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WORLDWIDE
FOREST/BIODIVERSITY CAMPAIGN NEWS
Wood
Wars: Corruption Threatens Welfare of Siberia
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Forest Networking a Project of Forests.org
http://forests.org/ -- Forest
Conservation Archives
http://forests.org/web/ -- Discuss Forest
Conservation
3/1/00
OVERVIEW
& COMMENTARY
Russia
has the largest forest resources in the world, with 22
percent
of the world's forest area. The growing
Russian timber
boom is
described below as mayhem, with timber exports to China
soaring
274 percent in the first nine months of 1999.
These
forests
are a very important global ecosystem engine, repository
of
biodiversity and hold great potential for sustainable
development
to raise Russian living standards--perhaps one of the
only
options remaining. Yet they are being
wasted, and are
clearly
threatened. Policy in the next year or
so will ultimately
determine
their long-term fate.
g.b.
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RELAYED
TEXT STARTS HERE:
Title: Wood Wars: Corruption Threatens Welfare of
Siberia
Source: St. Petersburg Times
Status: Copyright 2000, contact source for
permission to reprint
Date: February 16, 2000
Byline:
Natalya Shulyakovskaya
Russia's
forests are among the nation's most valuable resources.
But as
Natalya Shulyakovskaya reports, their chaotic exploitation
means
that wise guys and foreigners are the main ones reaping the
rewards.
TIMBER is the blood trickling through the soggy veins of
the
town of Balagansk, a small disjointed town of 11,000 souls
that
spreads along the Angara River, 70 kilometers from the
nearest
railroad and 205 kilometers north of Irkutsk.
Without
timber, there would be nothing to pump life into the
endless
cycle of barter deals that makes it possible for Balagansk
to
survive. Because of timber, bread is still baked here,
kindergartens
are still heated, new houses go up and sparkling
four-wheel-drives
roar along the wide but bumpy roads of the town.
Balagansk
is a clear model of how a timber-based economy works, a
perfect
example of the logging centers throughout the Irkutsk
region-where
close to 90 percent of the territory is covered with
forest,
and timber reserves are equal to 9.2 billion cubic meters
or 11
percent of Russia's total reserves. Balagansk is a model
emulated
across most of the nation.
The
best houses here line the street where the forestry officials
traditionally
have lived. Another center of influence is the
office
of the district administration, which has the power to
allocate
permits for individuals to chop wood. Here, from dawn to
dusk,
babushkas dressed in their very best line up for hours to
get
their timber requests signed. The bureaucrats from
neighboring,
timber-less districts come here-driving sparkling
sports
utility vehicles and escorted by bulky men in track-suits-
to
plead for their own bit of the timber "pie" to keep their
districts'
own barter cycles going.
SPREADING
THE WEALTH
"This
is thanks to timber," says Valery Yemelyanov, deputy head of
the
Balagansk district administration, as he waves his arms in the
direction
of his shiny new cherry-colored Lada.
The Russian
government's
regulations on logging have helped to concentrate
enormous
power in the hands of this calm man with a shrewd and
ready
smile.
In
addition to ordinary logging permits, granted to companies for
commercial
purposes, Russian legislation lays down guidelines for
granting
permits to regular citizens to cover civilian use for
building
and maintaining the wooden houses in which a large
proportion
of the population live.
Yemelyanov,
who says he has set up his own logging team and has
been chopping
wood in addition to his administrative duties, is
responsible
for approving the locals' timber requests. He also has
an even
more crucial duty: He lobbies the region for allocation of
new
timber permits. Under federal law, each villager has the right
to cut
down 125 cubic meters of timber to build a house. Once
every
three years, each family is then entitled to an additional
20
cubic meters for timber to fix their homes.
Furthermore,
the 1997 Forestry Code establishes categories of
residents-such
as pensioners, the disabled, forced migrants,
veterans
and so on-who have the right to receive timber for free.
Local
district authorities have increased the allotted amount of
timber
to 300 cubic meters, bringing the flood of villagers hoping
to
convert their right to timber into some hard cash to the
administration's
offices.
"Now
everyone, every single person, is getting into timber,"
Yemelyanov
says. When villagers receive their timber-cutting
permits,
they pay about 12 to 17 rubles per cubic meter of uncut
forest-a
little bit more than 1 percent of the market value of cut
timber.
In 1999, the 50,000 cubic meters of timber allocated for
individuals'
needs in Ba lagansk district during the first six
month
were used up long before the first two quarters ticked away.
And it
was Ye me lyanov's turn to don his best suit and polish the
hallways
of the regional administration with the soles of his
dress
shoes.
While
officially, companies cut about 85 percent of the timber
logged
in the Irkutsk region, and individuals log the rest, those
numbers
are probably deceiving."The real comedy is that these
grandmas
and grandpas have no means of their own to actually cut
down
the trees. So they go sell their timber cutting permits to
the
wise guys around the corner," says Tatyana Goritskaya, a
section
head at the regional administration timber industry and
forestry
department. Goritskaya, Irkutsk's leading forestry
expert,
has worked in the region since 1958.
FOREST
ENTERPRISE
But the
"wise guys" themselves are not much further up the feeding
chain
than the babushkas. In order to operate, they need to strike
their
own deals with leskhozy, or local forestry officials, before
they
can move into the woods with their chain saws and tractors.
Russia
has the largest forest resources in the world, with 22
percent
of the world's forest area and 21 percent of all standing
timber
volume. The country is divided into forestry sectors
supervised
by Leskhozy or forestry management districts. These
forestry
"gods" have the power-free from any right of appeal-to
decide
life or death for timber producing enterprises. They issue
so-called
forest tickets that set logging quotas.
They
also decide where logging can take place-and where it can't-
whether
or not a company gets an allotment with ripe tall trees
close
to roads or a remote marshy patch with few trees and dense
bushes.
In the Irkutsk region, transportation expenses can run as
high as
80 percent of the production costs for timber.
The
leskhozy also have the power to fine timber companies if they
do not
clear logging allotments of debris and low-quality lumber.
They
decide which parcels could be put up for tenders and run
logging
tenders. At the same time, leskhozy have the
responsibility
for replanting trees and clearing off sick and
decaying
trees during so-called sanitary logging, a loophole that
some
leskhozy have turned into sizable timber harvesting
operations.
"Our
sanitary tree cutting has increased sevenfold since 1993,"
Goritskaya
says bitterly, "In 1998 alone, forestry officials cut
down
1.5 million cubic meters of timber under the pretense of
doing
necessary cleaning cuts."
The
going price for a permit is about 30 rubles per cubic meter.
But the
best, export quality timber can fetch between $40 and $55
per
cubic meter at the local warehouses of TM Baikal, a Russian-
Japanese
joint venture. Sold at about 1,000 rubles per cubic
meter,
export timber costs no more than a third of its sale value,
bringing
in 65 percent profits.
RAW
MATERIALS
In
Soviet times, forests were given out under long-term leases to
Lesprom
khozy or forestry industrial companies that logged timber
and
harvested tree sap and forestry products. The Lesp romkhozy
were
privatized during the early 1990s along with so many other
state
enterprises. But far from transforming Soviet monsters into
capitalist
champions, the privatization process decimated the
industry.
Timber logging in Russia fell from 304 million cubic
meters
in 1990 to just 85.4 million cubic meters in 1997.
In
Irkutsk, the effects can be seen to this day. Traditionally a
raw
materials "appendage"-rich in natural resources but lacking
high-tech
industry to produce final products-the East Siberian
region
is today haunted by that legacy.
In the
early 1990s, most of the Irkutsk region's state-run timber
industrial
complexes were privatized and quickly fell apart. Some
96
percent of all lesprom khoz equipment was privatized and 80
percent
of the former state enterprises are now either bankrupt or
facing
bankruptcy, according to Sergei Tka chyov, director of the
Siberian
Timber and Pulp Industry Institute in Irkutsk.
Some of
the surviving lespromkhoz have entered into exclusive
agreements
with large local pulp and paper mills in order to keep
operating.
Most of them have no other choice. Like 15 of the les
prom
khozy who signed agreements with the Bratsk Pulp and Paper
Mill
and can ship their timber only by river, most forestry
enterprises
simply cannot afford to ship their timber across the
wide
expanses of the region by truck or railroad because they cut
timber
so far from the roads.
There
are now only a few major timber companies in the region,
several
of them joint ventures between the Japanese and Irkutsk
regional
administration-something of a conflict of interest
considering
the administration's right to grant logging permits.
For
example, TM Baikal, one of the largest Irkutsk timber
producers,
is a joint venture between the Irkutsk regional
administration
and two Japanese companies-Tajima Lumber and
Mitsui.
Likewise,
another large producer is Igirma-Tairiku, a joint
venture
51-percent owned by the Irkutsk region and 49-percent
owned
by Tairiku Trading. Nine years ago, when it built its timber
mill,
the company installed two managers, one Russian and one
Japanese
to run the site. Now, their timber products are among the
very
few locally made items that are of export quality.
Since
1998, TM Baikal and the other main lumber firms have had to
fight
off an influx of Chinese timber dealers who have been
pushing
out from Buryatia where many of them have registered
businesses.
Yemelyanov says he shipped all of his timber to TM
Baikal,
as did many in Balagansk district. But most small
businesses
are eager to make as much money as they can from the
eager
Chinese buyers. Timber exports to China soared 274 percent
year-on-year
for the first nine months of 1999, said Vladimir
Gorshkov,
the head of forestry department at the Economics
Ministry,
quoting Customs Service data. Pulp exports to China
increased
55.7 percent, while cardboard exports rose 74.7 percent.
There
were no absolute figures available.
HARD
WOODS
Eastern
Siberia is one of the richest timber regions in Russia,
with
more than a quarter of Russian timber logged here. After
decades
of merciless Soviet chopping, the taiga, once dense and
practically
impassable, has been cleared down in the southern part
of
Irkutsk region as far as Bratsk, 460 kilometers north from
Irkutsk.
Loggers are now moving further and further north to cut
down
century-old pines. "There is no timber as far as 80 or even
150
kilometers around Irkutsk. This is mayhem," said Vladimir
Sakha
rov, vice president of Irkutsk Timber Union.
The
post-Soviet decline of the timber industry has done much to
arrest
the damage. Russia's forestry industry these days regularly
cuts
much less than the amount allocated by forestry experts for
commercial
tree-logging. The possible volume of timber allocated
for
harvest each year is 54 million cubic meters, although
Goritskaya
at the Irkutsk administration's timber industry and
forestry
department says the more realistic estimate would be
about
40 million cubic meters.
While
about 36 million cubic meters of timber a year was harvested
in the
Irkutsk region in the 1980s, 1998 saw permits for cutting
at
about 11 million cubic meters-of which only 8.5 million cubic
meters
were harvested. But that hides the growing illegal and
semi-legal
tree cutting industries, fueled by the timber smuggling
business
to China. Spurred by the drain this business represents
for the
regional budget, the regional police have launched a
special
investigation into the illegal trade in timber.
Whenever
the timber team of the Irkutsk regional police can scrape
together
enough money for gasoline, it heads for the makeshift
timber
markets that sprout in Irkutsk's industrial neighborhoods.
The
goal: To plug the holes through which freshly cut logs of
export-class
timber float out of the region, bypassing the local
budget
on their way. On a Saturday afternoon, on a wide shoulder
of a
busy highway tracing the walls of Irkutsk's rusting
industrial
park, street-corner "timber traders" in sparkling
foreign-made
cars are parked side by side with their day's catch:
Two
trucks laden with export-class timber. The timber's official
paperwork
pointed at more official destinations for the logs. But
these
days in Irkutsk, it is the side of a highway where timber
supply
and demand curves meet.
It's
about noon and drivers of the trucks are chatting feverishly
with
the traders from the passenger cars. But the business
atmosphere
quickly evaporates as a squeaking red Zhiguli and a
utility
vehicle packed with police officers pull in. Foreign-made
cars
immediately drive away; gloomy drivers climb back into their
trucks.
Nikolai Nikolayev, a Buryat truck driver from Ust-Orda
Buryat
auto no mous district adjacent to Irkutsk region from the
east,
said he wanted to sell the 10 cubic meters of timber he
hauled
450 kilometers to Irkutsk for about 1,000 rubles per cubic
meter.
"But I would take 800," he adds. Nikolayev, 51, brought
along
two friends as "bodyguards" to carry "the huge money" back
home to
"his boss." For such a trip, he gets a sack of sugar,
about
380 rubles worth. "We never see any real money,"
Nikolayev
adds, squinting. "What else can I do? I have five kids
and
four grandchildren and all of them beg for candy ..."
According
to Goritskaya, the timber industry brought in just 96
million
rubles for the region's six-billion-ruble budget in 1998.
The
Irkutsk region is also Russia's leading producer of pulp.
Bratsk
pulp and paper mill once used to produce 6.5 million cubic
meters
of the region's timber, and Ust-Ilimsk another 5.6 million.
But
those days are far gone.
ROUGH
CAPITALISM
That's
because the fragmentation of the industry has made it
almost
impossible to keep track of the precious timber, say local
police
officials. In 1998, when the ruble sank, lumber started
floating
away from Irkutsk-most of it in its rawest form. In 1998,
Russia
exported $3.02 billion worth of timber, pulp and paper
products.
In 1999, timber export climbed to $3.3 billion. But
while
unprocessed timber accounted for $938 million of 1998 timber
exports
(31 percent), in 1999 its share rose to $1.2 billion (36
percent).
"The share of raw timber in total exports is growing,"
said
Gorshkov at the Economics Ministry's forestry department."
Raw
exports to China are rapidly growing too."
Gorshkov
says Russia has little choice but to go on exporting raw
timber
to China: Russia can't make enough quality timber products
itself.
Indeed, to be able to accumulate money needed for
investment
in its forestry industry, Russia needs to sell its raw
logs to
raise cash. "The situation with China is simple: We are
offering
China timber products that have been processed here, but
they
stubbornly insist on buying only raw, round logs from us,"
said a
long-time industry insider who declined to be named. "We
know
that export to China has been very large. The Chinese are
moving
in to Khabarovsk, the Chita region and Buryatia."
According
to information compiled by the regional administration
using
customs data, timber exports from the Irkutsk region more
than
doubled last year. In the first half of 1998, one tenth of
all
timber harvested here was shipped abroad, but by the first
half of
1999, the share of timber export exploded to 23.7 percent.
At the
same time, export of pulp went up only 20 percent.
Vladimir
Sakharov of Irkutsk Timber Union says it has always been
a lot
more profitable to export timber from Irkutsk region, but
after
the 1998 ruble crash, the entire region found itself caught
in the
timber-exporting boom.
The Union
sees the infusion of Chinese timber traders that started
in
early 1999 as "a serious problem." "They are paying the
minimum,
but in cash, which is attractive," Sakharov says, "They
have a
high demand for timber in China, so they appeared here in
early
winter and even tried to set up their own timber harvesting.
But so
far, they have not succeeded." In Chita region, which is
closer
to China, the Chinese timber producers are bringing in
their
own labor, Sakha rov said. And because of the transportation
cost,
the way timber is harvested is drastically changed in
Irkutsk
region, too, said Sakharov, who spent 50 years working for
the
regional Irkutsk Les prom khoz and was its director.
"What
is happening now is robbery," he said. In Soviet times, the
region
which could theoretically harvest up to 40 million square
meters
of timber annually, usually cut down only 20 million. "Now,
the
region harvests only 8 million, but when we cut down 20
million,
we used every bit, from the stump to the needles. And
now,
everything but the best logs are left behind."
But the
official data might not disclose the real volumes of
timber
cutting in the region. No one knows how much forest is cut
illegally,
says Alexander Vasyanovich, the head of the Natural
Resources
Department of Irkutsk regional administration. "No one
will
tell you the truth. The trees are cut down, hauled away and
stolen."
SMALL
ISN'T BEAUTIFUL
"Timber
took off," Goritskaya says, summing up what happened in
the
Irkutsk timber market. Hundreds of one-day private companies
surfaced
overnight to handle the export flow. In 1998, small
private
companies already handled 78 percent of all timber export
from
Irkutsk region, says Goritskaya, citing official data
compiled
by the East-Siberian Railroad. The trend was worrisome
because
the region has few resources to ensure that such a
multitude
of tiny companies pay their taxes, cover the proper
customs
fees and log legally.
There
are at least 2,600 timber logging companies working in the
region,
with only 200 large firms, according to the Irkutsk
administration.
"If we had five or six large companies dealing in
timber
export, we would not be selling it off for close to
nothing,"
Goritskaya says. The only way to bring some order into
timber
hauling and trading, the officials say, is to introduce
licensing
for timber logging and for export. "We want to cut off
the
small-change companies, but even when we were writing the law,
I knew
we were wasting our time: The region has no power to
enforce
such laws," Goritskaya says. Such changes to the Forestry
Code,
the main set of laws governing forest use in Russia, could
be made
at the federal level only.
Another
way to eliminate abuse would be to separate the function
of
managing forest reserves and supervision of its use-but there
is
little hope for changing the system any time soon. Goritskaya
believes
that forestry management agencies should lose their
authority
to sell off timber or lease logging allotments, but the
main
demand voiced by regional authorities is for control over
forests
to be shifted to the region. "This is the power. Our
natural
riches are the foundation of our regional economy. So give
this
foundation to us to run," says Goritskaya, outlining the
regions'
arguments.
EVERYONE'S
DOING IT
Even
Anatoly Petrov, editor of the Balagansk district newspaper-
which
bears the unusual title "10,000 of Me (10,000 Ya)"-devotes
only
part of his time to his publishing business. The rest of his
working
days he spends cutting timber in order to keep the
newspaper
afloat. Petrov, who also publishes the district's
official
newspaper, managed to squeeze what the district
administration
owed him for printing the newspaper, but not in
cash.
Instead, he was awarded a tree-chopping permit for
1,000
cubic meters of timber. He promptly recruited three
editorial
workers to form a lumberjack team and made his driver
the
foreman. Having not seen a kopeck of his 600-ruble salary for
18
months, Vladimir Petrov, 50, was happy to oblige.
"I
am my own man here," says the driver, who now spends weeks in a
row
chopping and clearing woods by himself." My wife is not
picking
on me, and I need very little here." Like most lumberjacks
in the
region, Petrov mostly gets his pay in bread, flour and,
rarely,
cash. But the editor says, the reasons for that run deeper
than a
simple desire to cut costs on salaries. "If you give our
men
money, they will immediately spend it on booze at the nearest
store,
and spend the next few days studying the world through
happy,
bleary, alcohol-laden eyes." On Petrov's staff, there are
four
people whom he tries never to give any money to: "They drink
like
hell," he says.
Nevertheless,
it's hard to find men in Balagansk on weekdays. Most
have
gone to the woods. "You can land a Boeing in the taiga these
days,"
said Aleksei Gritsko, one Balagansk young truck driver
working
with the lumberjacks. "If it continues on the same rate,
in
about five years, there would be no forest left around here."
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