Russian Forestry and Wood Supply Operations Analysis
FOREST LEGISLATION
FOREST LEGISLATION
18
Improvement of Russia's Forest
Legislation in 2013-2014,
and Current Changes
The years 2013-2014 can be described as a period of very high law-making activity in respect of the
forest legislation of the Russian Federation. Before that, changes had not been frequently made in the
Forestry Code, and most of them had a very limited influence on the forest industry and its investment
attractiveness. Based on the results of a number of polls, the professional community named the poor
development of forest legislation as the main cause of the industry's inefficiency.
The meeting of the State Council under the
President of the Russian Federation held in Ulan-
Ude (Republic of Buryatia) on the 11th of April
2013 was a stimulus to change the situation. The
state of affairs in the forest industry of Russia
was seriously criticized at the meeting of the
State Council, after which the President prepared
a number of instructions concerning the use,
conservation, protection, and regeneration of
forests. The instructions of the President of the
RF concerning legislation improvement can be
divided into several main areas. They are aimed
at increasing the investment attractiveness and
efficiency of the business, improving the forestry
management system and fighting illegal logging
and illicit timber trafficking.
The Department of State Policy and Regulation
in the Field of Forest Resources of the Ministry
of Natural Resources and Environment of the
Russian Federation, that was newly established in
2012 became the head organization in charge of
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FORESTRY
implementing the instructions to make changes
in the forest legislation (before that, the Federal
Forestry Agency performed the functions of forest
legislation execution). Working out strategic
decisions in the area of forestry relations and
statutory regulation in the forestry area became
the main task of the Department.
In September 2013 the Government of the
RF approved the Basics of the State Policy in
the Field of Use, Conservation, Protection and
Regeneration of Forests in the Russian Federation
for the Period up to 2030. Before that, there
had been no documents of such a format in the
forest legislation at all, for which legislators had
been constantly criticized by the professional
community: the country of the world richest in
forests had had no strategy for the management
of such forests. The basics of the state policy
determined, albeit in the form of a declaration
set forth in theses, the strategic benchmarks for
the development of forest legislation through to
2030. In addition, the legislation now contains
such concepts as: intensive model of forest
management and use, national heritage forests,
environmental potential of forests, green economy,
bioenergy and so on. Practical application of these
basics means that all future legislative initiatives
must be brought in line with this declaratory
instrument.
In 2014 Russia's logging volume for all forms of
use amounted to about 197 million cu. m. Taking
into account that over three-quarters of that
volume are logged by forest plot leaseholders,
the most interesting aspect of an analysis of
the legislation are the innovations aimed at the
development of business. Such changes manifest
themselves in an easier access to resources with
the creation of equal and fair conditions, in the
availability of certain guarantees from the state
for bona fide forest users, in the support of small
and medium businesses and in fighting illegal
logging.
Therefore, I would like to start the review of the
changes made in the Forestry Code of the Russian
Federation over the last two years with the
Federal Law No. 415-FZ of 28.12.2013 adopted
in December, in respect of timber turnover and
transactions with timber. This law has set a
precedent, having changed the provisions of the
Forestry Code to a considerable degree. Firstly,
the boundaries of the Forestry Code have been
expanded from a forest plot (felling area); the
Code became also applicable to the turnover of
round timber up to its processing or exports in
the round form. Secondly, the Code now covers
not only those who use forests directly, but
also all those involved in the turnover of round
timber.
The provisions of the Federal Law 415-FZ take
effect stage by stage. To enable all participants
of forestry relations to adapt their accounting
systems, the Law provides for administrative
liability for a breach of a certain requirement of
the law only 6 months after it takes effect. For
example administrative liability for a missing or
noncomplying shipping document for the carriage
of timber took effect from the 1st of January
2015, whereas the requirement itself of having
a shipping document of the established standard
has been in effect from the 1st of July 2014.
Several basic parts of the law concerning
accounting, transportation, marking of timber
and declaration of transactions with timber should
be distinguished.
The Unified State Automated Information System
Accounting of Timber and Transactions With Timber
(EGAIS) must become the core of the timber
accounting system. As planned by its developers,
the system will be an information portal on the
Internet, to which all participants of forestry
relations will have access according to their powers
and functions. Thus, forest management bodies
must enter in EGAIS all primary information on
forest plots (data of the National Forest Inventory,
data on the forest plot and so on); and persons
using forests, that is forest users, must enter in
it the data from the forest use report, on logged
timber and transactions with it (an electronic
declaration is opened for each transaction, and as
timber is shipped to a buyer, respective volumes
of timber are written off from the total volume
stated in the declaration). On the other side of a
transaction, the buyer must confirm such volumes.
To ensure the transparency of information on
cut timber, access to EGAIS is provided for all
interested parties, including those purchasing
timber and products made of it. This, among
other things, must facilitate the application of
their DDS (Due Diligence Systems) by importers
of Russian timber who are residents of the EU
regarding obtaining information on its origin and
verifying that the volumes meet the requirements
of Timber Regulation No. 995/2010.
The said law has created a basis for implementing
a unique tool for accounting timber and, more
importantly, transactions with it, which, in its
turn, creates a financial basis for fighting the
turnover of illegally cut timber.
Another new important law for the forestry
industry is the Federal Law No. 250-FZ of the
21st of July 2014, which has conferred on the
Government of the RF the powers of approving
the standard agreement of forest plot lease and
set forth the possibility of changing the terms
and conditions of the agreement in certain
cases. Before that, each entity of the Russian
Federation could use the fact that the Forestry
Code mentioned a model form of an agreement of
forest plot lease as an excuse and could introduce
unfavorable, and sometimes even discriminatory,
provisions in regard to the leaseholder. From
the moment of approval of said law, regions no
longer have this possibility and must use the
standard form, which is the same for the entire
country. The standard form itself, ensuring a
balance of interests of all participants of forestry
relations, will be approved by separate acts of the
Government of the RF for each type of forest use.
The Federal Law No. 69-FZ of 02.04.2014 provides
for an increase in the period of limitation for the
institution of administrative proceedings against
forest users for a violation of the legislation of
the Russian Federation in the field of nature
management to one year from the moment an
offense is committed. The adoption of the Law
will make it possible to preclude the current
practices when those who have violated the
forest legislation can evade responsibility, on the
ground that it is impossible to make the necessary
documents confirming the fact of such violations
without delay.
As for improvement of the efficiency of forestry,
the Federal Law No. 27-FZ approved in March 2014
cannot go unmentioned. The Law has granted
the state budgetary or autonomous institutions
in regions (in fact, these are the former forestry
enterprises, leskhozes) the priority right of
taking measures aimed at the protection and
regeneration of forests that have not been leased
out. Thus forestry sections are being strengthened
in Russia's regions. This step has been mentioned
as necessary many times since the moment of
the adoption of the Forestry Code, i.e. since as
early as 2006. Before the adoption of said law,
the work of the protection and regeneration of
forests that have not been leased out could be
performed by any organization that won that
right at an auction. That scheme had a lot of
disadvantages, as those who offered a lesser
price became winners of an auction, and, as a
result, the quality of work was lower and some
contractors just did not perform their obligations.
The one-year cycle of work organization did not
allow long-term planning of forest protection
and regeneration in the region, while forestry
sections were left without work.
The fact that now the preferential right of
performing that work belongs to the state
budgetary or autonomous institutions that
have been established within forest management
bodies has returned the possibility of forming
their material resources and preserving valuable
specialists. Another important fact is that now
the income from the sales of timber obtained
in the course of work of forest protection and
regeneration goes mainly to the regional budget,
which makes entities interested in a more efficient
management of their forest resource.
In addition, the Law has made it possible to
solve a number of problems in the field of forest
seed farming. With its adoption, the forestry
switches over to evaluating the forest regeneration
activities by the final result, which consists in
transferring the forest reserve lands to the
forested area. In 2014 a separate subordinate
act established the procedure of forest plant
seed procurement, treatment, storage and use.
As for measures aimed at restricting illicit
trafficking of expensive timber, it should not
go unmentioned that Mongolian oak has been
included in Appendix III to CITES (Convention
on International Trade in Endangered Species of
Wild Fauna and Flora). It is common knowledge
that the unregulated legislation allowed predatory
logging of that fine wood in the Far East. Oak is
a species forming the habitat of the Amur tiger.
After the oak was entered in Appendix III to
CITES upon proposal of the Ministry of Natural
Resources and Environment of Russia, the export
of that kind of timber became significantly more
difficult, which drastically reduced the profitability
of its illegal logging and made life easier for bona
fide forest users.
All in all, about 40 subordinate acts (Resolutions
of the RF Government, Decrees of the RF
Government, and Orders of the Ministry of
Natural Resources and Environment of Russia)
were adopted for the two years starting from
2013. They were adopted both as a follow-up
to the above Federal Laws and as independent
regulatory acts, e.g., "On Approving the Russian
Federation State Program The Development of
Forestry for the Years 2013-2020," "On Approving
the List of Forest Site Zones of the Russian
Federation and the List of Forest Regions of
the Russian Federation," "On Approving the Rules
for Extinguishing Forest Fires," etc.
In pursuance of the above FZ-415 on the
accounting of timber and transactions with
timber, about 20 subordinate acts have been
adopted. Among them such acts should be noted
as, for example., Resolutions and Executive Orders
of the Government of the RF "On Approving
the Rules for Timber Accounting", "On the
Accompanying Document for the Shipment of
Timber", "On Approving the Rules for Submitting
Information to the Unified State Automated
Information System for the Accounting of Timber
and Transactions with Timber", "On Approving
the List of Information Contained in the Unified
State Automated Information System for the
Accounting of Timber and Transactions with
Timber, Published in Public Data Networks,
including the Internet, and of Information
Published in the Form of Open Data."
In the discussion of innovations in the forest
legislation, the initiatives worked on at the
moment cannot go unmentioned. It is the support
of forestry entrepreneurship that many of the
bills are aimed at, and some of them are of great
interest for business.
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