UK re­searchers, Ukraine of­fi­cials face off over il­le­gal tim­ber ex­ports to EU

Kyiv Post - - National - BY BERMET TALANT [email protected]

Ukrainian of­fi­cials and rep­re­sen­ta­tives of the Euro­pean Union in Ukraine have strongly re­futed al­le­ga­tions of col­lu­sion and cor­rup­tion made by the Lon­don-based en­vi­ron­men­tal watch­dog Earth­sight.

In July, Earth­sight re­ported on col­lu­sion be­tween Ukrainian state forestry en­ter­prises and bil­lion-dol­lar Euro­pean firms to ex­port il­le­gally-felled tim­ber, de­spite the ef­fec­tive ban on log ex­ports im­posed to fight smug­gling and stim­u­late the do­mes­tic sawmill in­dus­try.

State forestry of­fi­cials called Earth­sight’s in­ves­ti­ga­tion false, while EU of­fi­cials said it was un­sub­stan­ti­ated. The Bri­tish non­govern­men­tal or­ga­ni­za­tion, how­ever, is not the first nor the only or­ga­ni­za­tion that has re­ported on cor­rup­tion in the tim­ber in­dus­try — an is­sue that cam­paign­ers say is con­tribut­ing to the de­struc­tion of Ukraine’s pris­tine forests.

Ac­cord­ing to the lat­est re­port by the World Wide Fund for Na­ture, or WWF, up to a quar­ter of tim­ber from the Carpathi­ans is felled il­le­gally: with­out per­mits and in unau­tho­rized ar­eas like na­tional parks. It is equiv­a­lent to one mil­lion cu­bic me­ters of wood a year.

Earth­sight’s find­ings

This week, Earth­sight pre­sented its two-year in­ves­ti­ga­tion into the Ukrainian tim­ber in­dus­try in Ukraine for the first time. Orig­i­nally re­leased in July, the re­port didn’t grab much at­ten­tion in Ukraine de­spite re­veal­ing that il­le­gal­ity seeps into the en­tire wood sup­ply chain, from li­cens­ing to har­vest and ex­port.

The in­ves­ti­ga­tion found that 40 per­cent of tim­ber pro­duced by a net­work of state-owned forestry en­ter­prises that fall un­der the State Forestry Agency’s ju­ris­dic­tion is logged il­le­gally.

Abuse of a law that al­lows trees to be cut as a san­i­tary mea­sure to pre­vent the spread of dis­ease is be­ing widely ex­ploited, re­searchers have al­leged.

And the EU buys this tim­ber. In fact, 70 per­cent of Ukrainian wood ex­ports go to the EU, bring­ing over 1 bil­lion eu­ros to Ukraine an­nu­ally.

The in­ves­ti­ga­tion found fur­ther ev­i­dence that logs from Ukraine have been mis­la­beled as fu­el­wood in cus­toms dec­la­ra­tions in or­der to cir­cum­vent the ban on round log ex­ports, ef­fec­tive since 2015, and the ban on pinewood ex­ports, ef­fec­tive since 2017.

Earth­sight claimed that it had copies of an email ex­change be­tween EU im­porters and of­fi­cials of the State Forestry Agency that in­di­cated that cor­rupt schemes had changed lit­tle from the times of Vik­tor Sivets, for­mer head of the State Forestry Agency from 2011 to2014.

Sivets re­ceived multi-mil­lion dol­lar kick­backs from for­eign wood im­porters through off­shore firms.

In par­tic­u­lar, Earth­sight named ma­jor Euro­pean wood-pro­cess­ing com­pa­nies as com­plicit in the il­le­gal trade and, al­legedly, brib­ing Ukrainian of­fi­cials. They are Aus­tria's Eg­ger, Sch­weighofer, Kronospan, Len­z­ing, JAF Group; Switzer­land­head­quar­tered Swiss-Krono; and a Pol­ish mill of an Amer­i­can firm In­ter­na­tional Pa­per.

Pre­vi­ously, jour­nal­is­tic in­ves­ti­ga­tions by Kyiv Post re­porters and by the Or­ga­nized Crime and Cor­rup­tion Re­port­ing Project found ev­i­dence of the in­volve­ment of Aus­trian firm Sch­weighofer in il­le­gal log­ging in Ukraine. Sch­weighofer also lob­bied the Euro­pean Union to pres­sure the Ukrainian govern­ment of­fi­cials to lift the mora­to­rium, ac­cord­ing to in­ves­tiga­tive find­ings.

Cer­ti­fi­ca­tion prob­lems

Many Ukrainian state forestry en­ter­prises use cer­ti­fi­ca­tion from the For­est Stew­ard­ship Coun­cil, an in­ter­na­tional non­profit that ver­i­fies that log­ging in a par­tic­u­lar for­est is le­gal and en­vi­ron­men­tally friendly. Over 40 per­cent of Ukrainian woods, in­clud­ing over 70 per­cent of the Carpathian forests, are FSC-cer­ti­fied.

But the quan­tity doesn’t re­flect the qual­ity, said en­vi­ron­men­tal sci­en­tist Petro Testov from a Kyiv-based non-gov­ern­men­tal or­ga­ni­za­tion called En­vi­ron­ment. Peo­ple. Law.

In his words, FSC cer­tifi­cate are a for­mal­ity in Ukraine, and state forestry en­ter­prises reg­u­larly vi­o­late laws by felling trees with­out per­mits or in pro­tected ar­eas.

For in­stance, in the past two years, an FSC-cer­ti­fied state forestry en­ter­prise cut a mas­sive part off an old oak for­est in the Tsuman­ska Pusc­sha na­tional park in Volyn Oblast, where log­ging was for­bid­den.

The rea­son why FSC cer­ti­fi­ca­tion seems to be in­ef­fec­tive stems from a con­flict of in­ter­ests.

The ma­jor­ity of cer­ti­fy­ing au­di­tors come from the forestry in­dus­try and of­ten act as “ad­vo­cates for forestry en­ter­prises,” Testov said, adding that FSC com­pli­ance must be car­ried out by in­de­pen­dent bod­ies and also in­volve bi­ol­o­gists.

“When a Euro­pean con­sumer buys an FSC-la­beled prod­uct they don’t know that the wood it's made of was logged il­le­gally or in for­est con­ser­va­tion ar­eas,” he said.

Ac­cord­ing to the Earth­sight NGO, EU firms that al­legedly buy il­le­gal Ukrainian tim­ber are the sup­pli­ers to IKEA and H&M, HP and Xerox, as well as some big Euro­pean chains like the UK’s Home­base and French Leroy Mer­lin.


Earth­sight hoped to use its find­ings as a chance to dis­cuss steps that must be taken to tackle cor­rup­tion in the EU-Ukraine tim­ber trade.

The en­tire struc­ture of Ukraine’s forestry sys­tem has to be changed, ac­cord­ing to Earth­sight di­rec­tor Sam Law­son.

Con­trol and law en­force­ment func­tions have to be taken away from the state en­ter­prises that do the log­ging and be given to a new in­de­pen­dent agency that has in­ves­tiga­tive pow­ers. An­other ur­gent mea­sure is a rad­i­cal im­prove­ment to the trans­parency of data re­lated to log­ging, li­cens­ing, etc.

“Th­ese two things are in­ter­de­pen­dent. If there’s in­for­ma­tion show­ing a wrong­do­ing, some­one has to pros­e­cute it,” Law­son said, adding that re­forms re­quire po­lit­i­cal will from Ukrainian of­fi­cials and po­lit­i­cal and eco­nomic sup­port from the EU.

Of­fi­cial re­buke

In­stead, Earth­sight has been ac­cused of pre­sent­ing false in­for­ma­tion.

Deputy Head of the State Forestry Agency Volodymyr Bon­dar called the Earth­sight al­le­ga­tions “vague, un­sub­stan­ti­ated and in­cor­rect.” He said that the re­searchers had not pre­vi­ously been to Ukraine and had not met with state forestry staff.

In an in­ter­view with the Ukrin­form agency, Bon­dar claimed that there was no sys­temic smug­gling of logs and that the ex­ports of a banned type of wood, dis­guised as an­other type, was im­pos­si­ble in Ukraine. How­ever, he ad­mit­ted that in­di­vid­ual in­ci­dents hap­pened.

“Wood is not a pack of ci­garettes, not a smart­phone that one can carry in a pocket. Wood can cross the bor­der only by a cer­tain pro­ce­dure,” Bon­dar said. “If cus­toms rules on log ex­ports are vi­o­lated, com­pe­tent au­thor­i­ties have to con­trol such cases.”

Earth­sight’s Law­son will face off with Lyubov Polyakova, head of the in­ter­na­tional depart­ment of the State Forestry Agency, on Nov. 9 dur­ing a panel on Ukrainian il­le­gal log­ging at a global fo­rum on for­est gov­er­nance held at Lon­don’s Chatham House in­ter­na­tional think tank.

EU pres­sure to lift ban

At a round­table dis­cus­sion in the Ukrainian par­lia­ment on Oct. 5, Aus­trian am­bas­sador Her­mine Pop­peller gave a state­ment, since Earth­sight par­tic­u­larly pointed fin­ger at a few Aus­trian firms that al­legedly im­port il­le­gal wood from Ukraine.

“All ac­cu­sa­tions against Aus­trian com­pa­nies with­out spe­cific ev­i­dence are un­jus­ti­fied and un­pro­fes­sional,” the am­bas­sador said.

She added that by im­pos­ing a mora­to­rium on round log ex­ports the Ukrainian lead­er­ship de­prived the state of an im­por­tant source of rev­enues.

The EU has been de­mand­ing to lift the ban since it doesn’t com­ply with rules of the World Trade Or­ga­ni­za­tion and, most im­por­tantly, con­tra­dicts the EU-Ukraine As­so­ci­a­tion Agree­ment on free trade.

In July, Poroshenko ve­toed an amend­ment to ex­tend the ban on fu­el­wood but the ban on round logs and pine wood is still in place.

Law­son of Earth­sight said the log ex­ports ban was a dis­trac­tion from the real is­sues in Ukraine’s forestry.

“I think it’s un­for­tu­nate that the EU is fo­cus­ing its in­ter­est and in­flu­ence on the ban rather than on wrap­ping up its ef­forts on im­prov­ing for­est gov­er­nance and im­ple­ment­ing EU tim­ber reg­u­la­tions in Ukraine,” he said.

Log­ging site in the Carpathi­ans forests near a vil­lage of Lopukhovo in Zakarpat­tia Oblast on Aug. 21, 2018. (UNIAN)

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