64607 LAW COMPLIANCE AND PREVENTION AND CONTROL OF ILLEGAL ACTIVITIES IN THE FOREST SECTOR IN GUYANA Preliminary Report Prepared for the World Bank Gary Clarke October 2006 The World Bank Washington, D.C. © 2005 The International Bank for Reconstruction and Development/The World Bank 1818 H Street, NW Washington, DC 20433 Telephone: 202-473-1000 Internet: www.worldbank.org/rural E-mail: ard@worldbank.org All rights reserved. The findings, interpretations, and conclusions expressed herein are those of the author(s) and do not necessarily reflect the views of the Board of Executive Directors of the World Bank or the governments they represent. The World Bank does not guarantee the accuracy of the data included in this work. The boundaries, colors, denominations, and other information shown on any map in this work do not imply any judgment on the part of the World Bank concerning the legal status of any territory or the endorsement or acceptance of such boundaries. Rights and Permissions The material in this work is copyrighted. Copying and/or transmitting portions or all of this work without permission may be a violation of applicable law. The World Bank encourages dissemination of its work and will normally grant permission promptly. For permission to photocopy or reprint any part of this work, please send a request with complete information to the Copyright Clearance Center, Inc., 222 Rosewood Drive, Danvers, MA 01923, USA, telephone 978-750-8400, fax 978-750-4470, www.copyright.com. All other queries on rights and licenses, including subsidiary rights, should be addressed to the Office of the Publisher, World Bank, 1818 H Street NW, Washington, DC 20433, USA, fax 202-522-2422, e-mail pubrights@worldbank.org. This analysis has been completed with funding provided in part by the European Union and the Bank-Netherlands Partnership Program Contents iii Acknowledgments vii Acronyms and Abbreviations ix 1. Introduction 1 1.1 Country Situation 1 1.2 Forest Administration 1 1.3 Production 2 1.4 Socioeconomic Situation 4 1.5 Policies and Initiative to Control Illegal Logging 6 1.5.1 Log tracking system 6 1.5.2 Regularization of chainsaw logging and community associations 7 1.5.3 Compliance with international agreements 7 1.6 Current Status and Trends in Selected Governance Indicators 7 1.6.1 Transparency International Corruption Index 7 1.6.2 Sustainable Forest Management Indicators 7 1.6.3 UN Convention against Corruption 7 1.6.4 Inter-American Convention against Corruption (Organization of American States) 7 1.7 Ongoing Major Programs to Address Governance in Sectors Relevant to Forestry, including Those Sponsored by Government and Other Stakeholders 8 2. Status of Illegal Logging and Other Aspects of Forest Sector Legal Compliance 9 2.1 Definitions of Illegal Logging 9 2.1.1 Preamble 9 2.1.2 Guyana Forestry Commission 9 2.2 Compatibility of the National Definition with the World Bank Indicative List of Illegal Logging Practices 9 2.3 Types of Illegal Logging 10 iv 2.4 Volume of Illegal Logging 11 2.5 Border and Trade Issues 13 2.6 Impact on Government Finances 13 2.7 Impact on indigenous Communities, Rural Poor, and the Environment 13 2.7.1 Amerindians and logging 13 2.7.2 Other rural communities 14 2.7.3 Conflicts resulting from forest resources theft or encroachment within Amerindian reservations 15 2.7.4 Potential environmental impacts 15 3. Impact on the Forest Industry 17 4. Forest Sector Institutional Analysis 19 4.1 Policy Framework 19 4.1.1 National Forest Policy 19 4.1.2 The National Forest Plan 19 4.1.3 National Development Strategy 20 4.2 Policies related to Illegal Logging Activities and Their Implementation 20 4.2.1 Log tracking system 20 4.2.2 Other policies 20 4.2.3 Internal armed or significant social conflicts 20 4.3 Legal Framework 20 4.3.1 Forests Act 20 4.3.2 Regulatory disincentives and incentives to legalize forestry operations 22 4.4 Summary of the Main Issues and Challenges from Other Sectors that Affect Logging Company Operations 23 4.5 Activities for Logging Operations, Estimated Costs, or Production and Compliance, and Procedures Related to Timber Sales and Concession Allocation 23 L AW C O M P L I A N C E I N T H E G U YA N A F O R E S T S E C TO R 4.6 Monitoring and Control System 26 4.6.1 Concessions, permits, and tags 26 4.6.2 Law enforcement 26 5. Knowledge Management 29 6. Forest Sector Competitiveness in Guyana 31 6.1 Economic Trends 31 6.1.1 Background 31 6.1.2 Sector performance 31 v 6.1.3 Sector development 32 6.2 Sector Competitiveness 32 6.2.1 Human resource development 32 6.2.2 Competition 32 6.2.3 Imperfect competition 33 6.2.4 Investment possibilities 33 6.2.5 Forestry and the WTO 33 6.2.6 Recent developments 33 7. Summary of Underlying Causes of Noncompliance and Illegal Logging 35 8. Findings and Suggested Actions 37 9. Annexes 39 9.1 Annex 1—Key Stakeholders and Actors for Law Enforcement in the Forestry Sector 39 9.2 Annex 2—Definitions of Illegal Logging 39 9.2.1 World Bank 39 9.2.2 Center for International Forestry Research (CIFOR) 40 9.2.3 WWF and the World Business Council for Sustainable Development (WBCSD) 40 9.3 Annex 3—Forests and GFC Acts 41 9.3.1 Guyana Forestry Commission Act 1979 42 9.4 Annex 4—Guyana’s Protected Areas 42 ANNEXES Figures Figure 1 Flowchart of Material through a Typical Large-Scale TSA Operation 24 Figure 2 The Cash Flow through the Logging, Extraction and Retail System for a Community Logging Association Operating on its Own SFP 25 Tables Table 1 Forest Types by Area in Guyana 1 Table 2 Allocation of the State Forest (2005) 2 Table 3 Export Volume of Forest Products (2005) 3 vi Table 4 Royalty from Forest Products (2003) 4 Table 5 Export Value of Forest Products (2005) 5 Table 6 Employment in Guyana Forest Industries (1997) 5 L AW C O M P L I A N C E I N T H E G U YA N A F O R E S T S E C TO R Acronyms and Abbreviations vii COP Code of Practice for Timber Harvesting Scientific Names FPA Forest Products Association of Guyana Common (vernacular) species names have been GFC Guyana Forestry Commission used in the text. The following are the equivalent scientific names: SFEP State Forest Exploratory Permit Common Name Scientific Name SFP State Forest Permission Baromalli Catostemma commune TSA Timber Sales Agreement Crabwood Carapa guianensis WCL Wood Cutting Lease Greenheart Chlorocardium rodiei Locust Hymenaea courbaril Purpleheart Peltogyne venosa Tauroniro Humiria balsamifera CHAPTER ONE Introduction 1 1.1 COUNTRY SITUATION TABLE 1 Forest Types by Area in Guyana Guyana is the only English speaking country in Forest type Area (%) South America, is located on the Atlantic seaboard of north-eastern South America. It extends 800 km Rainforest 36 south from latitude 88° N on the Atlantic coast to Montane 35 latitude 1° N and some 480 km east to west between Swamp & Marsh 15 longitudes 57° and 61° W. It has an area of about Dry Evergreen 7 215,000 km2. The total population is some 750,000 Seasonal 6 made of 45 percent Indian descent, 37 percent Mangrove 1 Afro-Caribbean, 7 percent Amerindian and 11 per- Total 100.0 cent of Chinese, European and mixed descent. Source: GFC. Population and commercial agriculture is concen- trated along the coastal strip. In 2004 Guyana had a (360,000 ha), Conservation International’s Gross National Income per capita of US$990 (glob- Conservation Concession (80,000 ha), Morabali ally ranked 146th) according to World Bank data. Reserve and some small reserve/research sites Tropical high forests cover some 16.4 million ha (totaling approximately 3.5 percent of forest area). or about 76 percent of the total land area, making it In addition to state forests, a portion of the one of the most forested nations worldwide. The national forests are under titled Amerindian lands. breakdown by forest type is given in Table 1. Land titles were issued to Amerindians in 1976 onwards. Approximately 13 percent of the total land area of the country is under titled Amerindian 1.2 FOREST ADMINISTRATION land; the proportion of this area with commercial forest potential has not been documented (though State forests administered by the Guyana Forestry is estimated at 1.4m million ha).1 However, within Commission (GFC) account for about 13.6 million the commercial forestry belt, there has been signifi- ha (63 percent of the land area). By 2004, 52 percent cant commercial timber production on Amerindian of state forest had been allocated for timber lands which is subject to the same log-tracking harvesting. Within the State Forest Area there are some areas nationally identified for total or partial conservation activities including Iwokrama Forest 1. P. Persaud, Pers. Comm. TABLE 2 Allocation of the State Forest (2005) Class of Permit/ Land-use Total Area (ha) % Total Allocation No. Permits/Areas Average size (ha) TSA 4,560,631 71.0 31 147,117 WCL 434,267 6.8 5 86,853 SFP 832,926 13.0 263 3,167 SFEP 375,639 5.8 4 93,910 Conversion 206,700 3.2 28 7,382 Reserves 15,694 0.2 10 1,569 2 TOTAL 6,425,857 Source: GFC data. system operated on State Lands (though timber I State Forest Exploratory Permits (SFEPs), which produced on Amerindian lands is not subject to are issued for survey and feasibility purposes state royalty fees—village councils may set small only and do not include cutting rights. royalty fees for timber produced on their territory but this system is not standardized).2 Since 1991 the number of TSAs has almost dou- Under Guyanese laws, forest on private lands bled from 163 in 1999 to 31 in 2005 (see Table 2). including those titled to Amerindian communities During the same period in the room for the middle are not subject to the control of the GFC with no of an infinite the number of SFPs has declined from special laws existing to regulate felling though the 571 to 263. Compared with 1999, the area allocated draft Forest Act of 1997 tries to address this through to TSAs has increased by 22 percent, as well as the the provision of regulatory mechanisms for interac- proportion of al l allocated State Forest (by area tion, including those with timber companies. Also, from 64.5 percent to 71 percent). Meanwhile, the the new Amerindian Act (2006) gives GFC greater area allocated to SFPs has fallen by 37 percent in powers to regulate forestry practice on Amerindian real terms and also proportionally (23–13 percent). lands. Though no data were available to corroborate, Access for commercial timber removal on State one contributing factor to the decline in the num- Forests is controlled by the GFC through the alloca- ber of SFPs over recent years is thought to be the tion of temporary concessions and permits as fol- initiative of the GFC to assess the productive capac- lows: ity of current SFPs. This has resulted in some being classed as available for certain forest products only I Timber Sales Agreement (TSA) covers conces- (such as walaba poles) or as ‘worked-out’ in which sions of more than 24,000 ha and is allocated for case they are not reallocated. a period of more than 20 years. I Wood Cutting License (WCL) is issued for 3 to 1.3 PRODUCTION 10 years, and covers forests of between 8,000 and 24,000 ha. I State Forest Permissions (SFP) are given for two According to the FAO’s global forest assessment years and cover areas of less than 8,000 ha. SFPs survey results4 deforestation rates in Guyana are low are generally issued to individual small-scale (less than 0.1 percent land area per annum), largely operators and community-based associations. since logging practice is selective and relatively low 2. From Clarke, G & Mangal, S. 2006. Chainsaw logging study—Socioeconomic impact and tracking study. 3. ITTO (2003). Achieving the ITTO Objective 2000 and Unpublished report for LTS International and DFID’s Forest Sustainable Forest Management in Guyana. ITTO. Research Programme. 4. FAO (2002). State of the World’s Forest 2001. FAO Rome. L AW C O M P L I A N C E I N T H E G U YA N A F O R E S T S E C TO R intensity. Guyana’s forests are therefore largely TABLE 3 intact, though in terms of remaining commercial Export Volume of Forest Products (2005) productive capacity there are some marked geo- graphical differences with the most accessible near- Product Volume (m3) interior forests less productive for high value Logs 116,384 species of marketable dimensions and quality. In Sawnwood 42,150 several Amerindian reservations there is a localized Roundwood 8,982 shortage of prime timber species. Splitwood 2,198 Guyana’s commercial forests are characterized Plywood 36,574 by high species diversity but the main commercial Total 206,289 species have a low standing volume per unit area Source: GFC. which results in low volume extraction per unit 3 area. It has been estimated that in 2000, the total annual wood production of 400,000 m3 came from latest figures7 (2005) indicate a slight resurgence to a forest area of some 6 million ha, equating to less 312,688 m3. than 0.1 m3/ha.5 However, since a significant por- Data for the production of sawn lumber from tion of the allocated area is not active in any given static (and now including mobile) sawmills are not year, actual average increment is probably closer to officially available post-1997. At that time, produc- the 0.33 m3/ha/yr recognized by the GFC.6 In prac- tion was 56,604 m3/yr. Statistics have been collected tice, removal of commercial timber from unlogged for chainsawn lumber since 1994 when annual pro- forest rarely exceeds 8 m3/ha. The reasons for the duction was recorded at 29,832 m3. Since then pro- low productivity can be found in the relatively poor duction has remained relatively steady and after a forest soils typical in the country; the highly selec- slight decline in 1998–99 is was up to 36,085 m3 in tive nature of logging (targeting less than 5 percent 2004 and 36,176 m3 in 2005. of the tree species occurring) and the relatively high Roundwood (piles, poles, posts and spars) and occurrence of defective trees (estimated at more split wood (staves and shingles) production is also than 20 percent overall). significant though latest figures are given in linear Selection of species for commercial harvesting is meters or pieces. The most recent figures available influenced by a number of considerations, which in cubic meters are from 2000 when 32,100 m3 was include availability or abundance and market produced. recognition and/or acceptance, particularly in Approximately one half of total timber volume export markets. Greenheart and purpleheart are production is currently exported from Guyana; the still the most commercially favored species though most common destinations are Asia (in particular mora, kabukali, tatabu and shibadan especially can for logs), Europe (especially sawnwood to the find export markets (as logs or sawn lumber) and United Kingdom), the Caribbean, and North several other species are marketed locally as mixed America. The average annual volume of logs hardwoods or, for less dense species, formboards. exported between 1995 and 20008 was 42,935 m3 Baromali and several other species are harvested as and average sawnwood exports between the same peeler logs for plywood manufacture. Locust wood periods were 19,716 m3. In 2004 export volumes for is used extensively and almost exclusively by one logs and sawnwood, respectively, were 61,255 m3 company for the manufacture of garden furniture and 39,046 m3. Export volume breakdown for 2005 primarily for the United Kingdom market. is given in Table 3. There are no figures specifically Log production has shown considerable fluctua- for chainsaw lumber. tions over the past decade, peaking in 1997 at GFC records indicate that there were 88 521,529 m3 and falling to 288,534 m3 by 2000. The sawmills registered in 2005. The majority of these 5. Hunter (2001). The Forestry Sector in Guyana. Report for 7. GFC data. Unless otherwise stated production and other GFC. background data are from GFC. 6. GFC (2002). Code of Practice for Timber Harvesting. 8. Derived from Hunter (2001) op. cit. INTRODUCTION are economically and technically inefficient and TABLE 4 would benefit from heavy recapitalization. Many Royalty from Forest Products (2003) sawmill operators obtain their raw materials from their own concessions, though in recent years there Royalty % Annual has been an increasing trend for saw millers to pur- Product Class (US$) Total chase logs and sawn timber from other suppliers to Logs 355,900 49.1 supplement their own raw material supplies. This is Chainsaw Lumber 287,000 39.6 especially so from chainsaw operators who in many Roundwood 73,600 10.2 cases are able to provide rough sawn lumber rela- Splitwood 2,730 0.4 tively cheaply. Fuelwood 4,225 0.6 The majority of sawmill operators are Guyanese Other 1,200 0.2 family-owned businesses, ranging in size from small TOTAL 724,651 100.0 4 to medium (defined as producing up to 16,000 Source: Derived from GFC (2004). Quarterly Market Report m3/yr), and employing on average between 5 and 50 2003/04 and Summary Report 2003. people. Most sawmill operators produce for the domestic market, with only a few exporting to over- seas markets mainly, but not exclusively, in the has been in transition from a centrally planned to a Caribbean region countries. The average annual market economy. The World Bank and capacity of sawmills is estimated at between 5,600 International Monetary Fund are very powerful and 8,500 m3. actors in the country’s economic restructuring and A total of 188 lumberyards were registered with Poverty Reduction Strategy. Poverty as a percentage GFC in 2005. Many of these establishments have re- of population was estimated at 35 percent on the saws, cross-cut saws, planers, and molding coast in 1999 and is much higher in rural areas. machines. Lumberyards source their material from Even in Georgetown, the capital, 20 percent of the static mills, mobile mills and chainsaw operators. In population live in squatter settlements. Eighty-five some cases, lumberyard owners also have SFPs percent of the indigenous peoples are estimated to which form the main source of their material. The be living in poverty.9 The country has suffered a majority retail to the local market though increas- steady brain drain and there are social tensions and ingly lumberyard owners are finding export mar- political and ethnic divisions that lead to a climate kets for high-value species such as purpleheart and of defensive professional relations.10 The legal min- greenheart. imum wage is G$24,828 per month (US$124). There are estimated to be about 190 joinery or Between 1988 and 1993 forestry contributed just woodworking establishments in Guyana—mainly over 2 percent to Guyana’s Gross Domestic Product producing certain furniture components or domes- (GDP) but between 1997 and 2004 it averaged 3.73 tic fixtures and fittings. The manufacturing sector percent with an al-time high of 4.93 percent in comprises mainly furniture manufacturers involv- 1997. In 2004 (the latest available) the contribution ing around 5 large manufacturers (employing more was 3.29 percent. Note that these figures are for than 100 employees), 25–30 medium size operators, production and primary processing only and do not and many small ‘backyard’ or ‘bottom-house’ oper- include secondary processing, plywood or furniture ators employing a few persons only. The medium to manufacture, for which national-level financial large manufacturers typically produce to supply data are not readily available. departmental stores and factory outlets in the cities Data on the contribution of royalties, acreage and towns, while the small enterprises supply local, fees, and export commission to the public purse often community-based markets. were not available for 2005. Most recent published data by Product Class is from 2003 (Table 4). These 1.4 SOCIOECONOMIC SITUATION 9. From Clarke, G & Mangal, S. 2006. Op. Cit. 10. MacCuish D 2005. Guyana: experience of Economic Guyana is a heavily indebted country that is Reform Under the World Bank and International Monetary dependent on external aid. Since 1989 the country Fund. The Social Justice Committee. L AW C O M P L I A N C E I N T H E G U YA N A F O R E S T S E C TO R TABLE 5 TABLE 6 Export Value of Forest Products (2005) Employment in Guyana Forest Industries (1997) Value Activity Employment Product (US$ million) Logging 7,144 Logs 12.1 Sawmills 4,855 Sawnwood 20.1 Plywood mills 1,000 Roundwood 1.8 Charcoal 180 Splitwood 1.1 Palmheart 800 Plywood 11.3 Total 13,979 Total 46.3 Source: GFC. Source: GFC. 5 are not exclusively, descendants of the indigenous data indicate that the greatest contribution to the people of Guyana (also referred to as Amerindians). exchequer in the form of royalty was from chainsaw Except in coastal regions, most Amerindians live lumber (43.3 percent). These data do not include in well-established villages 83 of which currently chain sawn lumber produced on Amerindian forests. have designated Amerindian land by the The total value of exports of al logs sawnwood, Amerindian Act.13 It is estimated that at least 26 roundwood, splitwood, and plywood between 1997 Amerindian communities in Guyana do not have and 2004 was US$251 million with an annual aver- legally titled lands but still enjoy ancestral/tradi- age of US$31.5 million, peaking in 2004 at US$41.6 tional user’s rights on these lands.14 million. Figures for 2005 are given in Table 5. Many communities are currently asking for the Domestic consumption of sawnwood was esti- extension of their lands, in part because of popula- mated at 35,000 m3 in 1997, the last year for which tion increases, which can put stress on the available official figures exist. Domestic consumption of community natural resources and in part because chainsaw lumber was estimated at a little less than their original land claims in the immediate post 30,000 m3 in 2000.11 colonial period have not been fully addressed. The latest official figures, from 1997, indicate However, in many cases, land claimed has already that 13,979 persons are directly employed in the been identified or allocated for resource use under timber and forest products production sector State authority and oversight. Consequently, (Table 6). Unofficial figures from 2000 suggest that Amerindians have sometimes found themselves in this number had fallen to under 11,000 persons the midst of land use conflicts, where the land they with around 58 percent in the logging subsector, 38 reside upon has been granted as, for example, and a percent in sawmilling, and 4 percent in plywood forestry concession. There are several cases; howev- manufacture. There are no figures for the numbers er, where issues have been resolved by GFC excising employed in chainsaw lumber subsector though recognized Indigenous lands from forestry conces- anecdotal evidence suggests that each SFP can employ sions.15 between 10–50 persons throughout the year.12 In recent years there has been a marked increase Most of the country’s infrastructure—roads, in the use of chainsaws for the production of lum- power supplies, telecommunications, mains water, ber in Guyana. They represent a relatively small and so forth—as well as the population are found capital investment, can be easily moved around the along the settled Atlantic Coast. The Hinterland is forest as demand dictates and, since lumber is pro- characterized by low population density. Only some duced at stump, do not require heavy machinery to 50,000 people live outside the coastal strip and the extract logs from the forest. Most crews operate few main inland towns. These people include, but 13. P. Persaud, Pers. Comm. 11. Thomas et al. (2003). Small and Medium Forest 14. Haden, P. 1999. Forestry Issues in the Guiana Shield Enterprise, Guyana. A Discussion Paper. GFC/IED. Region: A Perspective on Guyana and Suriname. 12. Thomas et al. (2003). Op. cit. 15. From Clarke, G & Mangal, S. 2006. op. cit. INTRODUCTION under a contractor who provides the majority of verification and tracking of the chain of custody in equipment and arranges sales. Contractors may also Guyana. The system was introduced in 2000 to own their own SFP, though many operate freelance mainly verify the origin of forest produce and con- or within a community logging association. trol the levels of harvesting within state forests. The Chainsaw lumber production is also common log tracking system currently applies to al opera- on private lands especially Amerindian reserva- tions including those on state forests, Amerindian tions. In al cases an annual sawpit license is required reservations, and private properties and is linked to to cover al chainsaws operating within the private the state forest permit quota system—an initiative land boundaries. In 2005 there were 121 sawpit to control the volume of produce harvested. The licenses covering state and private forest land. system is regulated by a system of bar coded log tags The majority of legal chainsaw lumber produc- which are assigned to legal operators at the renewal tion on state forest occurs on the relatively small- of an operator’s annual license. 6 area and two-year leased SFPs. This section of sub- An operator’s quota (forest produce volume) is sector is thus quite well regulated. However, since a calculated by the GFC using a formula to estimate license is not required to purchase or own a chain- the sustained yield which considers the size of the saw, there is also a section that is largely informal forest area and captures the minimum log harvest- and difficult to regulate. This group consists of per- ing variables of felling cycle, felling distance, mini- sons who are often quite mobile and may operate mum girth, and inventory information. The quota only on a part time basis. is equated to the number of trees which will yield There are no figures for chainsaw ownership but this volume; and it is the number of trees comput- the vast majority of chainsaws are purchased ed that will dictate the number of tags to be issued through one dealer in Guyana. Figures provided by with one tag being equivalent to one standing tree. the dealer indicate that from 2003–05 inclusive Each operator is allocated a number of tags in there were over 5,000 chainsaws sold. If one accordance to his sustained yield and is recognized assumes a practical life of a chainsaw as 3 years, this by a unique sequence of numbers assigned to that figure gives a good estimate of the number of chain- operation. saws currently functional in Guyana. It is further Log tagging is done at the stump where one half estimated that 80 percent of these (by nature of the of the tag is fixed to the stump at the time of felling model—the Stihl 051) are used in chainsaw lumber and the other part, bearing the same sequence of production. numbers recorded on the stump tag, is affixed to The GFC indicate that the chainsaw lumber pro- the produce being conveyed. It is the unique num- ducing subsector contributes around 45 percent of bers of each tag assigned that indicates who the the total revenue earned by the public purse in roy- operator is and therefore is able to indicate the geo- alties and fees from forest producers – from just 13 graphic origin of the forest produce within the for- percent of the allocated state forest land. It has been est estate. Al forest produce including logs, lumber, estimated that around 70 percent of persons work- piles, poles, and posts are tagged. ing in productive forestry are employed on SFPs.16 GFC administrative control and monitoring of the log tracking system is facilitated by a simple database and its monitoring outposts (forest sta- 1.5 POLICIES AND INITIATIVE TO tions) and forest officers who are supplied with a CONTROL ILLEGAL LOGGING register of log tag allocation by district. These forest officers are more effective in verifying the origin 1.5.1 Log tracking system and capturing royalties due on any forest produce being conveyed. The system is supplemented by the The log tracking system developed for Guyana by use of operators’ production registers, which are the the GFC is the mechanism used to perform legal property of GFC and are reviewed to ensure speci- fications of forest produce recorded on the removal permit are authentic. 16. Thomas R. et al. 2003. Op. cit. L AW C O M P L I A N C E I N T H E G U YA N A F O R E S T S E C TO R 1.5.2 Regularization of chainsaw logging mum of 10 (High Clean) and a minimum of 0 and community associations (High Corrupt).17 In recent years the GFC has pursued a strategy of 1.6.2 Sustainable Forest Management legitimatizing forestry operations of nonindigenous Indicators communities in close proximity to forest resources. The GFC actively pursues an extension program GFC reports that Guyana was recently ranked 6th where communities which were previously depend- worldwide for its sustainable forest management ent on other industries (mainly mining) which have practices by the ITTO. In addition, in 2005 Guyana become defunct and have turned to the forest ranked eighth worldwide on the Environmental exploitation as their livelihood activity. These com- Sustainability Index.18 Neither of these assessments, munities are being issued concessions as coopera- however, included specific indicators of legal compli- 7 tive logging associations. This will tend to reduce ance within the forestry sector. the level of illegal logging that occurs in these areas since, in part, it is in the cooperative’s best interests 1.6.3 UN Convention against Corruption to self-regulate and monitor its resource to ensure sustainability. Guyana is not a signatory 1.5.3 Compliance with international 1.6.4 Inter-American Convention against agreements Corruption (Organization of American States) Guyana is a signatory to CITES and therefore safe- guards its listed flora and fauna from over-exploita- Guyana signed the treaty on March 29, 1996, and tion. This is accomplished through the local scien- ratified it on December 11, 2000. Safeguards that tific authority and the management authority of the would reduce illegal practices in forestry include: Wildlife Division of the EPA. Export quotas are published each year by the scientific authorities in I The establishment of standards of conduct for accordance with CITES regulations. In fact, cur- the correct, honorable, and proper fulfillment of rently there are no CITES Appendix I or II listed public functions to prevent conflicts of interest. tree species logged in Guyana. I System for registering the income assets and lia- bilities of persons who perform public functions in certain posts as specified by law. 1.6 CURRENT STATUS AND TRENDS IN I Systems of hiring and procurement of goods and SELECTED GOVERNANCE services that are open, equitable and efficient. INDICATORS I Government Revenue collection and control systems that deter corruption. 1.6.1 Transparency International I Laws that deny favorable tax treatment for any Corruption Index individual or corporation for expenditures made in violation of the anticorruption laws of the The index defines corruption as the abuse of public state parties. office for private gain, and measures the degree to I Systems for protecting public servants and pri- which corruption is perceived to exist among a vate citizens who report acts of corruption country’s public officials and politicians. It is a composite index, drawing on 16 surveys from 10 independent institutions, which gathered the per- 17. 2005. Transparency International Corruption Perceptions Index. Transparency International Secretariat. ceptions of businesspeople and country analysts. In 18. 2005 Environmental Sustainability Index. Yale Center for 2005 Guyana was ranked 117 with a Corruption Environmental Law and Policy, Center for International Perception Index (CPI) score of 2.5 out a maxi- Earth Science Information Network, Columbia University. INTRODUCTION I Oversight and modern mechanisms for prevent- number of international donors and agencies ing, detecting, and punishing corrupt acts. including DFID, FAO, ITTO, and WWF. Some of I Deterrents to the bribery of domestic and for- the major achievements during the period of this eign government officials, such as mechanisms support, relevant to legal infrastructure and com- to ensure that publicly held companies and pliance, have been the development of the logging other types of associations maintain books and tracking system the development of a new draft records that reflect the acquisition and disposi- Forests Act, the development of the national forest tion of assets and enable officers to detect cor- policy, training and capacity building in participa- rupt acts. tory and community forestry, development of the I Participation by civilians and nongovernment Code of Practice for Timber Harvesting, the nation- organizations in efforts to prevent corruption al initiative for forest certification and the up-com- I The study of further preventive measures that ing development of a legal verification system. 8 take into account the relationship between equi- Other sectors involved in the custody of the land table compensation and probity in public service. and natural resources have also received consider- able support during the same period. The key sector agencies involved in natural resource manage- 1.7 ONGOING MAJOR PROGRAMS TO ment—the GFC, the Guyana Geology and Mines ADDRESS GOVERNANCE IN Commission and the Guyana Lands and Surveys SECTORS RELEVANT TO FORESTRY, Commission—are working on a long-term collabo- INCLUDING THOSE SPONSORED BY ration to develop a national land use plan for GOVERNMENT AND OTHER Guyana. In the short-term, the agencies are reach- STAKEHOLDERS ing an understanding and accord on land manage- ment particularly where resources overlap and Over the past decade the GFC has been the recipi- exploitation can cause intersectoral conflicts (such ent of technical and institutional support from a as gold-mining and forestry). L AW C O M P L I A N C E I N T H E G U YA N A F O R E S T S E C TO R C H A P T E R T WO Status of Illegal Logging and Other Aspects of Forest Sector Legal 9 Compliance 2.1 DEFINITIONS OF ILLEGAL LOGGING Tropical Timber Agreement, it has de facto adopt- ed ITTO’s definition. The International Tropical 2.1.1 Preamble Timber Organization defines Illegal Logging “as the removal, transportation, processing, buying or sell- Many definitions of illegal logging1 have been pro- ing of wood in a manner that is against the provi- posed over recent years by organizations (for exam- sion of relevant laws of the particular country,� in ple, World Bank, ITTO, FAO, CIFOR, WWF, this case Guyana. FERN, Confederation of European Paper Since Sustainable Forest Management is at the Industries) and individuals (for example, Brack & core of Guyana’s forest polices and plans, the sup- Hayman,2 Smith3). While there are variations in porting rules, regulations, procedures, and laws content and detail, most contain two common ele- must be applied to ensure conformity and compli- ments: (i) a statement that illegal logging is that ance with norms for the proper conduct of the for- which is done in violation of (relevant) national est sector. Once logging activities are undertaken in laws and (ii) that illegal logging is just one sub-set accordance with these national forest laws, the of illegal activities within the sector that include ille- activities are considered legal. gality in acquisition of permits, transport, process- ing, trade and payment of taxes, royalties and so 2.2 COMPATIBILITY OF THE NATIONAL forth. DEFINITION WITH THE WORLD BANK INDICATIVE LIST OF ILLEGAL 2.1.2 Guyana Forestry Commission LOGGING PRACTICES Guyana does not have a clearly defined definition or policy identifying what is illegal logging. The de facto definition of legality adopted by GFC However, being a signatory to the International includes those elements in the World Bank indica- tive list as follows: 1. See Annex 2 for some detailed examples. I Outside a concession area—is considered illegal 2. Brack, D. & Hayman, G. 2001. Inter-governmental actions without authorization from the responsible on illegal logging Royal Institute of International Affairs. 3. Smith, W. 2002. The global problem of illegal logging. agency (GFC) or Minister responsible—Forest ITTO Tropical Forest Update, Vol 10, pp. 3–5. Act. I In excess of quota—based on the issuance of a umes, cash flows, and debt service levels—this quotas system for all concessionaires annually would be covered by Finance Act. through log tags (log tracking system) to ensure I That engages in the illegal transport and trade of sustainability of the resource. timber or the smuggling of timber that is I In a protected area—Once the area is fully pro- processed without the required licenses and that tected and designated and gazette, it would be is not in compliance with environmental, social illegal. and labor laws—covered by quotas and manage- I In indigenous territories—only if the harvesting ment plans and the Code of Practice. and removal of forest produce was done with the community’s (usually a council) full l approval. 2.3 TYPES OF ILLEGAL LOGGING I Without appropriate permits—removal permits are required listing the species and volume of 10 forest produce. Failure to comply will lead to To expand on definitions of illegal logging many impounding of produce. authors have sought to provide examples of the I Without complying with bidding regulations— types of activity that are being undertaken in any applications for forest concessions must follow given context. A useful synopsis is given by Brack4 the proper transparent procedures. who categories the various aspects of illegal timber I Without submission of required management trade activities as: plans—GFC has the right to refuse renewal of a license with out the submission of management I illegal logging plan for TSA and WCL. SFPs are exempt from I timber smuggling this requirement. I misclassification I In prohibited areas such as steep slopes, river I transfer pricing banks, and water catchments—Guidelines for I illegal processing harvesting which includes these regulations as I grand corruption stated above are included in the code of Practice I petty corruption for Timber Harvesting which is a mandatory document for concessionaires to follow. In Guyana the nature of illegal activities that I Protected species (as defined by CITES or other occur in the forestry sector can be surmised from international law)—must be adhered to, though detection of such activities and from the anecdotal no tree species are currently protected by CITES. evidence of those involved in the sector (in produc- I With duplicate felling licenses—falsification of tion, processing, trade, and regulation). From such documents. evidence typical illegal activities occurring in I Using girdling or ring-barking to kill trees so Guyana in contravention of laws, regulations, and they can be logged legally—not applicable since procedures are: final volume would be restricted by quota issued. I Poaching from other concessions, nonallocated I That contracts with local entrepreneurs to buy state forest, private property or reserves upon logs from protected areas. which the persons do not have logging rights I That removes under/over sized trees from pub- I Encroachment and logging on neighboring con- lic forests—restrictions within Code of Practice. cessions—either knowingly or not I That reports high volumes extracted from forest I Smuggling produce past forest stations (thereby concessions to mask that part of the volume is avoiding declaration and royalty payments) from nonauthorized areas outside of the conces- I False declarations—for example, passing off sion boundaries—this would be in violation of (“also known as laundering� or “legalizing�) the tagging system and licensees’ quotas. I That uses bribes to obtain logging concessions— addressed in the Forest Act. 4. Brack, D., Illegal Logging and the Illegal Trade in Forest I That uses deceptive transfer pricing and other and Timber Products. International Forestry Review 5(3), illegal accounting practices to distort prices, vol- 2003. L AW C O M P L I A N C E I N T H E G U YA N A F O R E S T S E C TO R produce as originating from private lands with There are no hard data, but it seems likely that a cer- falsely obtained removal permits tain proportion of the national production of high- I Misuse of tags (for example, purchasing tags value species in particular is from illegal logging. from another concession holder; wrongly locat- Chainsaw logging also has a wider significance ing stump tags) and one which is recently being recognized in I Under-declaring volume of loads and falsely Guyana by international and national agencies and declaring species a broad range of stakeholders.5 there appears to I Logging restricted species have been a steady rise in the number of chainsaw I Operating or processing without appropriate operators involved in logging and ripping in recent licenses (for example, chainsaw license, sawmill years (which is supported by unpublished chainsaw license) sales figures). I Logging in contravention of the Code of Practice In part because of the challenges involved in reg- 11 ulating this disparate and relatively mobile subsec- Unofficial records of detection of illegal activi- tor, it is often expressed in certain quarters that ties indicate that, across the gamut of illegal activi- chainsaw loggers are largely responsible for any ille- ties, noncompliance is perpetrated by both small gal activities that occur, or that the majority of and large operators and by operators along the chainsaw loggers are operating at least part of the whole supply chain. Unfortunately, these records time illegally. As the recent discussions indicate, are not presently kept in such a way that meaning- however, these general statements are probably not ful analysis is possible, though the regulatory justified and are certainly an oversimplification. agency is making efforts to improve his situation. The issues of the chainsaw-logging subsector are Anecdotal evidence suggest that there is not closely tied with questions of logging economics, large-scale commercial illegal logging in Guyana with land and resource accessibility, with appropri- and that, while clear generalization is difficult, the ate processing technologies and with rural liveli- larger concessionaires are not knowingly and sys- hoods. tematically engaged in illegal logging activities. On Lately, Guyana has witnessed an increase in the the other hand, there are reports of small-scale phenomenon of targeted species-specific logging. commercial illegal logging which in certain areas As is common for certain species such as mahogany may be quite widespread. in many ACTO countries, the high price on the The export of logs in Guyana is allowed though world market of one or two species, coupled with a there are export restrictions on certain species (cur- strong local demand, is driving increased logging of rently crabwood, and locust). The larger concession particular species. In Guyana purpleheart is cur- holders (TSAs) have the capacity to extract and rently the most valuable species (US$600/m3 + transport logs though the majority of smaller oper- sawn lumber delivered Georgetown), though green- ators (mainly SFP holders) do not have that option heart and locust also fetch high prices.6 For exam- and their modus operandi is to fell and rip at stump ple, DFID-funded chainsaw logging study: Guyana. thereafter removing the boards by tractor or even 2006. DFID/FAO workshop on chainsaw logging by hand. Such is the value of certain species that for held in Georgetown in May 2006. some chainsaw loggers the financial incentive exists, coupled in many cases with few or no options for 2.4 VOLUME OF ILLEGAL LOGGING alternative sources of income, to log high value species on land to which they have no legal logging rights. In some cases, illegal loggers do not have Illegal logging can go recorded or unrecorded. legal access to forest land; in some others the land Unrecorded logging encompasses wood that passes on which they have permission to log has been depleted of high value species. Illegally logged chainsaw wood is converted at 5. For example, DFID-funded chainsaw logging study: stump and an attempt is made to either smuggle the Guyana. 2006. DFID/FAO workshop on chainsaw logging held in Georgetown in May 2006. boards past forest monitoring stations or to declare 6. To put this value in perspective it is around 4x the nation- the produce as legal with false tags and permits. al minimum monthly wage. STATUS OF ILLEGAL LOGGING AND OTHER ASPECTS OF FOREST SECTOR LEGAL COMPLIANCE through the entire system without being detected at Recorded illegal logging is in theory easier to al or wood that starts as illegal but then becomes quantify though there are currently in Guyana no “legalized� (strictly following Richards et al.)7 by, official long-term records maintained of illegal log- for example, carrying false tags in which case it ging or legal noncompliance within the forestry sec- appears on production records as legal. It is widely tor.10 Nevertheless, a rough calculation11 based on recognized that unrecorded illegal wood is very dif- GFC reports of detection of noncompliance during ficult to quantify since under normal circumstances the first 6 months of 2006 indicates that during that it is unknown. Several attempts have been made in period there were around 100 detentions of unli- other countries to try and estimate the volume of censed and unpermitted lumber (that is, with otherwise unrecorded illegal wood. These methods improper or no tags and/or an invalid removal per- encompass combinations of targeted case studies, mit). An estimate of the lumber volume those aerial estimates of illegal logging, comparison of con- detentions represented revealed a figure represent- 12 sumption data with production data and compari- ing around 3.5 percent of estimated total legal son of production data with expected forest yields.8 chainsaw lumber production for those 6 months Unfortunately at this time none of these meth- (based on equivalent figures from 2005). ods is truly appropriate for the situation in Guyana ITTO in their annual review and assessment of due to an absence of primary research, lack of col- the world timber situation of 2004 reported that lateral data and relatively unproductive forests. during the first half of 2003 GFC had cause to seize Specifically: there are no reliable domestic wood 86 loads of timber. Violations ranged from traveling consumption figures available (note that those without (or with expired) documents to cutting appearing in the ITTO’s annual reports are simply under-sized logs, sourcing logs form outside con- declared production minus export volumes); har- cessions, harvesting protected species and false dec- vesting is highly selective and cannot be meaning- laration of harvest volume. It was reported that in fully estimated by an area proxy, even if there were the previous year 130 shipments were detained. records of the geographical extent of illegal logging; Unfortunately the report in the next year’s ITTO average volume production across the largest con- report was minimal for Guyana and did not include cession types is estimated to be as low as one-quar- detention figures. Nevertheless, in terms of num- ter9 of the allowable cut of 20 m3/ha (over 60 bers of detentions, from 2003–06, there appears to years)—and even at this conservative level be an upward trend. Guyana’s forests actually yield less than a half their Data are available for certain individual species productive capacity; the few PSPs that exist in and if the example of purple heart is taken there Guyana do offer a future potential means for esti- appears to be some discrepancy between declared mating illegal logging as was done in Slovenia, but production and declared export volumes. they are currently not numerous enough and are According to official GFC figures, for the period not regularly re-measured or maintained. January to June 2006 the total production of pur- pleheart logs was 14,682 m3, whereas the records for export of logs during the same period indicate 7. Richards, M. et al. 200. Impacts of illegality and barriers to 16,105 m3. This could suggest that there was some legality: a diagnostic analysis of illegal logging in Honduras export of illegal logs though it is possible that some and Nicaragua. IFR 5(3) 282-292 logs recorded as exported in 2006 were produced in 8. For example, Richards, M. et al. 2000 op. cit.; SAVCOR 2005. Ensuring sustainability of forests and Livelihoods 2005 or that the discrepancy is due to different through improved Governance and control of illegal Logging means of recording log volume (according to the for economies in transition. Report for World Bank; Auzel, P. et al. 2002. Evolution of the exploitation of Cameroon’s forests: national production, illegal exploitation, perspec- 10. The Forest Monitoring Division of the GFC has recently tives. Report for DFID; Viselic, Z. 2004. Illegal logging in started developing a database of detection of illegal activities Slovenia. Workshop Report, Geneva. including seizures, nature of noncompliance and legal action. 9. GFC. 2004. Analysis of Forest Area Allocation to Timber The GFC has indicated its receptivity to reporting of nation- Sales Agreements and Woodcutting Leases (1998–2003), ally available data in an eventual international format. November 2004. Guyana Forestry Commission, 11. Accurate calculations are not currently possible during Georgetown, Guyana. (quoted in Mendes & MacQueen, the developmental stage of the database. By the end of 2006 2006). more accurate and reliable figures should be available. L AW C O M P L I A N C E I N T H E G U YA N A F O R E S T S E C TO R GFC, production is recorded by Hoppus volume poorer particularly for payment of necessary but export logs are recorded as true volume—which national insurance by employers. is approximately 27 percent more). If the data for lumber are scrutinized the dis- 2.5 BORDER AND TRADE ISSUES crepancy is larger. The production of purple heart chainsaw lumber recorded during the period January to June 2006 was 1,277 m3 whereas the There have been occasional rumors in the forestry records for purpleheart lumber exported during the sector that from time to time logs and lumber have same period indicate that 5,015 m3 left the country. come into Guyana illegally, particularly from In the apparent absence of any logs contributing to neighboring Suriname. This is thought to be due to purpleheart lumber exports (the data indicate more the rather porous (river) border between the two were exported than remained to be processed in countries and the relatively high rates of royalty and 13 Guyana) al of the lumber exported would be export tax imposed by the Suriname authorities expected to have come from chainsawn lumber. However, the GFC have recently been in dia- While again there may be a time-lag factor, and logue with the customs officials at the border and it some unrecorded production from Amerindian was concluded that the import of contraband tim- reservations, the figures do tend to support the ber was not at any significant level and did not war- anecdotal reports of illegal logging (in this case at rant any special initiatives or efforts, though GFC least by nondeclaration of production) of the rela- does work with its counterpart in Suriname (the tively high value purpleheart in particular. SBB) in monitoring the situation. In the absence of hard data on the total volume In the absence of hard data, an assessment based of illegal logging occurring in Guyana, or a satisfac- on expert opinion suggests that the amount of logs tory method of calculating reliable estimates, the or roundwood exported illegally is minimal. This is informed opinion of a sample of those working in due in part to the strict licensing requirements in various aspects of the sector was sought. The major- place and monitoring by both the customs authori- ity of those questioned opined that compared to ty and the GFC. However, though there is no hard many other countries the volume of illegal wood evidence in support, it is felt by some that a quanti- being sourced, transported and/or sold illegally in ty of illegal lumber is exported from the country. Guyana is rather low. Most persons put the figure at less than 15 percent though there were a couple of 2.6 IMPACT ON GOVERNMENT FINANCES higher estimates. The regulatory agency put at less than 5 percent the volume of illegal wood that goes undetected. In 2005 approximately US$1 million was trans- It is not possible to provide a quantitative assess- ferred to the government budget directly from the ment of other illegal activities that may be occur- forestry sector from acreage fees, royalties, export ring in the forest sector which are not covered levy and other permits. It is estimated by the GFC under illegal logging (for example, corruption, eva- that if al revenues due were paid the timber sales sion of taxes and fees, noncompliance with labor (public and private) and compare this to the laws etc). The level of corruption in the sector amount that should have been transferred, the dif- depends on who is asked, though the general opin- ference would only be a few percentage points. ion is that some petty corruption does exist within the sector but that it is not widespread or endemic. 2.7 IMPACT ON INDIGENOUS The level of compliance with payments of taxes and COMMUNITIES, RURAL POOR, fees that are due is generally high and has improved AND THE ENVIRONMENT markedly over the past few years with the efforts of the GFC to enforce payment of outstanding acreage fees and royalties. Compliance with labor laws is felt 2.7.1 Amerindians and logging to be rather good especially as workers tend to be well represented by unions. However, it is likely It has been reported that the Amerindian commu- that for smaller operations compliance may be nities as a whole are the most economically disad- STATUS OF ILLEGAL LOGGING AND OTHER ASPECTS OF FOREST SECTOR LEGAL COMPLIANCE vantaged among the ethnic groups in Guyana. The lage. Furthermore, there are reports of inequitable majority of them rely on subsistence fishing, farm- distribution among community members of the ing, and hunting for their living. Amerindian royalties arising from logging agreements. In some involvement in the forestry sector is limited largely cases it is reported that tags and removal permits to their participation as contract loggers or work on issued to communities have been used by others to their own reservations. A few Amerindian individ- disguise the origin of illegally logged wood. uals, however, own chainsaw timber business. Communities without legal title to land are in a Their participation in the cash economy some- particularly parlous condition as both legal (in the times involves full but general intermittent employ- strict sense) and illegal activities can be occurring ment in the mining and forestry sector which can on lands traditionally or customarily used by them. from time to time include poverty-driven illegal Many remote communities suffer from a lack of logging. It has been reported that the majority of knowledge about the correct procedures and regu- 14 Amerindian people who participate in the sector do lations and it is difficult for them to come to the so intermittently particularly during the farming regulatory agency’s head office to acquire appropri- off-season. ate information. Work accommodation in the field is usually basic with temporary tarpaulin tents erected. 2.7.2 Other rural communities Serious diseases such as malaria can be common in certain areas. In some cases, the subcontractor pro- Apart from Amerindian communities there are sev- vides food and other goods which are supplied on eral other substantial settlements within Guyana’s credit to other workers with a high marked up hinterland. Many of these mixed communities were price. Without formal or written contracts, it is eas- established around mining enterprises (bauxite, ier for Amerindian workers in remote locations to manganese, gold, and diamonds) and for periods be underpaid, while being overcharged for services when the mines were productive the communities provided to them by the subcontractor in these log- flourished. However, at various times and for vari- ging camps. ous reasons many of the core mining activities have There are usually no written or formal contracts disappeared leaving a significant number of persons covering the terms and conditions of their employ- without access to livelihoods. In many cases, these ment. This is compounded by the high unemploy- communities resorted to chainsaw logging as a ment and literacy levels, which make them more means of basic income-generation, though without susceptible to exploitation. The national insurance formal access to state forest land, through the per- scheme provides industrial benefits, maternity ben- mitting process this logging activity was illegal. efits, and sickness benefits. Contributions are usual- In a simplistic sense illegal logging was beneficial ly not paid for Amerindian workers. In some to these communities. However, as illegal activities instances it has been reported instances the con- became more widespread the regulatory agency tractor deducts this money but does not submit to under its mandate sought to address the issue. NIS; as a result employees will be unable to claim Recognizing the key social and economic role that for these benefits. logging was playing it followed an approach of reg- As custodians of large areas of forest land indige- ularization through the formation of community nous communities are inevitably affected by illegal based forestry groups which were issues legal per- practices in the forestry sector. Lacking appropriate mits to operate on state forest land. resources, many communities are unable to utilize Though these initiatives have met with some their own forest timber products or monitor them success many of the community logging groups are for encroachment and poaching by third parties. faced with a situation in which the lands allocated Even where arrangements have apparently been to them tend t be relatively poorly stocked in the made with outsiders to log on their lands these more valuable species and of insufficient size to sus- agreements may not have been reached with the tain the number of livelihoods that are needed. prior, free, and informed consent of the whole vil- L AW C O M P L I A N C E I N T H E G U YA N A F O R E S T S E C TO R 2.7.3 Conflicts resulting from forest 2.7.4 Potential environmental impacts resources theft or encroachment within Amerindian reservations Illegal logging, at least the unregulated logging out- side legally permitted areas, is mainly focused on a Amerindian lands in Guyana can be divided for few high value species only. Of these only red cedar convenience into those that have legal title and (which is not widespread) and greenheart are IUCN those that are claimed by communities based on red-listed species. Purpleheart is probably most tradition occupation and/or use. In the first case, no affected by poaching though it has no internation- logging activities can legally take place without the ally recognized conservation status. There have consent of the village council. Some communities been no studies done in Guyana specifically on this are actively involved in logging themselves and pro- species, though it is possible that in certain localities duce chainsaw lumber for the local market and it may be becoming rare and possibly threatened. 15 dealers who have export markets for dressed and/or Illegal logging in the few gazetted protected areas profiles chainsaw lumber. in Guyana is not generally considered a major Other communities who have forest resources threat due to their relative remoteness (though dis- have entered into contracts with individuals or even tance becomes less important for high value species large companies to log their reservation areas. My that are removed as lumber). Iwokrama is poten- of the arrangements have ended up not favoring the tially under threat as it has reasonably good river communities for a variety of reasons and often and road access, though it does have its own rangers include nonpayment or partial payment, over- who patrol accessible areas along its boundaries. An exploitation of the resource, restricted opportuni- exception is the forest reserve area known as ties for community members to benefit directly (for Morabali which is very accessible to some hinter- example, from employment). It is not possible to land communities and has over the past years espe- generalize but it also possible that a number of these cially—coinciding with the decline in the mining contracts are not proper legal documents. industry in the area—suffered quite severely from Lands that are claimed by communities but over illegal logging. which they have no legal title can produce different It has been reported elsewhere that illegal log- conflicts. Such lands may be held by bona fide con- ging can destroy the habitats of endangered species cessionaires who have a right to log them despite and impair the ability of the land to absorb carbon the land being recognized by the community as part dioxide emissions.12 In addition, destruction of for- of its traditional area. On the other hand, individu- est cover can have knock-on effects that may result als may resort to logging in such areas if they feel in flash floods and landslides for example. The situ- that they have a right to do so, even though it is ille- ation Guyana, however, mitigates against such gal. This is especially the case where the communi- destructive effects since even where illegal logging is ty’s titled lands have been depleted of valuable tree occurring it is usually highly selective and relatively species either by their own activities or historic undamaging to the forest ecosystem. encroachment and poaching. 12. Brack, D. 2005. Illegal logging. Chatham House Briefing paper SDP BP 05/02. STATUS OF ILLEGAL LOGGING AND OTHER ASPECTS OF FOREST SECTOR LEGAL COMPLIANCE CHAPTER THREE Impact on the Forest Industry 17 he impacts of illegal logging on the legal always made). Chainsawn lumber, legal and illegal, T operations are reported to be minimal. There are no reports of marked difference in price to the retailer or consumer between legal is certainly cheaper on the local market than con- ventionally sawn lumber. Large operators are not greatly affected directly and illegal lumber (there is no record, for example, by illegal lumber production—though in accessible of a lumberyard having two price levels: one for areas away from their active logging areas poaching lumber with the permit and another for lumber reportedly does occur, particularly close to roads without). It is likely that most illegal lumber bought and rivers, from both large and small operators by retailers and consumers is done so unwittingly (either intentionally or otherwise). (though it is probable that proper checks are not CHAPTER FOUR Forest Sector Institutional Analysis 19 4.1 POLICY FRAMEWORK resources and contribute to national develop- ment while allowing fair returns to local and for- The relevant policy framework for the forestry sec- eign entrepreneurs and investors. tor includes the National Forest Policy, the New I Achieve improved sustainable forest resources Draft Forest Act, the National Forest Plan, and the yield while ensuring the conservation of ecosys- relevant chapter(s) of the National Development tems, biodiversity, and the environment. Strategy I Ensure water protection and rehabilitation: pre- vent and arrest the erosion of soils and the degradation of forests, grazing lands, soil, and 4.1.1 National Forest Policy water; promote natural regeneration and refor- A new National Forest Policy was approved by the estation and protect the forest against fire, pest, Government in 1997. This is the first official policy and other hazards. statement since 1953 and was developed over a period of two years through a process that involved A subsection of the national forest policy extensive consultation with interest groups. The addresses the forest industry: new policy responds to significant changes in Guyana’s economic, social, and political environ- I The fundamental objective shall be to develop a ment over the last fifty years and addresses the financially and economically viable forest country’s national and global responsibility for the industry. sustainable management of the forests. The policy I The number and types of forest based industries recognizes the vital role of the forests in maintain- established shall be consistent with the capacity of ing the earth’s climate and ecosystems and that they the nation’s forest for sustainable management. are an increasingly important source of income and wealth for national development. Forest laws are 4.1.2 The National Forest Plan being reviewed and updated to support the imple- mentation of the new policy. The National Forest Plan was produced in 2001 by Its objectives are to: the GFC after a period of consultation with stake- holders in the sector. The Plan provides a frame- I Promote the sustainable and efficient forest work, and identifies programs and activities that activities which utilize the broad range of forest must be accomplished, to ensure implementation of the policy and compliance with the law. However, the log tracking system has historical- Recognizing the broad purview of modern forestry, ly never undergone a third party audit and is still l it stated clear objectives, with associated activities, plagued by inaccurate documentation on the pro- for national planning, forest resource management, duction register and the removal permits. As a forest industry, research and information, educa- result forest products are not easily tracked, espe- tion and training and social development. cially when there is deliberate falsification of infor- mation by individuals trying to escape payment of royalties to the state. The tags are also inappropri- 4.1.3 National Development Strategy ately utilized since they are not being applied at the The National Development Strategy speaks to many point of extraction, but rather at a later point dur- aspects of the forestry sector that have relevance to ing processing. its environmental performance. On land-use, it The GFC has been holding meetings with con- 20 states that the nation’s forest policy will be an inte- cessionaires to improve on the documentation gral part of a comprehensive series of land use aspect and correct use of the log tags to correct plans. These plans will recognize the conflicting but short comings of the system. Third party verifica- legitimate interests of different stakeholders and tion of the tracking system is also currently being promote a process of developing a consensus on undertaken by Proforest of the UK. land use. Amerindian Councils and private owners with more than 100 ha of forest land will be encour- 4.2.2 Other policies aged to develop and implement sustainable man- agement plans for forests on their lands, with the Other policies and instruments that address illegal assistance of the GFC. All resources of the forests logging are the requirements for management will be managed in a sustainable manner for the opti- plans; the Code of Practice for Forest Harvesting; mization of their social, economic, and environmen- the regularization of chainsaw loggers and develop- tal benefits. The ecological and economic impact of ment of community forest groups; the facilitation utilizing timber or nontimber forest products will of Amerindian groups to access SFPs; new draft for- assessed by the GFC in conjunction with the EPA est law (currently with the Attorney General’s and their extraction regulated as appropriate. chambers); audit of the log-tracking system and the Management or operational plans will be required development of a legal verification scheme; support for the harvesting of al nontimber resources of the for FSC certification; outreach and training in the forests before a license or permit is issued. sector; development of a Code of Practice for lum- beryards. 4.2 POLICIES RELATED TO ILLEGAL LOGGING ACTIVITIES AND THEIR 4.2.3 Internal armed or significant social IMPLEMENTATION conflicts There are no internal armed conflicts in Guyana 4.2.1 Log tracking system though violent gun crime has for recent years been a common occurrence. Social conflicts between the The main explicit policy relating to illegal logging is two main ethnic groups tend to worsen around the the log tracking system. The system has been func- national election period. tional since 2000 and is the means by which GFC controls the level of harvesting and verifies the geo- 4.3 LEGAL FRAMEWORK graphical origin of logs. The system also includes the use of a production register which is issued to all concessionaires but remains the property of GFC. 4.3.1 Forests Act The production register is one means by which GFC verifies the actual logging volume that is allocated Until repealed by passage of the “new� Forest Act to the concessionaires and transcribed on the which is in draft, current law relating to forests removal permits. comprises of the following Acts namely: Forests L AW C O M P L I A N C E I N T H E G U YA N A F O R E S T S E C TO R Act, Guyana Timber Export Board Act, Timber I Measurement of logs for royalties Marketing Act, Balata Act, Guyana Forestry I Felling limits Commission Act, Forests (Exploratory Permits) I Protected species Amendment Act and the Forests (Miscellaneous I Conveyance of forest produce Provisions) Act.1 It also includes regulations made I Submission of information to support applica- thereunder and certain provisions of the State tion for concessions Lands Act and Amerindian Act. I The regulation of activities of sawmillers and The main piece of legislation dealing with timber dealers forestry is the Forests Act which was enacted in 1953 (Chapter 67.01 of the Laws of Guyana). This In 1979, the Guyana Forestry Commission Act Act provided essentially for the following: was enacted to place responsibility for implementa- tion and enforcement in the Guyana Forestry 21 I Substantive powers for designating State forests Commission. The powers of the Minister responsi- I The award of forestry concessions ble for forests (except the power to make regula- I The protection of State forests tions and hear appeals) were turned over to the I The enforcement of law relating to State forests Guyana Natural Resources Agency. This Agency I Making of regulations concerning State forests was subsequently abolished. The power of the President to award land grants and leases of state In keeping with its main objectives listed above, land within state forests, subject to certain regula- the Forests Act also sought to determine questions tions, remains in the Land Development Act. relating to: There was, however, some confusion as to whether this entity (GFC) was autonomous, or not, I Sale of forest produce of the Government. Issues abounded as to the I Suspension and cancellation of leases parameters of the Minister, the Board members of I Ownership of forest produce the Commission, and the Management. These I Offenses, including: issues are being resolved in favor of the autonomy • Trespass of the Commission, which arguably was the whole • Unlawful possession of forest produce intent and purpose of the statute which created it. • Counterfeiting and similar Offenses The powers of the Minister responsible for forests have, thus, largely been transferred to the The Act also clarifies the position on: Commission, except where specifically it is stated in the Act or any other related Act that the Minister is I Power of the court to confiscate forest produce so empowered. I Penalties for erection of unauthorized building Additionally, under the Mining Act of 1989, the and so forth Guyana Geology and Mines Commission has the I Power to search for forest produce power to grant prospecting permits and licenses on I Power to seize and detain private, Government and State lands in Guyana and I Powers of forest officers to issue mining permits and licenses for the extrac- I Protection of rights of Amerindian Communities tion of minerals. There can thus be a concurrent jurisdiction on the part of the GFC and the GGMC Forest regulations made under the Act deal for the same piece of land when the land has forest mainly with: on it and minerals beneath. Further, Guyana has undertaken several obliga- I Concessions granted, such as SFPs, WCLs, and tions in keeping with International agreements to TSAs which it is a party. These treaties are concerned with I Royalties and fees forest management and include the following: I Convention for the Protection of the World 1. Ramjatan, K (ed. G Clarke). 2004. Forest Law. Unpublished Cultural and National Heritage 1972 training manual. Guyana Forestry Commission. FOREST SECTOR INSTITUTIONAL ANALYSIS I Convention on the Trade in Endangered Species 4.3.2 Regulatory disincentives and (CITES) 1973 incentives to legalize forestry I Amazon Cooperation Treaty 1978 operations I United Nations Framework Convention on Climate change 1992 The policy and regulatory frameworks for the forest I United Nations Convention on Biological sector in Guyana are generally considered to be rel- Diversity 1992 atively good, though there is an opportunity to revisit the National Forest Policy Statement 10 years The new Forests Act has its origin in the draft after its approval by government. The current legal Act of 1998 which was born out of a report on framework is operational but clearly outdated, being Forestry Law and Policy prepared in 1995 and sup- based primarily on an Act of 1953. The draft new ported by British Aid. After an eight year period of forest act needs to be enacted as soon as possible. 22 gestation, the draft law is scheduled to soon become While the frameworks are in place, implementa- law and will constitute the principal legislation tion of the monitoring and control systems in par- dealing with forests. ticular are often not fully adequate and effective in The new Forests Act proclaims that its purpose eliminating illegal practices. The main reasons for is to: “consolidate and amend the law relating to this are the human, physical and financial resource forests, to provide for the protection and rational use constraints though the current review and audit of of the forest resources of Guyana, the regulation of for- the system being undertaken by a third party will no est industries, the marketing and export of forest pro- doubt identify some weaknesses in the system duce and matters incidental to or connected there- which will require attention. with.� This expands the purpose of the “old� Act by Incentives and disincentives pertain at the level recognizing the need for protection and rational use of the individual operators. The primary incentive while restating the regulatory role and function of to undertake illegal logging is undoubtedly one of the State. financial gain, put into sharp contrast against the The purpose of the new Act are further backdrop of the rural poverty prevalent in Guyana. described and set out in more details as follows: The greater the returns from logging high values species, at relatively low cost by chainsaw ripping, I Conservation of forests including: the greater the incentive. The bigger picture is one • Conservation of biological diversity, soil, and of legal access to the resource. Adequate legal and water resources long-term access to the resource, including higher • Protection of specific trees and forest plant. value species, would act as a disincentive to illegal • Protection against degradation, fires, pests operation. and diseases Notwithstanding the driving force of poverty, I Participation of Amerindians, local communi- the disincentive of getting detected and arrested ties, NGOs, commercial users and others in seems to be too weak. In the absence of official fig- developing and implementing forest policy; ures it is not possible to say with certainty, but it is I Sustainable use of forest resources in keeping likely that the chances of actually getting caught in with national policy and developmental objec- the act of logging illegally are rather small. There is tives; a greater chance of getting apprehended removing I Comprehensive regulation of the multiple and lumber—but in that case the fines seem to in effect complementary functions and uses including remove only the profit for the load and not more (at traditional uses; least for first time Offenses). It seems to be the case I Promotion, regulation of primary conversion that repeat offenders are common. activities, and quality control of value added for- A disincentive that could perhaps be developed, est product; and, though it would be quite remote from many of I Discharge Guyana’s responsibility in ensuring those engaged in illegal logging, is that of the image that its forest activities do not damage the envi- of Guyana’s forest sector in this age of international ronment of other states or extended areas. scrutiny of legality and verification of timber origins. L AW C O M P L I A N C E I N T H E G U YA N A F O R E S T S E C TO R 4.4 SUMMARY OF THE MAIN ISSUES AND Government lands are those purchased by, or CHALLENGES FROM OTHER SECTORS granted to, the Government to be developed for THAT AFFECT LOGGING COMPANY general revenues, such as hospitals, schools, gov- OPERATIONS ernment administrative buildings, and land devel- opment schemes. State and Government Lands are approved by the Ministry of Agriculture, while The institutional framework for forestry in Guyana under the existing legislative framework Cabinet is made complex by the existence of other bodies must approve the sale of State and Government whose functions overlap with those of GFC. Lands Particular issues relate to wildlife under the control The large number of agencies and sub-agencies of the department of wildlife, especially as wildlife that are concerned with the allocation of land and trade is an important activity often carried out the collection of rents and fees from the plethora of 23 within the state forest and which many lead to con- land types has led to accusations of unfairness, flict with concession holders. The environmental bribery, and corruption. What is certain is that this protection agency also has a broad mandate on high number of government organizations lead to environmental issues, including the approval of inefficiencies.2 environmental management plans and environ- mental impact assessment (EIAs) for forest conces- 4.5 ACTIVITIES FOR LOGGING sion holders. This has lead to dissatisfaction as the OPERATIONS, ESTIMATED COSTS, OR industry has to provide plans to satisfy two agencies PRODUCTION AND COMPLIANCE, for what is a single set of activities. AND PROCEDURES RELATED TO Mining is controlled by the Guyana Geology and TIMBER SALES AND CONCESSION Mines Commission, with mining being a major ALLOCATION cause of forest damage in Guyana and is also responsible for social problems. There is usually dual issuance on state forest for both the extraction A flow chart of material through a typical large- of forest produce and sub-surface rights to different scale TSA operation is given in Figure 1. Costs, of individuals. course vary, but variable costs of producing and There is no coordinated land-use policy in delivering 1 m3 of dressed lumber at Port Guyana. Although over the years, several attempts Georgetown from a concession 300km away are in have been made to devise comprehensive land the region of US$225. capacity classifications for the country, and to uti- The cash flow through the logging, extraction, lize these as the basis for land zoning and land allo- and retail system for a community logging associa- cation, the process is far from complete. As a result, tion operating on its own SFP is given in Figure 2. land-use throughout the country is haphazard, Variable costs of producing and delivering 1 m3 of unplanned, and wasteful. rough sawn lumber at a Georgetown lumberyard The problems that are inherent in the absence of from a concession 80km away total about US$135. a land-use policy and land-use plans are com- The cost of full compliance with the law and reg- pounded by the complexity of the land tenure sys- ulations is estimated at less than 5 percent of total tem. Publicly owned lands that comprise State costs of logging. Lands and Government Lands. State Lands, former- It was generally reported that the procedures ly called Crown Lands, are controlled by the related to the sale of timber were adequate and Commissioner of Lands and Surveys. However, the transparent, though it was conceded that once ille- Guyana Forestry Commission, the Guyana Geology gal rough sawn lumber is dressed and in the system and Mines Commission, and the Lands and Surveys it is difficult to detect. Department administer land that is utilized for forestry, mining, and agriculture, respectively. Each of these three Government agencies may issue titles for different purposes over the same land space. 2. From the Guyana National Development Strategy (2000). FOREST SECTOR INSTITUTIONAL ANALYSIS 24 FIGURE 1 Flowchart of Material through a Typical Large-Scale TSA Operation Logs/ Break bulk Truck Piles wharf Container Squares Container wharf Log yard Sawmill Sawn Local Log market Sorting yard Stockyard Truck lumber consumer L AW C O M P L I A N C E I N T H E G U YA N A F O R E S T S E C TO R Logs Profiled Container Planer shop Export shed Truck lumber wharf Harvest block Container FIGURE 2 The Cash Flow through the Logging, Extraction and Retail System for a Community Logging Association Operating on its Own SFP Retail consumer Lumberyard Workers Tractor GFC owner Fuel Fuel Contractor Hauler supplier wholesaler Logging association Ration Ration retailer wholesaler Administrative Chainsaw assistant operator Chainsaws Chainsaw parts wholesaler supplier Chokerman Roadmen FOREST SECTOR INSTITUTIONAL ANALYSIS 25 Allocation of new concessions is effected after land owners and Amerindian councils. Tags are not standard procedures that are enshrined in the law transferable once issued. (for State Forest Exploratory Permits) or adopted as All log tag numbers are when reported on the best practice by GFC (for SFPs). In both cases it is a removal permits are linked in a timely manner with competitive process following public advertisement the name of the operator to whom these were of available areas. Applications are screened by a issued. Whenever a tag issued to Concession X and GFC technical committee and, for SFEPs, by a sub- is utilized by Concession Y, the GFC’s system points committee of the GFC Board of Directors. The GFC this out. The GFC’s keeps record of al tags issued, to Board gives final approval for allocation of SFPs whom and when. Upon utilization of tag as indicat- while the Cabinet of the incumbent Government ed by the removal permit, these are entered as uti- needs to approve allocation of SFEPs. lized in the system and cannot be reused. GFC’s tags have specific issued dates integrated into the 26 records. Upon expiry of the valid dates, the system 4.6 MONITORING AND CONTROL detects these and the concessionaire is contacted. SYSTEM All timber produce leaving the stump which is destined for sale, whether from State or private 4.6.1 Concessions, permits, and tags land, must be accompanied by a removal permit stating the tag numbers, species, sizes and so forth. Logging on State Forest land should only occur This permit should accompany the vehicle at al where a forestry concession has been issued. Al times which in transit and be surrendered on associated operations associated with logging— request to a GFC officer. including felling, log removal, road construction, Royalties are payable, within a specified period and so forth—should be a carried out in accordance after removal, on the volume of logs (for TSAs) or with the GFC’s Code of Practice for Timber lumber (SFPs) that is transported according to the Harvesting. In addition TSAs and WCLs should removal permits. Acreage fees are fixed rate annual have an approved 5-year forest management plan fees based on the area of individual concessions. and an annual plan of operations. In addition to concession permits, al those oper- SFP concessions are not subject to management ating a chainsaw on their concession are required to plans by the owners. Logging is regulated by the obtain an annual “saw-pit� license; sawmills identification of an annual volume quota deter- (including portable sawmills) are required also to mined by the size and integrity of the concession be licensed as are al lumberyards engaged in retail- and the forest type. ing of timber products. In addition, lumberyards Logging on private lands—such as agricultural should keep records of receipts and sales of lumber land and Amerindian reservations—until recently and are subject to regular monitoring by the GFC. has not come under the regulation of the GFC, though the recently passed Amerindian Act (April 4.6.2 Law enforcement 2006) does give the GFC greater authority to regu- late logging activities on reservations. The GFC is solely responsible agency for forest law All trees felled—including those on private enforcement (though from time to time the assis- lands—should be identified with a GFC tag and the tance of the Guyana Police Force may be enlisted corresponding tag affixed to the stump. Tags are for particular incidences or operations). The issued to SFP concessions based on the quota iden- Environmental Protection Act of 1996 empowers tified. Once used up further tags can be requested the Environmental Protection Agency with requir- once a case is made that the quota was insufficient ing ESIAs for any new large-scale forest develop- or the mean log size is less than that used to deter- ments and with monitoring compliance with con- mine the original number of tags (3 m3/tree). Tags ditions laid out in environmental permits (which in are issued to TSAs and WCLs based on the Annual practice is does in close collaboration with the Allowable Cut determined in the forest plans. Tags, GFC). Ministries of Labor and Finance are directly marked private and distinguished from State Forest responsible for enforcing compliance with tags by a different color are issued on request to labor/OHS and financial laws respectively. L AW C O M P L I A N C E I N T H E G U YA N A F O R E S T S E C TO R The GFC employs around 70 persons in its Forest though more resources would undoubtedly result Monitoring Division located across a network on 22 in more effective law enforcement. forest stations located around the country. The most common penalties associated with Methods of law enforcement include routine noncompliance are detention of any equipment checks of permits as any produce passes a forest sta- involved (such as chainsaws), impounding of illegal tion, specific field visits based on tip-offs (normally produce and a monetary fine (strictly it is a “com- from neighboring concessionaires reporting pensatory fee� agreed by the Auditor General in lieu encroachment); regular night/day patrols along of court action as the later is a lengthy process and main road arteries and in-forest; bi-annual on-site the fines stipulated in the Act of 1953 are ridicu- legal compliance and environmental monitoring of lously low in today’s economy). The compensation all concessions; weekly monitoring of lumberyards. is based on estimated market value of the produce In addition, GFC carries out ad hoc stump inspec- and ranges between 17 percent and 100 percent, 27 tions in cases where the source of logs or lumber is depending on number of previous Offenses, in in doubt. addition to outstanding royalties. After payment The GFC believes that its tracking, monitoring the produce is released; detained equipment is also and control systems are largely effective in deterring released on payment of between US$250 and illegal logging and detecting it when it occurs. US$500. In rare cases, where there is dispute, the However, no mater how good a system there will be mater can be taken to the courts. loopholes and transgressions which are not easy to Complete records of detection by the GFC of eradicate especially given the size and remoteness of illegality have only recently been collated and the the forest area. In particular, there have been database is still in development. However, initial reports of illegal use of tags (for example, re-using internal records indicate that approximately 285 or transferring) in the sector to facilitate the “laun- cases of noncompliance across the range were dering� of illegally sourced logs through the system. detected and monetary penalties imposed during Detection rates of al noncompliance within the the first 6 months of 2006. An estimated 30 percent forest sector are considered quite high and a figure of these may have been incidences of timber theft of 95 percent has been quoted. It is likely that this (i.e. unlicensed logging and un-permitted removal). figure is an average and that for certain illegalities Corruption in the forest sector in Guyana is the actual rates will be higher or lower. For exam- widely considered to exist but to be at a “petty� ple, detection of irregularities with permits or trans- level, strictly following Brack.3 gressions of the Code of practice may be quite high whereas detection rates of unlicensed logging may be lower. 3. Brack, D. et al. 2003. Controlling the international trade in Operational funds and resources are provided illegally logged timber and wood products. The Royal by the GFC annual budget which is financed prima- Institute of International Affairs. Petty corruption tends to be short-term and tactical. Typically it consists of graft given to or rily by collection of royalties and acreage fees. In solicited by junior officials to falsify harvest declarations, overlook general, the relative provision of monitoring staff petty infringements, ignore logging or laundering of logs from and resources is considered sufficient by the GFC, outside prescribed boundaries and avoid reporting restrictions. FOREST SECTOR INSTITUTIONAL ANALYSIS CHAPTER FIVE Knowledge Management 29 n common with many institution in Guyana the I importance of law compliance promulgated. GFC GFC suffers from a high turnover of staff due has an excellent GIS department that also provides mainly to emigration of persons to the US and an efficient service to the sector. A key area where Canada (in particular). However, formal knowl- improvement is needed, and this is recognized by edge management in the GFC is currently relatively GFC, is in maintaining a user-friendly database of good in terms of record keeping, data management occurrence of illegal logging and noncompliance. and training. GFC has a social program that Once set up this can be queried and results used to involves elements of participatory forestry. assist future planning. Where data are being collect- However, more could be done in this regard espe- ed by different sections of the regulatory agency, in cially in terms of outreach programs informing particular, some overview follow-up work could be communities and individuals of the legal require- done to assess accuracy of data and to flag any obvi- ments and regulations. At the same time, issues sur- ous discrepancies and nonreconciliations in data. rounding illegal logging could be addressed and CHAPTER SIX Forest Sector Competitiveness in Guyana 31 6.1 ECONOMIC TRENDS of small chainsaw operators and a major increase in foreign investment since 1995 resulting in exports 6.1.1 Background of timber increasing from 34,000 m3 worth US$8 million in 1995 to 145,000 m3 worth US$51 million The agriculture and mining sectors remain the in 1996. Current value of exports looks to top bedrock of the Guyanese economy.1 About 40 per- US$60 million in 2006. cent of Guyana’s merchandise exports are made up In spite of the rise in timber harvesting, the local of rice and sugar, 8 percent of unprocessed forest privately owned saw milling sector has not fared products, 26 percent of gold, while rum, fish prod- well with competition coming from chainsaw oper- ucts and nontraditional exports including pineap- ators undercutting them on the local market, high ples, water melon and exotic fruits, make up the operating costs and inadequate quality owing to old remainder. and obsolescent equipment and a lack of kiln facil- Guyana is a net exporter of timber and timber ities which are a constraint on the export market. products. Forest industry development is encour- Government policy has also changed as it sees the aged by the Government of Guyana in order to forest as a valuable asset and aims to ensure sus- improve the technologies, increase employment tainable use of these resources and to this end has and improve the forestry sector’s contribution to strengthened the regulatory framework for exam- the Gross Domestic Product. (GDP). Markets for ple, the Environmental Protection Act and the timber can be found traditionally in Europe, North revised Forestry Act. America and, more recently, in the Far East. Some of the key issues to be faced by the sector are summarized as follows: 6.1.2 Sector performance I Production Issues: Locally owned companies are Between 1972–92, 90 percent of lumber produced undercapitalized and poor state of equipment was sold locally. However, timber production has hinders production of export quality product; increased radically since then with the proliferation Recovery of lumber from logs is low (35–45 per- cent) and there is a high degree of wastage; Lack of skilled management and technical operators; 1. This section draws in particular on an unpublished work- Wide range of species grown but not available in ing paper on timber markets produced by the GFC in 2003. large stands, resulting in species being widely spread out thereby increasing the cost of har- increase to the regional Caribbean markets, where vesting; Short leases reduce the ability to raise over the years there has been a high level of unsatis- capital. fied demand for hardwoods other than greenheart I Policy Issues: Lack of forest inventory to facili- and the development of subsidiary products, for tate planned harvesting; Chainsaw operators not example, parquet flooring. well regulated; Cutting cycle increase from 25 to HRD opportunities in forestry and wood prod- 60 years; Intense competition from concessions ucts exist in such areas as strengthening the capaci- with apparent preference for foreign owned ty of the Forest Producers’ Association of Guyana companies. and the Wood Products sector of the Guyana I Economic Issues: Timber always sold at below Manufacturers’ Association on improving cost locally, subsidized by exports; Selling solely sawmilling techniques including welding, brazing, on local market not viable; Low levels of added metallurgy, sawmill types, saw sharpening and ten- 32 value; Timber being replaced by concrete and sioning, edgers, planers/molders; training in appli- steel. cation and maintenance of value-added machinery I Ecological Issues: Soils of Guyana are essentially such as kilns; chain-saw lumber operation/direc- alluvial soils, are acid (pH 3.6 and needs 3.5 tons tional felling, sawing techniques, recovery and safe- of lime per acre) and quickly degenerate once ty, care and maintenance of chain saws; low impact trees are removed. logging techniques—directional felling, skid trail layout, machine operation, safety and environmen- tal aspects; logging practices—scaling, grading, log 6.1.3 Sector development preparation, chemical control of insects and fungi; Foreign owned companies engaged in the produc- and forest inventory/forest sampling, enumeration tion of plywood are dominating the industry. methods, data recording, mapping, data processing, However, their costs of operations are increasing reporting. and this as well as the economic crisis in South East Asia where demand has fallen will affect their prof- 6.2.2 Competition itability. Also some of the locally owned sawmills are in danger of going out of business and there Many of Guyana’s forestry products face competi- appears to be few new buyers. tion on the export market because of cost of pro- duction and transportation issues. It is generally believed that the cost of production is too high and 6.2 SECTOR COMPETITIVENESS this eroded both the export as well as the domestic markets. When one considers the high cost of ship- 6.2.1 Human resource development ping from Guyana (currently estimated at as much as US$25/m3 more than from neighboring Brazil) HRD is a priority identified by the sector and to North America, Europe, China, and India, this encompasses al areas of technical skills training cov- only serves to exacerbate the competitive disadvan- ering saw milling techniques and maintenance of tages. It should be noted that in many cases, the machinery and equipment. Several HRD opportu- shipping of relative small volumes precludes opera- nities to increase competitiveness of the forestry tors from enjoying the benefits of volume shipping. and wood products sector have been identified. In addition, lesser-known species are at a marketing Although the HRD needs for the sector are disadvantage since little is known about their appli- numerous, with the vast resources of raw materials, cation. improved competitiveness could provide maxi- On the local market. there is an increasing trend mum benefits to the industry and the economy by to move away from the use of wood products in the improving the quality of products, increasing pro- construction industry in preference for cement and ductivity which in turn could make wood products other imported building materials. The explana- competitive on the local market and save foreign tions for this is that it is more cost effective to use exchange by reducing imports of cement and steel. concrete, given its durability, and also the relative On the export side, sales of wood products could high cost of the local building products. The local L AW C O M P L I A N C E I N T H E G U YA N A F O R E S T S E C TO R materials also lack quality consistency of dimen- I Limitation on log exports and emphasis on value sions and are prone to early deterioration if used added downstream production incorrectly. Nevertheless, local producers feel that I Agreement to allow effective multiple use of the domestic prices for wood products are still too forested areas by different users low. I Special efforts to promote income from nontim- In addition, the chainsaw loggers and mobile ber uses including ecotourism. sawmills to a lesser extent have provided intense I Provision to allow for portions of allocated lands competition to the larger establishments, since con- to be recalled to facilitate national priorities such sumers are more price sensitive. This has in man as protected areas instances forced the large milers to sell higher qual- I Provision to allow for adjustments to recognize ity lumber at chainsaw lumber prices, thus reducing Amerindian settlements their profitability. I Undertaking to maintain strict observance of 33 environmental norms, good forest practices, and utilization of environmentally friendly 6.2.3 Imperfect competition technology The Government’s program of attracting foreign I Respect for the rights of the Guyanese people investment saw the commencement of operations and more especially the indigenous people and by two foreign owned firms in the forestry sector workers employed by the investor between 1990–92. In an effort to attract these investors, generous 6.2.5 Forestry and the WTO incentives were provided including 5 years tax hol- idays, duty free concessions and other incentives. It should be noted that, like fisheries, forestry is not As a result, the country benefited only through the one of the sectors covered by the WTO Agreement collection of royalties, acreage fees and employee on Agriculture (AoA). Whether Guyana has an income taxes, estimated at less than 2.2 percent of objective interest in having forestry included in a the export value of the logs revised AoA is not clear but it would seem better to As a result of these incentives, many operators have multilateral disciplines that would ensure that are of the view that they do not compete on a level some degree of harmonization and mutual recogni- playing field. There are great concerns about for- tion of certification schemes if only to rule out the eign firms competing with local producers. possibility of their arbitrary use. Bringing forest cer- tification into the WTO framework may also help to address the concerns of some environmental lob- 6.2.4 Investment possibilities bies on the possible negative impacts of greater lib- Though a significant part of the forest resources eralization of trade in forest products, but there are land area has already been granted for concessions legal difficulties in protecting particular forms of there are possibilities for State Forest Exploratory production under WTO rules (which normally look Permits which once the conditions are met can be only at the product traded, not how it is produced). converted to TSAs. Investors are also encouraged to participate with existing operators in activities to 6.2.6 Recent developments produce furniture, plywood and veneers, parquet, floor tiles and kiln drying and wood preservation The forestry sector’s importance is seen to lie in its activities. The investors may wish to enter into joint export capacity, its quantitative role as an employ- ventures or special arrangements with er, especially in the hinterland, and its largely holders/operators of concessions in the industry. unseen effect on infrastructure such as roading and Among the conditions set out for investors even upon conservation, since logged forest is large- (based on the policy of the Guyana Government ly intact, in contradistinction to the effects of other that the natural resources must be utilized in a sus- forest uses like mining and agriculture. Of course it tainable manner while making a significantly is easy to point to flaws: there are high rates of labor greater contribution to the national economy) are: turnover on concessions owing to working condi- FOREST SECTOR COMPETITIVENESS IN GUYANA tions and logged forest lacks the classic diameter income levels and hard mortgage conditions distribution of virgin forest with the old upper restrain the ability of the population to acquire or canopy dominants. Nevertheless, the sector’s status improve their homes. is high, and at the present moment it takes on a new Guyana has an independent organization, GO- role as the GFC becomes a profitable State-owned INVEST, which is designed to provide a one-stop enterprise, able to fund its own operations and to service for potential foreign investors, and also to pay a surplus into the Consolidated Fund.2 assist exporters, although other Government agen- However, the commercial part has not, until cies also participate in the decision to allow any very recently, been doing so well. Guyana has only proposal. GO-INVEST produces a useful summary one plywood producer, Malaysian-owned, and publication describing Guyana’s infrastructure and prices in this market have been driven very low by outlining potential investment opportunities. It is the effect of illegal logging in Indonesia following also equipped to assist Guyanese exporters. 34 the lifting of the log export ban on IMF urging. The forestry sector has received some support in Malaysian plywood exporters have been hard hit by recent years to develop its competitiveness, notable China’s reversion from plywood to logs. Guyana from the Caribbean Competitiveness Program of now faces a situation where a certain amount of the the Canadian aid agency, the UK Department for commercial resource is locked into a subsector, ply- International Development and the EU. A recent wood, whose short- and medium-term prospects initiative that will increase competitiveness is the are unfavorable. establishment of the Guyana Forest Products There is considerable scope in the domestic Marketing Council. Already this provides a useful market for renewing the housing stock, and sawn service to the sector through an informative web- timber and plywood should benefit from this, but site, training, market information, and serving as a clearing-house for enquiries from overseas 2. Hunter, L. 2001. Op. cit. prospects. L AW C O M P L I A N C E I N T H E G U YA N A F O R E S T S E C TO R CHAPTER SEVEN Summary of Underlying Causes of Noncompliance and Illegal Logging 35 recent draft guidelines document,1 devel- A stances. However, it has been voiced that if poverty oped in collaboration with World Bank is the initial cause it may not remain so over time. ENA FLEG Secretariat, has summarized In other words, certain individuals, through logging common types of illegal logging worldwide and activities may begin to rise above poverty thresholds suggested potential drivers for the typical contexts. and begin to pursue activities for more commercial For the types of illegal logging of significance in reasons. Typically, this is evidenced in the ground Guyana many of the potential drivers proposed by persons buying more chainsaws and becoming a would apply including the inability of people to contractor subsequently perhaps purchasing a trac- meet their basic needs, poverty, disputes over land tor to rent out to contractors and so on. The line tenure, inefficient legal procedures, inadequate between poverty-driven and commercially-drive monitoring data on timber flows and origin of tim- illegal logging is therefore unclear. ber and strong export demand for certain species. It needs pointing out that persons engaged in Perhaps atypically, compared with other coun- illegal logging for reasons of gaining a livelihood, or tries, underlying causes reside more in individual for more commercial reasons, may not be operating circumstances (economics, perceptions, knowl- illegally habitually. Often logging is transient, part edge) than in governance and legal framework as time, and opportunistic and any illegal activities the later are widely considered to be rather well- may be supported by legal forestry activities and developed in Guyana in the forest sector (though other small-scale income-earning pursuits such as there are questions about the efficiency of imple- farming. mentation and monitoring). The issue of land allocation and access to If the widely reported view is accepted, that the resources is often raised by community associations illegal logging that is taking place is mainly of trees and indigenous communities. In some, though not being logged and converted to lumber at stump, al, cases the arguments for access to the more valu- then the underlying cause, or driving force, is pri- able resources make sense when the number of per- marily one of poverty and the need for a livelihood sons involved in the associations and living in some for persons living in economically denuded circum- Amerindian communities are compared with the size and productivity of the resources that are cur- rently legally available. 1. Anon. 2006. Guidelines for Formulating and Implementing National Action Plans to Combat Illegal Logging and Other The high value of certain species and therefore Forest Crime. SAVCOR-INDUFOR /World Bank. the potential rewards of logging those species (legal- ly or illegally) have been suggested as a powerful legal right to log them, can result in unwitting tres- driving force, especially when linked to poverty and pass especially for communities who tend to view the earning potential of the few options typically natural resources as common and not legally available. owned. Lack of knowledge may be a cause of a certain On the regulatory side, though the legislation amount of noncompliance and illegal activities in and systems in place are considered broadly ade- the broadest sense—and this transcends al sizes of quate, the lack of capacity to fully enforce them and operations. Ignorance of procedures, of regulations monitor activities provides a loophole for illegal and the Code of practice, of where legal concession activities whatever the driving force might be. boundaries actually are (a typical excuse for Punitive measures when noncompliance is detected encroachment), of the actual costs of compliance. and arrested do not seem, at least superficially, to be Lack of information about who actually owns acting as a sufficient deterrent. 36 neighboring concessions, or that anyone has the L AW C O M P L I A N C E I N T H E G U YA N A F O R E S T S E C TO R CHAPTER EIGHT Findings and Suggested Actions 37 he findings of this rapid assessment suggest T lations. There is a definite need for a greater collec- that illegal logging and noncompliance does tive will to address these two issues in particular. occur in Guyana though probably at a far Land allocation is of course a politically-charged lower rate in comparison with other countries.1 rel- and emotive issue. However, given the nature of the atively minor noncompliance is common and spans apparent driving forces behind much of outright the sector from small to large operators. Logging in illegal logging, it is doubtful whether more rigorous areas where there is no legal right seems to be enforcement or stronger punitive measures would occurring and apparently is mainly perpetrated by be broadly very effective or even politically desir- some chainsaw operators from rural communities able. Therefore, the issue of land and resource in response to poverty, limited livelihood choices access is one that should be on the table for discus- and restricted legal access to land and/or better sion at appropriate fora in search of a longer term quality resources. The current high price of purple- solution to the problem. heart, in particular, is an additional driving force On the ground monitoring of al types of non- for illegal logging. compliance could be improved by a greater pres- The legislative, policy, governance and regulato- ence in hinterland areas by GFC inspectors, rangers ry framework is considered to be generally well- and guards (a policy that the GFC is apparently developed and largely effective in encouraging pursuing). On several occasions it was suggested by legality and best practices in the forestry sector. informed persons that aerial survey and monitoring There are two obvious caveats to that in the policy would be a useful tool to employ. area of land allocation/land-use planning and in the The importance and value of on-going training capacity, due to limited resources, of the regulatory and awareness-building for al parts of the sector, agency to fully enforce the law and associated regu- including the regulatory agency, should not be overlooked. The whole chainsaw lumber subsector requires 1. Guertin, C-E. 2003. Illegal logging and illegal activities in further investigation from socioeconomic, legal, the forestry sector: overview and possible issues for the and environmental perspectives. The steep rise in UNECE Timber Committee and FAO European Forestry chainsaw sales in recent years needs to be looked at Commission. Discussion Paper. This paper presents esti- and data on who is making the purchases, why and mates of the proportion of wood illegally harvested in 2002 ranging from 20 percent to as high as 90 percent in 9 coun- where the chainsaws are being utilized should be tries from 4 continents. collected. Studies would inform the regulatory agency on whether there is a requirement for a I Development of efficient data collection, , stor- change in policy or approach to chainsaw lumber age, retrieval and reconciliation systems pertain- production and the monitoring of chainsaw owner- ing to illegal logging and noncompliance ship and use. I Support for development and implementation It is suggested that technical assistance, mone- of legal verification and assurance systems tary support and other interventions should be I Investigation into chainsaw lumber production directed towards: and chainsaw ownership and use I Training and awareness outreach program in I Development of more effective means of moni- legality and noncompliance toring and enforcement I Studies on the issues of land allocation and I Continuous review and improvement of the log resource access tracking system and development of chain of I Inventory and forest management planning sup- 38 custody systems along the supply chain port for rural/indigenous communities I Review of the National Forest Policy Statement L AW C O M P L I A N C E I N T H E G U YA N A F O R E S T S E C TO R CHAPTER NINE Annexes 39 9.1 ANNEX 1—KEY STAKEHOLDERS 9.2 ANNEX 2—DEFINITIONS OF AND ACTORS FOR LAW ILLEGAL LOGGING ENFORCEMENT IN THE FORESTRY SECTOR 9.2.1 World Bank I Guyana Forestry Commission Based on the World Bank indicative definition, ille- I Guyana Forest Products Marketing Council gal logging is defined as logging: I Environmental Protection Agency I Guyana Police Force I Outside a concession area I Guyana Defense Force I In excess of quota I Guyana Revenue Authority (Customs) I In protected areas or prohibited areas such as I Amerindian NGOs (4) steep slopes, river banks, and water catchments I Community Logging Associations (7+) I Without appropriate permits I Iwokrama International Centre I Without complying with bidding regulations I Forest Products Association of Guyana I Without submission of required management I Guyana Manufacturers and Services Association plans I Guyana Geology and Mines Commission I Protected species (as defined by CITES or other I Guyana Lands and Surveys Commission international law) I Ministry of Amerindian Affairs I With duplicate felling licenses I Ministry of Labor I Using girdling or ring-barking to kill trees so I Ministry of Finance they can be logged legally I Ministry of Legal Affairs I That contracts with local entrepreneurs to buy I Ministry of Agriculture logs from protected areas I Removing of under/over sized trees from public forests I Reporting high volumes extracted from forest concessions to mask that part of the volume is from nonauthorized areas outside of the conces- sion boundaries I Using bribes to obtain logging concessions I Using deceptive transfer pricing and other illegal • Logging in protected areas accounting practices to distort prices, volumes, • Arson to force conversion to other land use cash flows and debt service levels I Violations of transport and trade regulations I That engages in the illegal transport and trade of • Transporting logs without authorization timber or the smuggling of timber • Illegal transport of illegally harvested timber I That is processed with out the required licenses • Smuggling timber and that is not in compliance with environmen- • Exporting and importing tree species banned tal, social and labor laws under international law, such as CITES • Exporting and importing timber in contra- vention of national bans 9.2.2 Center for International Forestry I Violations of timber processing regulations Research (CIFOR) • Operating without a processing license 40 According to CIFOR’s definition, illegal logging • Expanding capacity without authorization includes: • Using illegally obtained wood in industrial processing I Violations of indigenous people’s rights • Operating in violation of environmental, • Illegal appropriation of indigenous land social and labor laws I Violations of public trust I Violations of financial, accounting and tax regula- • Forestlands allocated unlawfully to other uses tions • Issuing and implementing regulations con- • Untrue declarations of volumes, species, values flicting with other/higher regulations to • Declaring inflated prices for goods and serv- legalize illegal timber products and activities ices purchased from related companies, • Issuing logging concessions, permits and including transfer pricing authorizations in exchange for bribes and • Evasion and avoidance of taxes other private economic and political benefits • Money-laundering through forest activities, • Using bribes, threats and violence to avoid or from illegal forest activities prosecution/penalties or to obtain compla- cency 9.2.3 WWF and the World Business • Using funds from illegal forest activities for Council for Sustainable political purposes Development (WBCSD) I Violations of public or private ownership rights • Illegal expropriation of private or communi- WWF (through its Global Forest and Trade ty forests Network, an initiative to eliminate illegal logging • Illegal occupation of public forestlands, and improve the management of valuable and including slash and burn agriculture threatened forests) and WBCSD have in 2005 devel- • Illegal harvest on public lands (outside con- oped the following definitions pertaining to legality cession areas) in the forest sector: • Illegal harvest on indigenous lands I Violations of forest management regulations and I Illegal logging takes place when timber is har- other contractual agreements in either public or vested in violation of relevant forestry and envi- private forestlands ronmental laws and regulations • Logging without authorizations and/or I Sourcing of illegal wood takes place when required plans unprocessed wood is procured in the absence of • Logging in excess of permitted cut the seller’s legal right to sell or harvest • Logging unauthorized volumes, sizes, species I Illegal forest product trade involves the procure- (including protected ones) ment, processing, distribution and marketing of • Logging in prohibited areas such as steep products made from wood that has been slopes, riverbanks and water catchments obtained by illegal sourcing or illegal harvesting • Girdling or ring-barking to kill trees so that and/or are not in compliance with relevant they can be legally logged national and international trade laws. L AW C O M P L I A N C E I N T H E G U YA N A F O R E S T S E C TO R 9.3 ANNEX 3—FORESTS AND GFC ACTS Act, al forest produce in respect to of which such an offense has been committed and machinery and other implements used in such an offense Relevant laws are from the Forests Act of 1953, shall be liable to be forfeited by order of the Section 18–34: Offenses and Legal Proceeding: court in addition to any other punishment. I The penalty for the erection of unauthorized I Trespassers on state forest land will be liable to a buildings and enclosures will be liable to a fine of fine of seventy five dollars or to imprisonment two hundred dollars on conviction and order for two months if they can’t provide a just cause the removal of such structures and restore land for being on state forest. to its previous condition. I Any person who in any state forest (except in I A forest officer, district commissioner, justice of accordance with the terms of contract or lease the peace or constable may arrest without war- 41 granted by any other land use agency) cuts, feels, rant any person whom he reasonable suspects damages or removes forest produce; grazes or has committed an offense under this Act. pastures cattle; cleans, cultivates, cuts or digs the I Power to search for forest produce: A forest offi- soil will be liable on conviction to a fine of two cer, district commissioner, justice of the peace or hundred dollars constable suspects that any person is guilty of an I Any person who contravenes any regulations offense under this Act or in possession of any made under this act or the terms or condition of forest produce unlawfully obtained may search a contract or lease granted under this act or such a person. knowingly receives any forest produce which has I Power to Seize and detain: A forest officer, dis- been cut, felled, lopped, damaged, or removed in trict commissioner, justice of the peace or con- contravention of this Act will be liable on sum- stable may seize or detain any forest produce mary conviction to a fine of two hundred dollars. which he reasonably suspects are liable to be for- I Unlawful possession of forest Produce: Anyone feited under this Act. who removes or receives or is found in posses- I Collusive seizure or nonseizure or abandonment sion of any forest produce with respect to which of seizure: Any officer authorized under the Act a forest offense has been committed shall be to seize an article makes a collusive seizure or liable on summary conviction of a fine of two delivers up or makes any agreement to deliver hundred dollars and to imprisonment for six up or not to seize an article liable to forfeiture or months and the forest produce shall be liable to takes a bribe, gratuity or recompense or reward forfeiture. for neglect or nonperformance of duty shall for I Counterfeiting and similar Offenses: Any person each offense be liable on summary conviction to who fraudulently uses upon forest produce any a fine of one thousand dollars and be rendered registered mark or any mark used by forest offi- incapable of serving the state in any office what- cers; counterfeits or issues without authority any ever. lease in respect to state forest or permission, or I Any one who offers or procures to be given any removal permit or any other contract in respect bribe, recompense or reward to or make any col- to forest produce; counterfeits, alters, obliter- lusive agreement with any officer to induce him ates, defaces or removes any stamp, mark, sign, in any way to neglect his duty shall be guilty of license, permit or forest fee receipt used or an offense and be liable on summary conviction issued under this act; without due authority to a fine of one thousand dollars. alter, moves, destroys or defaces any boundary I Protection of Rights of Amerindians: Nothing in mark of a state forest shall be liable on convic- the act shall be construed to prejudice, alter or tion to a fine of one thousand dollars or impris- affect any right or privilege legally possessed, onment for six months. exercised or enjoyed by any Amerindian in I Confiscate produce and order restitution: When Guyana. any person is convicted of an offense under this ANNEXES 9.3.1 Guyana Forestry Commission Act other charges therefore. To ensure al forest pro- 1979 duce fees are recovered to ensure the legality of the transaction. The Guyana Forestry Commission is the statutory I To undertake research and investigations in al body with responsibility for the management of aspects of forestry. Including illegal activities. To Guyana’s national forest resources. This act assist in the prevention and control of forest addresses illegal logging indirectly through the fires, pollution of the environment, erosion of functions of the Commission: soil, disease and destruction of the flora and fauna. Forest Protection I To formulate, advise the government on and I To grant permissions and permits relating to the implement the forest policy of the Government felling and removal of timber and the occupa- as determined by the Government. This can tion of forest lands. Felling and removal of any 42 include a policy on illegal activities relating to timber without such permits will l be termed the forest sector. illegal I To be responsible for the management and con- I To enforce conditions and agreements for the trol of the exploitation of the forest of Guyana so sale of timber, timber concessions, forest per- as to ensure an optimum yield of forest produce mission licenses and permits. Ensure that al con- and the maintenance or improvement of the ditions are met on agreed contracts with compa- environment. The agency responsible for main- nies/entrepreneur including management plans taining the integrity of the forest resource against illegal activities is identified as the 9.4 ANNEX 4—GUYANA’S PROTECTED Commission. AREAS I To undertake economic studies and prepare plans for the development of the forestry and forest industries. Research to identify the level Guyana has only two gazetted protected areas and types of illegal activities in the sector and the namely Kaieteur National Park (62,700 ha or 0.3 development of incentive and disincentive plans percent of Guyana’s total land area) and Iwokrama to reduce illegal activities. (360,000 ha—1.7 percent of total land area— I To identify, establish and manage forests includ- though approximately one half of is designated for ing national parks, wildlife areas and nature sustainable resource use). For many years Guyana reserves for the purposes of production, protec- had been awaiting international support to develop tion of the environment, education, recreation, its National Protected Area System further. and the provision of amenities and matters of There are two pilot areas designated as priorities scientific, historical or special value: Ensure the for protected area status: Shell Beach in the north- integrity of such declared are maintained and west of the country and the Kanuku Mountains in protected from illegal activities. the south-west. However, there is no publicly stated I To provide goods and services in order to pro- timeframe for their designation. In addition, the gov- mote economic social and technological devel- ernment has recognized several other areas as having opment and to impose collect and recover al high biological importance though they do not have rents, fees, levies, royalties, stumpage, tolls and any legal protection or conservation status. L AW C O M P L I A N C E I N T H E G U YA N A F O R E S T S E C TO R