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Illegal loggers and high fees affecting investment in forestry sector

Illegal loggers and high fees affecting investment in forestry sector

Dear Editor,

IT comes as no surprise that the Guyana Forestry Commission (GFC), a semi-autonomous Government Agency, with the oversight mandate to regulate the sustainable harvesting of one of our most valuable natural resources, had to be bailed out from the verge of bankruptcy by the newly-formed government.

While the GFC has been experiencing financial difficulties for a few years now, two of the main contributing factors to its many problems are: the ineffective implementation of certain aspects of the forestry regulations, and the enormity of its fees structure, both of which hinder sectorial investment.

According to a published article titled: “Forestry Commission struggling to pay staffers” in the Kaieteur News on April 13, 2019, “staffers claim that when they find illegal operations they are told to stand down, and there are likely no payments of the hefty fines, money that is needed to pay staffers” – an indisputable statement.

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.

Now, the impact illegal logging has on the sector should never be taken lightly. For years, this problem has plagued the sector, and although it was highlighted as a major sectorial issue, it never garnered the attention and action of the administration; all the while, most concession holders continue to lose stock in their forest-block-inventory.

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.

Operating in the forestry sector is by no means easy. There is the constant need to conform to onerous regulatory controls against the backdrop of intensive capital investments and volatile markets. But the enormity of the fees structure in place for certain category of operators is by far 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.

Indeed, 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.

Yours faithfully,
Capt. Ahamad Mazahar Ally
Director for AMSL

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