Russia’s Natural Resource Values Are Enormous
|December 31, 2003||Posted by Staff under The Progress Report|
Russia’s Natural Resource Values Are Enormous
Sale of Forests to Private Loggers
Could Create Ecological Crisis
Managing a forest in an ecologically healthy and economically productive way is not too difficult, but Russia appears determined to make grand mistakes. Here are portions of a news report from the Guardian (UK).
by Nick Paton Walsh
A plan by the Kremlin which would allow Moscow to sell off the 843m hectares of Russia’s forests to private logging companies has raised fears of an ecological disaster.
Forest makes up 70% of Russia’s territory and spans 12 time zones. It is known as “Europe’s lungs” and is second only to the Amazon in the amount of carbon dioxide it absorbs, and is home to many rare species.
This week the Kremlin decided to revise the law on state ownership of Russia’s forests, currently under the management of the ministry of natural resources, so they could be bought up by private companies. The estimated value of the land at private sale has been put at $164bn (£106.5bn). Yet environmentalists fear that the cost of its destruction to the planet, and air quality in Europe, may be far higher.
Andrei Ptichnikov, forest coordinator of the World Wildlife Fund, Russia, said: “Russia has 22% of the forest on earth — a very important part of climate stability and global biodiversity because of all the rare species that live there. According to some estimates, Russian forests absorb 15% of the world’s carbon dioxide or carbon monoxide. It provides a huge amount of oxygen for not just Europe, but the world.”
A new draft of the forest code — a part of Russian law notorious among bureaucrats and ecologists for being as dense and impenetrable as the forest it governs — focuses on selling off the forest to private companies. At present, private firms can lease some of the land from the government for up to 49 years. The Kremlin heavily regulates its use.
The new law however gives any private company the chance to buy the forest land outright, or to have use of it for up to 99 years and then buy it. The government hopes it will be approved by parliament by November 1, 2003.
A spokesman for Alexander Belyakov, head of the parliamentary committee on natural resources, which has to approve and refine the new law, claimed that the law is being carefully scrutinised to ensure the state does not lose out if oil or other valuable natural resources are found beneath the soil after the land is sold off.
But Mr Ptichnikov said that, while the forest code was in parts positive because it extended the lease period for companies to 99 years, forcing companies to take a greater interest in the sustainability of their plot of forest, it also allowed the sale of land to private construction companies to build housing. “There is a lot of concern that this may affect the forest around big cities,” he said.
He added that the new forest code did not “really provide a strategic way to ensure sustainable forest management. It has a lot of Soviet-era features. The same state officials are responsible for the commercial use of the forest as well as looking after it ecologically. Obviously, they will be inclined to spend more time on the profitable commercial issues. The new law provides a logging plan that is theoretically enough to ensure sustainability. But in reality, it is hard to get it to work well because there is not enough funding [to police the law].”
In Russia, logged wood sells for $1 (65p) a cubic metre, whereas it sells for $30 in Finland and $15 in Estonia. “Prices are cheaper, but there is also less money to keep the forest going,” he said. “It is difficult to see how that can change. Forest companies do not want their expenses to go up.”
Alexei Morozov, from Greenpeace Russia, said: “The law’s effect depends on the regulations that govern logging. The basic regulations for the last 1997 version of the code have only just been put into practice now. State ownership means the local government and population can negotiate over how to log some areas and protect others. Private ownership means businessmen can suit their own agenda.”
The Russian government has overseen the forests clumsily so far. While Russia has nearly a quarter of the world’s forests, it exports a quarter as much wood as Finland or Sweden. Now the government is keen to ensure that it profits from the exploitation of the forest, rather than illegal loggers.
Timber contraband already represents a large problem in the region, with Russia losing an estimated $30bn a year from illegal trade in wood with China and Japan, according to a report by the World Wildlife Fund last year. Legal exports accounted for only $4.15bn in 2001, they added, calling for stricter state control.
The potential levelling of vast swaths of the Siberian forest could also threaten the existence of several endangered species. The far eastern leopard, of which there are only 30 left, and the Siberian tiger, of which 400 remain, would all suffer from widespread logging. Rare trees such as the Siberian cedar pine and Korean cedar pine are also threatened in Russia’s far east, and the wild chestnut, already being illegally logged in the Caucasus, is also at risk.
The big sell-off
So far, corrupt insiders rather than the Russian people have been the beneficiaries of privatization.
Oil, gas and aluminium During the mid-90s, the Yeltsin government accepted a proposal by businessmen to “manage” the state utilities and natural resource companies, in exchange for a “loan” to the government. This gave half a dozen men control over companies like Gazprom, which owns 30% of the world’s natural gas, and oil giants Yukos and Lukoil. The finance, coupled with the media outlets these oligarchs owned, helped sway the 1996 elections in Boris Yeltsin’s favour
Land The 2002 land code permits sale of land on which factories sit and of private plots, previously prohibited. Yet the sale of farmland remains prohibited, and tenants have to go through a complicated procedure to change how the land may officially be used
Airlines Aeroflot was turned into a private company by Valeri Okoluv, Mr Yeltsin’s son-in-law, with help from the Kremlin kingmaker at the time – now receiving political asylum in London – Boris Berezovsky
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