Timber companies of the Arkhangelsk region supported the amendments to the Forest Code

The Committee for Forestry, Natural Resources, and Ecology of the Arkhangelsk Regional Parliament prepared a package of proposals on amendments to the RF Forest Code and submitted it to Dmitry Kobylkin, Minister of Natural Resources and Ecology of Russia. Titan Group, Ilim Group, and ULK Group endorsed the proposals.

The authors admitted the need to support large transregional investment projects in the field of forest use, first of all, through the delegation of powers to make decisions on the provision of forest areas to the authorities of the federal level.

The Committee emphasizes that the key issue here is the execution of a forest area lease agreement for a new term after its expiration. The Committee also proposes to change approaches to calculating lease rates when using forest areas for timber harvesting: it is advised to establish the rent based on the area of the leased forest plot (per 1 ha). However, amounts of timber harvesting should still be determined based on AACs. In this case, quality improvements of the forest fund and intensification of wood growth (i.e. AAC) will not cause the rent increase but will contribute to the forest user receiving additional income, which in its turn will lead to a quantum leap not only in the economic indicators of the forest sector but in the enhancement of forestry as well.

Among the proposed essential amendments, there is also establishment of the initial price for contracts tendered, in a similar manner to the procedure for determining the rent upon termination of the grace period under lease agreements of priority investment projects (i.e. the minimum rent rate and the average rent increase factor over the minimum rate for the certain region).

The Committee proposed to legislatively establish a list of low-disturbed forest territories ensuring thereby compliance with the requirements of FSC standards and the legislation of the Russian Federation.

The Committee proposed to amend the forest legislation with provisions according to which the term of the lease agreement for a forest area provided for the implementation of a priority investment project, as well as for companies implementing intensive use and regeneration of forests, is to be determined based on the investor’s application.

Among the measures meant to change the timber industry development trend, the Committee mentioned, in particular, the development of roundwood trading at commodity markets, construction of forest roads on the lands of the forest fund, switch to the intensive use and regeneration of forests, use of the AAC unharvested in the previous three years, elimination of unnecessary control actions during forest regeneration and management operations, as well as terms of timber harvesting and hauling that can be prolonged by an authorized authority by no more than 12 months upon written application of the forest user.