TL: RUSSIAN FORESTS FOR SALE SO: Greenpeace International (GP) DT: May 1994 Keywords: terrec forests russia siberia logging clearcuts biodiversity multinationals greenpeace reports gp / As Russia enters the international market economy, trade in forest products in particular is on the rise. 300 ventures in Russia now have licences to export timber export - compared with 28 licences for oil export, 86 for oil products, and 20 for furs. Over 60 joint venture companies for logging are now operating in the Far East region alone (see appendix). Russia's domestic requirements in terms of timber are very high. Under present economic conditions, however, only a small fraction of the timber harvest can be used to meet domestic demand. Since at the same time the Russian timber industry highly depends on exports to gain foreign currency, it may happen that Russian timber-processing plants have to buy domestic timber using foreign exchange. The result, if export figures for timber rise as expected in years to come, Russian firms could go bankrupt for want of hard currency. 30% of the foreign exchange earnings from forest product exports will go to the state, 20% to the foreign exchange market at the current rate of exchange, and the rest, 50%, will stay with the exporter. In Moscow alone, more than 140 timber exporters are operating. Raw logs are exported abroad by middle men and various joint ventures, while Russian sawmills stand idle due to lack of raw materials. Timber processing in Russian has fallen to the wartime level. Roslesprom, the state-owned company which regulates forest product exports, estimates that of 15 million cubic metres of processed timber produced in Russia in 1993, 7 million cubic metres are exported by various joint ventures. A timber exporters association was set up in 1992, with the aim of competing effectively with Sweden and Finland. It now has 79 members and supplies almost 80% of the foreign market for Russian timber. DOMESTIC TIMBER SHORTAGE But official figures and organisations do not reflect the full extent of this trade. Exports are officially regulated by the state-owned company Roslesprom, which receives 0.5% of timber export earnings in hard currency. But around 400 unofficial exporters, according to Russian press reports, are bypassing this system. This may explain the apparent 200% drop in timber exports to CIS countries in 1993. Roslesprom's chief has complained that this unofficial trade is destroying timber and paper markets both in Russian and abroad. The result has been a retreat in trade liberalisation. In 1993 the formerly lucrative export of Russian fuel timber stopped because of prohibitively high customs and railway tariffs. In 1992 Finland alone bought US $17.7-worth. As recently as November 1993 export quotas were cancelled for forest products except for paper pulp. But 1994 brought a new government decree in response to pressure from Roslesprom, saying that export of industrial spruce timber and railway sleepers is to be subject to licences and quotas. Their grounds are "the need to provide the Russian economy and people with timber and paper products". COMMERCIAL CRIME This measure is unlikely to be effective, since the old quotas were not fully taken up by licensed exporters - only 60% of the 1993 quota was used. The Russian Minister of External Economic Relations has reported that in 1992, more than 1,000 crimes were involved the illegal export of timber materials. Re-export of Russian forest resources in the former republics is thriving. Dealers receive low-priced Russian timber and without even unloading the supply trains, send it on to other importers - at international prices. TIMBER TRADE'S SUN RISING IN THE FAR EAST But while officially recorded Russian timber exports in 1993 were well below the 1988 level, exports to the Far East are on the upward trend. One reason is the increase in staging posts such as Plastun. Russian timber dealers increased export to Japan in 1993 by 6 per cent on the previous year (3.7 million cubic metres to 4.5 million cubic metres). There were two main suppliers to Korea in 1993: Dalles, (80,000 cubic metres or 20% of Korean imports from Russia) and Exportles (300,000 cubic metres or 76%). Russian forest products also appeared on the Taiwan market in 1993. The other big customer outside the CIS is Finland - 4.9 million cubic metres of timber were exported to Finland in 1993 - 32% up on 1992. Russia's other significant European customer is Austria, which imported more than 400,000 cubic metres in 1993. APPENDIX: TIMBER-RELATED JOINT VENTURES IN THE RUSSIAN FAR EAST AUSTRALIA Samur Kelso Coastal region Oeenlod Flot Co Ltd Coastal region AUSTRIA Urec Sakhalin Stroileasing Saha Republic Yakutia Tuimaada " " " Aldan " " " Takt " " " Transforum " " " CANADA Antler Saha Republic Yakutia CHINA Farsin Coastal region Fecvo " " Sansheng " " Pasko Ltd " " Les Khabarovsk region Tailoong Ltd Amur region Mir Saha Republic Yakutia FINLAND Primfex Coastal region Dallesprom Timberjack Khabarovsk region GERMANY Meco Coastal region Dalsystem Co Ltd " " GREAT BRITAIN Farus Saha Republic Yakutia HONG KONG Russky Les Coastal region Raduga " " Hago Khabarovsk region ITALY Vladital Coastal region JAPAN Start Ltd Coastal region Crona Ltd " " Enkai Business Center " " Sonico " " Zolotoi Rog " " Lidoga Khabarovsk region Somon " " Rosco Service " " Flex " " SMIC Orient " " Sakhalin Kaihatsu (Development) Sakhalin region Seta Corporation Saha Republic Yakutia LICHTENSTEIN Primorskoye Coastal region NETHERLANDS Pacific Trade & Industry Co, Ltd Coastal region Sterkh (branch of JV Sovig Co) Saha Republic Yakutia MONGOLIA Antler Saha Republic Yakutia NORWAY Far East Starma Khabarovsk region Forest Vanino " " POLAND Amurpol Amur region SOUTH KOREA Svetlaya Coastal region Hon Joong Khabarovsk Khabarovsk region Anan Amur region Halla Limited Saha Republic Yakutia Sahanguk " " " SINGAPORE Rossiya Coastal region SWEDEN Dalfor Coastal region Dalsystem Co, Ltd " " Polyarny Krug Saha Republic Yakutia SWITZERLAND Vostokinkraft Sakhalin TAIWAN Alliance Khabarovsk region UNITED STATES Soviet American Timber Company Sakhalin S.I.D. Amur region Matco Magadan region Lesnik Yaninkor Saha Republic Yakutia YUGOSLAVIA (FORMER STATE) Setu Saha Republic Yakutia Angelica Khabarovsk region