatriate company the food allowance for foreign workers is said to be more than double that of the Guyanese - $15,000 per month (US$2 per day) versus $7,000 per month (US$1 per day). This allowance for food can be taken as canteen-supplied food, or as a kind of credit voucher which can be spent only by list-ordering from a company-tied shop. A worker makes out a list of shop supplies preferred, but is unable to select alternatives and the shop frequently does not have in stock the listed supplies.

Guyanese are not given assisted passages from work site to home or back. Even the short journey of 15-20 minutes from one log landing to the regional hub which is charged at $1,000 (US$5) per passage, one-way, by a private operator, has to be borne by the low-paid Guyanese worker, in the absence of advance information about their company's transportation movements on which they might hitch a ride.

Health - The 1953 Forest Law requires, and at least some of the major companies provided, first aid posts at the logging camps which also serviced the neighbouring communities at least into the 1980s. In the present, expatriate workers are immediately transported by expatriate logging companies to hospital if they are sick while Guyanese employees have to await the expatriate company's pleasure in providing transportation or find their own way to the nearest government health centre for medical treatment. Peer-reviewed research papers have described the differential treatment between foreigners and locals at one major expatriate operational centre (now closed). Other companies have emulated this race to the bottom - and disrespect for Guyanese labour in our own country.

There are no public reports of inspections by relevant government agencies of any of the forest camps of expatriate companies. However, there has been international, if no local, sanction of the Barama Company's non-compliance with basic health and safety requirements for workers in the camps as well as at work, and requirements for training in accordance with the Forest Stewardship Council (FSC) Principles and Criteria. The Barama Company's certification for good forest management in its two showcase compartments 4 and 5 was suspended for 3 months at the beginning of 2007.

What is also striking is the pervading climate of fear among Guyanese forestry workers. Guyanese workers expressed fear of personal victimization if their employer suspected that they might have expressed any criticism of their terms of employment. In his budget speech, the Minister of Finance said that the search was on to create thousands of jobs over the next five years. The Minister would be well advised to begin his search closer home. He could convene an inter-sectoral committee to consider policy on the continuing importation of Asian forest workers in the context of high unemployment rates in interior areas. As recommended by OECD guidelines for multinational companies, and as intended in the National Forest Plan 1997, Foreign Direct Investment arrangements should make explicit provision for the training of nationals to take over from foreign workers, at all levels including managerial. This could be through an enabling clause referencing a detailed supplementary action plan, or that plan could be one of the annexes to the FDI agreement. Next week's column will detail some measures which can be set in train now to create jobs and promote training and job security for Guyanese in the forestry sector.

This week's column resumes the discussion of employment in the forestry sector against the fourth cause singled out by Guyana's Poverty Reduc-tion Strategy Programme (PRSP) as responsible for persistent poverty: "deterioration in the quantum and quality of social services" (PRSP 2001, p. 7). Here I look especially at employment of Guyanese in foreign-owned forest sector enterprises. This analysis is undertaken in the context of the question: Why is there persistent poverty in the interior alongside the parcelling out of Guyana's best endowed forests in large-scale forestry concessions?

The official statistics on employment in the forestry sector are out of date and/or not disaggregated. The 1997/1998 Labour Force Survey lists 50,737 persons (Males 41,982; Females 8,755) as employed in 'Agro-Forestry,' which in that survey denotes 'agriculture' and 'forestry' as separate activities. The 2002/2003 census lists a total of 3,746 persons employed in 'Forestry, Logging and Related Services,' and 42,069 in 'Agriculture, Hunting and Related Services.' These official surveys suggest that full-time employment in the sector is low, which is not surprising given the low rates of pay, lack of contracts, job security, training opportunities and poor working conditions outlined in last week's column.

A common theme in the diaspora is the exploitation, poor remuneration and disrespect shown to Guyanese who lack 'papers' (legal documentation), recognized skills certification, work experience abroad, or union or other representation. Forty years after Independence, Guyanese workers in the forestry sector suffer the same fate: as disrespected at home as are undocumented Guyanese abroad.

The Guyana Forestry Commission (GFC) estimates that the forestry sector provides employment to about 15,000 persons, the majority in the small-scale sector. The small-scale forestry sector, allocated only one-fifth of the commercial forests, (and the most worked-over and worked-out forests) provides 75 per cent of forestry sector employment according to a Guyana Forestry Commission study in 2003.

At the time of negotiating Foreign Direct Investment (FDI) concessions, foreign-owned companies had emphasised the employment which they would bring in, but they have generated little sustainably in the way of employment or sustainable development at the local level. The quotas of expatriate workers are part of the FDI arrangements negotiated by Cabinet, and are not covered by the Forests Act or Forest Regulations. The Commis-sioner of Forests has said that the JaLing Company will be allowed to exceed its foreign worker quota of 20 per cent for 3-4 years because there were no local skills (Press conference with Minister for Forestry Robert Persaud, December 8, 2006). This position signifies official disregard of a contractual agreement, which itself is much weaker than OECD guidelines for multi-national enterprises recommend (see later).

In 2005, the biggest concession holder, with legal control of 26 per cent of State Production Forests, stated that its workforce totalled 1,100 workers (expatriate and Guyanese) in its logging (400 workers), milling (100 workers) and plywood factory (550 workers) operations (Sukhraj 2005). The downsizing of that company's plywood production can be tracked in the quartering of its workforce in a decade - from 1,900 in 1995 to 1,750 in 1996, to 1,000 in 1997 and 550 in 2005. At the same time, Barama's expatriate workforce is deployed across its sub-contracted concessions and in the Amerindian village lands of Akawini and St Monica, being logged through a 'harvesting contract' with another company named IWPI. Such arrangements were not mentioned in the original 1991 FDI agreement and probably not in the still-secret 2001 extended FDI agreement.

The Barama Company seems to be keeping to the overall limit of 15 per cent expatriate workforce by counting its unskilled local workers at the processing sites at Land of Canaan and Buck Hall. Foreign-recruited workers are sent with interpreters for technical training by the Guyana Forestry Training Centre (FTC), in effect reverse capacity building. And in spite of the exemptions from all taxes and duties, including import duties on fuel, the SGS Qualifor's Public Summary quoted a CARICAD study that, "… a comparison of Barama Company wages and salary structure rates with their competitors… indicates that BCL can do more to improve their competitiveness for human resources" (SGS Qualifor Public Summary 2006:30). Like most locally-owned forest sector businesses, foreign-owned companies rarely advertise job vacancies. Selection of administrative staff may be influenced by factors other than straight efficiency and competence.

Guyanese employers in the forestry sector have not performed well against labour standards. The proven charges, including of non-payment of salaries and of failure to pass on NIS deductions, levelled against Guyanese forestry companies by victimized workers are legion. The recent declared intent by the Minister of Amerindian Affairs to take firm action against companies and individuals found guilty of these practices (SN, February 7, 2007) begs the question of why the terms and conditions of employment set out in 10.2.3 of the GFC Code of Practice for Timber Harvesting (2nd edition) are not widely implemented.

Recommendations

1. Excellent relevant models, including FAO and ILO guides, exist for safe forest working practices. These should be used to enhance the GFC's Code of Practice for Timber Harvesting (second edition, November 2003). All holders of forest harvesting concessions should be obliged to work according to a revised version of this code, brought up to date against the conventions of the Inter-national Labour Organization (ILO); at present the GFC code is voluntary for older Timber Sales Agreements (TSAs) and Wood Cutting Licences (WCLs).

2. The GFC should facilitate and support logistically both random spot checks and scheduled inspections and monitoring visits by the Ministry of Labour's Oc-cupational Safety and Health staff to manufacturing plants which process forest products as well as to logging areas.

3. Forest Regulations (1953 as amended) include provisions for camp conditions and regulations: first aid equipment and sicknurse/community health worker (Article 37), food rations (Article 38). These regulations could be used to improve conditions for forest workers.

4. The FDI arrangements negotiated by Cabinet for Barama and JaLing allow 15 and 20 per cent foreign workers, respectively, with no provision for a reduction in the percentage of foreigners over time. Consequently, although Barama has been in operation in Guyana for 15 years, it is still claiming that 15 per cent. This, indeed all FDI arrangements, should be revised to meet OECD guidelines on multinational enterprises, and published to conform to the provision for open government under Article 13 of the National Constitution 1980. The revision of FDIs should require -

(a) written descriptions for all jobs;

(b) restriction of foreign employees to jobs proven to have no qualified Guyanese applicants (tested by a competitive application process);

(c) open advertisement in national press and local news posts (such as Village Council offices, schools and church buildings) for all jobs at all levels with reasonable periods for applications to be received;

(d) written contracts for all employees;

(e) formal and in-service training for Guyanese to take over from foreign workers at all levels according to a fixed (but revisable) schedule;

(f) scholarships or internships for Guyanese, leading usually to officially recognized qualifications;

(g) creation and operation of branches of existing labour and professional unions;

(h) workers' representative councils to negotiate with company management on employment matters including conflict management;

(h) gender issues.

Several other good and sensible points on employment are in the social issues section of the GFC Code of Practice for Timber Harvesting and in Part VI A 6 in the National Forest Policy (October 1997).

5. FDI and Go-INVEST concessions could also be used to require holders of forest harvesting concessions to

(a) provide social infrastructure such as labour living accommodation/barracks and canteens for company employees;

(b) facilitate access to health posts and schools for company employees and their families;

(c) provide banking and postal arrangements for company employees and neighbouring communities;

(d) provide or finance transport work-to-home-to-work for the vacations of company employees and their accompanying families;

The financial burden of some of these requirements could be mitigated by reduced forest taxes, according to an agreed barter arrangement. Indicators of progress, provision for bilateral or independent review, provision for revision of arrangements, and penalties for inadequate performance against agreed indicators, are essential for meaningful FDI contracts. None of these points are at all new.

The year 2006 marked the centennial of the birth of international labour law and of the trade-labour linkage. Policy-makers in Guyana and in other countries should as a matter of world public order try to think through how to achieve free trade and 'a living wage' together. The beginnings of a synthesis might start with the motto carved on the foundation stone of the main building of the World Trade Organization, the Centre William Rappard. The building that now houses the WTO was originally built for the ILO. What the stone says is "Si vis pacem, cole justitiam," or "If you desire peace, cultivate justice."

Today's column continues the discussion of the relation of interior/forestry roads to development within the context of the third cause singled out by the PRSP as contributory to endemic poverty: the absence of non-complementing growth-oriented infrastructure (PRSP 2001, p. 7). This analysis is undertaken in the context of the question: Why is there persistent poverty in the interior alongside the parcelling out of Guyana's best endowed forests in large-scale forestry concessions?

In November 2006, the General Secretary of the Guyana Gold and Diamond Miners Association (GGDMA) addressed the issue of the blocking of timber roads to free passage. "Enquiries, Shields told the miners, revealed there was no such thing as a private road. No one can stop another from using a road. However there is a road protocol, which says that if one is maintaining a road that person would have some authority but blocking of roads with trucks 'must be made a thing of the past'" (Stabroek News, November 11, 2006). Some logging companies charge a toll for the right of passage on a road through their concession; for example, Guyana Sawmills Limited, charges between G$5,000 and G$10,000 to vehicles on the Itaballi Trail. Permissions are also given in the Public Lands (Private Roads) Act Cap 62:03 - Article 3 (1) permission to construct; Art 3 (2) possible public compensation for that construction/maintenance; Art 5(1) power to levy a toll set by the minister; Art 6, grantee of a permission deemed to be owner and hence can control vehicular but not pedestrian access.

Section 6 of the act addresses the issue of trespass on roads and provides that the grantee of a permission under the act is deemed to be the owner of the land occupied by the road only for the purposes of any law dealing with wilful trespass on lands. Thus there is no 'ownership' in an absolute sense but only for the limited purpose of wilful trespass which has a special meaning in law. The grantee of the permission is only deemed to be the owner if someone wilfully trespasses on the said land. Wilful trespass in this sense means activities such as entering and cutting or destroying any wood, or by digging or carrying away, etc. without the permission of the owner… basically any entering on the land by anyone with the intent to injure or destroy. It would seem therefore that if wilful trespass cannot be proven, then no one can claim 'ownership' or to be deemed an owner. It would seem therefore that once passage is innocent and the contrary is not proved, then the grantee cannot block the road if the toll is paid (in relation to vehicles).

In Region 1, small-scale Guyanese loggers and millers express regret at the failure to link roads built by private concessionaires and public roads. In Region 10, large-scale concessionaires have had public roads closed indefinitely and caused fines to be levied against small-scale loggers who have tried to use those public roads to access their concessions. It is unclear to the loggers that the regulatory agency has any power under law to close public roads or to impose penalties. Also in Region 10, it is unclear which government agency has approved a road network now being built through logging concessions from the Corentyne River to the Berbice River.

Another telling indicator, related by any number of Guyanese drivers in the interior, is the hooliganism displayed by Asian truck drivers towards other road users. Their unspoken attitude is: 'We built this road; you get off'; 'My truck is larger than your puny vehicle, look out.'

The absence of effective road regulation arguably hurts local communities much more than peripatetic miners. A significant number of households in the Upper Pomeroon River (from Jacklow to Karawab) depend on harvesting or processing nibbi and kufa, tree-growing vines used in manufacture of 'cane' furniture. Yet local people are prevented from travelling along timber roads in order to carry out their traditional harvesting. The GFC code of practice for timber harvesting (second edition, November 2002, section 2.2 forest use zoning, page 7) says that "Consultation with local stakeholders during the planning process is required to identify whether and where certain tree species are in demand for their use as NTFP-producers (non-timber forest products). Species to consider are… Similarly, consultation should take place in relation to harvesting of Kufa and Nibi. The Code of Practice for Kufa and Nibi Harvesting [a separate GFC document] sets standards on the felling of host trees and sharing of information on the planned coupe six months in advance to allow harvesting of these NTFPs before logging." The expatriate forest workers destroy all the nibi and kufa in their path while Pomeroon nibi and kufa harvesters have had to re-locate to less productive forests along the Linden to Kurupukari Road.

I shall end with a quotation from the NDS which is still applicable: "Although the RAD has the responsibility for road maintenance and rehabilitation… it is unable to discharge this mandate due to institutional incapacity. One way to overcome this disadvantage is to work closely with other institutions …In the interior and hinterland areas, it could work with the GGMC, GFC, PFA, GGDMA, and Amerindian councils to achieve the same objectives. Collaborating with other institutions should be a policy consideration for the RAD in its current and future road planning and development programmes" (NDS, chapter 38).

The preceding five columns of 'Guyana and the Wider World' examined the disjunctures between Guyana's natural forest bounty and the stated national commitment to poverty eradication through sustainable use of our natural resources, including job creation and skills training. The brief overview of four areas singled out for attention by the Poverty Reduction Strategy Programme (PRSP) - economic policies, governance, infrastructure and social services - confirmed the continuing disconnect between national policies and sectoral practices. The findings suggested that the structural underpinnings of endemic poverty, as described by Guyana's PRSP, still exert their (strangle)hold in the forestry sector.

This column will conclude the discussion on the failure of the forestry sector to alleviate poverty, and introduce the subject of next week's column which will follow the supply chain to the principal destinations for Guyana's prime hardwood logs. In 2004, David Kaimowitz, then the Director General of CIFOR (Center for International Forestry Research) evocatively described the boom in imports of wood fibre into China, consequent on its 1998 partial ban on logging in natural forest and the rapid expansion of wood-using industries, mostly geared to export markets, as "the giant sucking sound of Chinese forestry imports." China has been 'hoovering up' cheap timber from all sources, especially from countries with weak marketing skills like Guyana. In response, what measures did our policymakers take in those following eight years from 1998 to protect Guyana's own fledgling downstream processing wood-using industries, to guard against the over-cutting of prime timber species in large-scale concessions and to ensure the implementation of their business plans by FDI-benefiting (Foreign Direct Investment) logging companies? Talk is cheap, as the saying goes, but even the public record of 'talk' on the matter of increasing log exports at the expense of local value-adding processing of forest products was sparse and episodic until the sheer volume of public debate in the independent press in the latter half of 2006 led to a belated government response, now being planned.

On the supply side, a laissez-faire approach in the matter of log exports has prevailed. In this policy vacuum the low-investment timber traders have been 'licking up' and shipping out our under-priced prime hardwood logs. Timber traders can hardly be expected to look out for Guyana's interests. However, national policy-makers and regulatory agencies are tasked to do so; it is an obligation in the act which created the Guyana Forestry Commission in 1979. As the previous columns on this issue detailed, Guyana's prime timber species, forest-dependent citizens and industries have all suffered from the absence of preparedness to deal with monopsonistic FDI companies operating here and competing to export the same timber species used in local industries.

The lack of action in the national interest harkens back to a colonial situation when colonies existed for the benefit of the mother country, and marketing was done by the colonial owners. Guyana is willing to sell its resources cheaply, and it requires little effort in marketing to capture a substantial mark-up (the excess rent) simply by trading logs into the export market. However, there is no mother country to fall back on when the last useful log has left our shores. As for the latest breed of neocolonial overlords who dominate both logging and log trading, they hold us in deserved contempt for the lack of stewardship and inter-generational responsibility which we display. Even their logging truck drivers force Guyanese drivers to give way.

According to Amartya Sen, the Indian-born Cambridge economist who won the 1998 Nobel Prize for Economic Science, poverty is not only about economic deprivation. Rather it is defined and sustained by a sense of helplessness, and the marginalization of the poor. Sen's theory is borne out by the lack of organic linkages between the citizenry in Guyana - from the forest-dependent to the Stabroek Market pavement vendors - and the decision-making structures of the state. The parallel operations of regulatory agencies and project implementation units with overlapping mandates but lacking coordination among themselves, never mind with national constituencies, stifle the hope of improved governance. The Stabroek Market is a stone's throw away from City Hall and from the National Assembly, but it might as well be in the 'bush' or 'backdam.' These interest groups bump visually and tangibly into the other, yet lacking structural linking mechanisms, generally only interact in situations of confrontation. This is the enduring tragedy of Guyana.

The introduction of the IMF-required Structural Adjustment Programme (SAP) in Guyana in the late 1980s included opening up the forestry sector to Foreign Direct Investment (FDI). The government-expressed view at the time was that FDI would lead to an influx of capital in Guyana, expansion of local value-added industries, and an increase in a trained and skilled workforce, in short, economic development based on sustainable use of nature's bounty. However, in place of the envisaged forward development planning linked to in-country industrial processing, with pre-identified forest areas opened for open competitive bidding including the offering of premia for resources access rights, the forestry sector is now even more of an enclave sector than it was in 1991. The forestry sector has retrogressed in the past two decades, now reduced to supplying Guyana's prime timbers in log form, at the lowest prices globally for equivalent species, to China and India principally. As one commentator ruefully noted, it is as if the Guyana Sugar Corporation (Guysuco) were to revert to selling sugar cane instead of sugar.

This retrogression of the forestry industry into supplier of a primary commodity (prime hardwood logs) to India and China principally has been accompanied by monopolization of the best-stocked State Production Forests by four Asian companies through secret Foreign Direct Investment (FDI) agreements; the importation of Asian forest workers who continue to displace Guyanese forestry workers even when the foreigners have no more skill at using equipment than the Guyanese operators of bauxite mining equipment, and even after 15 years of in-country presence; and the starving of in-country downstream processors of wood supplies.

It is not predestination or a rule of nature that Guyana has to be poor. We have the timber resources which are being turned elsewhere into high-value products. We have had the policies since at least 1980 to say that is what we should be doing. I will explore in subsequent columns some reasons for why this logic seems to have no resonance at government level or for most national investors, while the same logic drives efficient and profitable industries in India and China.

On the occasion of Chinese New Year, the Guyana Chronicle headlined Ambassador Zhang Jungao's message as 'Bound to be another fruitful year' (Guyana Chronicle, February 18, 2007). The ambassador was looking out for China's interests, as he well should. We ignore Guyana's interests at our collective peril.

This column resumes last week's discussion of the trading in forest concessions in Guyana by FDI-benefiting (Foreign Direct Investment) companies, in disregard of the specific prohibitions set out in Guyana's forest law.

In September 2006 when Seapower Resources International Limited purchased 51 per cent equity interest in Jaling Forest Industries Inc. for a consideration of HK$154 million (US$19.8 million), the company also obtained an 'Option' to acquire 51 per cent of the shares in 'Garner,' a forest concession in Guyana, within five years.

'Garner,' like Bai Shan Lin, is another player on the logging-of-prime-timbers-for-export block. 'Garner,' is both forest concession holder and timber trader. For some years now, Garner has been in the business of shipping logs to the People's Republic of China, including bulletwood (Manilkara bidentata), which is both a protected (in law) and keystone species (a species on which many animal species depend ecologically). Garner's principal(s) have negotiated logging concession(s) under secret FDI arrangements. As reported in last week's Guyana and the Wider World, the 'President' of Bai Shan Lin stated that his company was "also in the process of acquiring its own forest concession" ('New Chinese forest company pledges to invest US$100M,' Stabroek News, February 9, 2007) http://www.stabroeknews.com/index.pl/article?id=56513688).

According to Seapower's 'definitions' (see below) Garner's State Forest Exploratory Permit (SFEP number 03/04) was rolled over into a Timber Sales Agreement (TSA 03/05) in less than a year. Incidentally this is a violation of SFEP legislation which mandates a three year exploratory lease (Article 7B (2) in the Forest Regulations). A Draft EIA was briefly available on the Environmental Protection Agency's website and contains one reference only to the company's principals: "Garner Forest Industries Inc. is a privately owned company operated and managed by its subsidiary company Karlam South American Timber (Guyana) Inc. along with the Board of Directors." There is no public evidence that due diligence on financial status, probity or good citizenship (which is required by the Guyana Forestry Commission's (GFC) own procedure for evaluating an application for a SFEP) was carried out on 'Garner' before the award of the TSA.

Garner = Jaling = Karlam. Guyana's State Production Forests are becoming consolidated under a small number of foreign ownerships via the pretence of awards to different companies. These concessions are then freely traded nationally and internationally, in disregard of specific clauses in the concession agreements which disallow such practices, and in violation of Guyana's forest law.

Garner is also discussed in Seapower's September 2006 Letter from the Board to its Shareholders. As part of its deal in acquiring 51 per cent equity in 'Jaling,' Seapower secured the 'Garner Forest Option Agreement' according to which "the Guarantor (Danny Chan) shall not and shall procure Garner not to conduct, carry out and undertake any business and other operations and activities of Garner, including but not limited to the exploratory activities and any logging and forest exploitation, operation and management within a period of five years from the Completion Date" (page 15).

In plain English, while a Timber Sales Agreement is premised on the understanding that its holder will sustainably log the concession to feed a downstream in-country operation which creates added value and jobs in the State of Guyana, Garner's principals (also the principals of 'Karlam' and 'Jaling' and perhaps other concessions) immediately entered into a separate agreement with Seapower to keep Garner's forest concession dormant in the interests of profits for Seapower and its shareholders.

Not only are logs being diverted from feeding industries in Guyana, they are also being under-priced in Guyana Customs data relative to Asian market prices, as mentioned several times during the last year in articles and letters published by Stabroek News. One Indian log trader said to a forestry consultant who was present at the off-loading of logs from Guyana: 'If the Guyanese are so stupid as to sell their prime hardwood logs at low prices, they deserve all the contempt we privately heap on them. Guyanese are so ignorant, it is beyond belief. They make us laugh."

Some relevant definitions from Seapower's Letter follow:

" 'Garner' - Garner Forest Industries Inc., a company incorporated in Guyana, South America, with limited liability."

" 'Garner Forest' - the forest, including but not limited to those granted under the State Forest Exploratory Permit dated 18 June 2004 and the Timber Sales Agreement [number 03/05] dated 11 June 2005 executed by Guyana Forestry Commission in favour of Garner, of an area approximately 92,737 hectares mainly located in the left bank of Mazaruni River, the right bank of Puruni River, and the left bank of Putareng River of Guyana."

" 'Garner Forest Option Agreement' - an option agreement dated 16 May 2006, entered into between the Company and Mr Danny Chan, pursuant to which the Guarantor has granted the Company a call option to purchase 51 percent of the shareholding of Garner at a nominal consideration of HK $1 which is exercisable by the Company within five years from the Completion Date, at the purchase price of HK $60 million [US $ 7.8 million]."

" 'Company' - Seapower Resources International Limited, a company incorporated in the Cayman Islands with limited liability, the Shares of which are listed on the main board of the Stock Exchange."

" 'Guarantor' or 'Mr Danny Chan' - Mr Danny Chan, father of Mr Peter Chan, is the chairman and director of the Target [Jaling Forest Industries Inc.] and the beneficial owner of 44.55 percent equity interest in the Target as at the Latest Practical Date."

" 'Option' - a call option granted by Mr Danny Chan to the Company at a consideration of HK $1 to purchase from Mr Danny Chan 2,550 ordinary shares of Garner, representing 51 percent of the issued shared capital of Garner at a total price of HK $60 million, equivalent to approximately HK $23,529 per Option Share."

Guyana's forests also underpinned the launch of the parent company of Barama Company Limited on the Hong Kong stock exchange in February 2007. Samling Global Limited raised US $280 million through an initial public offering (IPO) of about 25 per cent of the company on the Hong Kong stock exchange. Samling Global Limited, like Seapower in 2006, emphasized its forest holdings:

"It [Samling Global Limited] has gross forestry concession areas (natural forest land it leases from the government) of approximately 1.4 million ha in Malaysia and 1.6 million ha in Guyana. In addition, it has harvesting rights for a further 445,000 ha in Guyana…" ('Malaysian timber company on track for HK listing,' Financeasia.com, 15 February 2007, http://www.financeasia.com/article.aspx?CIaNID=45887).

That article effectively acknowledges that the Barama company is illegally renting forest harvesting concessions in Guyana - a further 445,000 ha. The Financeasia article also noted that, "The company does, however, purchase some of the timber it needs for its manufacturing business in China to reduce transport costs, among other things. Typically it feeds about half of its harvested timber into its own operations, while the rest is sold as logs. The split can be adjusted to make the most of demand and selling prices for different products at any given time" (ibid.).

During his presentation of the GFC's Discussion Paper on Log Export Policy on February 17, 2007, the Commissioner of Forests said that between 2003-2006, the GFC calculated that log exporters had earned US $48.6 million from log exports, and that this sum was adequate for re-tooling in Guyana. Other estimates suggest that this figure is a gross underestimate of real earnings through export of unprocessed logs, but the GFC is unwilling to allow independent investigation. Isn't it odd that an indebted government refuses opportunities for increasing its forest and customs revenues and for fulfilling its own forest, industrialization, competitiveness and revenue policies? But I am happy to applaud the GFC for its recent policy of increasing the minimum royalty charges, to stimulate more intensive logging per hectare.

From the various figures quoted above, there are evidently considerable sums of money sloshing around - but for Asian principals and shareholders, not for the Guyana exchequer or for Guyanese workers. By the way, who in Guyana can have missed the incessant advertisements in all three daily newspapers requesting the purchase of hardwood logs for processing in Guyana? What these advertisements do not say is that the offer price is way above the export prices declared to Customs in Georgetown. And have the regulatory agencies taken note that a number of these suppliers are delivering logs direct to a wharf - whence they too are bound for China? Inaction and lack of coordination on Guyana's part support the Chinese takeaway at firesale prices. 'Locking the stable door after the horse has fled' may well be the Guyana epitaph.