…says issue of State lands to VHPI done transparently
MINISTER of Agriculture Robert Persaud has debunked assertions that the forest concessions made available to an Indian company have been made in a shroud of secrecy and said that the company is getting no sweet deals, unlike what Barama Company Limited now enjoys.
He spoke during a press briefing held at the Guyana Forestry Commission complex in Kingston yesterday. “Vaitarna Holdings Private Inc (VHPI), through a transparent process, was issued a State Forest Exploratory Permit, previously issued to a U.S. company, Simon and Shock Inc (SSI), and also VHPI was issued a Timber Sales Agreement that was previously issued to a Caribbean company, Caribbean Resources Limited. What VHPI got through this process was a re-allocation of the SFEP which was suspended and the TSA which was repossessed,” the Minister said.
“These are not new concessions or new areas. The issue with SSI is that this company, through a business arrangement was approved through the necessary due diligence carried out by the GFC, among others, and they themselves bought out SSI. Once that transaction was approved, they then got access to the SFEP,” the Minister said.
He said that CRL was part of the wider Clico grouping “and we all knew that problem that developed with Clico.”
“Contrary to what was reported, everyone knew that the TSA was repossessed and would be made available to other [interested] stakeholders,” the Minister said.
“Even before the concession leased to CRL was repossessed, GFC had indicated to both CRL management and other concession holders that this concession would be repossessed unless a suitable joint venture or complete take-over was affected by some company. Unfortunately, no company took up the offer. VHPI, after its takeover of SSI, then approached the Government of Guyana and GFC, applying for the concession to be re-allocated to it. Note that it was already public knowledge that the concession was repossessed,” the Minister said.
According to the Minister, VHPI paid US$3M to access the concession, which he said is less than 25 percent of Barama Company Limited’s leased concession. The Minister said that this money was used by the government to meet the Clico’s liabilities of some of its policyholders.
He said that VHPI would receive none of the tax holidays that Barama is currently enjoying. He said that while Barama has to pay annual acreage fees of $800,000 for access to 1.6 M hectares, VHPI has to pay $81.00 per hectare or $28M to access 345, 961 hectares. “This means that if VHPI had Barama’s acreage, they would have paid in excess of $120M to the GFC,” the Minister said.

He said that Barama enjoys a preferential sliding scale rate on royalties, moving from $5.00 per cubic foot to $25.00 in 2011, “VHPI has committed to paying the royalty as per any other company.”

He noted that Barama paid, until 2009, export commission only on greenheart logs. “VHPI will export logs only in accordance with the national log export policy. These are only some of the examples which serve to dispute the statement of VHPI being another Barama,” he said.
“Firstly, the company has firstly to do a forest inventory, present a business plan that incorporates the inventory amongst other requirements, and conduct an Environmental and Social Impact Assessment (ESIA). In doing the ESIA, there will be at least two public opportunities for persons to indicate their support/ objection to the granting of logging rights to the company. Also, this process is led by the Environmental Protection Agency (EPA) and the Environmental Assessment Board (EAB),” the minister said.

He said when this documentation is provided to the satisfaction of the authorities, only then will approval for logging be given.

The minister said that in addition to log exports in accordance with National Log Export Policy, the company would engage in value-added activities. “The GFC has a policy of added value forestry activities and would have rejected any application from the company if it was solely interested in log exports,” he said. “Also the National Forest Policy (currently under revision) does not say no to log exports, rather, it encourages and promotes value adding,” he said.
“Regarding due diligence checks, the public is assured that a comprehensive due diligence was done; this due diligence has proven that the company has the necessary expertise to undertake the various tasks that are required; it also established that the company has sufficient financial resources, and has a track record of carrying out harvesting and processing operation efficiently,” he said.