Speeches & Transcripts

Cooperation between Russia and the World Bank in Sustainable Forest Management

October 24, 2012

Michal Rutkowski, World Bank Country Director for Russia VI International Forum “Forest and Man” Moscow, Russian Federation

As Prepared for Delivery

I am very pleased to have the opportunity today to present the Bank’s collaboration with Russia in sustainable forestry management. The Russian Federation and the Bank have had successful cooperation in the forest sector for over 15 years, where efforts have centered on forest policy and governance, as well as sustainable forest management. This engagement has included

This collaboration has taken place both at the national level (via technical assistance, policy analysis, and an investment loan) and more broadly at the global level (through FLEG). The Russian Federation, as the custodian of over 20 percent of the world’s forests, is a major contributor to international efforts to improve forest governance.

This partnership first developed during the mid 1990s, as the Bank conducted a forest policy review and Russia also carried out analytical work that identified several key constraints in the forest sector, including

  • financial and economic viability,
  • the regulatory framework,
  • forest management plans,
  • forest protection,
  • forest industry, and
  • social issues.

In particular, allocations from the central government for forest management at the time did not cover costs, which resulted in the over use of sanitary felling. Also, while the forest code provided guidelines for forest management, these needed to be also adapted to the regions. Forest fire and pest incidence had also increased since transition – partly due to decreased funding but also due to an emphasis on fire fighting rather than monitoring, prevention and management.  Lastly, the economic downturn had severely affected forest industry. The sector was undercapitalized and needed new equipment and new skills to compete. 

The Russian Federation requested Bank support to help create a favorable environment for sustainable management and subsequent investment by the private sector. The Sustainable Forestry Pilot Project (US$60 million), which closed in May 2010, supported forest management in 7 diverse regions in European Russia, Central Siberia, and the Far East, by enhancing forest management, information and land-use planning systems and strengthening regional forest inventory and pest protection organizations.

With the project's support, forest area covered by improved information management and planning systems increased from 10 million ha in 2006 to 95 million in 2009.  The project supported the development of national voluntary forest certification standards, with a subsequent significant increase in areas of certified forest. In addition, forest pest monitoring (by remote sensing) now covers 85 million ha. And the forest area protected against forest fires and proliferation of forest pests and disease increased during the project period to 410 million ha. 

In 2005, the World Bank assisted the Russian Federation in organizing and holding the FLEG Ministerial Process for Europe and Northern Asia (ENA-FLEG) in St. Petersburg.  This led to EU support for the FLEG process in the countries of Russia, Armenia, Azerbaijan, Belarus Georgia, Moldova and Ukraine, which the Bank is implementing with WWF and IUCN.

The results of the four year (2009-2012) FLEG regional program (Euros 6.3 m) have been impressive.

National ownership and capacity has increased; gaps in legislation and policy have been identified; awareness has been raised significantly both within the sector and with outside stakeholders; there has been improved collaboration with neighboring countries; an increased area of forest has been certified; among others.

It is also important to highlight that Russia's contribution among the participating FLEG countries has been significant, with Russia taking the lead in many regional collaboration events and knowledge sharing.

So what then is the context of the forest sector in Russia now? Well, forest fires continue to cause impact – not just in terms of economic losses, but also associated with carbon emissions and climate change, losses of biodiversity; the forest code of 2007 has been amended, but at the same time more needs to be done to address the perverse incentives; we’re very pleased to see that a new participatory process has commenced to develop a new federal forest policy; the process of decentralization and institutional change continue to pose challenges to the sector; the ongoing financial crisis impacts the forest sector and rural poor; and there are external factors such as the pending introduction of the EU Timber Trade regulation, which requires all timber traders in the EU to undertake ‘due diligence’ to ensure timber traded within the EU comes from legal sources.

In terms of our current cooperation in the forest sector, the Bank together with our implementing partners (WWF and IUCN) has prepared a follow on program to the recently completed FLEG activities. This second phase of the FLEG Program (US$11.21 million) will continue to support participating countries in (i) strengthening forest governance, (ii) enhancing their forest policy, legislation and institutional arrangements, and (iii) developing, testing and evaluating sustainable forest management models at the local level on a pilot basis for future replication.

In addition, the recently approved Forest Fire Response Project builds on the successes of the forestry pilot project, particularly in the areas of forest fire prevention, suppression and management and related forest protection.  It also responds to the 2010 summer wildfires (which demonstrated areas in Russia's forestry legislation and forest fire management that could be improved). 

The project supports both forest fire management and sustainable forest management given their close linkages. 

In conclusion, much has been achieved as a result of the Bank and Russian partnership in the forest sector.  And we look forward to continuing this cooperation and building achievements in truly sustainable forest management.

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