1. Management of state – owned forests Tbilisi, 5th June 2014 Janusz Zaleski Deputy Director General of the Poland’s State Forests

2. 2 Reforms? No changes in structure since 1974 Evolution in management Revolution in financing

3. 3 Tytuł slajdu Put la faccums andiatet, venim vel eum veriusc illandre minim Borperi uscidunt ipit, quat, suscidunt la feuguero commodionum Unt dolortio odipsusto doloreet ver aut lore te digna facing Put la faccums andiatet, venim vel eum veriusc illandre minim Borperi uscidunt ipit, quat, suscidunt la feuguero commodionum Forests in Poland grow on an area of 9.1 million hectares. 77,4% of forests are managed by the State Forests National Forest Holding Management of state – owned forests

4. 4 The State Forests units operate on nationwide, regional and local levels. We employ 25.000 people / in 1989 -130 000/ and are the biggest organization of this kind in the European Union Our revenues exceed 1.8 billion euro. In around 90% they come from wood sales. Due to a special financial mechanism we are economically independent and don’t rely on taxpayers support Almost the entire income is invested in sustainable forest management

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6. 6 GENERAL DIRECORATE OF THE STATE FORESTS REGIONAL DIRECTORATES OF THE STATE FORESTS (17) FOREST DISTRICTS (430) Regional Directorates - from 150 000 ha to 650 000 ha Forest Districts - from 5000 ha to 35 000 ha Forest sub–districts - from 500 ha to 2500 ha Organisational structure

7. 7 Responsibility Ministry -Supervises forest management -Sets deduction rate for the Forest Fund -Approves forest management plans -Approves fees for the maintenance of RD of SFH -Supervises Nature 2000 areas General Director -Oversees the activities of RD of SFH -Creates and closes RD and Forests Districts of SFH -Manages the Forest Fund -Funds scientific research in forestry field -Organizes joint ventures -Sets financial plan for SFH

8. 8 Regional Director -SuperviseS FD activities -Organizes joint ventures -Commissions study on the forest management plans -Appoints and dismisses chiefs of FD Head of Forest District -Executes the forest management plan -Employes staff -Sells forests smaller than 1 ha -Hires and leases land and immovables -Is creditworthy Responsibility

9. 9 Pre-conditions for an effective and efficient organisational structure political will legal framework scientifical support well-skilled people stability

10. 10 Conflicts are inevitable Protective function Social function Productive function

11. 11 Conflicting interests – how SFH deal with this problem Rules and money: SFH is financially self–sufficient Timber production must create profits Free timber market Social and environmental functions should be followed Conflict is inevitable

12. 12 The Forest Fund Forest Fund – particular kind of financial mechanism supporting those who are not able to get good economic results because of factors beyond their control Forest Fund resourses come from deductions from the income from timber sales, fines and fees for excluding of forest land from production Forest Fund allows forestation, tending, protection. It may be allocated to: building of the infrastructure scientific research elaboration of forest management plans nature conservation

13. 13 Commercial risk and social responsibility Risks Commercial use of forests is necessary -striving excessive exploitation -fluctuations in the timber market -social protests -conflict with the nature protection -bad publicity of forestry Responsibility Free timber market is necessary -free timber market -excluded diversification of customers due to their size -support for some of them /poor households/ should be provided by the State budget

14. 14 Financial issues Optimization applies only to the financial costs Considering ecological and social costs, maximizing of benefits / revenue shouldn’t be a main criterion of expenditures Environmental impact and public mood should be taken into account

15. 15 How to best manage revenues and build financial reserves? Deepends on strategy, goals and targets Adjuststment of investments to avaliable resources in the planning process Dedicated fund should be created for reinvesting money in forest management Additional sources should be placed in profitable and less risky ventures

16. 16 Mistakes Lack of State budget participation in State Forest revenues Not enough clearly define targets for investing free funds Weak supervising on private forests Weak participation of society in forest planning processes

17. 17 Dyrekcja Generalna Lasów Państwowych ul. Bitwy Warszawskiej 1920 r. nr 3 02-362 Warszawa sekretariat@lasy.gov.pl tel. +48 22 322 33 44, fax +48 22 233 44 55 Thank you!

18. 18 The State Forest Holding 1924- 2014 The 20th biggest enterprise in Poland SFH are one of a very few state organizations in Poland that has such a long history Almost 80% of Poland’s forests are owned by the State Treasury and managed by the State Forest 1989-2014 decrease of staff from 130 000 to 25 000 1945-2014 increase of forest area from 20% up to 29.3% of the country area. Increase of growing stock from 170 up to 250 m3/ha

19. 19 Some key figures Surplus of revenues against costs State forests organization is independent from the State budget Turnover: 1,6 billion euro Timber sales as percent of all revenues: 92% Net profit: 17- 00 million euro Timber sales: 37 million m3