Save the forest and develop the market: mission possible

This can be done simultaneously by using a comprehensive approach to reforming the sector

In the forestry sector of Ukraine, there are regularly many problems associated with harmful human activities, including misuse of natural resources, inefficient legislation, and climate change. Only in June, we witnessed floods in western Ukraine, devastating fires in the Luhansk region, and international scandals related to the use of illegally cut timber.

To solve the problems, rather than hastily eliminate the tragic consequences, the state should develop a strategy as a long-term policy in the sector and introduce comprehensive effective regulation for its implementation.

The strategic tasks in the forest sector include the fight against illegal timber trade, protection of forests from illegal logging, fires and pests, changes in the policy of state-owned logging companies, reforestation and afforestation, creation of forest infrastructure, construction of forest roads, publication of data on forestry activities in open data formats.

Additionally, given the undeniable advantages of electronic auctions over direct contracts for the sale of timber, it is very important to analyze the results of the experiment with the use of the Prozorro.Sales timber platform and other electronic systems; compliance with the requirements of the relevant resolution of the Cabinet of Ministers by market participants, and, if necessary, improve the current model. Of course, this requires a sound strategic vision, the political will of lawmakers, and adequate funding.

Money for the forest

In 2020, only 10% of the required amount was allocated from the state budget. Today, Ukraine invests $0.3/ha to support the forest industry. For comparison, Belarus invests $9/ha, Poland – $17.5/ha, and Hungary – $43.6/ha.

To provide the required funding, it is necessary to develop and approve a national target program for the development of the forest sector for the period of up to 2030. The basis for it has been already created: it is the Resolution of the Cabinet of Ministers of Ukraine No.524 that approved the state program of stimulating the economy to overcome the consequences of the pandemic. It provides for 1.5 billion hryvnias for the forest sector in 2021.

Illegal logging

In 2019, several key steps were taken to reduce illegal logging by more than 45%. For example, the legal basis for the forest inventory has been approved for the first time since independence. It is the Law “On Amendments to the Forest Code of Ukraine regarding the National Forest Inventory”. The Resolution No.1142 made it possible to introduce a system of electronic timber management. And the Resolution No.1178 provided for the introduction of electronic auctions for the sale of unprocessed timber.

However, illegal logging and illegal timber trade can be significantly reduced by introducing a full range of measures and responsibilities. Experts of the Better Regulation Delivery Office (BRDO) Regulation together with the State Forest Resources Agency and the Ministry of Environmental Protection and Natural Resources have developed a draft law “On Amendments to Certain Legislative Acts of Ukraine to Improve Forest Legislation”.