Illegal loggers, exorbitant fees affecting investment in forestry sector – operator

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Amid revelations that the Guyana Forestry Commission (GFC) is trapped in serious debts and was operating on a deficit, one operator has linked this current state of the semi-autonomous agency to the vast level of illegal logging which transpires under its nose, without any repercussions or imposed penalties to curtail such.

Director for AMSL, Ahamad Mazahar Ally on Saturday said that Guyana faces an excessive loss of revenue when illegal logging cloud the forest reserves. This has been coupled with dwindling investments by larger companies, limiting income streams for the entity. In a letter to the editor, Ally noted that should the GFC seek to remove itself from this calamitous state, serious actions must unfold to clamp down on such activities and the tariffs which create a disadvantage to the legal operators must be restructured.

“There is significant loss of revenue through the pilfering of forest resources coupled with investment shrinkage such as, in the case of Barama and other large companies. However, for the Forestry Commission to dig itself out of debt, it needs to clamp down on illegal logging and restructure its plethora of burdensome fees that is creating an unfair advantage. These changes will raise more revenues, attract more investments, and contribute to the long-term economic success of the forestry sector,” the director contended.

The Guyana Forestry Commission

Ally penned that the need for a bailout from the new Administration came as no surprise, since the Commission suffered from ineffective implementation of forestry regulations and exorbitant fees – both of which hindered sectorial investment within the past few years. He pointed to information that was publicised in the media, which showed that staffers are told to “stand down” when they uncover illegal operations. This issue, he said, should not be taken lightly.

“Illegal loggers continue to enjoy a free pass, while legal concession holders bear the burden of hefty regulatory costs to set up and maintain their operations in accordance with the various categories of agreements with the Forestry Commission. These concession raiders consist of known individuals and rogue companies who conspire to manipulate and cheat the system to its disadvantage.”

Throughout the years when these activities were unfolded, it was highlighted that the Granger-led Administration never paid heed, despite being labelled as a major issue.

“Further, forest raiders take advantage of loopholes in the system. Although reports are made of illegal activities when caught by concession holders during routine boundary surveillance, the illegal loggers are operating with impunity. Not to mention, the unsustainable and destructive manner they use in harvesting logs, for example, the cutting down of small-sized trees for logs along with endangered species of trees, thereby destroying the environment. Eventually, their loot makes its way to the open market selling at lower rates than legal concession holders, and the cycle continues,” he detailed.

At present, there is the constant need to conform to onerous regulatory controls against the backdrop of intensive capital investments and volatile markets while the enormity of the fee structure for certain categories of operators is one of the biggest hurdles.

“Because of this, illegal loggers take advantage of the situation and undermine the highly regulated concessionaires. In other words, certain categories of operators incur high cost of production and even pay for the lost logs through high fixed acreage fees and royalties, while having to compete against their looters. The playing field is uneven thus leading to the decimation of investment and revenue stream in the forestry sector,” the operator added.

In early August, Parliamentary Affairs and Governance Minister, Gail Teixeira confirmed that the GFC was left in a state of bankruptcy, after just five years under the APNU/AFC rule. The Minister related that when the People’s Progressive Party/Civic (PPP/C) had demitted office in 2015, the Commission had over $4 billion in its coffers. Now, the agency does not even have sufficient funds to pay salaries and had owed money to utility companies.

The Minister had also questioned how the agency has been completely drained, since it was garnering significant revenues at the end of each year.

As a result of the financial state of the entity, President Irfaan Ali approved $350 million to bail out the Commission. According to Government, the money is to pay salaries to staff and utility services. It noted that the new Administration is currently saddled with the burden of bailing out the Commission due to the mismanagement of the sector under the previous Administration.