BARAMA Company Limited has announced that it will not be seeking to renew or extend its Forest Concession Agreement with the Government of Guyana.In a statement to the media, the company said its Concession Agreement expired on October 15 and since then government has been informed of that status. “The company will also not be seeking the renewal of extension of the Investment Agreement that mainly relates to the Forest Concession which expired on Saturday, 15th October, 2016.”
However, the company said it will be continuing all of its other projects here inclusive of veneering, plywood manufacturing and sawmilling. “Barama very much regrets having to make the decision to close our Forest Concession operations after having, over the past 25 years, invested approximately $45B in the development of Guyana’s forestry industry,” the statement added.
Representatives of the company approached government for the first time on September 2, 2015, with a proposal for both the renewal of the Investment and Forest Concession Agreements. Since then, the company has been continuing discussions with government on the agreements. The company said too that earlier this year, by virtue of correspondence with government, it had advised that economic conditions influencing the company’s continued investment in the country’s forest industry were not encouraging.
“Barama has , as a consequence, now regrettably concluded that it is no longer viable for the company to continue its forestry operations,” but looks forward to engaging government to explore the continuation of its other operations so as to sustain value-added and job-creation potential here as well as to determine a new Investment Agreement. The company thanked its shareholders for the support given to it over the years.
Meanwhile, last week, Minister of Natural Resources, Raphael Trotman, told reporters at a press conference that Barama’s contract is up for renewal and noted that the two sides have been meeting over the past 10 months to craft a new contract. He said a draft has been shared with the company for its perusal, so that continued negotiations can continue and an agreement made by year-end.
In September, The Ministry of Natural Resources had refuted statements made by trade unionist Lincoln Lewis that Barama had laid off 70 workers as a result of the non-renewal of their contracts.
The Stabroek Business supplement in its Friday, September 2, 2016 edition,had said that with the impending expiration of Barama’s five-year contract this month, and no indication of renewal of same, hundreds of local workers of the company are likely to be laid off. But the Ministry of Natural Resources said the information published by the Stabroek News was inaccurate. In a statement to the media, the ministry said, “The facts are that the Barama Co Ltd has been continuously informing the Ministry of Natural Resources and the Guyana Forestry Commission about its loss of market share in Asia which is affecting its profitability, and challenges experienced by bad weather conditions. The Ministry of Natural Resources rejects any assertion that the loss of jobs is tied to the renewal of Barama’s contract and calls on the company to set the record straight.”
Additionally, the Ministry of Natural Resources said that at the request of Barama for its contract to be renewed with the government last year, Cabinet gave its ‘no objection’ to continuing the relationship with the logging company, but called for the establishment of a task force to examine the request.
“This task force was deemed necessary, given the rapacious activities of some foreign companies operating in the forests of Guyana, and some not-so- positive observations that had been expressed about Barama in particular.”
The task force comprised representatives of the Ministries of Business, Natural Resources, Public Infrastructure and Indigenous Peoples’ Affairs, the Guyana Revenue Authority, the Guyana Forestry Commission and a legal consultant. The report of the task force was to be submitted to Cabinet for review and approval on September 30. It is unclear whether the report was submitted. Attempts to contact both Minister Trotman and Minister within the Ministry of Natural Resources, Simona Broomes, to comment on Barama’s announcement proved futile.