Forests to be legalized within 18 months

Europe was going to close its borders to illegal timber on January 1, 2012. This decision was made two years ago, when European Parliament members accepted a proposal to ban illegal trade in wood. Then, due to the lack of clear-cut criteria and a legality check procedure, the EU took a two-year timeout. Now the EU Timber Regulation, which officially comes into force in March 2013, demands that the imported timber and timber products be of legal origin, i.e. they should have a relevant certificate which proves that the product is the result of inexhaustible, sustainable, and continuous forest management.

Forest certification is not a new thing for Europeans. It was launched as long ago as 1989 in response to public concern over the sources of timber products and the need to verify sustainable forest management. The main goals of forest certification were and still are to improve the environmental, social, and economic forest management, to maintain or improve access to legal products, and to increase the economic benefit of legal wood harvesting.

Summing up the experience of more than 20 years, experts note that the emergence of certified forest products has already formed consumer groups, membership of which means gradual or even sudden refusal to buy non-certified products. So certification has begun to have a considerable impact on industrial competitiveness, forest product flows, and the situation on, above all, environmentally sensitive markets. Therefore, the certified products market has gained serious competitive advantages, such as increased benefits that forestry enterprises can derive from foreign economic activity (for buyers are ready to pay more, knowing that the product is legal and, hence, of high quality), wider access to environmentally sensitive markets, and establishment of a direct and long-term partnership which calls for eliminating intermediaries as an unnecessary element. Besides, most of the European countries regard certification as an effective method to resist unauthorized logging, as it is impossible to substitute the certified forest items because they are duly marked and carry proper covering documents. Experts conclude that forest certification is a pass of sorts to the elitist club of companies that adhere to the same ideology of the development of pollution-free production facilities and socio-ethical marketing.

For this reason, the adoption of the abovementioned regulation by the European Parliament can be absolutely rightly called logical evolution of the European timber market. Therefore, the raw forest material importing companies, which derive profits on EU markets and want to remain behind in this segment, should work on developing programs to verify the legality of timber sources or make use of one of the following internationally approved schemes of forest certification – the Forest Stewardship Council (FSC) and the Program for the Endorsement of Forest Certification (PEFC) aimed at supporting rational forest utilization via third-party monitoring. For, under the new rules, the exporting companies, including those working in Ukraine, must produce, from March 2013 on, documents that confirm the legal origin of their products. Otherwise, the European border will be closed for them.

Commenting on EU plans to close the border to illegal timber and on the likely consequences of this provision for Ukrainian forestry, Pavlo Kravets, FSC National Representative in Ukraine, told The Day that in Ukraine small an medium enterprises account for a sizable share of exports. If direct and indirect legality assessment expenses are not high, such enterprises will be made part of the importer monitoring program. Otherwise, they will have to stop supplying timber onto EU markets and reorient to domestic or other foreign markets. At the same time, EU markets-oriented large and medium businesses have already been certified or are going to be certified in the nearest future, Kravets says. He estimates there are more than 20 woodworking facilities in Ukraine now, which are part of the FSC certification scheme. So, as an alternative, they may be included into import monitoring programs. “Time will show how successful this work will be, and this will depend on many factors. It is difficult to forecast market losses, but they are sure to be,” the expert concluded.

The experts polled by The Day noted that Ukraine had taken a few steps to establish a new system to legalize the harvesting and handling of wood. This includes, among other things, introduction of the Legal Timber Certificate (LTC). Under this rule, every exporter must receive the LTC for each lot of lumber covered by one transportation document. To receive the LTC, the exporter will submit either timber purchase transportation documents or the felling license to the regional forestry department.

The next step is to establish a single state-run system of timber electronic tagging. There are so far only some elements of it in action – usually at the level of some forestry enterprises. The system as a whole is still in its infancy and requires considerable funding to be improved and implemented. As Viktor Sivets, chairman of the State Forest Resources Agency of Ukraine told The Day, Ukraine is making an extensive effort on all of its territory to implement timber electronic tagging. As a result, in his words, it is planned to fit all timber with electronic chips which will show the cubic capacity, assortment structure, and the area where it was harvested. “Incidentally, the state has allotted no money to purchase the equipment, and the forest agency is buying all the appliances at its own cost. The industry is making every effort to introduce the electronic tagging of timber, for this will make it impossible to handle the criminally-obtained timber. As of today, Zhytomyr oblast has been fully equipped with all that is needed for electronic tagging, and Karkiv, Sumy, and Poltava oblasts have remitted funds to this end,” Sivets says. “Our goal is, first of all, to supply the necessary equipment to the resource regions and only then the rest of Ukraine. And we are planning to finish the introduction of electronic tagging before the end of 2011.”

And, finally, what confirms the legality of Ukrainian timber is voluntary certification of some Ukrainian forestry enterprises under various international programs. Participation in this kind of programs usually shows not only a certain level of forestry but also, for example, the preservation of biodiversity, protection of the rights of local residents and small-scale business, etc. Sivets says that, as of September 19, 2011, certified forests covered more than 1.21 million hectares or almost 12 percent of the entire Ukrainian woodland. For example, all state-run businesses in Zakarpattia and Lviv oblasts, as well as seven businesses in Chernihiv oblast and one in Kyiv and Volyn oblasts each, have been fully certified. Enterprises of the Volyn Oblast Forestry and Hunting Directorate are actively preparing for certification. A similar organization has begun to do preparatory work for certification in Ivano-Frankivsk oblast. In the view of Sivets, there are good prospects for certification at the enterprises of the Rivne, Zhytomyr, Vinnytsia, Kyiv, Cherkasy, and Sumy forestry and hunting directorates.

Experts believe that each of these elements is still to be essentially amended. For example, the above-mentioned EU Timber Regulation covers almost the whole range of categories in the commodity group “timber and timber products.” This far exceeds the list of the commodities for which Ukraine issues the legal timber certificate. Besides, in reality, to obtain the LTC, the exporter usually submits timber purchase documents rather than the felling license. In other words, the LTC in fact proves that the product has been bought, not that it is legal. For this reason, experts recommend to obligatorily enter the felling license number into the LTC, for the felling license is the basic document for calculating timber production, setting conditions for forest management and transportation of the harvested wood, etc. The felling license is also used to take account of forest utilization payments. Before getting the license, one should prepare some more documents, including the logging site map and flow chart, etc. So entering the felling license number into the LTC will allow, if necessary, tracking the timber legality from the very logging site onwards.

It is also necessary to form new elements of the legality verification system. In particular, the Ukrainian law does not have a clear definition of illegal loggings. Besides, the Ukrainian law and the EU Regulation use different terms about illegal loggings. The EU document considerably broadens the limits of the traditional interpretation of illegally harvested timber. So, according to Kravets, the recognition of Ukrainian products in compliance with EU requirements will depend on the governmental efforts to improve legislation and intensify combating illegal loggings, as well as on the importers themselves who should implement the relevant mechanisms of assessing the sources of timber.

Asked by The Day about bringing the national forest certification system into line with international practice, the State Forestry Committee said that the forest certification problem is being tackled by a forest monitoring and certification laboratory at the Ukrainian Research Institute of Forestry and Silvicultural Reclamation, the premier research facility under Ukraine’s State Forest Resources Agency and National Academy of Sciences. The committee chairman assured The Day that this laboratory is taking an active part in the development of forest certification in Ukraine. Sivets points out that the laboratory experts have already mapped out Ukrainian national indicators for seven out of nine FSC principles.