EU and Ukraine authorities urged to ‘systematically reform’ forest sector

To end Illegal logging and corruption, reform must go beyond piecemeal government efforts announced so far, urges NGO coalition

A group of leading Ukrainian civil society groups has today led calls for systematic and urgent reform of Ukraine’s forest sector in letters sent to EU and national authorities.

The five NGOs, supported by Earthsight and Swiss non-profit Bruno Manser Fonds (BMF), said a lack of political will to implement change has meant almost all Ukrainian wood now entering local and EU markets risks being linked to corruption, illicit deforestation, environmental abuses or organised crime.

The letters sent to the EU (Ukrainian version) and Ukraine government (Ukrainian version), signed by Environment-People-Law, Ukrainian Nature Conservation Group, National Interests Advocacy Network, Forest Initiatives and Communities, Free Svydovets, Ecoclub, Earthsight and BMF, said that such practices have gone unchecked in the country for years.

The Carpathian Mountains, home to some of Europe’s most biodiverse forests and the epicentre of recent floods, are of particular concern and have long been exposed to illegal logging and environmental destruction.

In the wake on Earthsight’s recent Flatpacked Forests report, which revealed Ikea’s illegal timber problem in Ukraine, Prime Minister Denys Shmygal pledged to crack down on illegal logging.

However, changes must go far beyond short-term enforcement checks and eye-catching staff changes and instead must focus on systematic reform to root out long-standing problems.

Demands asked of the Ukraine government include:

• Firstly, and most urgently, to take steps immediately to reorganise the State Forest Agency (SAFR), by separating the controlling and economic functions, as previously called for by national and international NGOs as well as the EU. Effective governance assumes avoiding conflicts of interest. Therefore, separation of SAFR functions, which now combines managerial, regulatory, economic, and supervisory powers, is mandatory
• Ensure the formation of a quality forest policy, based on the support and preservation of environmental, social, and economic values ​​of all forests of Ukraine in the short and long term based on the wide public consultation process
• Recognise the problem of illegal sanitary logging and illegal logging carried out by forest users themselves and start tackling it. Separating control and economic functions of SAFR will be the main way to tackle this “legal illegal” logging
• Ensure the activities of state forest enterprises according to the OECD principles for the management of state enterprises
• Complete the reform of State Environmental Inspectorate.

In the wake of Earthsight’s 2018 report on timber corruption in Ukraine, former Prime Minister Volodymyr Groisman ordered a crack on illegal timber, but vital changes to the forestry agency at the heart of the problem failed to materialise. This time, the groups stressed, the opportunity to make substantial changes must not be wasted. 

The EU, as the largest consumer of timber from enterprises controlled by SAFR, must also play its part.

Major EU buyers of timber made from Ukrainian wood are complicit in the problems seen in Ukraine but are turning a blind eye to the corruption and illegality in their supply chains, documented exhaustively by national and international organisations.

The letter stressed that these buyers’ demand for an uninterrupted supply of cheap wood from Ukraine is pressuring local actors to cut corners on the environment.

Demands asked of the EU include:

• To apply the principle of "money in exchange for reforms" to reform the forest sector, in shaping the policy of providing Ukraine with the next tranches of macro-financial assistance. To tie all present and future funding of the forestry sector in Ukraine to actual action (rather than verbal promises) by Ukraine to restructure the forestry agency to separate economic and forest-protection and regulatory functions in particular, as well as action to increase environmental enforcement
• To remember that the goal of the European Union Timber Regulation (EUTR) is to prevent illegal timber from entering EU markets; to require stronger enforcement of these laws in the context of timber imports from Ukraine
• To this end, to finish drafting the Ukraine-specific guidelines for the EUTR, that has been stalled for months, which will require EU companies purchasing Ukrainian wood products to perform additional due diligence on their Ukrainian timber imports
• To recognise in this guidance as well as broader guidance on EUTR implementation, the significant failures of certification schemes to ensure legality or sustainability of timber from Ukraine, recently documented again in Earthsight’s 2020 report ‘’Flatpacked Forests.’’ To require EU companies to go beyond certification to ensure risk of illegal Ukrainian timber entering the EU is ‘’negligible’’ as the EUTR requires
• To call for urgent structural change of FSC International, the most well-known certification scheme for wood, to remove conflicts of interest in its certification bodies that are creating a ‘’race to the bottom’’ for who can implement standards least strictly
• To expand the product scope of the EUTR to cover all wood products including seating and furniture.