Forest Plots in the Russian Far East to Be Allocated to Investors Thrice as Fast

The experiment on the upgrading of the forestry management system supposed to be carried out in the Russian Far East will make it possible to automate the processes in the sector and make allocation of forest plots to investors thrice as fast. TASS learned this on Tuesday from the Press Office of the Far East Development Fund (FEDF, affiliated with VEB.RF).

“Introduction of automated electronic document flow and automation of data exchange will simplify and accelerate the administrative procedures for business significantly. In particular, introduction of лесвосток.рф service portal will make it possible to accelerate the allocation of forest plots from 235 days to 80 days”, said the representatives of the Press Office.

According to them, data on the forests are currently out of public view and frequently unreliable due to fragmentation of the information systems and use of hard-copy document flow. Both the plot allocation mechanisms and pricing principles in the industry are non-transparent.

On Monday, the draft federal law on the forestry management experiment in the Russian Far East developed by the FEDF in collaboration with the Ministry for Development of the Russian Far East was published. It provides for the creation of a federal information system to integrate the forestry sector information at the disposal of every agency at all levels. It will be used as the basis for лесвосток.рф online facility containing the industry data for the Russian Far East and offering services to investors.

The new system will allow to put the government — business communication on forestry matters online, the representatives of the FEDF said. Thus, the online facility will make it possible for investors to choose a forest plot on an interactive map and secure the right to use it via e-auctions.

In a similar vein, wood transactions are supposed to be digitalized. The facility will be integrated with electronic exchange. The automated information system will make it possible to control the transaction chains and manage them in order to improve transparency in the sector. Thus, it will be impossible to export timber from the Russian Far East unless the online facility contains information on the harvested and shipped wood of relevant species confirmed by the shipping documents.

Creation of the Platform

The creation of лесвосток.рф digital platform will comprise two phases. Phase 1 scheduled to be completed this fall provides for creating a service portal with basic functions to be tested in the pilot regions — the Khabarovsk Territory and Zabaykalsky Territory.

At Phase 2, the facility is supposed to acquire new functions and be integrated with the systems of government agencies, including the Federal Forestry Agency, Federal Tax Service, and Federal Customs Service. This work is scheduled to be completed by the third quarter of 2021; thereafter, the facility will become available in the entire territory of the Russian Far East.

Additional Industry Development Measures

As part of the experiment on the upgrading of the forestry management system, the FEDF proposed additional industry development measures. Thus, such measures provide for developing a new methodology of forest taxation, i.e., forest assessment in terms of size, reserves, and growth. To that end, forest plots located in the Primorye Territory will be used at the experimental phase.

“The use of modern earth remote sensing and continuous forest surveying methods will make it possible to reduce public forest taxation costs (from RUB 150 to RUB 80 per 1 ha) and bring forest surveying materials up to date (by reducing their age from 25 years to 12 years)”, the representatives of the Fund claim.

In the meantime, investor risks at the project start-up phase are supposed to be reduced. The representatives of the Fund highlighted that investors would be able to tax a forest following the auctions. At present, by contrast, timber companies do the assessment prior to securing their rights of use without any investment payback guarantees.

Besides, the forest use and regeneration regulations are supposed to be upgraded. The authors of the draft law propose to allow the creation of man-made forests to grow industrial wood on uncultivated farmland. In addition, the possibility of allowing the construction of forest roads under concession agreements is contemplated. These may potentially be toll roads.

In August 2019, Yuri Trutnev, Deputy Prime Minister of the Russian Federation — Plenipotentiary Envoy of the President of the Russian Federation to the Far Eastern Federal District, announced that an experimental forestry management system might be introduced in the macroregion. According to the draft federal law, the experiment is supposed to last for five years.