Bill № 4197 on the timber market needs to be finalized

It is unfortunate to state, but it is true that neither the past nor the current laws and other regulations relating to the forest sector of the economy and the domestic timber market have not satisfied, and do not suit now, foresters who plant, care for and harvest wood, neither woodworkers nor woodworkers who use it. Because their interests have always been either neglected in general or taken into account in part. Unfortunately, the bills № 4197 and its alternative №4197-1 on the timber market do not seem to be devoid of similar shortcomings. At least this is evidenced by discussion at the round table “Wood in Ukraine: what you need to know furniture maker?”, Organized in early December by the Ukrainian Association of Furniture Manufacturers, and more specifically – its Platform for lobbying the interests of furniture makers.

We offer key theses of the round table speakers.

UAFM President Volodymyr Patis, who set the vector for the online dispute, said in particular that all those who use domestic timber are not only dissatisfied but also seriously concerned about the fact that auction prices for wood have more than doubled this year.

Pavlo Pisnyi, head of the UAFM platform for lobbying the interests of furniture makers, who is well acquainted with this topic, because he has repeatedly helped members of the Association, the furniture industry in general in conditions of legal imperfection, nihilism and bureaucratic arbitrariness, acting as a moderator of the round table. opinions, their position in such a way that they can be formalized as proposals of furniture makers to adjust, improve the bill, which will be submitted to its developers and the relevant committee of the Verkhovna Rada.

Vasyl Masyuk, Chairman of the Public Council at the State Forestry Agency of Ukraine and Editor-in-Chief of Derevoobrobnyk newspaper, criticized the initiative of the Ministry of Environmental Protection and Natural Resources to create a new business entity to centralize the management of all state forestry enterprises. timber), as well as the intention to sell 100% of the timber only by conducting electronic auctions in the electronic trading system Prozorro. Sales “. The bill under discussion is, in his opinion, openly lobbying for the interests of ProZorro, not the best alternative to the bill, developed with a balanced consideration of the interests of woodworkers (the so-called Matusevych bill), who proposes, in particular, that they have 50 per cent buy from forestries under direct contracts. The draft law №4197-1 does not provide any preferences for domestic wood processors and woodworkers in electronic bidding, and this is its significant shortcoming and difference from the Matusevych bill. If we proceed from the goal only to increase revenues to the state budget and enrich “Prozorro. Sales ”, the bill № 4197-1 is correct, and if the goal is to help the forest sector of the economy and domestic woodworking and furniture industries, their development, it is harmful, because it does not set such a goal. Moreover, it is deadly for these industries, and in the short term stated V. Masyuk.

Mr Oleksandr, a representative of the Ruskopolyansky Furniture Factory, believes that the proposed bill № 4197-1 provides for monopolization in the trade-in domestic timber. Surprisingly, the Antimonopoly Committee did not pay attention to this. Such a monopoly will be harmful not only to those who buy logs but also to those who sell them – forestries.

“The lion’s share in the cost of our final furniture products is the price of wood. So, if these prices continue to rise, as this year, Ukrainians will simply not be able to buy domestic furniture, because the prices for them will be exorbitant (and not because of the furniture, as you know). And so the furniture industry will have to stop. Under the current conditions, we and our fellow furniture makers cannot compete at auctions with “monsters” who find it advantageous to screw up prices so that only they get the best. Is it normal when class C wood is sold in Ukraine for almost 12 thousand hryvnias? ”

Orest Kiyko from the National Forestry University, who joined the conversation, said that scientists from this “university” are involved in the development of relevant laws, so he has something to say in this topic. Since the resource for which spears are constantly broken is truly unique, it should unite all those involved, including the UAM, in the so-called Forest Sector Council, which could be created under the Cabinet of Ministers. In general, his position was in favour of wood processors buying 50 per cent of the logs under direct contracts, in the form of a so-called public offer. If the authors of Bill № 4197-1 really aim to avoid abuses, corruption indirect procurement, as they claim, then transparent mechanisms for such bidding can be devised and provided for in the law, and not completely reject the form of direct procurement contracts.

Vladimir Patis called to pay attention to the foreign experience of transparent electronic bidding. They are multilevel, ie take into account the interests, needs and opportunities of small, medium and large consumers of wood. And those who need expensive breeds and varieties, and who are satisfied with lower quality raw materials. In this case, bidders of the same level will compete with equals like them – for example, furniture makers with furniture makers.

Vitaliy Orel, a lawyer for Mikheil Saakashvili’s Office of Simple Solutions and Results, said that their office had developed a concept of forestry reform, the essence of which was to provide logging rights to private individuals with the subsequent right to sell harvested timber. Forest plots set aside for felling will be sold at auctions for a long time. This will break the existing state monopoly in the forest sector, which is not good in market conditions. According to the authors of the concept, this approach will eliminate a number of conflicts that have not been resolved for years between timber sellers, buyers and intermediaries (exchanges and auctions).

In response to an initiative by Saakashvili’s office, Vasyl Masyuk said that Russia and Slovenia had tried to follow this path and had catastrophic consequences. Instead, he strongly supported the foreign practice of multilevel bidding, as Volodymyr Patis said, but not at auctions, but under direct contracts.

Yevhen Kozytskyi (Enran company) said that his company used to produce furniture boards in Khust, independently – under the control of forestries – procuring raw materials for themselves in Transcarpathia on the allotted plots. And such mutually beneficial relations between foresters and wood processors continued until the new laws forbade such logging independence. Thus, Yevhen supported the concept from Mikheil Saakashvili’s Office, which was not supported by Masyuk.

The comments and suggestions were based on Bill № 4197, which would take full account of the interests of woodworkers and furniture makers, promoting the development of these important sectors of the economy. Obviously, it will be necessary to formulate such concrete proposals for the drafters of the bill and the profile committee of the Verkhovna Rada, which prepares it for discussion in the session hall, as well as for acquaintance with them in general. in particular, the UAFM platform for lobbying the interests of furniture makers. Pavlo Pisnyi said that this would be the case, but some participants of the round table agreed to take part in the process of such concretization.