GEO

Ministry of Energy and Natural Resources to introduce new forest management system

29 August, 2011
Over the past months there has been discussion and speculation with regards to the reorganization of the Ministry of Environmental Protection and Natural Resources. One of the main questions that has been raised is related to forest management in Georgia. This is, however, not a new issue for post-revolution Georgia. A new system for leasing Georgia’s forests was first initiated in 2006 by the Ministry of Environmental Protection and Natural Resources. The first auction was held in 2007. Since 2008 the process has been led by Kakha Bendukidze. In 2009 the leasing process was ceased by the newly appointed Minister of Economic Development, Lasha Zhvania, and the Minister of Environmental Protection, Goga Khachidze. The 2006 legislation had some gaps and it was necessary to work out a new strategy on forestry and carry out an inventory of forests. In 2011 when the Ministry of Environmental Protection was restructured, management of natural resources was separated from it and consequently the forestry sector is now the responsibility of the Ministry of Energy and Natural Resources. In July 2011 Alexandre Khetaguri, the Minister of Energy and Natural Resources, unexpectedly stated that the Ministry had decided to introduce a new system of leasing forest, and that the first auction would take place in the middle of August. The statement was strongly criticized by the non-governmental sector, which led Khetaguri to organize a meeting to briefly present the upcoming forest reform plan. The meeting was held on August 4, 2011 and was attended by NGO representatives and other experts.

Innovations

Khetaguri announced that, by the end of August, a draft of the new Forestry Code will be introduced, which will establish new regulations regarding logging management and forest leasing. The new Georgian Forest Code will be based on that of Austria. Khetaguri stated that in September a new electronic database will be launched, which will enable online control of logging. New marking labels for harvested wood will be introduced, which will have unique bar codes, making it possible to register and track harvested wood. Specially trained units of ministry staff will be created, similar to city park employees, who will control cutting, transporting and selling of wood. These units will be equipped with special bar code readers that can scan labels and send information to the electronic database. Khetaguri said that he believes the problem of unlicensed logging will be tackled with the help of this system because logging, transportation, and selling of wood will be controlled; all sawmills in Georgia will be registered and will not be allowed to process wood that is not marked with the new labeling system.

Logging Areas and Types

Khetaguri stated that the number of logging areas will be reduced and if there used to be small logging areas in every village, large logging areas will be created which will be territorially accessible from four or five villages. There will be two classifications of logging: “social logging,” which means harvesting wood for non-commercial purposes, and “commercial logging”. Currently, there are limits on the amount of wood that can be harvested for social logging. In the future, loggers will be able to harvest as much wood as they need, as long as they follow appropriate regulations and pay for the wood they harvest.

Forest Areas

The Minister underlined that the new Forest Code introduces a new term, “forest area”, which encompasses everything inside the designated territory, including fields, lakes, animals, fish, and so on. All the forested land in Georgia, except national parks and protected areas, will be divided into pieces, which according to the Minister should be large enough, to attract investors, and those pieces of lands will be leased.

Protected Areas

Leasing the whole forested area of Georgia means that no new protected areas will be created in Georgia. Although the Parliament still has the authority to declare some territories as protected areas, doing so would breach the State’s contract with any corporations holding leases to the affected land and would likely require compensating the leaseholder. Moreover, Khetaguri stated Georgia already has too many protected areas. (Georgia currently has 511,123 hectares of protected land, which is about 7% of Georgia’s total territory). It was better for Georgia to use its resources for income and not just preserve them, the minister said. Khetaguri added that if the issue of creating a new protected area is raised in the future, he will definitely oppose it and try to persuade other government members as well.

Lease Duration and Investors’ Obligations

According to Khetaguri, when an investor intends to invest in a forested area, a project management plan must be presented. This plan should be open for public discussion. If it is approved by the ministry, a lease contract will be made with the investor for 49 years. As Khetaguri explained, if investors do not breach their agreements the lease contracts will automatically become permanent after 49 years. Investors will have an obligation to take care of the forest by mitigating fires and erosion; they must allow the public to continue social logging, harvesting wild plants, and other activities which do not need prior licensing; they must develop the forests’ infrastructure, plant three new trees for every cut tree, and at the same time must not decrease the forests’ total volume of wood. If an investor does not fulfill its obligations, time will be given to correct the violations, but if the investor fails to make the necessary corrections the contract will be terminated. The Agency of Natural Resources, a legal entity of Public Law under the control of the Ministry of Energy and Natural Resources, will prepare forests for leasing and oversee the fulfillment of contract provisions as well.

Forest Inventory

In contrast to the Austrian Forest Code, the revised Georgian code will not impose an obligation on the state to inventory its forest areas. Khetaguri explained that performing a ministerial inventory will take too much time and delay the forest leasing process. Thus, prospective investors will be required to hire specialists certified by the Forest Stewardship Council, an international NGO promoting responsible forestry, to perform an inventory of the forest. Khetaguri said he believes that investors will not have any interest in falsifying inventory results, and even if the investors underestimate the initial size of forest area in order to circumvent the requirement that the volume of the forest be maintained, the state will still control the logging process with the help of the new labeling and the electronic database, and therefore will not let investors gain any illegal benefits.

FSC Standards

The minister announced that the leasing process will be carried out in accordance with Forest Stewardship Council’s (FSC) standards. Some experts who attended the meeting indicated that the FSC standards are set very high and that it is almost impossible for newly established forestry companies to satisfy the requirements. These experts expressed concern that the result might be the same as during the previous round of the leasing process, when the majority of investors failed to satisfy FSC standards, and were simply freed from that obligation.

TIG Recommendations

TI Georgia welcomes all efforts to improve the management of Georgia’s natural resources. TI Georgia calls on the Ministry of Energy and Natural Resources to do a thorough inventory of the forest before the areas are leased to private investors, and to assure that investment project are preceded by a consultation process involving experts and the general public.
Author: Zurab Gvelesiani