1. Update on Russian Forest Sector and Russian-Chinese Relations: WWF View Elena Kulikova, WWF Russia April, 26, 2007 Beijing, China

2. Content New Forest Code and subordinated normative documents ENA-FLEG – current situation Russia-China relations – last developments WWF activities

3. Forest complex is in the focus of Russian political authorities Forest sector problems are discussed with personal involvement of the President

4. New Forest Code: Major Changes Maximum decentralization of forest management and use system in Russia Delivery of responsibilities on forest management, use and protection to the regional level (subjects of the Russian Federation)

5. NGOs (WWF Russia, Greenpeace Russia, TRN) Comments on the Code State ownership but some conditions for privatisation New classification of forest use types, several categories of protected forest type no longer exist Designation of protected areas will become more complicated Ecological expertise (EIA) is disappeared Mechanism for public participation in decision-making is absent Rights of local people on traditional livelihoods are not guaranteed Leasing of forests is allowed for periods of 10-49 years, absence of any obligations related to SFM, biodiversity conservation or solving social issues. Reorganisation could result in large numbers of job losses in rural areas, increase in social problems and in illegal logging

6. New Forest Code Character Not forestry oriented Pro-industry oriented “Frame” character A lot of work to finalize forest legislation. 42 sub- ordinate normative acts need to be developed at the federal level, all together 78 with regional norms

7. Normative Acts under New Forest Code: Process of Development and Discussion 5 major Russian environmental NGOs: Greenpeace, WWF, Biodiversity Conservation Center, International Social and Ecological Union, Transparent World Joint efforts to ensure openness of the process Positive tendency: norm drafts are on the web- site of the Ministry of Natural Recourses NGOs conclusion: norm drafts has significant weaknesses Set of joint and agreed comments from NGOs to these drafts in constructive manner 15.03.2007 г. – joint letter to the Minister with attached comments Public Council within FFA

8. European-North Asia Ministerial Conference on Forest Law Enforcement and Governance ENA FLEG

9. ENA FLEG: National Action Plan and Russian Federal Forestry Agency (FFA) Delivered to the Government (autumn, 2006) as a part of developed Programme Re-arranged into Programme of Measures MNR as a coordinating agency Measures are presented in the Programme as normative documents, reports, meetings

10. ENA FLEG: Current FFA Activities Direct regional control – check up forestry and related operations in the regions: Karelia – North-West Russia (March), Chita – bordering with China (April) Remote sensing control Combined check-up with involvement of relevant agencies (inter-agency work)

11. ENA FLEG: Practical Work Remote Sensing Monitoring 2006 18 Russian regions 101,2 mln ha - area of remote sensing monitoring 1 2 3 4 5 6 78 9 10 11 12 13 14 15 16

12. New Export Tariff Policy for Round Wood: New Conditions Today: 6.5% but > or = EUR 4 Compare with Canada and USA – 27%, Finland, China – export is prohibited Resolution of the Russian Government #75: from 1-Jul-07: 20%, but > or = EUR 10 from 1-Apr-08: 25%, but > or = EUR 15 from 1-Jan-09: 80%, but > or = EUR 50 Main reason for export tariffs revision is quick stimulation of domestic wood processing and raising effectiveness of forest sector

13. New Tariff Policy : Reaction from Outside Finland: - Plan to Prepare for Russian Log Export Tax Increase - possibilities to replace Russian wood by domestic attract attention of EU countries – bilateral negotiations Japan -Search for alternatives for Russian wood in other countries -Japanese Association of Forest Importers – wish to share business activities in Russian forest industry development China: -Rather quiet reaction -Ready to switch round wood trade to processing -Comments by Chinese Deputy Minister of Commerce -Encourage Chinese investments into pulp and paper, sawing and furniture enterprises

14. New Tariff Policy : Reaction from Inside Russian Far East Industry Calls to Postpone Log Export Tariffs until 2013 Association Dalexportles addresses the Russian Government Fixed timeframe of 22 months are insufficient to establish wood-processing capacities Cause decrease in Far East forest sector, multti-million losses to the economy, social problems and unemployment of 60 000 people

15. Russia-China – New Conditions Refreshed relations at the governmental level Changes in market demand FSC certification – new geographic trends Cross-boarder cooperation China: no clear intention to actively participate in ENA FLEG? Japan markets – Public Procurements Rules US markets – Civil G “8” – Bush-Putin

16. FSC certification in Russia 15 ml ha FSC-certified forests ( March, 2007) It comprises more than 10% of commercial forests 2-nd place in the world

17. Russian Federation siblescom томлеспром Geography of FSC certification

18. WWF Joint work: Systems to identify legally-sourced wood in supply chains involving Russia and China “Keep it legal” manual 200 forest sector field staff (producers and inspectors) trained on how to identify illegally-sourced timber and on forestry legislation reforms Two or three demonstration pilots for “verified legal” wood in cross-border (Russian forest to China factory) Case study on costs and benefits of a ”verified legal” supply chain Recommendations to stakeholders on improved methods for legal verification of wood supply

19. ekulikova@wwf.ru