-after company’s decision against renewing agreement
With Barama Company Limited not seeking a renewal of its forest concession agreement, the Ministry of Natural Resources (MNR) yesterday said it would be embarking on an assessment of the 25-year-old investment to citizens.
In a statement issued yesterday, the ministry said Barama’s decision provides an opportunity for the government to partake in a “stocktaking exercise” where it can objectively assess the value of the remaining forest through its contribution to the ecosystem, while also evaluating the value of the past 25 years to the Guyanese citizens. “Such an exercise would be pivotal in decision-making as it relates to economic empowerment and development of sustainable livelihoods of present and future generations. Following the review, the Guyana Forestry Commission will shortly be making a determination about the future allocation of the Barama concession,” the statement said.
The statement came in wake of Barama’s surprise announcement that it would not renew the agreement, which had lasted 25 years, although it said it would continue its other projects here, inclusive of veneering, plywood manufacturing and sawmilling.
“Barama very much regrets having to take the decision to close our forest concession operations after having, over the past 25 years, invested approximately $45B in the development of Guyana’s forest industry,” the company said in an ad published yesterday.
The ministry noted that while discussions for the renewal had started over a year ago and Barama was provided with a draft agreement for review and negotiations, the company communicated its decision to not renew since it had concluded that it was no longer viable to continue in the forestry operations in view of prevailing global prices.
The statement further pointed out that the ministry has mandated the Forestry Commission to work along with Barama to ensure that there is a smooth closure of all concession-related activities within the allotted period. The Commission will also have to ensure that all labour related issues are fully addressed, in keeping with the law and regulations.
The government thanked Barama for its involvement over the past 25 years and added that it will be engaging it in further discussions on its stated interest in the continuation of the added value activities.
As it currently stands, with the company downscaling, more workers are expected to be laid off in the coming weeks, although it is unclear how many.
Speaking to Stabroek News yesterday, a few staffers expressed their surprise at the company’s announcement. They explained that from what they were “hearing around the grapevine,” they were expecting a positive response from the investors.
Barama’s announcement comes after weeks of mixed signals about whether the deal would be extended.
Barama set up here in 1991 in a controversial deal which gave South Korean and Malaysian investors control of a lowland, mixed tropical forest concession of approximately 1.6 million hectares in the Northwest region of Guyana.
It had had a chequered history with the authorities, facing fines and questions about limited value added activities in recent years.
At its height, it employed over a thousand workers but numbers have fallen significantly.
The company had reported last month that 180 workers had been retrenched over a threemonth period and its General Manager Mohindra Chand had said Barama was forced to let the workers go because of the market slowdown and the fact that government was not moving quickly towards renewing the company’s contract.
The Ministry of Natural Resources has said that in 2015, at the request of Barama for a continuation of its contract, Cabinet gave its ‘no objection’ to the continuing of the arrangement but recommended the convening of a Task Force to examine the request. This Task Force was seen as necessary given the “rapacious activities” of some foreign companies operating in the forests of Guyana, and “some not so positive observations that had been expressed about Barama in particular,” the ministry had said in a statement.
The statement said that the Task Force met on several occasions and visited Barama’s operations at Buck Hall, Essequibo, following which the legal consultant began reviewing the existing contract, forest concessions, and tax incentives previously granted to the company, while other members evaluated workers’ rights, value-added operations and environmental management practices, among other things.