Forests for rent
26 May, 2011
Forests for rent

To curb uncontrolled forest cut out government cancels short-term licenses and introduces 49-year-long rents instead. After expiration the rent can be prolonged by another 49 years if government approves.

The intricate thing that creates risk is that inventory of forests is up to the renter to be implemented, sector pundits say. Besides, they worry that the forest reforms are going too quick to avoid confusion and contradictions in future.
Parliament has already approved the amendment in the Forest Code on replacing

licenses with the long rents. Licenses were given on timbering activity generally and granted owners by forest exploitation right from 5 to 20 years, while long renting aims on a broader target, Nino Enukidze, Deputy Minister of Energy and Natural Resources Minister, said. 
“The long-rent empowers a renter by 49-year-long consumption of forests but unlike licenses [that only granted timbering activity] it includes a complex development of the forest like a render may enjoy a comprehensive profit out of the forest, to develop timbering, hunting, fruit and berry harvesting, also may develop a recreation zone there. But apart of exploitation the renter is also responsible for taking care of forests, develop road-nets, care about its ecological function and planting. To this end we oblige a renter to plant three trees in the place of one cut tree if the forest is used for timbering,” Enuklidze told Georgian Journal.
A year-long rent will also be available under governmental approval in special cases. Holders of currently valid licenses may either claim for long rents or continue their activities till the licenses expire. The law enters into effect starting July 1, 2011.
Non-governmental green watch-dogs approve the governmental approach to replace short-term licenses by long rents as giving forest under short-term exploitation discourages owners to take care on forest development and they rather focus on enjoying as much profit as possible in a short period of exploitation tenure. What makes sector pundits worry is incoherent forestry policy.
“The longer the rent term the better,” Nanuka Janashia, an environmental expert with the Caucasus Environmental NGO Network (CENN), said. “We, green-friendly NGOs would be even approving privatization of forests. What makes us uneasy is that government works on forest management policy alone that means a focus on exploitation mainly, while of paramount importance is drafting a comprehensive forestry concept that includes ecological as well as multi-function role of forests. Also implementation of forests inventory is absolutely crucial. These must be worked out first of all and the renting issue may follow only next.”
Aleko Khetaguri, Minister of Energy and Natural Resources, assures that the forestry concept will be worked out prior them the forests will be given under rent. But thain inventories will fall under responsibilities of lessees.
“Inventory is quite expensive and why should the state implement it? Let the lessee do it,” He told GJ. He believes that authenticity of inventories will be guaranteed by international audit companies for renters are obliged to implement an inventory through them to make an unbiased data-base.
Ilia Osepashvili, a forest expert with the World Wild Fund (WWF) program in Georgia, finds this approach unreasonable and risky. According to him, the fact that inventories will be implemented by renters after granting rent rights it poses risks for the rent price-making and leads to non-transparency.
“It means that government will be relying on the old inventory information while assessing the rent price. The problem is the last forests inventory was carried out some 20-30 years ago in Georgia and the information is by 20-30% less trustful that leads to confusion. For example a potential renter when claiming for a certain forest zone may account that it may give 50 thousand cubic meters (tcm) of timber based on old data while after approving a rent he/she will find out only 30 tcm is available. It means that a renter will be at loss,” he said.
But it may happen vice versa and the state will stay at loss. At any rate the non-transparency creates risks that reputable and responsible companies will be bypassing Georgian forests and companies of dubious backgrounds and unclear intentions will be applying.  While transparency is crucial to mountainous Georgia safety of which largely depends on forests 40% of its territory is made by forests, but only 10-15% of this 40% can be actually used for exploitation, the remainder part has ecological importance…
“Inventory is quite expensive about USD 3 per hectare [Georgian forest make 2 million 800 thousand hectares including breakaway Abkhazia and South Osetia but only about 500 hectares is for exploitation] that requires several thousands from Georgia. I understand that we have no free money for that but the best international practice is that the state implements the inventory to avoid risks, and then fixes higher rents. We may implement inventory not of all forests immediately but of those plots that are slated for renting . It is a matter of political will,” Osepashvili said.


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