Ihor Lavrynenko: It is necessary to prohibit timber selling in circumvention of auction

19-07-2016

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The year of the moratorium on timber export was meaningless. Experts said that all the problems remained unsolved. It is necessary to look for alternative ways to stop the illegal forest felling and implement the system of timber export registration and control. The Better Regulation Delivery Office (BRDO) leading analyst Ihor Lavrynenko said more on this issue and others in details in the exclusive interview to Agro.Polit.com.

― Are you for or against imposing the moratorium on timber export?

Lavrynenko― Imposing the moratorium is an emotional and unprofessional response to the abuses in the forestry sector. The moratorium was imposed to provide national woodworking suppliers with a greater access to the timber. However, these expectations remained incomplete.

To fight the corruption in the wood sector, it is necessary not to impose new bans, but to arrest corrupt officials and introduce clear procedures of timber selling.

The year of the moratorium showed that the amount of abuses has not declined, and the scandals amount has increased. The volumes of illegal forest felling are impressive, the situation hasn’t improved with the moratorium.

To my mind, moratorium should be abolished, as it is inefficient, and instead of it transparent and clear rules of timber selling should be introduced.

Particularly, there should be the rules, which provide for the abolition of direct transactions, while all the timber volumes should be put up to auction to enable anyone who wants to buy the wood.

We will not solve the problem by prohibiting the sanitation cutting – it is necessary to prohibit timber selling in circumvention of auction.

― Will the moratorium on sanitary forests cutting be introduced?

― Sanitary cutting problem appeared because all deputies have been fighting the corruption mainly in paper for last 20 years. If there were 20% of sanitary cuttings 20 years ago, now it is 50%. The reason is simple: the timber harvested during sanitary cuttings can be sold by direct contracts in circumvention of exchange. That is why everything that can be cut under the guise of sanitary cuttings is being cut exactly in such a way. We will not solve the problem by prohibiting the sanitation cutting – it is necessary to prohibit timber selling in circumvention of auction. Now they want to auction all types of wood, but forestry enterprises reserve the right to sell the sawn wood products on agreements and not put them up for auction. So, the problems with timber selling will appear in a year or two.

― Is it necessary to put sawn wood products up for auction as well?

― It is an alternative option, but forestry enterprises are not ready for this. Now industrial wood is being exported as firewood, now they want to abolish firewood export. If they will do it, then industrial wood will be exported under the guise of stubs or logging wastes. Our people always invent something new.

If “grey” and industrial wood is being sold as firewood for Ukrainian timber exports, the cuttings in the Carpathians are completely “black”.

― How should we solve the dilemma in order not to make the Carpathians “bold” and let the state to get the revenue?

― The Carpathians is a third problem. The moratorium was imposed there 15 years ago. If the Ukrainian timber export is “grey” and industrial wood is sold like firewoods, then cutting in the Carpathians are completely black. If there were no moratorium in the Carpathians, the forest had existed because there were legal cutting obligations to conduct reforestation and plant new forest after the cuttings. There is legal cutting in the Polesia, so there is a lot of young forest. People cut forest in the Carpathians illegally and, of course, they plant nothing there. That is why it is necessary to abolish the moratorium on industrial cutting in the Carpathians, but our deputies do not understand it.

― How can we solve the problem of illegal cuttings?

― There are two comprehensive ways to solve this problem. The first one is to introduce the European approach for timber control. In Europe, the forest is being tagged at the place, it is possible to know where and when the tree was cut with the help of the code.

Municipal forestry enterprises take care of two businesses: sell the timber and issue “fake” documents to export the stolen timber for Hutsuls.

It is necessary to introduce a technology and a system of wood flow registration and control for all forest users. It will not solve all the problems, but will significantly reduce the amount of abuses.

There is a separate kind of “black” timber earnings – giving “fake” documents for timber. Why does this market exist? It is because of the mandatory tagging only for state forests. Municipal forestry enterprises take care of two businesses: sell the timber and issue “fake” documents to export the stolen timber for Hutsuls. People on the customs cannot distinguish the oak from the fir tree. It is necessary to tag all cut timber to prevent selling the stolen timber documents by fraudsters, but wherefrom the deputies will live later?

― Is there the guarantee that the certificates of raw materials origin will be effective?

― The amount of risks will decrease. It will be easier for policemen and customs officers to check the information on whether the concrete timber batch was cut down legally or illegally.

The main opponents of introducing the cut timber tag are the Regional Council Heads because it is their business.

― How soon will this system be able to work?

― Nearly six months are needed. The main opponents of introducing the cut timber tag are the Regional Council Heads because it is their business.

― How many people were punished for illegal timber cuttings?

― One from the hundred can be punished at best. Most of people committing such violations are officially disabled or parents with many children who cannot be fined, or they are the unemployed – what can you get from them?

― Maybe it necessary to abolish these privileges for parents with many children?

― And then we will see a whole series of stories how a poor father who had stolen a stub to warm freezing children in winter was punished on television. It is necessary to approach systematically for such topic and prepare a new Code of administrative violations.

― How to reveal the people running this corruption?

― The approach is very simple: a person is released from the liability, if he says who had persuaded him to do it.

Now there are small timber supplies to Russia.

― Does Ukraine export timber to the aggressor country?

― There is no timber export to Russia. First, it is economically inefficient. Secondly, Russia is the biggest exporter. We used to be one of the biggest Russian timber importers: up to 15 million cubic meters have been delivered from Russia and sawed in our country during the Soviet times, and then sold to Europe. Now there are small timber supplies to Russia.

About the business with timber exports to the occupied East.

― Are there any supplies to the occupied ATO zone territory?

― There are dozens of criminal cases. This is a very good business.

― Are all the supplies illegal?

― In fact, they are, all the supplies are registered as army aids, the supplies for defense needs, and then they are resold to the enemy. All the timber to Crimea is a real contraband.

― Why does the Ukrainian timber lose its value?

― The position of the State Forest Resources Agency Head have been sold during the last ten years. The cost of this position is $5-10 million.

The timber is being exported at $200 million per year; the half of this amount is a result of “grey” export.

― Tell about the shadow cutting volumes in Ukraine, which regions has the biggest problem with that?

― The shadow cutting volume in Ukraine is 10-15%, legal cutting is 16 million cubic meters, so the illegal is 2 million cubic meters. The timber is being exported at $200 million per year; the half of this amount is a result of “grey” export.

― What countries are the biggest customers now?

― There are three main customers, they are Europe, Turkey and China.

― Why does it happen? Are there any legislative restrictions?

― Current standards do not allow it because they are soviet. New ones were proposed in 2005, but ten years passed, and they are still have not been implemented yet.

One of the options to minimize the abuses is to move to the Europe standards.

Another problem is a lack of effective domestic added-value wood conversion market. Forestry enterprises have to look for the foreign ones because of a lack of the Ukrainian customers.

― Why is Ukrainian timber being sold at a low price?

― It cannot be sold at high prices. The Law demands an advance payment for a timber, it is impossible to sell raw materials at high prices in such circumstances.

― Has something changed in the framework of the FTA with the EU?

― This agreement doesn’t contain any special aspects for the forest industry. But it is not a critical problem, there is a potential for the cut timber export increase.

It is needed to adopt a combined document on enhancing the liability for forest sector violations.

― What legislative steps should be done to establish the order?

― The Cabmin should hold a transparent and open competition to fill the vacancies of the sector Head and his deputies. If the sector sees that it is led by the professional with the normal team fulfilling their responsibilities clearly, than it will solve the half of problems. The Cabmin should approve a resolution on the introduction of timber registration and control system, the implementation of compulsory timber sale by auction.

The Parliament must amend a budget, allocate the funds for fire prevention in the South and East forests, and abolish the moratorium on timber export. It is needed to adopt a combined document on enhancing the liability for forest sector violations.

― How do you think, what punishment should be included there?

― They must be adequate to the current situation. There is no need to arrest someone, there are alternatives making people behave in a normal way. For example, there is an option not to let companies buying stolen timber to participate at the timber purchase auctions.

― Why do the deputies not approve these draft laws? Do they get into the act?

― Not all, but some of them get into the act.

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