The European Union says illegal logging is pervasive and is a threat to biodiversity.
Ukrainian timber exporters could be shut out of the $49 billion European Union wood market if they don’t comply with restrictions designed to curb illegal logging, which is rampant in the nation.
The measure, which will be enforced starting in 2013, bans the sale of illegally logged timber and requires EU importers to take steps to assure that they are in compliance.
Other traders in the EU supply chain will need to keep records of their suppliers and customers to allow the products to be traced.
Classified into 44 different product groups, the measure will affect wood-producing Ukrainian companies that either directly export raw-to-finished wood products to the EU or through intermediaries.
The regulation is an example of a growing trend to encourage proper forest management and discourage violators.
“Presently throughout the world, there is a movement toward sustainable forestry management,” said Viktor Mauer, head of the civic council under the State Forest Resource Agency. “
And in this relation, there is timber that is illegally harvested, and timber that is harvested in breach of biological diversity, for example.
The World Bank estimates that 20-30 percent of all timber harvested in Ukraine is illegally logged.
Experts say that current government procedures for certifying the legality of wood origins are weak and contain loopholes such as the ability to alter documents and opportunities for bribes to forest rangers.
Global annual losses from illegal cutting of forests, including governments’ loss of tax revenue, are estimated at more than $10 billion, more than eight times the total of official developmental assistance for sustainable forest management, according to World Bank calculations.
Forests cover 17.5 percent of Ukrainian territory, or some 603,000 square kilometers, according to the forest law enforcement and governance project financed by the European Union.
The EU says illegal logging is so pervasive that it poses a threat to forests and biodiversity.
Ukraine last year exported $828 million in timber and timber products, the Ukrainian State Statistics Committee reported.
The forestry sector accounts for roughly 1.3 percent of the country’s gross domestic product, more than $1 billion.
Serhiy Sagal, head of the Furniture Industry Association said that last year Ukrainian companies exported 2.9 million cubic meters of wood to the West, mostly to EU countries, and $50 million worth of furniture.
“The EU directive will affect everybody in the forestry industry. This is serious, it could be a real barrier to the EU market,” Sagal said.
“Nobody knows how to comply. The authorities aren’t informing us and they really should pay more attention, especially since the State Forest Resource Agency is the largest exporter of wood,” he added.
Roughly 10 percent of forestland – or 1 million hectares – is certified and about 30 wood-harvesting companies have certification that the origin of their wood is legal, according to Vitaliy Storozhuk, a forestry expert and consultant to the World Bank.
But more needs to be done to strengthen tracking systems, Storozhuk said.
The scope of wood certification needs to be broadened, the World Bank expert said, together with forestry management bodies.
“We should turn our efforts towards the state supervising the origin of wood, from harvesting to processing. It is necessary to develop or extend the concept of a national electronic wood tracking system,” he said.
According to the World Bank, sustainable forestry management is “hampered by: poor roads, overly conservative harvesting levels, and inappropriate forest classifications.”
Environmentalists say forests provide a broad variety of environmental, economic and social benefits including timber and non-timber forest products and environmental services essential for humankind, such as maintaining biodiversity and ecosystem functions and protecting the climate system.
Ukraine ranks eighth in Europe in terms forestland percentage, the majority of which is located in the northern parts of the country and in the Carpathian Mountains where many old growth forests live.
The new EU legislation is similar to the U.S. Lacey Act, which makes it illegal to handle fish or wildlife produced illegally outside the U.S.
An amendment to the Lacey Act to extend it to timber products was agreed by the U.S. Congress in June 2008.