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Statement by WWF-Ukraine on the possible unification of forestry enterprises

The Cabinet of Ministers of Ukraine plans to approve a resolution "On Certain Issues of State Property Management in the Forest Sector", which envisages the creation of a state unitary commercial enterprise "Forests of Ukraine". This means that the likely transition to the privatization of Ukraine's forests through corporatization is expected. All state forestry enterprises subordinated to the State Agency of Forest Resources will be dissolved and cease to exist as separate legal entities, while their property, rights and permissions to use forest resources will be transferred to the SE "Forests of Ukraine".
WWF-Ukraine is against the premature adoption of this document under martial law because:

  1. The draft decree contradicts Article 13 of the Constitution of Ukraine, according to which The land, its mineral wealth, atmosphere, water and other natural resources within the territory of Ukraine, the natural resources of its continental shelf, and the exclusive (maritime) economic zone, are objects of the right of property of the Ukrainian people. Ownership rights on behalf of the Ukrainian people are exercised by bodies of state power and bodies of local self-government within the limits determined by this Constitution.
  2. The draft resolution contradicts the State Forest Management Strategy of Ukraine until 2035 approved by the Cabinet of Ministers on December 29, 2021. According to the strategy, during the reform of the forest sector of Ukraine the state forestry enterprises remain in the status of legal entities, and their privatization is prohibited.
  3. The draft resolution was not submitted for public discussion with the public or industry representatives.
  4. The draft resolution does not contain a substantiation of the expediency of this reform, in particular in wartime.
  5. The reorganization of the forestry enterprises will lead to a complete monopolization of the timber market, which is now being sold at a licensed exchange. Monopoly always goes hand in hand with corruption risks. The concentration of power and resources in a limited circle of producers closes access of small and medium-sized players to the timber market and will eventually lead to their bankruptcy.
  6. Because of the potential implementation of the proposed reforms, forestry enterprises will lose their PEFC and FSC forest certification. Currently, more than half of the forests are certified within the structure of the State Forest Agency under voluntary international forest certification systems. Certificates are valid within each individual forestry enterprise and do not provide for succession in the event of liquidation of the enterprise. In turn, the lack of a certificate will close the possibility of access to exports to international markets.
  7. The draft resolution does not regulate fulfillment of protection obligations for protected areas within the forest fund. According to the State Cadastre of Territories and Objects of Nature Reserve Fund of Ukraine, at the beginning of 2021 there were 8633 protected areas on  4,1 million hectares. These territories ensure not only the preservation of unique natural landscapes, ecosystems and biodiversity, but also contribute to sustainable ecological development and environmental renewal. What is the fate of these territories if a unitary enterprise appears?
  8. The conclusions on the environmental impact assessment will become invalid, and it has not been determined how the EIA procedure will be carried out in the future, as well as measures for the development of forest management documentation.
  9. The issue of the transfer of land forest plots to the new structure is not fully spelled out. Most of the forest enterprises today do not have duly executed documents, which can lead to the loss of forest areas during the reorganization.
  10. The Resolution does not contain an overview of the environmental impact of such reorganization because forests are primarily ecosystems that provide a large number of ecosystem services. Changing the way forests are managed will affect environmental safety issues, and therefore the resolution should have undergone a strategic environmental assessment.
The forests of Ukraine are its national wealth and by their purpose and location perform mainly water protection, protective, sanitary and hygienic, health, recreational, aesthetic, educational and other functions and are the source of satisfaction of the society's needs in forest resources. All forests, irrespective of which category of lands they grow on and regardless of their ownership rights, constitute the forest fund of Ukraine and are under protection of the state.
WWF-Ukraine calls to continue discussion of the necessary changes in the forest management system and approval of the appropriate legislative framework with the obligatory involvement of representatives of the industry, public organizations, business representatives, and scientists.  

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