Weak response by Central Bank to regulate forestry firms
The Central Bank (CB) seems to be unfazed by the drama at the under-fire-forestry management company Touchwood Investments Ltd, ignoring calls to regulate the forestry firms in the country, industry officials say. Sadaharitha Plantations Ltd, also a forestry management firm, says it hasn’t still heard from the regulator after numerous telephone calls and letters with requests to regulate the commercial forestry industry.
“We approached the CB about a year ago having written to them to step in to regulate this industry in a bid to advocate better practices into it and they were quite interested. This was more than one year ago, but still there is no progress,” H. Rohana, Chief Executive Director – Sadaharitha told the Business Times. He added this was positively considered by the CB at the time. “They understood the concept of Sadaharitha and the importance in promoting a green economy in the country by encouraging investments in ‘Commercial Forestry’.” According to a senior CB official who didn’t wish to be named, the regulator is facing a manpower crisis and is unable to implement any regulation pertaining to this area. “With the financial sector consolidation that’s happening now, our hands are pretty much tied,” he said.
Mr. Rohana said that during the recent past the “Commercial Forestry Industry” has come under a lot of disapproval and scrutiny due to various reasons and has begun to lose its credibility among investors and potential investors. He said that without intervention and rulings to regulate the industry and with the need to guarantee the return on investment, no lack of transparency and poor management practices adopted by the companies that are operating in the industry and corrupt business practices by companies seeking short-term benefits are some reasons why commercial forestry isn’t recognised.