Forestry body launches probe into Mazaharally’s operations
By Gitanjali Singh
Stabroek News
August 20, 2002
The Guyana Forestry Commission (GFC) has launched an investigation into the forest operations of A Mazaharally and Sons Ltd (AMS).
Last Friday, the GFC issued AMS with a cease work order as it investigated alleged under-invoicing of forest exports by the firm, but revoked the order later that day to save workers’ jobs.
Commissioner of Forestry, James Singh, said the cease order was lifted as a lot of employees would have been out of jobs otherwise. He would not be drawn on the rationale for issuing a cease order and revoking it almost immediately.
However, a source said yesterday that Head of the Forest Products Association (FPA), John Willems, informed the company on Friday that the cease order was lifted by Head of the Presidential Secretariat, Dr Roger Luncheon and Minister with responsibility for Forestry, Satyadeow Sawh. The source said the company called Singh who confirmed that he had a meeting with the minister and Luncheon and it was agreed to lift the cease order.
The decision to slap a cease order on AMS came in the midst of the GFC’s investigation of alleged illegal exports of Mora Sleepers by the company. It had demanded information on the firm’s exports of sleepers between 1998 and 2002 by last Monday.
An invoice dated August 8 and a customs declaration form dated August 9 were sent to the commission for approval of the export of 960 pieces of sawn Mora railway sleepers at prices, which seemed to be below value. The quantity was also believed to have been more than stated on the invoiced. Before the GFC could have verified the quantity on board the ship and the prices being quoted to give approval for the shipment, it was confronted with the bill of lading, which is issued when a shipment leaves Guyana. No royalty was paid on the exports and as is required, the GFC’s approval was not obtained before the sleepers left the country.
Singh yesterday said he was not in a position to say how much royalty had escaped the government’s coffers as a result of the company’s actions, but he expects the investigations to wrap up by the end of the month and to give a good idea of the revenue loss involved. He said that his officers were currently verifying the production records of the company and would be doing stump investigations. He said contact has been made with the buyers overseas, but would not say if the UK customs had been contacted for assistance with the declared invoices at that end.
Yacoob Ally, managing director of AMS is abroad and his production manager, Mohamed Hassim said he was in the dark as far as the investigation went. However, subsequently one of the company’s officers contacted Stabroek News to put forward the company’s side, including a response to Singh’s initial queries.
Singh had on August 2, written to Ally informing him that it was drawn to the attention of the GFC that the company has been exporting Mora Sleepers on a regular basis.
“Our records at the GFC do not reflect any such exports. Information received from officers in the Essequibo region indicates that produce is regularly loaded to go to CRL wharf, with explanation that the documentation would be sent to the GFC. Investigations at CRL reveal, however, that no sleepers have been sent to that wharf,” Singh’s letter said.
The commissioner demanded in face of this, details of all Mora sleepers exported by the firm between 1998/02 before or on August 12.
On August 12, Singh received a faxed response from the company which said that it was exploring the possibility of a market for Mora Sleepers in the UK with a few flat racks but the experience was not a happy one as the sleepers were detained for want of forest certification and a substantial loss was endured.
“However, as a result of this experience, we are again exploring the possibility of exporting Mora sleepers as a means of keeping our nose above water at this time of economic crisis in the timber industry and the economy as a whole.”
It said that officers no longer in the employ of the firm supervised the details of shipment of Mora sleepers, but the firm was investigating the extent to which there could be discrepancies in its records.
The invoice, which the GFC received some time after August 9 of this year, was from Mazaharally to Horwich Castings Ltd of the UK for 75 BM of sawn Mora Sleepers (5x10x18) and 33 BM of 5x10x8. The Free on Board (FOB) price per BM quoted in the invoice was US21 cents and US33 cents, with the more expensive sleeper being quoted at a cheaper price.
Forestry sources said yesterday that the selling price per BM is in the vicinity of US55 cents to US70 cents per BM and the price quoted in the invoice was even below cost of production and makes no sense.
The source said by the time GFC began to probe the shipment for the UK, it had already left Guyana without any royalties being paid or the GFC verifying the price and quantity being exported, a breach of the GFC’s regulations.
The commission issued a statement yesterday on the issue saying it has launched investigations into the alleged illegal export of forest products by AMS. The statement refers to the evidence of sleepers being sent to the UK without its permission or payment of royalties.
“It is an extremely serious matter since in effect, it is defrauding the state and people of Guyana of revenues from a national resource,” the statement said.
The statement said that as such the GFC has launched a detailed investigation into all of the company’s forest operations and a multi-agency task force including the Guyana Revenue Authority, the Auditor General’s chambers and the Attorney General’s chambers was looking into the issue. It also said Luncheon and Sawh have been briefed on the matter.