Russian language English   15 May 2012, 18:01
20.04.2012, 14:44

Forewarned is forearmed

Forewarned is forearmed
A. Ptichnikov

Russian forest industry will face serious challenges in spring 2013

A year to the day is left till the new EU regulation comes into force, which prohibits importing timber to the EU countries without certificate of the origin. Despite the fact that there have been long talks about the new requirements of the European Union, a few people have actually a clear idea of what fate awaits Russian timber exporters in the nearest future. What are the surprises that spring 2013 is preparing for the Russian forest sector entrepreneurs who are actively operating on international markets? Searching for the answer we met with the Head of the representation of Forest Stewardship Council in Russia and CIS countries Andrei Ptichnikov.

– Andrei, in the summer of the last year when talking about the new EU regulation at the international conference in Petrozavodsk you mentioned the fact that it was not clear what requirements would be imposed on timber exporters. Has anything changed since then?

– Some events of principal importance have taken place: the final version of the European legislation has been adopted, and it will be enforced since March 2013. As of today, some normative documents are under development that will be published in summer this year, and they will clarify the EU requirements. In fact, European regulations read that the trader importing a product to the European market should have a system of “proper conscientiousness” in terms of tracing the origin of the wood imported. The first requirement is lawfulness. However, it is still not clearly identified what laws will confirm that lawfulness, i.e. will it be just forest law, the environmental law or some other legislation. The second issue is that the importer of the goods should know what types of wood they are made of. And finally, the exporter should have the information about the region where they are delivered from. Those are the three key requirements.

– In your opinion, what is the goal they are pursuing in the European Union requiring such detailed information about the origin of the timber?

– First of all, it is an attempt to limit harvesting of rare tree species that are entered in the Red Data Book and that are banned for trade. The target of the new EU legislation is to reduce the risk of buying illegally harvested timer to the maximal extent. It is not that an enterprise has to refuse from procuring dubious wood once and for ever. If there are some territories with higher risk of selling illegally harvested wood, the enterprise should switch to more favorable forestry regions. Let’s analyze the situation with the example of Boxitogorsk district of Leningrad region. Newspapers published information about the whole system of illegal cuttings there. If we follow the logic of the new European law, the trader should either refuse from timber from that region and focus on, let’s say, neighboring Tikhvin district, where the risks are not that high, or considerably reduce the volumes of the timer supplied from the blacklisted territory. There is information about illegal logging in other areas of the European part of Russia as well. Therefore, the purpose is to evaluate the risks of emerging illegal products and to shrink it to the minimum.

By the way, one of the standards of volunteer FSC forest certification concerns evaluating the risks of supplying illegally harvested timber. In this respect we see the future prospects of cooperation between FSC and the authorities executing control over the enforcement of the European legislation.

– Will the new European regulations require establishing additional supervision authorities?

– Probably, those will be special inspection services that should be established in European countries. I know that such inspections have already been formed in Latvia, France and other countries, and they are ready to start working.

– It is rather difficult to trace the origin of timber in wood products. Imagine production of furniture, when they use tropic species together with Russian chipboards. How is it possible to identify if the final product is legal?

– The hardest challenge is to evaluate “purity” of paper production. Last year FSC carried out an interesting experiment trying to trace what raw materials were used for manufacturing notebooks by a large American company Wal-Mart. We managed revealing amazing things. It turned out that the basis for paper raw material was Russian timber harvested in Siberia and transported to China. From China the pulp made of that wood was sent to America via a complex chain of intermediaries. Those can be countries of Southern America, Europe or Vietnam. Then all those streams meet in some “neutral” country, and as a result we get notebooks by American company Wal-Mart. The most difficult thing is that the transportation routes of pulp are so geographically tangled that only a powerful electronic recording system can trace the real origin of a paper notebook. FSC has such a concept as supply chain certification from one delivery spot to another and all throughout the whole route will all possible ramifications. However, we have this system only on paper. It is clear that without the electronic version prompt tracing of actual routs is a time and labor consuming endeavor, and therefore it is not too efficient. The EU requires instant confirmation of legality of the shipments. We are trying to introduce an electronic certificate for supply chains planning to establish a unified database on its basis. This will allow tracing transportation of timber almost in real time.

– Judging by what you are saying, it is still not clear how they will confirm the legal origin of products. Under those conditions, is FSC taking any steps in relation to the new requirements by suggesting their own options for solving the problem?

– I would even say that some FSC technologies, such as planned “electronic” supply chain certificates are unique. We are working with the companies that created those systems in other sectors. For instance, there is a system for tracing supplies of “conflict” diamonds or movements of cotton shipments. Similar systems are working in the world, and now they are to be introduced in the forest sector.

– In your opinion, do they realize the global nature and complexity of the problems that will emerge after March 2013? It is clear that FSC is trying to solve the issue. However, this is just a proposal, and the EU might accept or impugn it.

– Representatives of different countries participate in the discussion of the European legislation, and as far as I know there are totally opposite opinions. Some countries want FSC to be directly included in legislation, and others object to mentioning specific systems. In any case, the EU will not be able to secure enforcement of its legislation without the existing working certification systems and authorities.

– Besides volunteer FSC certification, there is a Paneuropean system for international certification PEFC. Do you interact somehow or compete?

– We have some interactions with PEFC on those issues. I don’t see any competition in this sphere.

– Since 2005, there has been a FLEG system, which was established for counteracting illegal harvesting and illegal timber trade. In your opinion, has it made any significant impact on the ongoing processes?

– I am not a big expert on FLEG, but this is rather an information project designated for telling about the problems related to illegal timber trade and for giving thoughts about the mechanisms for tracing the legal origin. This is more a forum for discussion and an opportunity to have a dialogue among the society, forest industry and forest services. FLEG is helpful as initiator of useful undertakings in the area of more intensive civil control in the forest sector, as a tool for forest policy and increasing awareness among the people making forest-related decisions.

– What will Russian forest industry face in March 2013?

– It seems to me that there is a large risk group in Russia, and March of next year might become a serious test for them. Those are forest harvesting and trade companies taking no efforts for confirming the legality of their products, not to mention the fact that they should get FSC certificate. European legislation does not set this goal for them. The meaning here is to at least analyze the sources of timber, to trace the legality, and to integrate the available documents into their system of securing proper conscientiousness at least on the grounds of indirect data. If Russian wood material exporters have no such information about the origin of the products, they will definitely face problems. Those not capable of developing such tracing systems should either address consultants for help and, for instance, pass certification, or forget about the western markets.

– According to your assessment, are there many companies in Russia that haven’t done anything yet?

– Unfortunately, there are quite many companies that haven’t heard about the new European regulations. We know that the largest traders are perfectly aware of the impending changes, but often times they don’t know their chains of delivery. It might happen so that some harvesting company from the middle of nowhere will get a requirement to prove the legality of its products in March next year. But it has no idea that its timber is exported to the European Union as the supply chains are very sophisticated now. We try to inform the stakeholders about the need in scrutinizing European legislation since the products of any company might turn out to be sold at the European market. However, there 20 thousand forest leasers in Russia, and we can probably inform five hundred or a thousand. I believe that the task of warning the others should be fulfilled by the government.

– In that case, another question comes up. If the situation is that alarming, then what should the government do to help Russian forest business overcome the new European barriers?

– There is fundamental problem here. Different governmental agencies related to the forest sector consider the problem within the scope of their authority. For example, Rosleskhoz is concerned with the issue of exporting roundwood. But the electronic system for controlling roundwood trade does the tracing only to the first buyer of the round logs, whereas the EU requires the whole chain from the harvesting site to the European market. However, Rosleskhoz, like other ministries, does not have the authority to force anyone to trace those chains. We have certificates of supply chains. We suggested Rosleskhoz developing a joint interface for the planned timber accounting system and supply chains, but there has been no clear feedback. Today everybody cares much about establishing just accounting. But this will not be enough for the European Union. Besides, we should not forget about the mixed products that will consist of parts coming from Russia and other countries. For example, paper production, where – figuratively speaking – pulp from different parts of the world is mixed in one cauldron. The situation gets even worse, because the EU does not trust documents from governmental authorities, and it requires independent confirmations. It seems to me that this issue is not sufficiently understood in our country. I am afraid that in a year the authorities will be swarmed with letters from entrepreneurs that will be in a difficult situation when the new European legislation comes into force. Of course it is possible that in the very beginning this legislation will not be that tough and business sector will be given some time to adapt to the European norms. I believe that it is necessary to better prepare to the new European regulations and to involve specialists and organizations that are aware of the situation. It is desirable that Rosleskhoz and other stakeholders would start discussing the issue and finally develop national response to the EU legislation.


Translated by Vladimir Mineev

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