If the draft Law No. 4197-d “On the Timber Market” is adopted, all timber transactions will be subject to mandatory entry into the electronic timber accounting system, and any actions with timber harvested in violation of the law will be prohibited.
This was reported by the Ministry of Environmental Protection and Natural Resources of Ukraine.
Among the innovations in this draft law are:
- creation of a register of business entities engaged in wood processing;
- establishment of general requirements for the retail sale of wood to individuals to meet social and household needs.
How the bill is progressing
The first vote in the Verkhovna Rada and the adoption of the document as a basis took place on November 18, 2021. According to Yuriy Dyug, coordinator of the Wood Industry UA economic platform, MPs have been active in preparing this document only in the last six months, although the discussion around this draft law has been going on for many years.
The discussion of the European integration draft law No. 4197-d on the timber market prepared for the second reading took place on December 27 at a meeting of the Verkhovna Rada Committee on Economic Development, which is designated as the main committee for this document.
EcoPolitic analyzed the transcript of this event. The discussion between MPs and stakeholders was very active, so the committee members decided to postpone consideration of the draft law to another meeting. Among other things, industry representatives complained that even the members of the working group managed to get the revised text of the document only a day before the committee meeting. They stated that there were many comments to it.
In order to harmonize the proposals of all stakeholders, the committee held another roundtable discussion of the document on January 8.
"By the end of January, this draft law must be completed in the final version and be ready for the hall," said its chairman, deputy Dmytro Natalukha, at the committee meeting.
The text of the draft Law is currently available on the website of the Verkhovna Rada as of September 14, 2021.
The main innovations of draft law No. 4197-d
1. It regulates in detail and comprehensively the functioning of the forest portal, which is intended to become an important tool in achieving openness, publicity and control over the activities of wood market participants.
2. Introduces the planning of wood harvesting by permanent forest users.
3. Determines the mechanisms for the sale of wood and individual wood products by forest owners and permanent forest users, which can be carried out exclusively through electronic auctions or on the terms of the offer.
According to Yaroslav Stefurak, head of the NGO "Association of Woodworkers and Forest Managers of the Verkhovyna Region", the most important thing for woodworkers is that this law includes the sale of wood through an offer contract.
"This is a guarantee of the existence of small and medium-sized businesses in this industry," he is sure.
4. Provides for the introduction of liability of forest owners and permanent forest users for refusing to supply buyers with the specified volume and quality of wood for which the buyers paid the price determined by the contract.
5. Establishes the responsibility of buyers for non-fulfillment of the terms of the sales contract (for example, non-payment of the price of wood under the sales contract).
"Such violations on the part of buyers are quite common and cause significant material damage to forestry enterprises, as the latter lose time and the opportunity to sell wood at the market price to other buyers," the explanatory note to the draft law states.
6. Terminates the practice of concluding direct contracts for the purchase and sale of wood by permanent forest users, which was a significant factor of corruption.
7. Introduces mandatory declaration of wood processing.
8. Defines clear conditions for the export of roundwood, namely the need to obtain:
- certificate of wood origin;
- harvesting of wood during selective felling of main use in forests of artificial origin;
- certificates on the origin of wood from the region, where the indicator of protective forest cover is not less than the established standards;
- certificates on the absence of species listed in the Red Book of Ukraine in the areas where wood was harvested.
9. Introduces mandatory submission and publicity of information on volumes, sales prices and buyers of wood and wood products.
10. Determines the steps to regulate the own wood processing of state forestry farms in order to bring such processing to a competitive market.
11. Introduces the documentation by all participants of the wood market of the processes of the forest management system and the supply of products through the mechanism of declarations on operations with wood (a list of documents is determined that enables market participants to harvest and further process wood).
12. Defines the principles of conducting electronic auctions, their types and features, as well as requirements for publishing information about conducted electronic auctions.
13. Provides for the establishment of a Commission to consider complaints regarding trade in timber as a tool to protect market participants.
Currently, there is no publicly available information regarding the results of the January 8 round table. EcoPolitics will monitor the preparation of the draft law on the wood market and the amendments made to it.
We will remind you that a year ago, in January last year, the then Minister of Environmental Protection and Natural Resources Ruslan Strelets stated , that within the next 6 months the market of forest products will completely come out of the "shadows" thanks to online certificates on the origin of wood. As we can see, this never happened.
EcoPolitic also published comment Oleksandr Mysyura, one of the stakeholders of the forestry industry, regarding the development of the forestry industry and the corruption component in it.
