Barama denies overexploiting charges
By Chamanlall Naipaul
Guyana Chronicle
December 20, 2006
BARAMA Company Limited (BCL) is assuring that it is committed to its socio-economic responsibilities to Guyana, denying that it is overexploiting forest resources and not practicing sustainable forestry practices.
General Manager of the company, Mr. Girwar Lalaram, at a press conference yesterday at Cara Lodge Hotel on Quamina Street, Georgetown, reiterated his company’s commitment to value added production and sustainable logging operations.
The news conference was called against the background of several articles and letters in local newspapers accusing the company of malpractices in the forestry industry, Lalaram said.
“BCL believes it is an appropriate time to provide an update to the media and Guyanese public on its activities, given the current interest reflected in newspaper articles and letters,” he said.
Defending BCL’s achievements over the past 15 years in Guyana, the General Manager cited several accomplishments, including the establishment of a plywood factory at Land of Canaan, East Bank Demerara with 1,487 Guyanese employees, many of whom have benefited from overseas training.
He also noted the state of the art sawmill at Buck Hall, Essequibo Coast, accompanied by a veneer plant, kiln drying facilities and finishing plant and a three-megawatt co-generation plant and dry dock.
He stressed that BCL’s workforce is 99% Guyanese and the company is committed to having its workforce predominantly Guyanese.
Lalaram explained that the US$35M Buck Hall sawmill which can produce 3,000 cubic metres of sawn lumber per month, is currently producing only 1,200 cubic metres due to a shortage of skilled labour, but the company is optimistic that in the new year production would be upped to its maximum.
There has been a delay in getting the veneer plant into operation because of difficulties in acquiring the appropriate technology which will provide the efficiency to make production economically feasible, he said, adding that volume of production is essential in such an operation and a Chinese technology which was explored proved to be inadequate in peeling and preparing Guyana’s hardwood.
However, he reported that BCL has been able to acquire an appropriate Japanese technology which will provide the efficiency needed for economic viability.
Lalaram said that in kiln drying, it is uneconomical to use diesel for power generation, and as such the company will be establishing a three-megawatt co-generation plant for this purpose.
He also reported that some 150 workers are building the dry dock which is expected to be completed within the first quarter of next year.
“The timeframe for the installation of all components at Buck Hall is projected as the third quarter of 2007. Factory buildings, work sheds and buildings for accommodating employees are all in place. In addition to the significant labour force that will be employed when the Buck Hall facilities are in place. BCL will undertake to train 35 Guyanese in marine welding,” Lalaram said.
On the issue of sustainable forestry management, the General Manager noted that BCL boasts the largest tract of tropical natural forest -- 570,000 hectares -- certified by the Forest Stewardship Council (FSC).
RECORD-SETTING ACCOMPLISHMENT
The FSC is an independent non-profit organisation that provides standard setting, trademark assurance and accreditation services to companies and organisations interested in responsible forestry.
According to Lalaram, the World Wildlife Fund (WWF) calls this “a record-setting accomplishment,” noting that “with this milestone, Barama not only serves as a catalyst for improved forest management systems in the Guianas but ensures that the fragile tropical ecosystem is effectively and efficiently utilised by the company so that the national patrimony is protected for the benefit of present and future generations.”
He said that to gain access to markets in North America and Europe, it is increasingly becoming necessary to have certified products as organisations such as Greenpeace and other non-governmental organisations are putting pressure to ensure that purchases of forest products originate from certified forests.
Lalaram said an international audit team was here last month to assess BCL’s compliance with FSC standards which resulted in the company maintaining its certification.
“The effort and resources put into the certification process underscore BCL’s commitment to the rigorous international standards set by the FSC, and to sound social and environmental practices. The FSC certification enables BCL to access markets in North America and Europe, which demand forest products from well managed forests, and guarantees that BCL is fulfilling its social and economic responsibilities to Guyana,” he asserted.
BCL, he said, is also working towards Chain of Custody Certification, a system which connects responsible forest management practices and products with consumers, and FSC Chain cf Custody Certification will enable BCL to demonstrate its commitment to environmentally and socially responsible forest management by labelling its products with FSC trademarks.
Asked how compliant are the company’s plants with environmental pollution requirements, Lalaram said officials of the Environmental Protection Agency (EPA) visit regularly and any recommendations made are complied with.
He added that BCL complies with Occupational Health and Safety regulations, recalling that when the company began its operations there were many serious industrial accidents.
Responding to criticisms that BCL has decreased its production of plywood and increased exportation of logs, Lalaram explained that due to technical problems, including acquiring spares for equipment involved in the production of plywood, output was adversely affected.
PLYWOOD PRICES RISING
However, he said the technical problems have been overcome and the company will be seeking to up its production to 7,500 cubic metres per month because prices for plywood are rising.
He indicated too that production has been affected by a high rate of absenteeism by workers which averages between 15% and 18%, but pointed out it has not been the only company in the forestry sector which is affected by the problem.
Asked if conditions of work and remuneration levels are contributing to the high level of absenteeism, Lalram disagreed with this contention, offering that BCL offers a comprehensive medical insurance package for workers and their families, as well as provision of free transportation of workers which costs the company some $6M per month.
On the issue of exports of logs, he said low density woods are used to produce plywood and none of the logs from these woods are exported.
He noted too that it is difficult to get buyers for sawn lumber, citing the example of India, which is the largest purchaser of logs from the company, where importation of logs attracts a 9% duty while sawn lumber attracts a 35% duty.
As such buyers prefer to import logs, thus making it difficult to get buyers for the finished product, he said.
However, Lalaram told this newspaper that he has been in discussions with the Minister of Agriculture to see if the government could forge a bilateral agreement with its Indian counterpart to pave the way for both products to attract a 9% duty.
He also pointed out that BCL has not been making any significant profits over the past 15 years, but the company is adopting a more long-term approach whereby it seeks to optimise investments so as to gain significant profits in the future.
Dealing with transfer pricing, which newspaper letters accused the company of practicing, Lalaram asserted that from what has been written, it clearly shows that the writers do not understand the concept, which according to him involves a company selling a product at cost price to a subsidiary.
He denied his company is involved in such transactions.