Understanding why means taking into account the country\u2019s recent political history and unique ecology.<\/p>\n
Global Financial Integrity, a US-based non-profit, found Guyana among the top 25 of 82 countries surveyed from 2008 to 2012 for illicit financial flows (IFF), estimated at 17.3% of its GDP and 16.4% of its total trade.<\/p>\n
Over that period, Guyana\u2019s GDP per capita was US$2,866 while its IFF per capita was US$495, placing it at number five in terms of IFF relative to population. It was a regional outlier, being the only Caribbean country and one of two South American countries in the\u00a0top 25<\/a>.<\/p>\n Guyana has abundant tropical forests with unique varieties of timber including greenheart (Chlorocardium rodiei<\/em>), darina (Hymenolobium flavum<\/em>), purpleheart (Peltogyne venosa<\/em>) and wamara (Swartzia leiocalycina<\/em>), which are highly sought-after on the Chinese market.<\/p>\n Aside from logging and log trading, Chinese companies are also prominent in construction, retail and other commercial sectors.\u00a0 BSL provides one illustration of how the new government is not enforcing the rules to ensure the fair award of contracts or the sustainable management of resources.<\/p>\n National forest policy and the voluntary codes of practice for timber harvesting require the\u00a0Guyana Forestry Commission<\/a>\u00a0(GFC)\u00a0<\/em>to set species-specific harvest rates so as to conserve viable populations of commercially desirable and ecologically important trees and ensure sustainable timber production. This has not been done.<\/p>\n There is no regard for the provision of the next crop<\/p><\/blockquote>\n On the naturally infertile soils of Guyana, some of these trees grow in single-species clumps or groves known locally as \u2018reefs\u2019. These are very susceptible to over-cutting unless rules on maintaining an adequate distance between tree stumps are carefully observed. There should be no heavy felling in these clumps.<\/p>\n Guyana\u2019s tropical timber<\/a>\u00a0is in high demand from factories in China of BSL\u2019s associates and other buyers, owing to its hardness, heaviness, dimensional stability (it does not shrink or swell) and dark colour, desirable for luxury furniture and impact-resistant wood floors.<\/p>\n These timbers are also slow-growing, so conservative harvesting should be the norm. But\u00a0in practice, BSL and the tree fellers from whom it purchases logs have been cutting smaller and smaller trees, as log diameters recorded for tax purposes show. There is no regard for the provision of the next crop. This means the next harvest cannot be felled for many decades, perhaps hundreds of years, which entirely contradicts the policies and rules for sustainable forest management.<\/p>\n The GFC has been aware of the importance of preventing the unsustainable felling of the most profitable of Guyana\u2019s more than 1,000 species of tree since the 1950s.\u00a0The huge profits that can accrue from exporting top timbers as logs to China enable BSL to pay its way past official rules. Penalties for breaking the rules provide scant disincentive since they are too small and are not always enforced in the case of large and politically-connected companies.<\/p>\n The Guyanese government has been and is accused of acting in collusion with BSL, allowing the company to contravene local laws and get around\u00a0logging quotas<\/a>\u00a0by purchasing from small loggers associations (SLAs) and exporting under their names. Local media have reported a number of cases of alleged wrongdoing.<\/p>\n In late March 2016, Joseph Harmon, minister of state in the office of Guyana\u2019s president \u2013de facto<\/em>\u00a0the country\u2019s second most powerful leader \u2013 went on an official visit to China accompanied by \u201cbusiness advisor\u201d B.K. Tiwari, independent press reported. Tiwari is a controversial businessman who had had close links to the previous PPP government, and is embroiled in a number of court cases with Bai Shan Lin over\u00a0illegal land deals<\/a>.<\/p>\n Following a public outcry, and before Harmon had returned to Guyana, president David Granger publicly rescinded the \u201cbusiness advisor\u201d appointment that Harmon had apparently conferred on Tiwari\u00a0earlier in 2016.<\/p>\n Shortly after the affair, Harmon reportedly told\u00a0Guyana Revenue Authority<\/a>\u00a0(GRA) officials to abort an ongoing operation aimed at repossessing three luxury vehicles owned by BSL, on account of non-payment of taxes. Again, presidential intervention quickly followed, with the assurance that the GRA would operate\u00a0without political interference<\/a>.<\/p>\n \u201cThe GRA is going to carry out its duties and its responsibilities, and it has recommitted to doing so without fear or favour,\u201d Rawle Lucas, chairman of the GRA\u00a0said<\/a>\u00a0in response to the allegations, adding; \u201cwe are all about restoring confidence in this agency and ensuring that mistakes of the past are not repeated.\u201d<\/p>\n A\u00a0photograph<\/a>\u00a0also appeared in\u00a0Kaieteur News<\/em>, one of Guyana\u2019s two independent newspapers,\u00a0 apparently taken on 27 March during the China trip, of Harmon in a private jet flanked by Chu Wenze and Chu Hongbo, of BSL, and Su Zhirong, of Rong-An Inc., the second biggest Chinese logger and log trader in Guyana.<\/p>\n \u201cThe picture by itself, of course, is a\u00a0very uncomfortable<\/a>one to look at,\u201d admitted Raphael Trotman, the minister for forestry. Harmon finally issued\u00a0a statement<\/a>\u00a0which claimed\u00a0inter alia<\/em>\u00a0that the Chinese Ambassador to Guyana had arranged the private jet trip for him to visit\u00a0Long Jiang Forestry Industries Group<\/a>, a company based in Heilongjiang Province, in northeastern China.<\/p>\n The Long Jiang group is a state-owned company that had acquired 55% of the shares in Bai Shan Lin and intends to\u00a0fully take over<\/a>\u00a0the company in 2016. Any such acquisition of BSL\u2019s logging concessions would require prior presidential approval under Guyanese law. There is no evidence that this has been granted.<\/p>\n BSL has misused its FDI concessions from the Guyana government to expand its portfolio of business interests. In 2007 BSL declared its intention to invest US$100 million in value-added wood processing at two locations.\u00a0 Nine years later, there is still no wood-processing factory.<\/p>\n BSL has since acquired interests in gold mining, transporting sand and stone, barge construction for transport of logs and quarried stone, selling duty-free imported steel, real estate, construction of residential housing, a government ministry car park and a shopping mall.<\/p>\n In 2007, BSL said it had rights to log\u00a0400,000 hectares<\/a>\u00a0of forest in Guyana. By November 2012, it claimed to control\u00a0950,000 <\/a>hectares of forest although the GFC only counted\u00a0627,000 hectares<\/a>. Independent calculations showed that the figure was closer to\u00a01.5 million hectares<\/a>.<\/p>\n Many of the 200 vehicles imported duty-free for use in BSL\u2019s wood processing factory were actually deployed in BSL\u2019s other businesses. The use of duty-free fuel also intended originally for logging gives the BSL group of some 19 subsidiary companies in Guyana an unbeatable cost advantage over local enterprises which do not enjoy such\u00a0FDI benefits<\/a>.<\/p>\n Copies of some of the 2012-2015 requests by BSL for duty-free imports and tax relief claims were leaked to the independent newspaper\u00a0Kaieteur News<\/em>, with some of the more amazing requests extracted and\u00a0published<\/a>. These\u00a0included<\/a>: 1 billion tonnes of cement, 1 billion metres of electric wire, 2 billion pails of paint and 100,000 tonnes of steel \u2013 all of which were approved by the then minister of finance. Each application referred to BSL\u2019s intention to construct the wood processing facility, with only rare queries from the Guyanese about the lack of any progress since 2007.<\/p>\n Guyana should apply consistently, transparently and without any bias the approved national policies and laws and forest harvesting codes of practice.<\/p><\/blockquote>\n Chu Wenze, BSL\u2019s CEO, was elected in November 2012 as one of four vice presidents of the industry association, the China Timber and Wood Products Distribution Association (CTWPDA). Among other activities, the association hosts events at which wood trade representatives rub shoulders with government officials. The CTWPDA\u00a0 rejected a report by the\u00a0Environmental Investigation Agency<\/a>\u00a0on the trade in illegal timber entitled\u00a0Appetite for destruction<\/em>.<\/p>\n The Guyana government\u2019s decision in the matter of the full takeover of BSL by Long Jiang Forestry Industries Group is seen as a test case as to whether the Guyana government will ensure transparency and compliance with legal requirements.<\/p>\n China and Guyana signed a bilateral trade agreement in 2003, which calls for respect for Guyana\u2019s laws. Moreover, any FDI agreements should follow the guidelines set out in the\u00a0latest report<\/a>\u00a0of the\u00a0Organisation of Economic Cooperation and Development<\/a>\u00a0(OECD) and the\u00a0guidelines<\/a>\u00a0produced by the\u00a0State Forestry Administration<\/a>\u00a0and\u00a0Ministry of Commerce in Beijing<\/a>.<\/p>\n Guyana should apply consistently, transparently and without any bias the approved national policies and laws and forest harvesting codes of practice.\u00a0 For this to happen in the forestry sector, it will be necessary to put an end to discretionary practices and the tradition of political interference in order to bring BSL and other logging companies into compliance.<\/p>\nHeavy selective logging<\/h2>\n
Connections<\/h2>\n
![\"\"](\"https:\/\/dialogue.earth\/content\/uploads\/2016\/09\/joseph-harmon.jpg\")
BSL\u2019s interests<\/h2>\n
Looking ahead<\/h2>\n