Update on Russian Forest Sectorand Russian-Chinese Relations:

WWF View

Elena Kulikova, WWF Russia

April, 26, 2007

Beijing, China

Content

• New Forest Code and subordinated normative documents

• ENA-FLEG – current situation

• Russia-China relations – last developments

• WWF activities

•Forest complex is in the focus of Russian political authorities

•Forest sector problems are discussed with personal involvement of the President

New Forest Code:Major Changes

• Maximum decentralization of forest management and use system in Russia

• Delivery of responsibilities on forest management, use and protection to the regional level (subjects of the Russian Federation)

NGOs (WWF Russia, Greenpeace Russia, TRN) Comments on the Code

• State ownership but some conditions for privatisation• New classification of forest use types, several categories of

protected forest type no longer exist • Designation of protected areas will become more complicated• Ecological expertise (EIA) is disappeared • Mechanism for public participation in decision-making is absent• Rights of local people on traditional livelihoods are not guaranteed • Leasing of forests is allowed for periods of 10-49 years, absence

of any obligations related to SFM, biodiversity conservation or solving social issues.

• Reorganisation could result in large numbers of job losses in rural areas, increase in social problems and in illegal logging

New Forest Code Character

• Not forestry oriented• Pro-industry oriented• “Frame” character• A lot of work to finalize forest legislation. 42 sub-

ordinate normative acts need to be developed at the federal level, all together 78 with regional norms

Normative Acts under New Forest Code: Process of Development and Discussion

• 5 major Russian environmental NGOs: Greenpeace, WWF, Biodiversity Conservation Center, International Social and Ecological Union, Transparent World

• Joint efforts to ensure openness of the process • Positive tendency: norm drafts are on the web- site of the Ministry

of Natural Recourses• NGOs conclusion: norm drafts has significant weaknesses • Set of joint and agreed comments from NGOs to these drafts in

constructive manner• 15.03.2007 г. – joint letter to the Minister with attached comments• Public Council within FFA

European-North Asia Ministerial Conference on Forest Law

Enforcement and GovernanceENA FLEG

ENA FLEG: National Action Plan and Russian Federal Forestry Agency (FFA)

• Delivered to the Government (autumn, 2006) as a part of developed Programme

• Re-arranged into Programme of Measures

• MNR as a coordinating agency

• Measures are presented in the Programme as normative documents, reports, meetings

ENA FLEG: Current FFA Activities

• Direct regional control – check up forestry and related operations in the regions: Karelia – North-West Russia (March), Chita – bordering with China (April)

• Remote sensing control

• Combined check-up with involvement of relevant agencies (inter-agency work)

ENA FLEG: Practical WorkRemote Sensing Monitoring 2006

• 18 Russian regions

• 101,2 mln ha -area of remote sensing monitoring

1

23

4

5

6 7 8

9

10

1112

13 14

1516

New Export Tariff Policy for Round Wood: New Conditions

• Today: 6.5% but > or = EUR 4 • Compare with Canada and USA – 27%, Finland, China –

export is prohibited• Resolution of the Russian Government #75:from 1-Jul-07: 20%, but > or = EUR 10from 1-Apr-08: 25%, but > or = EUR 15from 1-Jan-09: 80%, but > or = EUR 50• Main reason for export tariffs revision is quick stimulation

of domestic wood processing and raising effectiveness of forest sector

New Tariff Policy: Reaction from Outside• Finland:- Plan to Prepare for Russian Log Export Tax Increase - possibilities to replace Russian wood by domestic attract attention of EU countries – bilateral negotiations• Japan- Search for alternatives for Russian wood in other countries- Japanese Association of Forest Importers – wish to share business

activities in Russian forest industry development• China:- Rather quiet reaction- Ready to switch round wood trade to processing- Comments by Chinese Deputy Minister of Commerce- Encourage Chinese investments into pulp and paper, sawing and

furniture enterprises

New Tariff Policy: Reaction from Inside

• Russian Far East Industry Calls to Postpone Log Export Tariffs until 2013

• Association Dalexportles addresses the Russian Government

• Fixed timeframe of 22 months are insufficient to establish wood-processing capacities

• Cause decrease in Far East forest sector, multti-million losses to the economy, social problems and unemployment of 60 000 people

Russia-China – New Conditions

• Refreshed relations at the governmental level• Changes in market demand FSC certification –

new geographic trends• Cross-boarder cooperation• China: no clear intention to actively participate

in ENA FLEG?• Japan markets – Public Procurements Rules• US markets – Civil G “8” – Bush-Putin

FSC certification in Russia

• 15 ml ha FSC-certified forests ( March, 2007)

• It comprises more than 10% of commercial forests

• 2-nd place in the world

Russian Federation

siblescom

томлеспром

Geography of FSC certification

WWF Joint work:Systems to identify legally-sourced wood in supply chains involving

Russia and China

• “Keep it legal” manual• 200 forest sector field staff (producers and inspectors)

trained on how to identify illegally-sourced timber and on forestry legislation reforms

• Two or three demonstration pilots for “verified legal” wood in cross-border (Russian forest to China factory)

• Case study on costs and benefits of a ”verified legal” supply chain

• Recommendations to stakeholders on improved methods for legal verification of wood supply

ekulikova@wwf.ru