Towards Responsible Swedish Timber Trade?
Colofon
Taiga Rescue Network (TRN) is an international network of non-governmental organizations and
indigenous peoples working for the protection and sustainable use of the world’s boreal forests. TRN was
established in 1992 to give voice to those wanting to see sensitive development in the boreal region.
Today more than 180 organisations are participants of the network.
WWF Sweden (Världsnaturfonden WWF) is one of 27 independent National Organizations (NO) of World
Wide Fund for Nature, the world’s largest independent nature conservation organisation. WWF Sweden
was founded in 1971. With the financial backing of over 150 000 supporters WWF Sweden annually
funds more than 100 conservation projects in Sweden and abroad – especially in the Baltic region and
the tropics. WWF Sweden is focusing its conservation work within five programmes: Agriculture
landscape, Education and Youth, Freshwater, Oceans and Coasts, and Forests.
Sarah Lloyd, Towards Responsible Swedish Timber Trade? A Survey of Actors and Origin of Timber from
Russia and the Baltic States
Taiga Rescue Network Publications 2000
ISBN: 91-974019-0-0
© Taiga Rescue Network, WWF Sweden
The report can be downloaded from TRN’s website at www.taigarescue.org
Design: Daan van Beek, Utrecht, the Netherlands
Printed by Macula, Boskoop, the Netherlands
Printed on recycled paper: Cyclus
Photo’s: Ola Jennersten (cover and page 6, 42), Eberhard Weckenmann (page 16, 20),
Bettina Heilmann (page 24), Ola Larsson (page 58).
Taiga Rescue Network
WWF Sweden
Box 116
Ulriksdals slott
Ajtte, S-962 23 Jokkmokk
170 81 Solna
Sweden
Sweden
Phone +46 971 17039
phone +46 8 6247400
Fax +46 971 12057
fax +46 8 851329
www.taigarescue.org
www.wwf.se
e-mail: [email protected]
e-mail: [email protected]
Towards Responsible Swedish
Timber Trade?
A Survey of Actors and Origin of Timber from Russia and
the Baltic States
Includes Swedish summary and NGO-guidelines for responsible trade
Taiga Rescue Network and WWF Sweden. November 2000
Preface
This report was commissioned by the Taiga Rescue Network and WWF
Sweden. It was produced by Taiga Consulting AB. The research was carried
out by Sarah Lloyd. The report was written by Sarah Lloyd in cooperation
with Karin Beland Lindahl.
This report provides a public summary of the research carried out. All data
collected is not included in the report because some information collected
is considered business proprietary. It is the hope of the authors that the
report will provide the information necessary to understand the current
Swedish import of timber from Russia and the Baltics without exposing sensitive information about the respondent companies and corporations.
The guidelines for responsible trade included in the end of the report are a
position paper developed jointly by NGOs. The guidelines represent the
views of the undersigned organizations. Other conclusions and positions
expressed in the report reflect the views of the authors.
The authors would like to thank all the companies who participated in the
survey as well as the key contact people who provided valuable information. Also thanks to those who took time for longer personal and telephone
interviews. Much appreciation is given to those who read and commented
on drafts of the report.
Jokkmokk, 25 October 2000
Sarah Lloyd
Taiga Consulting AB
Box 44
962 03 Mattisudden, Sweden
5
6
Foreword
Today, the Baltic States (Estonia, Latvia, Lithuania) and Russia together provide more than 80% of the timber and wood products imported to Sweden.
Imports from those countries have increased by 70% between 1995 and
1999 and the trend is expected to continue.
Sweden is one of the biggest importers of round wood in the world. In this
context, the Taiga Rescue Network and WWF Sweden undertook an extensive market research of which the results are being presented in this report.
The report comes second in a series of studies about the involvement of the
West European forest industry in Russia (The Finnish Forest Industry in
Russia – On the Thorny Path Towards Ecological and Social Responsibility –
Taiga Rescue Network and Finnish Nature League, 1999).
The Swedish involvement in the market for Russian and Baltic timber and
wood products constitutes an opportunity to improve forest management in
those countries, provided that the Swedish actors implement high and
ambitious environmental and social standards adapted to the specific ecological and socio-economic conditions in the region. On the other hand, if
companies do not take this chance, they may run the risk of contradicting
their own purchasing policy and undermining their credibility.
There has been much speculation about the origin of timber and the risk for
logging in ecologically sensitive forest areas driven by the foreign exports in
Russia and the Baltic States. However there was a crucial lack of information on this subject so far. This report should be seen as a first step to fill
this gap with regards to the Swedish imports. Data is given on relevant
actors in the roundwood market and the potential impact of their activities
on Russian and Baltic forests.
The overall picture is encouraging. The number of middlemen involved in
the trade seems to have decreased over the last three years, making the
trade flows clearer and more transparent. Considerable improvements have
also been made regarding knowledge of the area of origin and the specific
harvesting area.
However, there seems to be very little knowledge about the qualities of the
forests from which the timber is coming and the ecological and socio-
7
economic impacts of the forest practices, both in the Baltic States and
Russia. The current level of knowledge obtained by the actors involved in
the import does not allow them to sufficiently evaluate the impacts of their
activities. Additional efforts and improvement must be made if these companies want to ensure that their activities are not damaging to the forests
and communities of the countries of origin. Companies therefore need to
develop and implement strategies for forest protection and for certification
of forest management.
Certification is one of the tools available, which may give Swedish companies the ability to gain knowledge and verify their impact in the origin countries. The majority of the large Swedish pulp and paper producers have their
own forest holdings certified under the Forest Stewardship Council (FSC)
and they may play an important role in the development of independent
certification in the Baltic States and Russia, by taking an active part in standard development processes and by demanding FSC-certified raw materials.
It is our hope that the information in this report will provide a basis for discussion for all stakeholders interested in the timber and wood product trade
in Sweden and encourage the development of joint planning and common
strategies to ensure the long term ecological, economic and social stability
in the region.
Taiga Rescue Network
Arjan Alkema
WWF Sweden
Stefan Bleckert
Programme director forests
8
Table of contents
Sammanfattning
11
Summary
17
I.
21
Introduction
Problem Statement
21
Previous Studies
22
Objectives of this Study
23
Methodology
23
The Trade from Russia and the Baltic States
25
III. The actors and general trends in their trade
29
II.
IV.
Forest Industry Corporations
29
Independent Sawmills
32
Forest Owners Associations’ Processing Industry
36
Import Agents
38
Lemo Agencies AB
39
Thomesto Sverige AB
40
Smaller Agents
41
Origin and Impact of Trade
43
Geographical Origin and Impact of the Swedish Imports
44
Mechanisms Used to Gain Knowledge
45
Trusting the standard and enforcement of local forest
management laws
45
Setting company environmental or purchasing policies as base
demands
46
Writing contracts between buyer and seller
46
Employing documented systems tracing timber to harvesting site
47
Trusting import agents’ activities
48
Visiting the supply sites
48
Limiting number of suppliers
49
Owning or having close business relations with local logging
companies
49
Educating Russian and Baltic partners and suppliers
49
Contacting and having cooperation with environmental
organizations
50
Using certification and third-party verification
50
V.
The procurement areas of the Swedish import
53
Impact of the Swedish Import
56
Analysis and Conclusions
59
Guidelines for Responsible Trade
64
Source List
67
Appendices
1. Summary of results of 1998 Fältbiologerna inquiry
69
2. Questionnaire
69
3. Companies contacted during the survey
71
4. Comparison of Historical Import Origin into Sweden
72
Import of Timber and Wood Products to Sweden by Export Country
26
List of figures
Figure 1:
Figure 2:
Import of Pulpwood to Sweden from Russia and the Baltic Countries
27
Figure 3:
Import of Saw logs to Sweden from Russia and the Baltic Countries
27
Figure 4:
Imports of Timber and Wood Products to Sweden from Russia and the
Baltic Countries
27
Figure 5:
Timber Measurement Regions
33
Figure 6:
Regional Sawmill Organizations
34
Figure 7:
The Swedish Forest Owners Associations
37
Figure 8:
Map Trade Flows
41
Figure 9:
Steps Towards Responsible Trade
43
Figure 10:
Label Lemo Agencies
47
Table 1.
Imports of “Selected” Wood Products to Sweden by Export Country (m3)
25
Table 2:
Timber Imports to Sweden Reported by Forest Industry Corporations & Pulp
List of Tables
Table 3.
Table 4:
10
and Paper Mills
30
Forest Industry Corporations’ Operations in the Baltic Countries
31
Total Import of Sawmills Not Owned by Forest Industry or Forest Owners
Associations (m3)
34
Table 5:
Timber Imports to Sweden Reported by Independent Sawmills (m3)
35
Table 6:
Timber Imports to Sweden Reported by Forest Owners Associations (m3)
38
Table 7:
Timber Imports to Sweden Reported by Import Agents (m3)
39
Table 8:
Questionnaire responses regarding verification of origin and impact
52
Table 9:
Suppliers and Origin of Swedish Imports as Reported by Respondents
53
Table 10:
Origin of Thomesto Sverige AB’s Import coming through Petrolesport
55
Sammanfattning
(Summary in Swedish)
Den totala svenska virkesimporten var över 11 miljoner m3 1999 och förväntas öka under år 2000. Importen från Ryssland och Baltikum har ökat
med 70% mellan 1995 och 1999, och uppgick under 1999 till över 9 miljoner m3. Dessa länders andel av den totala virkesimporten till Sverige har
också ökat kontinuerligt, från 26% 1990 till närmare 65% 1995 och 80%
1999. Från 1997 och framåt har rundved av barrträd (massaved och sågtimmer), främst från Ryssland, stått för huvuddelen av såväl volymen som
importökningen. Importen styrs av marknadspriset på virke, dollarkursen
och den svenska skogsindustrins produktionsnivå. Den fortsatta utvecklingen av importen är svår att förutsäga, men det finns ekonomiska studier som
indikerar att virkesimport kommer att förbli viktig för svensk skogsindustris
råvaruförsörjning även i framtiden.
Att den svenska skogsindustrin är beroende av råvaruleveranser från
Ryssland och de baltiska länderna är odiskutabelt. Det är också klart att
stora naturvärden står på spel i dessa länders skogar, samtidigt som stora
insatser görs för att miljöanpassa skogsbruket i Sverige. I det perspektivet
framstår det som angeläget att försöka bedöma såväl de miljömässiga som
de sociala effekterna av virkesimporten.
Syftet med denna studie är att ge en översikt över handeln med virke från
Ryssland och de baltiska länderna till Sverige. En inventering av de större
aktörerna i denna handel genomfördes under augusti och september 2000.
Ett frågeformulär skickades ut till över 50 svenska företag och organisationer och 39 svar kom in. Därutöver har åtta sågverk, kontaktade per telefon,
meddelat att de inte importerar råvara från Ryssland eller Baltikum. Det
total antalet svar är således 47.
Aktörerna
Virkesimportens aktörer kan grovt delas in i fyra kategorier: skogsbolag
(stora bolag med massafabriker och i flertalet fall sågverk), fristående sågverk, skogsägareföreningar och importföretag (agenter). Importföretagen
och skogsbolagen är de viktigaste aktörerna. Importföretagen redovisar
import av 4,1 miljoner m3 årligen från Ryssland och Baltikum och skogsbolagens import redovisas till närmare 7 miljoner m3. Sågverken rapporterar
en import av 1,1 miljoner m3 och det är sågverk i Syd- och Mellansverige
11
som står för huvuddelen. Sågverk i norra Sverige importerar för närvarande
inte råvara från Ryssland eller Baltikum regelbundet eller i större volymer.
Skogsägareföreningarna är små aktörer i detta avseende, med undantag av
SÖDRA, som uppger en import på över 1,4 miljoner m3. Samtliga skogsbolag, fristående sågverk och skogsägareföreningar som importerar virke från
Ryssland och/eller Baltikum uppger att de köper virke genom importföretag.1
De större importföretagen, som Lemo Agencies AB och Tomesto Sverige AB,
har egna avverknings- och inköpsbolag i Ryssland och Baltikum. Flera av
skogsbolagen har också öppnat inköpsbolag i Baltikum. Korsnäs, Holmen
och StoraEnso har dessutom avverkningsbolag i Baltikum. De oberoende
sågverken importerar genom importagenter, skogsägareföreningar eller
SÖDRA. I ökande utsträckning samordnar små oberoende sågverk sina virkesinköp genom större inköpsbolag. Några av dessa bolag är relativt stora
importörer av virke från Ryssland och Baltikum.
Antalet aktörer, i synnerhet virkeshandelns mellanhänder, tycks ha minskat
under de senaste tre åren. Verksamheten har också ändrat karaktär, i synnnerhet i Ryssland. Svenska företag, som tidigare i flera fall startade såväl
avverkningsbolag som industrier i Ryssland, har numera dragit sig tillbaka
nästan helt och hållet och inriktar sig på rundvirkesimport genom importföretag. Aktiviteterna i Baltikum ökar dock och några skogsbolag, SÖDRA
och importföretaget Tomesto Sverige AB, har etablerat fältorganisationer
och, i somliga fall, förädlingsindustri, främst i Estland och Lettland.
1
Det är svårt att uppskatta hur
stor del av den total importen som
täcks av enkäten. Många av de
företag som importerar virke anlitar
agenter och många har valt att inte
namnge sina leverantörer, vilket
Förändringarna i den svenska närvaron och verksamheten främst i Ryssland
under de senaste åren är av betydelse för diskussionen om virkesimportens
ekologiska och sociala effekter. Beroendet av importföretag och mellanhänder i Ryssland – istället för avverkningar av företag under direkt kontroll av
exempelvis ett svenskt skogsbolag – kan minska insynen i verksamheten.
Det kan också vara svårare att få tillförlitlig information om virkets
ursprung och avverkningarnas ekologiska och sociala effekter om många
aktörer är inblandade. Om det ökade utnyttjandet av importörer verkligen
är till nackdel från ekologiska eller sociala utgångspunkter beror dock på
antalet inblandade aktörer och hur de bedriver sin verksamhet.
medför att viss dubbelräkning inte
kan uteslutas. Utgår man från
svaren från skogsbolagen, de
oberoende sågverken och
skogsägareföreningarna är den totala
rapporterade volymen 9 483 565 m3.
Det är, som framgår av tabell 1, mer
än den totala importen från
Ryssland, Estland, Lettland och
Litauen enligt Sveriges officiella
statistik. Man måste hålla i minnet
12
En positiv trend i virkeshandeln är att de flesta importörer tycks föredra att
anlita ett begränsat antal väletablerade importföretag som har vidtagit
åtgärder för att öka sin kunskap om virkets ursprung och avverkningarnas
effekter. Trots detta bör man beakta att förändringen från att investera i
skogsbruk och skogsindustri till att importera rundvirke kan visa sig vara
socialt mindre fördelaktig för de berörda områdena. Den ökande närvaron
av svenska företag i Baltikum kan leda till ökad insyn och förbättrade möjligheter att härleda råvaran från avverkningsytan till den färdiga produkten
i Sverige. Dessutom har några företag gjort ansträngningar för att etablera
nära samarbete med lokala avverkningsföretag eller anställa lokal
att de volymer som rapporteras av
företagen inte är exakta. Många av
de svarande gav grova
uppskattningar av sin import eller
genomsnittssiffror för de senaste
åren. Några har svarat med
prognoser för år 2000. Siffrorna
visar dock att vår undersökning
täcker in alla större aktörer och
deras virkeshandel.
arbetskraft i sina egna bolag, vilket inte bara förbättrar trovärdigheten utan
också skapar ökade möjligheter för varaktig lokal sysselsättning.
Virkesimporten – ursprung och effekter
Företagen måste skaffa sig kunskap på två nivåer för att kunna utveckla en
“ansvarsfull handel” med virke.2 Mest grundläggande är att känna till och
kunna styrka det importerade virkets ursprung och i nästa steg att känna till
och kunna styrka de ekologiska och sociala effekterna av det skogsbruk som
står för leveranserna. Vad gäller ursprung är grundkravet att man vet från
vilken skogsskötselenhet virket kommer. Kunskap på den andra nivån innefattar faktorer som skogstyp, trädslagssammansättning, ålder, beståndshistorik och naturvärden men också hur den lokala skogsskötseln och den
avverkningsmetod som använts påverkat dessa faktorer. Socialt ansvarsfull
handel förutsätter vidare kunskap om de sociala villkoren lokalt och hur
skogsbruket påverkar dem.
Vår studie visar att aktörernas kunskap i allmänhet inskränker sig till den
lägsta nivån: man känner till det geografiska ursprunget för det virke man
handlar med. Men även på denna nivå varierar kunskapen. De etablerade
importföretagen och flertalet skogsbolag har kunskap om från vilken
avverkningsyta varje leverans härstammar och denna information är tillgänglig för deras kunder i Sverige. De större importföretagen som besvarat
vår enkät har interna system för att spåra och verifiera leveransernas
ursprung. Andra bolag tycks ha mycket begränsad eller obefintlig kunskap
om ursprunget hos det virke de importerar. Denna grupp förefaller dock stå
för en relativt liten del av den totala importen.
2
“Ansvarsfull handel” är ett något
oprecist uttryck. Denna rapport
syftar inte till att definiera kriterier
Regionerna Vologda och Leningrad i Ryssland är det viktigaste ursprungsområdet för virkesimporten till Sverige. Mindre kvantiteter importeras
också från Novgorod, Pskov, Komi, Archangelsk, Tver och Karelen. Av de
baltiska staterna är Lettland den största leverantören (3,4 miljoner m3
1999), följt av Estland (2,2 miljoner m3). Importen från Litauen var mindre
än 0,5 miljoner m3 1999. Leveranserna från Baltikum tycks inte vara koncentrerade till några speciella regioner i dessa länder.
för ansvarsfull handel. Här
definieras allmänt ansvarsfull
handel som en handel som inte
orsakar negativa sociala eller
ekologiska konsekvenser i den
handlade varans ursprungsland.
Företag som är inblandade i handeln
På de tillfrågade företagens svenska huvudkontor tycks kunskapen om de
skogar man importerar sitt virke ifrån vara mycket begränsad eller obefintlig. Samma gäller för kunskaper om skogsbrukets ekologiska eller sociala
effekter. De företag som försöker skaffa sig kunskap om ursprung och effekter av sin virkesimport utnyttjar en lång rad olika mekanismer eller metoder, som att man:
agerar medvetet och med kännedom
om effekterna av sin verksamhet och
med system och åtgärder för att
•
•
motverka potentiellt negativa
konsekvenser av verksamheten.
•
förlitar sig på gällande skogslagstiftning och dess tillämpning
upprättar miljö- eller inköpspolicy som baskrav för avverkningen av
det virke man köper
upprättar kontrakt mellan köpare och säljare
13
•
•
•
•
•
•
•
tillämpar fasta system för spårbarhet av virkesleveranser från
avverkningsplatsen
förlitar sig på importagenten
besöker leveransområdena
äger eller upprätthåller nära kontakt med de lokala avverkningsbolagen
har kontakt eller samarbetar med miljögrupper i leveransområdena
utbildar samarbetspartners i Ryssland och Baltikum
använder certifiering och tredjeparts-kontroll
Många litar på att skogsvårdslagstiftningen i de exporterande länderna
innehåller erforderliga regler och tillämpas i tillräcklig utsträckning för att
garantera ansvarsfull handel. Det kan naturligtvis vara en rimlig strategi,
förutsatt att lagstiftningen och kontrollen håller måttet. Miljöorganisationer
i både Ryssland och Baltikum ifrågasätter dock detta. Flera företag använder en kombination av de metoder som presenterats ovan. Många svar
understryker att oavsett vilka metoder man använder så finns en risk att
man blir lurad och att det således aldrig går att ge fullständiga garantier att
alla regler och krav har följts. Trots detta är alla de metoder som nämnts
ovan viktiga steg som kan bidra till att företagen ökar sina kunskaper om
virkets ursprung och om effekterna av sin verksamhet. Metoderna är däremot inte tillräckliga för att utesluta negativa ekologiska eller sociala effekter av virkesimporten.
Några svenska företag har anslutit sig till det frivilliga avverkningsstopp
(moratorium) för ”gammelskogar” (används i den här texten som översättning på den engelska termen ”old growth forests”) som finns i Karelen och
nordvästra Ryssland. Det bör noteras att flertalet svenska aktörer inte är
aktiva i de regioner där moratoriet gäller, vilket emellertid inte utesluter att
den svenska virkesimporten kan beröra värdefulla gammelskogar och andra
skogar med höga naturvärden. Mycket av de skogar, exempelvis i Vologda
eller Leningradregionen, som inte skulle klassas som gammelskogar (”old
growth”) enligt gängse definitioner är högproduktiva med hög biodiversitet
och stora naturvärden. Kunskapen om dessa skogar, som ligger i kärnområdet för den svenska virkesimportens ursprung, är i allmänhet dålig jämfört
med Karelen och norra delarna av europeiska Ryssland, där kartor över de
större kvarvarande områdena av gammelskog numera finns tillgängliga.
Det är därför omöjligt att bedöma virkesimportens miljökonsekvenser på
basis av tillgänglig information. Ett antal svenska företag importerar virke
från områden med rik förekomst av gammelskogar, som Karelen,
Archangelsk och Komi. Fördjupade studier krävs för att utröna om den
importen orsakar avverkning av värdefulla gammelskogar eller andra skogar med höga naturvärden. Sådana konsekvenser kan inte uteslutas, varken
i Ryssland eller Baltikum.
14
Kunskapen om det geografiska ursprunget för virke som importeras till
Sverige tycks ha ökat under senare år och de större aktörerna har utvecklat
eller utvecklar för närvarande system för att kunna kontrollera leveransernas ursprung. Kunskapen om miljöeffekterna av det skogsbruk i Ryssland
och Baltikum som levererar virket tycks å andra sidan generellt vara begränsad. Den kunskapsnivå som aktörerna för närvarande har tillåter dem inte
att tillfredsställande bedöma vare sig de ekologiska eller sociala effekter av
verksamheten. Visserligen har betydande framsteg gjorts under senare år,
men fortsatta förbättringar krävs om företagen vill kunna garantera att
deras verksamhet inte skadar skogar och lokalsamhällen i virkets ursprungsområden.
Certifiering är en metod som kan ge svenska företag möjlighet att öka sin
kunskap och skaffa sig kontroll över verksamhetens effekter i exportländerna. Ännu är dock inte certifieringen fullt utvecklad vare sig i Ryssland
eller de baltiska länderna. Forest Stewardship Council (FSC) har utfärdat ett
antal certifikat i Ryssland och ett i Estland, och fler lär följa. Svenska företag kan spela en viktig roll för att påskynda certifieringsprocessen genom att
aktivt delta i utvecklingen av nationella standarder i samverkan med lokala intressenter och genom att efterfråga certifierat virke. Företag som ännu
inte nått den mest grundläggande kunskapsnivån vad avser virkets
ursprung måste snarast vidta åtgärder för att bättre uppfylla kraven på en
mer ansvarsfull handel.
15
16
Summary
The total Swedish import of timber and wood products from all countries
was more than 11 million m3 in 1999 and this is expected to rise in 2000.
The imports of timber to Sweden from Russia and the Baltic countries have
increased by 70% between 1995 and 1999. Total imports from Russia and
the Baltics in 1999 were more than 9 million m3. This accounts for more
than 80% of the total import for timber and wood products to Sweden.
A survey of the major actors was carried out in the August and September
2000. The actors in the trade can be divided into four main categories: forest industry corporations, independent sawmills, forest owners associations,
and import agents. Of these, the major actors are the import agents and the
forest industry corporations. The import agents responding to the study
reported imports of almost 4.1 million m3 annually from Russia and the
Baltics. The forest industry companies responding reported imports of
almost 7 million m3. The independent sawmills reported almost 1.1 million
m3 coming from Russia and the Baltics. The central and southern sawmills
are the predominant importers within the independent sawmill industry.
The forest owners associations, with the exception of SÖDRA, which is
importing over 1.4 million m3 from Russia and the Baltics, are minor actors
in the trade. All respondents importing timber and wood products who were
not classified as import agents were buying some timber through import
agents either in Russia or in the Baltics or both.
The larger import agents, Lemo Agencies AB and Thomesto Sverige AB have
their own logging and wood procurement companies in Russia and the
Baltics respectively. Many of the forest industry corporations have set up
their own wood procurement companies in the Baltic countries. Korsnäs,
Holmen, and StoraEnso, in addition to wood procurement companies also
have logging companies in the Baltics. The independent sawmills are
importing through import agents and the forest industry corporations or
SÖDRA. Increasingly in Sweden many small independent sawmills are consolidating their wood procurement into single larger wood procurement
companies. Some of these companies are relatively large importers of timber from Russia and the Baltics.
The number of actors, especially middlemen involved in the trade seems to
have decreased over the last three years. The nature of the involvement on
17
the ground in Russia and the Baltics has changed. Swedish companies,
many of which were setting up logging or forest industry operations on the
ground in Russia have almost entirely pulled out of Russia and now concentrate on imports of roundwood through the import agents. At the same
time the Swedish forest industry corporations along with SÖDRA and the
import agent, Thomesto Sverige AB have established themselves on the
ground in the Baltics, primarily in Estonia and Latvia.
Vologda and Leningrad Oblasts in Russia are the central source of timber for
the Swedish market. Smaller quantities of timber are also imported from the
Russian regions of Novgorod, Pskov, Komi, Archangelsk, Tver, and Karelia.
Of the Baltic States, Latvia is the largest supplier of timber and wood products (3.4 million in m3 in 1999 followed by Estonia, (2.2 million m3 in
1999). The trade with Lithuania was less than 500,000 m3 in 1999. The
source of the Swedish import from the Baltic States does not seem to be
concentrated in any specific regions in the respective countries.
There are two steps of knowledge that companies must achieve to move
towards “responsible trade”. The two levels are: knowing and verifying geographic origin of imports and knowing and verifying the impact of the forest management supplying the import. The level of knowledge that the
actors have about the timber and wood products they purchase remains for
the most part at the first level of knowledge, that of geographic place
names. This knowledge of geographical origin seems to vary among the
actors involved. The established import agents and most forest corporations
can provide information about the specific harvesting area and this information is available to their customers in Sweden. The large import agents
responding to the inquiry have different internal systems, which can track
and verify origin. The smaller companies appear to have less established
systems for tracking and verifying timber purchases. Some companies seem
to have very limited or no knowledge about the origin of their imports. They
do however seem to represent a relatively small proportion of the overall trade.
In the Swedish offices of the companies contacted there seemed to be very
little knowledge, if any about the qualities of the forests from which the timber is coming and the ecological and social impact of the forest practices,
both in the Baltics and Russia. Companies, attempting to gain knowledge
about the origin and impact of their imports, are using a number of mechanisms. Many rely on the trustworthiness of the standard and enforcement
of national forest management legislation and controls to ensure responsible trade. This may be a successful strategy if forestry legislation is appropriate and enforced. However, NGOs on the ground in both Russia and the
Baltic countries question the trustworthiness of the standard and enforcement of state legislation and controls.
18
Some companies have developed specific tracking systems down to the harvesting area. Other companies employ mechanisms such as site visits, writ-
ten contracts, limiting the number of suppliers, cooperation with environmental organizations, education of local partners and workers in Swedish
standards for environmental forest management, using local logging companies, and participating in certification processes to increase control of
their imports. These mechanisms may assist companies in reaching the second level of knowledge about the impact of their activities. However, they
are not sufficient to exclude negative ecological and social impacts.
Some Swedish companies have committed to the voluntary old-growth
moratorium in Karelia and Northwest Russia. It must be noted that most
Swedish actors are currently operating outside of these regions in which
moratorium areas have been established. This does however not mean that
old growth and forests of high conservation value are not affected by the
Swedish import. Much of the forests for example in the Leningrad and
Vologda region, which would not be classified ”old growth” in the traditional definition are highly productive, biologically diverse and include
areas of high conservation values. Knowledge about the values of these
forests, which form core areas of Swedish timber imports, is generally poorly documented when compared to those maps available for Karelia and the
northern areas of European Russia. Therefore, ecological impact is impossible to assess on basis of the available information. A number of Swedish
companies are sourcing timber from areas, which are known to be rich in
old-growth forests, such as Karelia, Archangelsk, and Komi. Further research
and inquires are however needed in order to find out whether these activities actually involve logging of old-growth or high conservation value
forests. It is however clear that negative impact on old growth and high conservation value forests in Russia and the Baltic States can not be excluded.
The current level of knowledge obtained by the actors involved in the
import does not allow them to sufficiently evaluate the ecological and social
impact of their activities. Considerable improvements have been made over
the last several years. However, additional efforts and improvement must be
made if these companies want to ensure that their activities are not damaging to the forests and communities of the countries of origin. Certification
is a mechanism, which may give Swedish companies the ability to gain
knowledge and verify their impact in the origin countries. However, certification schemes and processes are not fully developed at present in Russia
and the Baltic countries making it difficult to rely on this mechanism to
mediate the impact of imports at this time. The Forest Stewardship Council
(FSC) has issued a number of certificates in Russia and one in Estonia and
this number is likely to increase. Swedish companies may play an important
role in speeding up the development of certification, by taking an active
part in standard development processes in cooperation with national stakeholders and by demanding certified raw materials. Companies, which have
not yet reached the first level of knowledge about the origin of their
imports, urgently need to do so in order to move towards a more responsible trade.
19
20
I.
Introduction
Problem Statement
◆ The import of
timber and wood
products to Sweden
reached an all time
high of 11.3 million
m3 in 1999
◆ Sweden is the third
largest importer of
Russian timber
3 Swedish National Board of Forestry,
“Utrikeshandel” (Foreign Trade)
www.svo.se/fakta/stat/default.htm.
Visited 25 October 2000.
4
This volume was calculated using
The import of timber and wood products to Sweden reached an all time
high of 11.3 million m3 in 1999. This is an increase in total imports of
almost 3 million m3 from 1995 import levels and almost 7 million m3 from
imports in 1990.3 Total wood consumption in Sweden for 1999 was more
than 60 million m3.4 Eighty-one percent of the total import in 1999 came
from Russia and the Baltic countries: Estonia, Latvia, and Lithuania. The
Russian and Baltic share in the total Swedish import has been rising continually over the years, increasing by 16.3% in its share of the total import
between 1995 and 1999.5 Imports from those countries have increased by
70% during the same period. Sweden is the third largest importer of
Russian timber after Finland, which imported 10 million m3 in 1999 from
Russia (primarily from European Russia) and Japan (importing from the
Russian Far East). The increase in import from Russia and the Baltics to
Sweden can be linked to a number of factors including; less secondary production and processing in the export countries, primarily Russia and to
some extent in the Baltics, increased production capacity in Sweden, as well
as lower prices available to Swedish companies for imported raw materials
when compared to domestic prices for raw materials.6
data from the “Summary of Total
Timber Use and Production of Forest
Products” for all regions published
by the Swedish Timber Measurement
Agency, 2000.
5
Swedish National Board of
Forestry, “Utrikeshandel” (Foreign
Trade)
www.svo.se/fakta/stat/default.htm.
Visited 25 October 2000.
6
This is a general picture received
by talking to a number of people
including, Henrik Asplund, Såg i Syd,
Håkan Alexandersson, Thomesto
Sverige AB and Sven Lundell, LRF -
Many of the companies using imported timber from Russia and the Baltics
are certified or plan to obtain certification under the FSC and PEFC certification schemes for their Swedish operations. Considerable attempts have
been made to improve environmental considerations in Swedish forest management and practices. Certification is one mechanism, which was introduced in the late 1990s to move in this direction. Many areas in the forests
of Russia and the Baltic states are of high conservation value due to the
forests’ relative size and unfragmented nature, primarily in Russia, and
when compared to Sweden, less intensive forest practices used in both
Russia and the Baltic countries. Currently there is no certification of large
scale in place in Russia and the Baltics, however the process of development
is on going. FSC certification exists in Russia and Estonia and regional standards are being developed. FSC certification is also in a late stage of development in Latvia.
Skogsägarna (The Federation of
Swedish Farmers, Forest Owners).
The strong presence of the Swedish companies on the market for Russian
21
and Baltic timber and wood products as well as the environmental standards which they have committed to, make questions of origin especially
relevant today. Without assurances for verifying origin and assessing the
impact of forestry, companies may run the risk of contradicting their purchasing policies and undermining company credibility in relation to certification commitments they have made on their home territory. There has
been much speculation about the origin of timber and the risk for logging
in valuable areas driven by the foreign exports in Russia and the Baltics.
However there has been little available data to provide facts regarding the
issues. This report attempts to fill this gap with regards to the Swedish imports.
Previous Studies
There have been several studies carried out in the last 3 years looking at the
involvement of the Nordic forest industry in Russia. These studies act as a
base of information for this current report.
The report, Swedish Forest Industry Goes East: a report on the Swedish Forest
Industry’s Involvement in the Russian Forest Sector, by Lindahl, et. al. published by the Swedish Society for Nature Conservation in 1997 looked primarily at the large Swedish forest industry companies and larger importers
acting on the ground in Russia investing in pulp and paper mills, logging
operations, and timber exports to Sweden. This report included a joint position paper by The Russian Forest Club group of NGOs regarding the Swedish
companies’ activities. This study details the large-scale ventures and investments being started in Russia by the larger Swedish forest and pulp and
paper companies. The report concluded that the trade in forest products
between Russia and Sweden was for the most part unregulated with a large
number of middlemen making it difficult for Swedish companies to evaluate the origin, legality or values of the forest from which their timber came.
At the time of that report approximately 85% of the import volume to
Sweden from Russia was to Swedish pulp and paper industry with less than
10% going to the sawmill industry. The report recommended that development of proper mechanisms for control of the origin of timber and forestry
practices used.
22
In 1999 the Finnish Nature League and Taiga Rescue Network published the
study, The Finnish Forest Industry in Russia: On the Thorny Path Towards
Ecological and Social Responsibility by Ovaskainen, et. al., which gave company specific information about 22 forest companies active in Russia or
procuring timber from Russia. The information was collected with a questionnaire and follow-up and it is estimated that the responses covered 85%
of the total Finnish import. The results showed that the main origin of procurement for the Finnish companies was in Karelia and Leningrad Oblast
(18 respondents of 22 and 12 of 22 respectively). Novgorod and Vologda
Oblasts were also named both by 6 of the 22 respondents as wood procurement areas. The report concluded that the activities of the Finnish compa-
nies had improved over the last years but was still in need of further
improvement.
At the same time as the Finnish Nature League was conducting its study, the
Swedish Fältbiologerna started a similar study of Swedish companies activities and imports of timber and wood products from Russia. A questionnaire
was sent to the large companies and 8 responses were received from the
large forest industry corporations, the SÖDRA and Mellanskog forest owners associations, and one sawmill. This information was collected but was
not followed-up on nor released formally to NGOs or to the public making
it difficult for NGOs and other actors to evaluate and use the results of the
study. (See appendix 1 for a short summary of the results.)
Objectives of this Study
◆ The objective of
this study is to
provide a general
picture of the trade in
timber and wood
products from Russia
and the Baltic
countries to Sweden
The objective of this study is to provide a general picture of the trade in timber and wood products from Russia and the Baltic countries to Sweden. The
market and sector are dynamic and rapidly changing. The study intends to
update and complement the previous studies carried out regarding this
issue. The goal is to identify the relevant actors and their activities. The
study also aims to assess the extent of knowledge Swedish companies
importing timber and wood products from Russia and Baltics have about the
forests from which their raw materials come as well as their procurement
policies and attitudes towards “responsible trade”7. The focus of the study
has been on the timber and wood products trade. The work has concentrated on the trade in roundwood by the primary processing industry
because of the fact that this sector makes up the largest portion of the trade.
The secondary processing industry using semi-processed or processed raw
materials has not been included in the study. The hope is that the information found in this report should act as a possible basis for discussion, dialogue, planning and strategy among all the actors involved.
7 “Responsible trade” is a somewhat
Methodology
vague term. It is not the attempt of
this document to define the exact
criteria for and qualities of
“responsible trade”. In the context of
this discussion the author generally
defines “responsible trade” as trade,
which does not produce negative
ecological or social impacts in the
country of product origin. In this trade
companies are conscious actors with
knowledge of the impacts of their
trade and with systems and activities
to mitigate potential negative impacts
of their trade.
General information for the study was collected through semi-structured
interviews with key informants in the timber trade. Quantitative historical
statistical data was collected from established sources. Company specific
data was collected through a questionnaire (see appendix 2). The questionnaire was sent to over 50 of the large forest companies, independent
sawmills, forest owners associations, and the known import agents. An
attempt was made when targeting the independent saw mills to obtain a
sample, which would give a geographical and size representation of the sector. Follow up telephone calls and interviews were carried out for all those
not responding and where clarification was needed. Personal meetings with
representatives from the two largest import agencies were carried out, as
well as an interview with a representative of the national saw mill organization. The study was carried out in July and August 2000.
23
Due to the short time of the study and the number of questionnaires sent
out it was not possible to follow up on all questionnaires. Priorities were
made to follow up on the largest actors and also talk with those actors who
could fill out the geographical reach of the study. The questionnaire was
sent out at a time when many were just getting back from vacation. This
added to the need for telephone calls to remind people and the need to
resend the questionnaire. Despite these difficulties, of the over 50 companies contacted, 39 responses were obtained.
In addition to the 50 questionnaires, 8 other sawmills were contacted by
telephone, which reported that they were not importing timber from Russia
or the Baltics bringing the total number of responses to 47 (see appendix 3
for a full list of those contacted and those responding to the survey).8 With
questionnaires and initial calls around 25% of each region’s independent
sawmills were covered by the study.9 It proved the most difficult to obtain
answers from the sawmills. The researcher asked many people for ideas
about the reasons, answers included; smaller staff means less time to fill in
questionnaires, less experience with the environmental movement or, hesitancy to expose how much they are importing because buyers of sawn products want Swedish quality including the raw materials.
In this report all statistics on imports and raw material needs from the
Swedish National Board of Forestry, the Swedish Timber Measurement
Agency and the Swedish Agricultural University expressed in cubic meters
(m3) refer to the measure, cubic meter solid volume exclusive bark (in
Swedish m3 f.u.b.). It is assumed that company responses on import volumes also were given in m3 f.u.b., although the parameter unit was not
always indicated in the answers. For simplicity cubic meters (m3) have been
used when referring to the companies’ responses presented in chapter III.
8
Information for Telemark Wood was
obtained by Norwegian colleagues
bringing the number of responses
included in the report to 48.
9
The figure 25% comes when
considering that many wood
procurement companies, which are
working for several sawmills (as
many as 10 in some places) were
contacted, thus allowing a greater
coverage of sawmills per
questionnaire. Questionnaires were
also sent to smaller sawmills
24
independently procuring wood.
II.
◆ Imports from the
Soviet Union to
Sweden began in the
1970’s
10
Swedish National Board of
Forestry, Statistical Yearbook of
Forestry – 2000, “Utrikeshandel”
The Trade from Russia
and the Baltic States
This chapter outlines a picture of the general trends in the import of timber
and wood products to Sweden from Russia and the Baltic States. Statistics
on the present level of trade are presented with discussion of the specific
products being imported. Imports from the Soviet Union to Sweden began
in the 1970s. The trade did not reach a wider scale until the 1980s. In the
1990s the imports began to increase substantially. Table 1 gives an overview
of the level of import to Sweden from the different countries over the last
twenty years. In 1999, Latvia was the largest exporter to Sweden followed
by Russia, and Estonia. Lithuania was the seventh largest exporter to
Sweden.10
Table 1. Imports of “Selected” Wood Products to Sweden by Export Country (m3)
Export Country
1980
1990
1995
1999
Latvia
2,377,918
3,416,919
Russia*
217,726
1,239,270
1,736,211
3,042,029
Estonia
797,954
2,202,838
Norway
882,680
711,276
650,698
828,505
Germany**
373,297
1,272,284
974,853
532,009
Finland
1,225,689
331,570
547,169
521,939
Lithuania
467,807
490,111
Canada
101,954
704
45,912
96,428
Denmark
255,722
428,950
230,695
84,245
Brazil
291,334
78,950
Poland
425,499
209,502
33,368
29,405
Spain
3,330
0
3,018
Netherlands
3,547
6,727
35,022
780
Myanmar
0
233
Belgium-Lux.
28,840
1,994
82
France
9,000
5,504
38
USA
562,766
2,958
16
UK
212,268
97,880
18
14
Other
17,515
357,030
139,887
1,415
Total
4,278,663
4,696,363
8,339,302
11,328,974
Source: Swedish National Board of Forestry 2000
(Foreign Trade)
*1990 and earlier figures are for the former Soviet Union as a block
www.svo.se/fakta/stat/default.htm.
** 1990 and earlier figures are the sum of totals for East and West Germany.
Visited 25 October 2000.
25
◆ The Russian and
Baltic share in the
total Swedish import
has been rising from
26% in 1990 to 80% in
1999
The Russian and Baltic share in the total Swedish import has been rising
continually over the years from 26% in 1990 to almost 65% in 1995 reaching 80% in 1999. This is an increase of 16.3% in its percentage share of the
total import between 1995 and 1999 (see Appendix 4 for a full comparison). Imports from those countries have increased by 70% during the same
period. Figure 1 shows the dominance of the imports from Russia and the
Baltics. It must also be noted that the total import of Russian and Baltic timber may be slightly larger if one considers the possibility that some timber
originating in Russia and the Baltics may come through Finland and Norway
on its way to Sweden.11
Figure 1: Import of Timber and Wood Products to Sweden by Export Country
Source: Swedish National Board of Forestry, Statistical Yearbook of Forestry - 2000
11
The volume of this potential
Unfortunately, because of EU regulations for statistic taking, the Swedish
National Board of Forestry as of 1995 no longer separates its imports by
pulpwood and saw logs. They only differentiate between coniferous and
deciduous round wood and finished products. Figure 2 and 3 below show
the quick rise in both pine and deciduous pulpwood as well as pine saw logs
from Russia and the Baltics in the first four years of the 1990s. Spruce saw
logs also reached a new high in 1994 after a sharp drop in 1991. No data is
reported for the import of deciduous saw logs. Figure 4 shows figures of
roundwood imports, divided between coniferous and deciduous round
wood for the years 1997, 1998, and 1999.
import chain was not ascertained
during this research.
12
Mats Nilsson, “Substitution
Effects and Pulpwood Imports into
Sweden”, in Mats Nilsson, Five
Essays on Forest Raw Materials Use
in an International Perspective,
Luleå University of Technology,
26
2000:13. p. 3.
The domestic Swedish standing timber volume has been increasing consistently since the 1930s (1.76 billion m3 in 1930 to 2.74 billion m3 in 1990).
This is due to industrial logging below officially calculated available yield
and the regeneration measures, which have steadily increased timber productivity in the Swedish forests.12 Despite these growing forest inventories
in Sweden, there has been a steady increase in both pulpwood and saw log
imports over the last two decades. Prior to 1995 it is possible to see a rapid
increase in imports in deciduous and pine pulpwood as well as pine saw
Figure 2: Import of Pulpwood to Sweden from Russia and the Baltic Countries
*Statistics prior to 1992 are for the
Soviet Union as a whole and
reported in the figure as “Russia”.
**1992 statistics for Latvia and
Estonia are from August 1992, prior
to that Latvian and Estonian figures
are reported with Russia.
Source: Swedish National Board of Forestry, Annual Forestry Statistics Book 1980, 1990, 1991, 1992, 1993,1994
Figure 3: Import of Saw logs to Sweden from Russia and the Baltic Countries
Note: Statistics prior to 1992 are for
the Soviet Union as a whole and
reported in the figure as “Russia”.
Source: Swedish National Board of Forestry, Annual Forestry Statistics Book 1980, 1990, 1991, 1992, 1993,1994
27
Figure 4: Imports of Timber and Wood Products to Sweden from Russia and the Baltic Countries
Source: Swedish National Board of Forestry, Statistical Yearbook of Forestry – 1998, 1999, 2000
logs. From 1997 to the present the volume and the level of the increase has
been the largest in the category of coniferous roundwood, which can be
both pulpwood and saw logs, particularly from Russia. The import of sawn
wood products and veneer and particle board makes up a very small portion of the trade. In 1999 Sweden imported 17,600 cubic meters solid volume of sawnwood products and 41,300 tons of veneer and particle board
from Estonia. There were no other reported imports of these products from
the region.13 A study of the substitution of domestic pulpwood with imported pulpwood finds that within the Swedish industry there is a bias in favor
of imported pulpwood pointing towards a continued strong import in the
future.14
◆ “... within the
Swedish industry
there is a bias in favor
of imported pulpwood
over domestic
pulpwood”
13
Swedish National Board of
Forestry, Statistical Yearbook of
Forestry – 2000, “Utrikeshandel”
(Foreign Trade)
www.svo.se/fakta/stat/default.htm
Visited 25 October 2000.
Unfortunately the numbers do not allow a consistent analysis. According to
a representative of one of the large import agent companies, the pulpwood
imports by the large pulp and paper companies have not increased dramatically, remaining steady since around 1995 while the saw log import has
been increasing since the sawmill industry entered the import market more
consistently around 1996.15 Saw log imports to Sweden continue to rise. A
representative from the large import agent Thomesto Sverige AB estimated
a 10% increase this year in the import of saw logs compared to 1999 levels.16
14
Mats Nilsson, “Substitution
Effects and Pulpwood Imports into
Sweden”, in: Mats Nilsson, “Five
Essays on Forest Raw Materials Use
in an International Perspective”,
Luleå University of Technology, 2000:
13 p.18.
15
Hans Persson, Lemo Agencies AB,
personal communication, 31 August
2000.
16
Håkan Alexandersson, Thomesto
Sverige AB, personal communication,
28
2 September 2000.
III.
The Actors and General Trends
in their Trade
The timber trade between Russia and the Baltics to Sweden, dominated by
the import of large volumes of pulpwood and saw logs, is formed by a number of primary actors. These have been divided into four categories:
Forest industry corporations
Independent sawmills
Forest owners associations
Import agents
forest corporations owning forest land and processing
industry (pulp, paper, sawn products, etc.) and smaller
“independent” pulpmills
sawmills without forest land, whose production is based
primarily on purchased timber
sawmills and pulpmills owned by the associations and
supplied by timber primarily from association members
trading houses acting primarily as middlemen for timber
Forest Industry Corporations
◆ “For a multinational company the
concept of ‘import’ is
a little bit unclear”
17
“SCA acquires Metsä Tissue and
Metsä Corrugated and divests
shareholding in Modo Paper”, SCA
Press release 31 May 2000.
www.sca.se, Visited 5 September
2000.
18
The Swedish forest industry corporations dominated by SCA, StoraEnso,
Modo Paper AB, Holmen, Korsnäs AB, and AssiDomän have undergone
much change, consolidation, and exchange of mills and production sites
over the past few years and even the past few months. Understanding the
picture and the complex and ever changing relationship between the companies is often difficult. The companies’ operations in Russia and the Baltics
are also complex. For example, MoDo Paper is a newly reconfigured company formed from parts of the former MoDo and parts of SCA’ s production
facilities. The remains of MoDo changed name and is now Holmen. Holmen
and SCA sold MoDo Paper to Finnish Metsäliitto in Spring 2000.17 Modo
Paper AB and Holmen operate in the Baltic countries with their own separate wood procurement and logging companies.
Olle Ankarling, StoraEnso Skog,
The Baltic Sea region is moving towards becoming a single timber market.
With regards to the multi-national corporations’ activities in the Baltic Sea
region a StoraEnso representative pointed out that, “for a multi-national
company the concept of ‘import’ is a little bit unclear.” “Of course what is
and is not an import is clear but everything is tied together” even if the
activities take place in areas separated by national boundaries.18
personal communication, 17 July
2000.
In 1999 the Swedish pulp and paper industry demanded 40.6 million m3 of
29
pulpwood and chips.19 The large corporations producing pulp and paper are
also operating sawmills. In 1999 there were 25 sawmills owned by the corporations in operation. In 1999, industry owned sawmills operated by the
large corporations listed above, accounted for 24% of the total sawmill production in Sweden. The total raw material needs for forest corporation saw
mills for that year was 8.9 million m3.20 The majority of the large corporations have their own forests in Sweden and their level of self sufficiency
varies widely and changes from year to year. Table 2 shows the approximate
annual import levels from Russia and the Baltic countries as reported by the
forest industry corporations and pulp and paper mills in response to the
questionnaire. As the table shows their reported import of timber and wood
products accounted for more than three-fourths of the total import to
Sweden from Russia and the Baltics.
◆ Import of timber
and wood products by
forest corporations
accounted for more
than three-fourths of
the total import to
Sweden from Russia
and the Baltics
Table 2: Timber Imports to Sweden Reported by Forest Industry Corporations & Pulp
and Paper Mills (m3)
Company
Import Russia Import Estonia
Total Latvia Total Lithuania
Total
AssiDomän
150,000
0
650,000
0
800,000
Holmen Skog
80,000
720,000
115,000
75,000
990,000
Klippan AB
no response
Korsnäs AB
250,000
60,000
230,000
85,000
625,000
Modo Paper AB
445,000
140,000
775,000
280,000 1,640,000
Munkedals AB
0
0
0
0
0
Rottneros AB**
10,000
0
430,000
0
440,000
SCA Forest Products***
“business proprietary”
Scaninge Timber AB***
“business proprietary”
StoraEnso
515,000
850,500
850,500
189,000 2,405,000
Munksjö
0
0
0
0
0
Peterson Scanproof*
0
0
0
0
0
Bäckhammers Bruk AB
0
5,000
0
0
5,000
TOTAL
1,450,000 1,775,500 3,050,500
629,000 6,905,000
*Peterson Scanproof responded that they procure timber from StoraEnso and asked that we refer to
them.
19
**Rottneros is also buying small amounts of timber from Estonia and Lithuania. This often takes the
using data from the “Summary of
form of exchange with StoraEnso and Thomesto Sverige AB.
Total Timber Use and Production of
***SCA and Scaninge Timber AB would not report the volumes of their import from Russia and the
Forest Products” for all regions
Baltic countries. According to SCA Forest Products company representative Christian Olafsson, the
published by the Swedish Timber
company imports a total of 200,000 m3 from all countries in the Baltic Sea region. The Baltics are the
Measurement Agency, 2000.
primary area of origin for the import, Latvia in particular. Total volume for Scaninge Timber AB is not
20
Ibid.
known. Scaninge is importing primarily from Russia.
21
Swedish National Board of
These statistics were calculated
Forestry, Statistical Yearbook of
30
The imports are used for both pulp and paper production and in the
sawmills. Pulp and paper production in Sweden has remained somewhat
constant over the last decade, at around 10 million tons of pulp a year.21
Sawmill production in general has been on a steady increase in Sweden
since the early 1990s from production levels of around 11 million m3/year
Forestry - 2000, “Skogsindustrins
Produktion” (Forest industry’s
production),
http://WWW.SVO.SE/fakta/stat/ska2/.
Visited 11 September 2000.
to 16 million m3/year in 1999.22 This increase comes from investments by
the industry in increasing production capacities. The number of sawmills
has been steadily decreasing while the average production capacity per
sawmill has been increasing. In 1995 there were 101 sawmills with production over 50,000 m3/year accounting for 69% of the total production. Just
five years earlier in 1990 there were only 63 mills production over 50,000
m3/year and they accounted for just over 50% of the total production.23
This comes at the same time that processing levels in Russia and to some extent
the Baltics have decreased compared to levels during the Soviet period.
◆ Many of the large
forest corporations
have established
themselves on the
ground in the Baltics
22
Sture Karlsson, Swedish National
Sawmill Organization, personal
communication 1 September 2000.
23
Many of the large forest corporations have established themselves on the
ground in the Baltics, primarily in Estonia and Latvia (see Table 3).
StoraEnso, Holmen, and Korsnäs have been active in the Baltics the longest,
running their own logging companies and procuring timber. Rottneros,
MoDo Paper AB, and AssiDomän are also active in the Baltic procuring timber through subsidiary companies. SCA has not established itself in the
Baltics.
Table 3. Forest Industry Corporations’ Operations in the Baltic Countries24
Company
Location
Operation
Baltic Pulp (MetsaLiitto +
Latvia
Planned pulpmill
SÖDRA + Latvian govt.)
MoDo Mezs, MoDo Miskas
Latvia*, Lithuania*
wood procurement
(Modo Paper AB)
Latsin SIA, SIA Freja,
Estonia, Latvia*, Lithuania
logging and wood
(Korsnäs),
Latvia SIA (Korsnäs)
procurement, shipping port,
forest machinery distributor
Holmen Mets (Holmen)
Estonia*, Latvia, Lithuania
logging, wood procurement
StoraEnso Forest
Estonia*, Latvia, Lithuania
logging, wood procurement,
forest owner (Estonia)
Rottneros Baltic (Rottneros AB) Estonia, Latvia*, Lithuania
wood procurement
AssiDomän Baltfor Ltd.**
(AssiDomän)
Latvia*, Lithuania
wood procurement
Department of Forest Production
(Institution för virkeslära), Swedish
* The single asterisk besides the country denotes that the company has a subsidiary company located
University of Agricultural Sciences-
in that country. The subsidiary companies procure timber from the other countries listed.
Ultuna, Sawmill Inventory 1995,
**AssiDomän also owns a corrugated cardboard plant, Assi Baltic Ltd. in Lithuania owned by
Uppsala 1996. p. 5.
AssiDomän Packaging in Denmark. This plant is not using raw materials from the Baltics.
24
This information was collected by
personal communication with
company representatives and by
visiting the websites of the
companies. It is not comprehensive
but should give a general picture of
the different levels of operation in
the region.
The presence of the forest industry corporations is not equally as strong in
Russia today. Many of the large corporations went in and tried to set up
business, including logging companies or purchasing paper mills, in the
1990s. In the 1997 report, Swedish Forest Industry Goes East, specific information about the on the ground activities of AssiDomän (OAO
Segezhabumprom), Tetra Laval (A/O Svetogorsk), Thomesto Sverige AB
(Ladoga Forest), and MoDo (Novgorod Lespromkhoz) were detailed. Since
31
the report was published, all of these corporations have closed down their
logging operations and ceased involvement in the pulp and paper mills on
the ground in Russia and work only through agents to procure
wood.25Thomesto Sverige AB, itself an agent, has given up its logging operations and acts only as a timber buyer, forwarder, and shipper. For their
Russian imports the large forest corporations are primarily relying on import
agents to procure timber.
According to a representative from Rottneros, the company has made a conscious decision to stay out of Russia and concentrate on the Baltics, particularly Latvia, because of the fact that the institutional landscape and trustworthiness of legislation, etc. seem more under control in the Baltic States
in comparison to Russia.26 Results of a survey on direct foreign investments
by Nordic companies in the Russian forest industry listed “…institutional
factors, such as an ambiguous legal system, difficulties in negotiating with
local authorities and general political instability…” as primary reasons why
Nordic companies chose to terminate direct investments in Russia. This
same study predicted continued low direct investment in the Russian forest
industry without fundamental changes in the legal and political systems.27
It is difficult to predict future trends in the activities of the forest industry
corporations. Their activities depend largely on the market prices for timber. After initial attempts in Russia, the Baltic states seem to present an easier location for the large corporations to set up operations on the ground.
The physical presence of the large corporations in the Baltics would suggest
that they have long-term interests in the region. However, when thinking of
long term available timber volumes one has to look at Russia and its potential capacity as a source of timber. Since the break up of the Soviet Union
there has been very little production of finished wood products in Russia.
The Baltic production has been increasing over the last few years. There is
currently no sawmill operating in the Leningrad Oblast. According to a representative from one of the large import agents, one possible future trend is
that demand for chips for paper and pulp will act as a motor for the establishment of sawmill operations on the ground in Russia. The large forest
industry corporations producing pulp and paper would be interested in
cooperation with sawmills in order to secure a steady supply of chips for
export to pulp and paper making facilities in Sweden. Another issue on the
horizon related to this is also the slowly “awakening” and potentially large
domestic market in Russia for sawn products for construction.28
◆ The Baltic states
seem to present an
easier location for the
large corporations to
set up operations on
the ground
◆ When thinking of
long term available
timber volumes one
has to look at Russia
and its potential
capacity as a source of
timber
25
International Paper now owns the
Svetagorsk mill, formerly owned by
Tetra Laval.
26
Ingemar Eliasson, Rottneros,
personal communication. 7
September 2000.
27
Mats Nilsson and Patrik
Söderholm, ”Nordic Forest Direct
Investment in the Russian Forest
Sector”, in Mats Nilsson, Five
Independent Sawmills
Essays on Forest Raw Materials Use
in an International Perspective,
32
In 1995 there were a reported 300 sawmills with an annual production of
over 5000 m3 in Sweden responsible for 98% of all production. Of these 300
there are 255 independent sawmills, not owned by the Forest Owners
Associations or the forest industry corporations. These independent mills
account for 65% of the annual production. The independent sawmills are
Luleå University of Technology,
2000:13. p. 2.
28
Hans Persson, Lemo Agencies AB,
personal communication, 31 August,
2000.
Figure 5: Timber Measurement Regions
VMF Nord
Wermländska if
VMF Mellan
border Timber Measurement
Region (VMF)
provincial border
VMF Syd
Source: Swedish National Board of Forestry (www.svo.se)
29
Department of Forest Resources,
Swedish University of Agricultural
Sciences, Sawmill Inventory 1995.
1996. p. 5. This inventory is carried
out every five years. Statistics for
2000 are not available at this time.
30
Ibid. p. 4-5.
31
Sture Karlsson, National Sawmill
Organization, personal
communication. 1 September 2000.
32
Henrik Asplund, Såg I Syd,
personal communication. 22 July
2000.
concentrated in southern and central Sweden (generally from the city of
Sundsvall and southwards), as well as along the coast of the Gulf of Bothnia
north to the border with Finland.29
In 1995 the entire Swedish saw mill industry used 32 million m3 wood
(42% pine, 57% spruce and 1% deciduous). In 1995, 1% of this reportedly
came from imported raw materials.30 At the time of this report there were
no numbers available covering the exact import by the independent
sawmills. There are several sources, which indicate the general volume of
the import to the independent saw mills. The director of the Swedish
National Sawmill Association (Sågverkens Riksförbund), which has around
200 member sawmills of the 255 independent sawmills in Sweden, estimated an increase of import to around 5% of total raw materials used.
Production in the independent sawmills has also been increasing over the
last few years. In 1999 production was around 8.1 million m3, which would
put the raw material needs around 18 million m3.31 If using the estimate of
5% import that would put imports at around 900,000 m3/year. This may be
a bit low considering an estimate by a representative for Såg I Syd, the
southern sawmill regional association, who estimated that the southern
region’s members alone imported around 1,000,000 m3 last year.32
The figures in Table 4 also give an indication of the level of import. Table 4
shows the volume of total import from all countries by Swedish sawmills,
which did not belong to the forest industry corporations or the forest owners associations from 1995-1999. By looking at Table 5 below, which gives
the responses from this study, it can be said that the large portion of the
import is originating in Russia and the Baltics.
33
In 1999 the import level was around 1.7 million m3. The figures show a
sharp rise in the level of import. The majority of this import goes to southern Sweden. The regions are broken into geographical divisions used by the
Swedish Timber Measurement Agency shown in Figure 5.
Table 4: Total Import of Sawmills Not Owned by Forest Industry or Forest Owners
Associations (m3)
Region
1995
1996
1997
1998
1999
VMF Nord
83,000
80,000
93,000
138,000
160,000
VMF Mellan
9,000
28,000
84,000
63,000
125,000
Wermländska + VMF Syd 318,000
255,000
644,000
844,000 1,409,000
Total
410,000
363,000
821,000
1,045,000 1,694,000
Source: Swedish Timber Measurement Agency 2000
The independent sawmills are divided into regional organizations (see figure 6)33. Not all independent saw mills in Sweden are members in the
regional or national sawmill organizations. It can generally be said that
many independent sawmills in southern and central Sweden (Såg I Syd and
Sågverken Mellansverige) are importing raw materials from Russia and the
Baltics on a regular basis. At the same time, many of the smaller sawmills
in these regions are not importing at all and have no plans to start.
Those, which are importing, act primarily through the large import agents
and large forest industry corporations with procurement operations.
However some of the smaller sawmills surveyed were purchasing small
amounts of timber from the small import agents.
◆ Many independent
sawmills in southern
and central Sweden
are importing raw
materials from Russia
and the Baltics on a
regular basis
Figure 6: Regional Sawmill Organizations
SÅGAB
Nedre Norrlands
Sågverksförening
✪
✪
✪
Sågverken
Mellansverige
■
Norra
Skogsägarna
Sågverkens
Riksförbund
33
Swedish National Board of
Forestry, Statistical Yearbook of
✪
Sågverksföreningen
Såg i Syd AB
http://WWW.SVO.SE/fakta/stat/ska2/.
provincial border
✪
head office
Produktion” (Production of Forest
Statistics)
regional border
34
Forestry – 2000, “Skogligstatistik
Source: Swedish National Board of Forestry (www.svo.se)
Visited 11 September 2000.
◆ Sawmills have
been active in
importing from
Russia and the Baltics
only since 1996
Many sawmills in these regions have consolidated their raw material purchases under single wood procurement companies responsible for the raw
materials of a number of sawmills. For example, in central Sweden 10
sawmills part-owned by the Hedin, Bergkvist, and Moelven sawmill groups
have joined together to form the wood procurement company Weda Skog
with projected annual raw material needs of 3 million m3. The Hedin and
Bergkvist sawmill groups are also on the ground in Latvia and Estonia as
part owners with Thomesto Sverige AB in two sawmills (see the description
of Thomesto Sverige AB’s activities below for more information). Sawmills
have been active in importing from Russia and the Baltics only since 1996.34
Table 5 shows the volumes of import of those sawmills responding via the
questionnaire and from telephone calls indicating some level of import from
Russia and/or the Baltics. The numbers are not exact. Many respondents
gave rough estimates of average import over a three to five year period or
gave planned imports for next year. It is possible that some sawmills importing timber from Russia and the Baltics have been missed. The focus of the
inquiry and this discussion is on independent sawmills, which are members
of the National Sawmill Association. There are many sawmills in Sweden
not affiliated with the national and regional associations. The table should
be seen as a rough picture of the import to the independent sawmills.
Table 5: Timber Imports to Sweden Reported by Independent Sawmills (m3)
Company
Region
Total
Total
Total
Total
Russia
Estonia
Latvia Lithuania
Enbuske AB
SÅGAB
2,000
Martinsons Trä KB** SÅGAB
2,500
5,000
Rolfs Såg och Hyvleri AB SÅGAB
200
Älvsbyhus
SÅGAB
6,000
Camfore AB*
NedreNorrlands 10,000
Siljans Sågverk AB Mellansverige
past import no plans for future
Weda Skog*
Mellansverige 500,000
AB Viking Timber* Såg i Syd
15,000
AB Möckelns Sågverk* Såg i Syd
5,000
10,000
Rörvik Timber AB* Såg i Syd
320,265
Västskog Sågråvaru AB* Såg i Syd
75,000
12,500
12,500
Vida Timber AB*
Såg i Syd
65,000
Kährs-WernerTrä AB Såg i Syd
200
9,800
Melltorps Såg*** southern sawmill 100
Gotlands Flis***
Gotland sawmill 30,000
30,000
TOTAL**
983,765
47,300
42,500
0
Total
2,000
7,500
200
6,000
10,000
500,000
15,000
15,000
320,265
100,000
65,000
10,000
100
1,073,565
*wood procurement company for a group of sawmills
**The volumes reported by Martinsons Trä KB have not been included in the total because those
34
Hans Persson, Lemo Agencies AB,
reported were rough estimates giving a total for import over the last 5 years (“one boat from Russia and
personal communication, 31 August
two from Estonia”)
2000.
***unaffiliated sawmill
35
It can generally be said, with a few exceptions, that the sawmills in the
northern half of Sweden (Nedre Norrlands and SÅGAB) are not importing
saw logs from Russia and the Baltics in large volume or with regularity.
Many have tried it out over the last 4 or 5 years to “make sure they knew
how it worked in case they needed to look east for raw materials”.35 Part of
the reason for this smaller export to the north is that timber from Russia and
the Baltics is coming from the south and the logistics and costs involved are
less favorable for import. Another issue is the actual fiber structure of the
timber. Northern sawmills are for the most part set up to process saw logs,
primarily pine, with a structure characteristic of timber north of 61º N latitude. This limits the area from which they can take raw materials without
having to change production processes and settings.36 The results of this
study show that imports going to the north are generally sporadic and from
smaller import agents. Some of the import is coming through Finland. There
is some evidence that shows that the northern sawmills are also starting this
same trend of consolidation. The sawmill and construction component maker,
Älvsbyhus and the Stenvalls Trä sawmill consolidated their wood procurement in August 2000 under the newly formed Bothnia Industries AB.35
The sawmills have been active in the Russian and Baltic trade of timber for
a short time. As the responses from the questionnaire show, many have tried
their hand at importing timber from Russia and the Baltics but have not continued this on a regular basis, choosing to concentrate on Swedish raw
materials. Others are just getting more involved in the import market. For
example, Möckeln Såg AB sawmill group reported an import of 5,000 m3
from Russia and 10,000 m3 from Estonia. In a newspaper article from
September 1999 the company forecasted an import level of 50-55,000 m3
from Russia in the coming year.38 Another trend is that sawmill companies
establish sawmill operations on the ground, such as the joint venture of
Hedins and Bergkvists sawmills in Estonia and Latvia. It can be assumed
that the majority of the Baltic import to those companies with operations on
the ground in those countries is not coming through the import agents,
however some volume may still be purchased through the agents.
◆ The sawmills in the
northern half of
Sweden are not
importing saw logs
from Russia and the
Baltics in large
volumes or with
regularity
35
August 2000.
36
Hans Persson, Lemo Agencies,
personal communication, 12 October
2000.
37
Erik Sjölund, Älvsbyhus, personal
Forest Owners Associations’ Processing Industry
communication, 17 August 2000.
There are six forest owners associations in Sweden representing forest owners in different geographical regions. Traditionally these organizations have
run sawmills supplied by the member owners’ forests. One of the forest
owners associations, Södra Skogsägarna, also runs pulpmills. In 2000 there
were 16 sawmills with annual production over 1,000 m3 run by the forest
owners organizations in Sweden. In general the forest owners associations
sawmills have a limited import. In 1999 the total import of these sawmills
was 2% of their total raw material use.39 However the need for deciduous
pulpwood for pulp and paper production drives the relatively large import
of Södra Skogsägarna. This also brings in coniferous saw logs since it is not
feasible to just buy deciduous pulpwood.40
Review, Nr 23, 1999, p.4, as clipped
38
36
Jörgen Näslund, Martisons Trä KB
sawmill, personal communication,
Swedish Forest Industry, Press
from Smålänningen 23/9.
39
This percentage was calculated
using data from the Summary of
Total Timber Use and Production of
Forest Products for all regions
published by the Swedish Timber
Measurement Agency, 2000.
40
Sven Lundell, Swedish Agricultural
Federation, Forest Owners, personal
communication, 8 September 2000.
Figure 7: The Swedish Forest Owners Assosiation
Norrbottens
Skogsägare
Skogsägarna
Norrskog
Västra
Skogsägarna
Norra
Skogsägarna
Mellanskog
border Timber Measurement
Region (VMF)
provincial border
◆ Sixty to seventy
percent of the
deciduous pulp wood
needs of SÖDRA are
covered by import
41
Sören Eriksson, SÖDRA, personal
communication, 8 September 2000.
42
Ibid.
43
SÖDRA, ”Grönt ljus för Baltic Pulp”
Södra
Skogsägarna
Source: Swedish National Board of Forestry (www.svo.se)
Södra Skogsägarna is the largest of the forest owners associations in
Sweden. Södra Skogsägarna is owner of the corporation, SÖDRA, which
includes, wood procurement, pulp and paper mills, sawmills, bio-energy
operations, and a very small area of forest land. Their imports are primarily to supply their pulp and paper operations. Sixty to seventy percent of the
deciduous pulp wood needs are covered by import. The sawmills run by the
organization are largely self-sufficient.41 SÖDRA buys timber from Russia
through the Norwegian import agent, Telemark Wood and other import
agents. SÖDRA is quite established on the ground in the Baltic countries
with timber procurement companies in Estonia (SÖDRA Eesti) and has just
started a company in Latvia (SÖDRA Latvia). They have their own port in
Estonia outside of Tallin, in Latvia outside of Riga and in Liepaja. The port
of Liepaja is fed by the railway system and also handles imports from
Lithuania and Belarus. SÖDRA is one of the suppliers of spruce saw logs for
Mellanskog forest owners association and several other small private mills
in Sweden. SÖDRA is also a part owner in Mellanskog with the National
Agricultural Federation. SÖDRA does not have their own logging companies
in the Baltics but buy from and work closely with several of the more established local logging companies in the Baltics. For timber imported from
Russia they use the Norwegian import agent, Telemark Wood.42
SÖDRA (33%) and the Finnish Metsäliitto Group (34%) have started a partnership with the Latvian government (33%) for the project Baltic Pulp. Plans
http://www.SÖDRA.com/mediaservice are for a pulp factory in Jekabpils, 150 km southeast of Riga in Latvia. The
/press000308.htm, Visited 21 August project is in its start-up phase with plans that feasibility studies will be done
2000.
by 2002 and the new pulp factory will be up and running in five to six years.43
(Green light for Baltic Pulp) press
release 8 March 2000,
37
Table 6: Timber Imports to Sweden Reported by Forest Owners Associations (m3)
Company
Total Russia Total Estonia
Total Latvia Total Lithuania
Total Import
Mellanskog*
60,000
(30,000)
90,000
Skogsägarna Norrskog
3,000
2,000
5,000
SÖDRA Skogsägarna
430,000
400,000
550,000
60,000
1,440,000
Total
493,000
402,000
550,000
60,000
1,505,000
* Mellanskog is importing 60,000 m3 from Russia through import agents. The 30,000 m3 from Latvia is
coming via SÖDRA and has not been included in the total volume of import for Latvia nor the Total
Import because it is already represented in the row indicating SÖDRA’s import.
Table 6 above shows the level of imports reported by the regional forest
owners associations. It is clear to see that SÖDRA is a dominant importer
with regards to the other forest owners associations but also when looking
at the total Swedish import from Russia and the Baltics. Mellanskog is also
importing through SÖDRA from Latvia and through an import agent from
Russia. In responding to this study Norra Skogsägarna and Skogsägarna
Norrbotten stated that they have imported timber in the past but are not
presently importing. Skogsägarna Norrbotten said they had no plans for
future import. Norra Skogsägarna reportedly had an operation with
Estonian partners that turned out badly, with legal action being taken
against the Estonian partners. They have ceased all involvement in the
Baltics. In a written response to this study a representative stated that they
have no plans for import but if they find it necessary they will “go via an
experienced company from Finland or Sweden.”44 Västra Skogsägarna stated that they have not imported timber from Russia or the Baltics and no
plans to begin importing. Skogsägarna Norrskog is importing via import
agents small amounts of spruce saw logs from Russia and Estonia but not
on a regular basis.
◆ SÖDRA is a
dominant importer
Import Agents
38
The forest industry corporations and the large import agents make up the
largest actors in the timber and wood product trade between Russia and the
Baltics and Sweden. It is difficult to estimate how much of the trade has
been covered by the inquiry. Many of the firms buying timber are going
through the agents and many chose not to name their suppliers so some
double counting may occur. By looking at the responses from the forest
industry corporations, the independent sawmills, and the forest owners
associations, the total volume reported is 9,483,565 m3. This number is
more than the official annual state statistics for the total import from Russia,
Estonia, Latvia, and Lithuania as reported in Table 1. It must be remembered that the numbers reported by the companies are not exact. Many
respondents gave rough estimates of their import or average numbers from
the last few years. Some gave projections for the year 2000. What can be
said is that the major actors and their general levels of trade have been captured by the study.
44
Gunnar Andersson, Norra
Skogsägarna, written
communication, 9 August 2000.
◆ Import Agents
responding to the
research accounted
for more almost 4.1
million m3 of the total
trade from Russia and
the Baltics
The import agents or trading houses control a large portion of the import
from Russia and the Baltic states. There are five large independent import
agents, which supply forest industry corporations and sawmills with timber
and wood products. There are a number of smaller import agents primarily
serving the smaller sawmills and sawmill procurement companies. These
smaller agents were more difficult to identify and not all were reached during the course of this research. The smaller agents were identified by
respondent companies timber suppliers. Table 7 shows the large import
agents as well as one of the small actors identified. Information available on
their imports is shown. Those responding to the research accounted for
more than 4.1 million m3 of the total trade from Russia and the Baltics. The
import agents, responding to the questionnaire, reported imports from
Russia above the volumes recorded by the Swedish National Board of
Forestry last year. The figures given by the companies are estimates and in
some cases forecasts for the year 2000. This can explain why the recorded
volume for Russian imports is over the official recorded trade for Sweden.
These figures do however illustrate the fact that there are few Swedish companies active on the ground in Russia today and most of the trade is going
via agents.
Table 7: Timber Imports to Sweden Reported by Import Agents (m3)
Company
Total Russia Total Estonia
Total Latvia Total Lithuania
Esswell International AB
270,000
no figures
“most from
Russia”
Lemo Agency AB
2,000,000
40,000
ScanCompForest/Uniforest
150,000
150,000
Thomesto Sverige AB
430,000
260,000
400,000
Aranna OY
45,000
Telemark Wood Company
361,460
Vänerved
20,000
Total
3,256,460
320,000
550,000 no volumes
reported
Total
270,000
2,040,000
300,000
1,090,000
45,000
361,460
20,000
4,126,460
Thomesto Sverige AB and Lemo Agencies AB are the two largest import
agents in the region importing to Sweden. Due to their dominance in the
import and experience in the trade, representatives of both companies were
visited and interviewed as part of the research for this report.
Lemo Agencies AB
Lemo Agencies AB represents the Swedish office of the Lemo Concern, a
Russian holding company made up of 10 affiliated companies. They own
and operate their own logging companies, ground transportation and forwarding, machinery and equipment company, ports, and boats. Lemo has a
number of logging companies, “Gatchinskaya Forest Group”, “Lemo Les”,
“Forest”, “Megatekh”, and “Nord Kemp” located in Gatchinski, Luzhski,
39
Volosovski, and Prioserski areas of the Leningrad oblast. All of these have 5
to 49 year leases on forest area. In 1999 the logging companies harvested
over 200,000 m3. Lemo owns port operations in St. Petersburg and
Vyborg.45 According to company representative, Lemo has long-term plans
for activities in Russia. Their goal is to become forest owners in Russia when
this is possible. Ninty-eight percent of their timber comes from Russia. The
remaining timber supply comes from the Estonian islands.
In Osmina where its Lemo Les company is located, Lemo is involved in business the old-fashioned way. That is to say the Soviet way. Lemo owns, along
with the logging operations, the pig farm, the sausage factory, a newly built
bathhouse, the restaurant and hotel in town where they have a dance every
Wednesday night. According to Lemo, of course, they’d rather not deal with
these aspects but given the current economic situation in Russia it is part of
the landscape. Lemo also buys the potato harvest in the town. Workers at
Lemo’s port operation in St. Petersburg get free lunch supplied by the
sausage factory and other produce from Osmina. Lemo hopes that Russia
entrepreneurs will be able to buy and take over these side operations, such
as the hotel and restaurant and make them work.
Thomesto Sverige AB
Thomesto Sverige AB is a subsidiary of the Finnish company Thominvest
OY. Thominvest OY is an investment and trading company with activities in
12 countries. They import wood raw materials to the Nordic countries,
Central Europe, Japan and China.46 Thominvest OY owns and operates the
port, Thomesto Terminal in St. Petersburg and the wood procurement company, Thomesto Vologda in Vologda region in Russia. Thomesto Sverige AB
has business with these subsidiaries of the parent company. Thomesto
Sverige AB had several logging companies in Russia up until 1996.
Thomesto has pulled out of logging operations in Russia for primarily economic reasons. It was not possible to make the logging firms operating to
Scandinavian standards profitable. This was due to many factors generally
attributed to the difficulties in doing business in Russia.47
◆ Lemo owns the pig
farm, the sausage
factory, a newly built
bathhouse, the
restaurant and hotels
in town
45
Visited 5 September 2000.
46
Thomesto Sverige AB has instead concentrated its operation in the Baltics.
Thomesto Sverige AB owns the logging and wood procurement companies
Mets & Puu (Tallin, Estonia) and Silva Ltd. (Babite, Latvia). Mets & Puu and
Silva Ltd. are supplying Thomesto’s Baltic processing as well as its Swedish
customers. According to the annual report, these two companies are also
importing wood to the Baltics from Russia. Thomesto is part-owner of two
saw mills, AS Toftan (Vörumaa, Estonia, 40% owner) and Vikawood Ltd.
(Punti, Latvia, 39% owner) with total production around 170,000 m3 and
raw material needs around 350,000 m3.48 The sawmills are owned in a
partnership with Swedish private independent sawmill groups from central
Sweden, the Hedin and Bergkvist groups.
Thominvest OY, Annual Report
1999. Thominvest OY also owns JV
Thomeast which is active in the
Russian Far Eastern port of
Nakhodka. Thomes Canada Ltd. is
importing very small volumes of
plywood and components to the
hockey market to Canada primarily
from Russia and Latvia.
47
Håkan Alexandersson, Thomesto
Sverige AB, personal communication,
2 September 2000.
48
40
Lemo Concern, “About Concern”,
www.lemo.ru:8101/eng/index.htm.
Thominvest OY, Annual Report
1999.
Smaller Agents
A number of smaller import agents were also identified during the research.
The smaller actors were primarily identified through information provided
by the respondent Swedish companies. Vänerved, listed above, was one of
these and the researchers successfully contacted the agent. The Swedish
agents or suppliers, Söderhamns Trävaror AB, Alveste, Petersen Scan-Baltic,
and R/G Kraft (also known as SweWood) were also identified but it was not
possible to contact these companies during the research period. Baltic
Woodproducts AB was sent a questionnaire but no answer was received and
no one answered at the telephone numbers listed for the company. Vemo
Holtz was identified by one respondent as an Austrian supplier of timber
from Russia. No additional information was found about the company. The
Estonian firm Timmertrans was also identified by one respondent but no
information was gathered on this agent.
◆ There is a number
of (other) smaller
import agents, which
account for a small
amount of the trade
volume
There is a number of other smaller import agents, which account for a small
amount of the trade volume. A representative for Thomesto Sverige AB stated that he has heard that some of the smaller Swedish import entrepreneurs
are operating out of the port of Lomonosov south and west of St.
Figure 8: Map Trade Flows
41
Petersburg. He did not believe that these agents were only buying timber of
questionable origin. These entrepreneurs are focusing primarily on the spot
market and following the needs of Swedish sawmills. However, the
Thomesto representative did point out that there may be a higher likelihood
that these small actors may be purchasing wood of unknown origin.49
49
Håkan Alexandersson, Thomesto
Sverige AB, personal communication,
2 September 2000.
42
IV.
◆ The issue of the
origin of the timber
coming to Sweden
from Russia and the
Baltic States is at the
heart of this inquiry
Origin and Impact of Trade
The issue of the origin of the timber coming to Sweden from Russia and the
Baltic States is at the heart of this inquiry. In an attempt to carry out environmentally and socially “responsible trade”, companies need to achieve
two levels of knowledge about the raw materials and products they are purchasing. The base level of information required is knowledge of the geographic origin, not only the region but also detailed knowledge down to the
actual forest management unit. In order to properly assess the impact of the
trade companies need to reach a second level of knowledge. This second
level can be characterized by knowledge of the forest type, species mix, age,
history, conservation values, as well as how the local forest management
and harvesting processes used impact these components. Socially responsible trade requires knowledge about the social conditions and impacts of
forestry operations and practices.
Figure 9: Steps Towards Responsible Trade
◆ To evaluate the
impact of the import
timber and wood
products companies
must ultimately
employ some sort of
certification or some
other kind of
assessment of the
effects of forestry
activities
There are different systems and mechanisms to trace or verify the geographical origin of timber and wood products. Some companies have developed internal systems as well as sending representatives to the origin countries and regions. Another possibility is to use a third party to verify company claims of origin. In order to objectively evaluate the impact of the
import of timber and wood products companies must ultimately employ
some sort of certification using a relevant standard or some other kind of
assessment of the effects of forestry activities. Certification or verification by
a third party increases the credibility of company claims.
43
Commitments to avoid specific methods or stay out of particular areas is
another approach used by companies operating especially in Russia. It may
be helpful as a means to avoid damage to identified areas or values.
However, this mechanism does not provide any information about the
impact on the area as a whole and specifically on areas were timber harvesting is taking place. It may even move damaging practices around to
other geographic areas, which are less well known. Voluntary commitments
to stay out of certain areas consequently do not replace the need for certification or verification of that forestry that is being conducted. This chapter
attempts to give a general overview of the actors, their levels of knowledge
with regards to the origin and impact, as well as systems and mechanisms
used to verify origin and impact of the timber and wood products import.
◆ Voluntary
commitments to stay
out of certain areas do
not replace the need
for certification or
verification
Geographical Origin and Impact of the Swedish Imports
The level of knowledge achieved by the Swedish companies purchasing timber and wood products from Russia and the Baltics is mixed. It is not possible to make generalizations across groups of actors about their behavior. It
can be said that as a result of this inquiry it appears that the largest import
agents (Lemo Agencies AB and Thomesto Sverige AB) have documented
systems making it possible to trace the origin of timber and wood products
to the harvesting site.
However, one may not automatically conclude that the other actors do not
have similar systems. The import agents were the only large actors visited
during the course of the research, which means that the most information
was received from these companies. Many of the forest industry corporations, as well as SÖDRA, active in the region and on the ground have a long
history of import from the area and also have developed systems for tracking the origin of their imports. Unfortunately the time and resource constraints of the survey did not allow for all systems to be researched and
detailed.
Of the 28 respondents who said they import Russian and Baltic timber and
wood products, 22 are not import agents. All of these, including the forest
industry corporations with activities on the ground in the Baltics were also
purchasing some timber and wood products through an import agent.
Eighteen of these 22 respondents gave some specific information about the
geographic region from which their timber came. For the most part this was
to the oblast or region level in Russia and city or region level in the Baltics.
(See table 9 in section on procurement area of the Swedish import for company specific replies on origin.)
44
The information given for the Baltics was less consistent than that given for
Russia. This may have to do with the few actors in Russia dominating the
Swedish import market. But it must also be considered that stating that
imports come from Vologda is no more precise than saying that imports
◆ It appears that the
largest import agents
have documented
systems making it
possible to trace the
origin of timber
originate from Estonia, considering the large area of some of the Russian
oblasts. Regarding the Baltics, some respondents simply said, “all over
Estonia”. Others responded that they were buying from Riga, meaning that
they were buying in the ports there. Those forest industry corporations with
operations on the ground for the most part specified specific cities and
regions in the Baltic countries. Several of the sawmills buying via agents
responded that they did not know or knew but would have to look up the
information.
Mechanisms used to gain knowledge
There are several mechanisms being employed by the Swedish companies
to verify origin and impact of their import from Russia and the Baltics to
Sweden. Some of these are more active and some are more passive.
These mechanisms include:
– trusting the standard and enforcement of local forest management
laws
– setting company environmental or purchasing policies as base
demands for impact of the timber extraction
– writing contracts between buyer and seller
– employing documented systems tracing timber to harvesting site
– trusting import agents’ activities
– visiting the supply sites
– limiting number of suppliers
– owning or having close business relations with local logging
companies
– contacting and having cooperation with environmental organizations
operating locally
– educating Russian and Baltic partners and suppliers
– using certification and third-party verification
◆ The majority of
those buying from
agents made
statements such as
“trust the agents”,
“follow the local
laws”, or “only buy
timber with the
State’s mark”
Trusting the standard and enforcement of local forest
management laws
In response to the questions included in the questionnaire on the system or
routine of verifying origin and whether or not they could guarantee that
they were not buying from areas of high conservation value, the majority of
those buying from agents made statements such as “trust the agents”, “follow the local laws”, or “only buy timber with the State’s mark”. When conducting follow-up interviews respondents gave the general opinion that the
laws and forest management institutions enforcing the law and issuing logging permits of the Baltic countries were trustworthy. Several respondents
made comments such as, “it is not easy to carry out illegal logging in the
Baltics.”
State control of the logging permits and registrations in the Baltics is also
considered strong. According to Thomesto Sverige AB, it is very difficult to
45
carry out illegal logging in the Baltics because of this state control.
Lithuania still has very dominant state control of the forests. In Estonia and
Latvia the state is relatively less dominant and there are more private owners, however the state still controls the logging permits and these are followed closely.50 There was some general feeling among company respondents that the on the ground situation in Russia was less certain than that
in the Baltic countries. These statements seem to be in direct contrast to
information from Baltic environmental organizations. A representative from
the Estonian Green Movement pointed out that “official” logging permits
could readily be purchased at any market.51
In response to the study, company representatives issued similar statements
specifically about Russia, “there are many laws dictating forest management
practices,” “the Russian laws dictate more stringent environmental forest
practices than in Sweden” and “the protected areas of Russia and the Baltics
are respected, ” “we can guarantee that we do not buy anything harvested
without a Russian logging permit.” However, a recent report published by
the Russian NGO Forest Club reports on the prevalence of logging permits
being issued for logging in violation of the documented Russian forestry legislation.52 Another factor when considering the ability for the Russian laws
to protect forest ecology is that Russian President Vladimir Putin has recently dissolved the Russian State Environmental Protection Agency, leaving
policy development and law enforcement in a vacuum.
◆ There was some
general feeling among
company respondents
that the on the ground
situation in Russia was
less certain than that
in the Baltic countries
◆ Some companies
and actors have
general documented
commitments and
policies but may lack
systems for
verification of these
official guidelines
50
2 September 2000.
51
Rein Ahas, Estonian Green
Movement, personal communication,
18 September 2000.
52
Setting company environmental or purchasing policies as base
demands
Several companies responding to the questionnaire refer to general company environmental policies or purchasing policies as base demands to suppliers. The company policies, many of which are not specific to Russia and
the Baltics, call for legal logging outside of protected areas, and even in
some cases call for no logging in old-growth forests.53 Some companies and
actors have general documented commitments and policies but may lack
systems for verification of these official guidelines. One example is the
Swedish National Sawmill Organization. The organization has a documented environmental policy for raw material procurement, including foreign
imports. The policy states that timber should not come from protected
areas, for example nature reserves, key biotopes, or old-growth forests. In
addition logging should be carried out with environmental considerations
at the level of the standards of FSC and PEFC.54 According to the director
of the organization, this policy is a general guideline for the member
sawmills but there is currently no system of verifying that members are following this policy.55
Håkan Alexandersson, Thomesto
Sverige AB, personal communication,
Alexey Morozov, ”Illegal Forest
Felling Activities in Russia”, Russian
Forest Club, www.forest.ru/eng/
publications/illegal/ 11 September
2000.
53
In the response received from
AssiDomän it was stated that they use
their “Forest management and nature
conservation guidelines for buying
wood” as a set of base demands for
suppliers. This document includes the
statement: “we will not buy timber
from ancient forest or from known key
biotopes whose survival would be
threatened by the felling of trees.”
54
National Sawmill Organization,
“Miljöpolicy för råvaruanskaffning”
(Environmental Policy for Raw
Material Procurement),
www.sagverk.se/nyheter/polmiljo.htm,
46
Writing contracts between buyer and seller
Written contracts between buyer and seller are also used to address issues
of origin and impact. It is common practice for companies to have written
contracts with suppliers of Russian and Baltic timber that state that timber
Visited 29 August 2000.
55
Sture Karlsson, National Sawmill
Organization, personal
communication, 1 September 2000.
is logged according to local laws and is not coming from protected areas.
Buyers reserve the right to cancel the contract if they find out that the
demands have not been met.56 The large import agents and larger actors
may for example have year long contracts with specific suppliers allowing
them to avoid basing large portions of their total import on the spot market.57 However, most respondents when asked stated that it is of course not
possible to guarantee 100% that these contracts or base demands are followed.
◆ Lemo in Russia,
and Thomesto, in the
Baltics and Russia,
have both developed
systems allowing
tracking of the timber
to the harvesting area
56
Tor Mantell, Västskog, personal
communication, 6 September 2000.
57
Håkan Alexandersson, Thomesto
Sverige AB, personal communication,
13 September 2000.
58
Employing documented systems tracing timber to harvesting site
One active mechanism is to set up specific systems for verifying timber origin down to the specific harvesting area. Lemo Agencies AB, in its operations in Russia, and Thomesto Sverige AB, in its operations in the Baltics
and to some extent in its Russian operations, have both developed systems
allowing tracking of the timber to the harvesting area. Below specifics of the
leading import agents’ systems are detailed.
Figure 10: Label Lemo Agencies
Lemo Agencies AB has an active system of timber tracking in Russia, which
it has developed in response from a demand from the large forest industry
and paper companies who make up a large part of its business. Lemo
Agencies AB has developed a system for tracking and verifying the origin of
the timber down to subdivision of the forest kvartal (harvesting site). All
loads from the trucks are labeled with a paper form that lists leskhoz (forest company), the lesnichestvo (forest district), kvartal, and specific harvesting area within the kvartal, and the type of timber and its length.
According to a Lemo Agencies AB representative, the company has invested
a lot of resources into the development of the system as well as the costs of
implementing and following this tracking system. This representative questioned the ability for other actors, relying heavily on the spot market in the
ports, to be able to track the origin of their timber purchases.58
Hans Persson, Lemo Agencies AB,
personal communication, 31 August
2000.
Lemo Agencies AB has its own port in St. Petersburg. Before entering their
port truck drivers with timber must go through a customs check point and
47
show all the necessary documentation on origin and declare the volume of
the load. Loads are labeled with the paper labels described above but also
each log is labeled with a color corresponding to the leskhoz of origin. This
is done to satisfy Russian customs demands. After the truck driver enters the
port area the timber is measured by Lemo Agencies according to the
Swedish timber measurement system, VMF standard. The driver then signs
off on this new measurement. Payment for the loads is given out the following week. Lemo Agencies is able to operate on this credit system because
they own the whole vertical chain of operation (except the forests themselves). Lemo Agencies is the only company that has its own complete port
in St. Petersburg.
Thomesto Sverige AB also has developed specific systems for tracking the
origin of timber. In Russia, Thomesto Sverige AB has information on rights
to owning and cutting the timber, oblast level, leskhoz, the registration
number for the logging permit, number for the logging area, the final date
of logging, the volume of the logging, the place the timber was loaded onto
the truck. They can trace the timber back to the exact place if asked but they
do not keep active track of all loads. According to a company representative,
of course there is the risk that they could be cheated. All papers can be falsified. Truck drivers transporting timber are responsible for filling in the
waybill. When the timber comes by train it is easier because you have the
railway cars that are single loads. By boat it can be more difficult to keep
the origins separate.59
In the Baltics where Thomesto Sverige AB operates its own logging companies all timber is marked with a number sourcing the timber to the specific
logging site. A computer tracking system is being developed.
Trusting import agents’ activities
Many respondents who are purchasing timber from import agents trust the
import agents to verify the origin and impact of the timber supply. Company
representatives responded that they have specifically limited their suppliers
to large established import agents because of this trust. A representative for
Lemo Agencies AB stated that the catalyst behind the development of the
company’s timber tracking system, detailed above, was the demands of the
large forest industry corporations for a system to verify origin of imports.60
48
Visiting the supply sites
Another active mechanism employed by Swedish companies to gain more
control over the situation is to visit the countries even when buying through
a “trusted” agent. In Russia where the Swedish forest corporations are primarily buying through the large import agents representatives from the corporations visit regularly to check on their products and the origin.61 Two of
the procurement companies for Swedish sawmill groups reported visiting
the region regularly. Västskog has one employee who spends about onethird of his working time on the ground in the Baltics and Russia checking
◆ Catalyst behind the
development of the
company’s timber
tracking system, was
the demands of the
large forest industry
corporations
59
Håkan Alexandersson, Thomesto
Sverige AB, personal communication,
2 September 2000.
60
Hans Persson, Lemo Agencies AB,
personal communication, 31 August
2000.
61
Ibid.
quality and origin.62 Several of the sawmills responding also said that they
had made trips to Russia and the Baltics. These trips are primarily to check
on the quality of the product to be purchased but also allow companies to
become acquainted with their suppliers and the on the ground situation.
Limiting number of suppliers
The large importers consciously limit their number of suppliers as a mechanism to control and verify origin. The number of suppliers has diminished
over the last few years. For example, when SÖDRA first started importing
from the Baltics they may have had as many as 35 to 40 suppliers, now they
have 3 or 4. Some of this also has to do with consolidation and organization within the logging companies in the Baltics.63 It must be noted that
fewer or larger suppliers is not automatically the black and white answer to
more environmentally and socially responsible imports. For example, in the
Baltics there is a large portion of small private forest owners. Some of these
owners bring their small volumes of timber directly to the ports to sell to
the large Swedish exporters.64 Simply excluding small scale, less formal
suppliers could keep small forest owners from involvement in the trade and
from potential sources of income.
◆ SÖDRA has limited
its suppliers from the
Baltics from as many
as 35 to 40 suppliers,
down to 3 or 4
◆ To reach
knowledge of the
impact a company
may own or have
close contact with
local logging
companies in the area
of procurement
62
Tor Mantell, Västskog, Personal
communication, 6 September 2000.
63
Sören Eriksson, Södra, personal
communication, 8 September 2000.
64
Ibid
65
Håkan Alexandersson, Thomesto
Sverige AB, personal communication,
2 September 2000.
66
Hans Persson, Lemo Agencies,
and Sören Eriksson, Södra, personal
communication.
Thomesto Sverige AB has also consciously limited its number of suppliers
and in the opinion of the company representative they seem trustworthy. In
Thomesto’s environmental policy it is stated that Thomesto reserves the
right to carry out random inspections of suppliers logging sites. When
speaking to a Swedish representative of the company, he was not sure that
these were carried out and suggested that a Thomesto office in St.
Petersburg be contacted.65
Owning or having close business relations with local logging
companies
Some companies are using different mechanisms, which have the potential
to assist in reaching knowledge about the second “impact” level. One mechanism to reach this second level of knowledge may be to own or have close
contact with local logging companies in the area of procurement. Both
Lemo Agencies AB, which operates its own Russian logging companies with
Russian employees and SÖDRA, which has made the conscious decision to
use experienced local logging companies in the Baltics, stressed that this
mechanism in concert with forest management legislation was a way of
ensuring that the specific forest values of the landscape could be taken into
consideration during harvesting.66
Educating Russian and Baltic partners and suppliers
Yet another mechanism to gain knowledge on the qualities of the forest supplying the import and thus address the issues of impact is to educate local
partners and workers in company approved environmental forest management practices. For example, Holmen Forest has had an ongoing education
program about Swedish environmental forestry practices. According to the
49
company this hopefully will bring the forestry practices in the east closer to
the environmental standards set in Western Europe.67 Thomesto Sverige AB
also has made a commitment to education and environmental training.
According to the company’s environmental policy logging personnel in
Estonia and Latvia were trained in environmental seminars both in the
Baltics and in Sweden. The Thomesto policy also sets a goal of 99% local
employment in its operations.68 It should be noted that direct export of
Swedish ecological concepts may not automatically lead to better forest
management in other countries and may in fact cause more problems. It is
important that Swedish ecological knowledge be integrated with local
knowledge within the local ecological and socio-economic context.
Contacting and having cooperation with environmental organizations
An additional mechanism being used by companies is contact and cooperation with environmental organizations working locally. Several companies
have been involved in the voluntary moratorium in Karelia and northwest
Russia.69 These areas are not completely relevant for the Swedish imports
because the majority is coming from areas outside of the moratorium (see
Table 9 in section on procurement area of the Swedish import). SÖDRA
reported of the cooperation its supplier, Telemark Wood, has had with
Russian Greenpeace, specifically regarding logging in the Cherepovets area
in Vologda. According to the company representative, this is one way for the
company to become familiar with the specific forest qualities locally.70
Thomesto Sverige AB’s wood procurement company in Latvia, Silva Ltd. has
on-going contact with WWF-Latvia. Thomesto Sverige AB currently does
not have any formal cooperation with environmental organizations in
Russia, Estonia or Lithuania although contact has been made regarding specific issues in the past.71
◆ It is important that
Swedish ecological
knowledge is
integrated with local
knowledge
◆ Very few companies
answered the question
about whether or not
they would demand a
similar level of
certification of the
Russian and Baltic
imports
67
verification and excursions in the
East), http://www.holmenskog.com/
Virke/vsid_4.html, Visited 9
September 2000. This website was
last updated in September 1998.
Updated information was not
obtained from the company.
68
Using certification and third-party verification
Certification is a mechanism, which can be used to verify that timber comes
from well-managed forests. The majority of those companies responding to
questionnaire were certified or planned to become certified according to
FSC, PEFC and/or ISO 14001 standards. Very few companies answered the
question about whether or not they would demand a similar level of certification of the Russian and Baltic imports.
Holmen Skog, “Miljörevisioner och
studiebesök I öst” (Environmental
“Environmental Policy of
Thomesto Sverige AB”, Thomesto
Sverige AB, August 1996.
69
The voluntary moratorium has
been called for by environmental
organizations. Companies signing on
to the moratorium officially pledge to
avoid logging and purchasing oldgrowth forests/forest products in
50
Of the Swedish companies with operations on the ground in the Baltics,
AssiDomän and StoraEnso answered that they plan to certify imports from
the Baltics. Rottneros AB is planning ISO certification of its Baltic operations. MoDo Paper AB expressed uncertainty due to its recent change in
ownership. Scaninge Timber answered it would not demand similar certification. Holmen expressed that it was not possible to effect certification
processes in other countries. The other forest industry corporations did not
answer the question. Lemo Agency AB’s Russian logging companies are participating in the WWF-Russia “Association of Environmentally Responsible
Timber Producers of Russia”.72 Lemo Agencies is also reportedly seeking a
Karelia and Murmansk.
70
Sören Eriksson, SÖDRA, personal
communication, 8 September 2000.
71
Håkan Alexandersson, Thomesto
Sverige AB, personal communication,
2 September 2000.
72
WWF-Russia, Brochure on
“Association of Environmentally
Responsible Timber Producers of
Russia”, no date.
FSC Chain of Custody certificate for its activities in Russia.73 A chain of custody certificate is not relevant until the holder has raw material from FSC
certified forest management. Korsnäs is reportedly working towards a system of third-party verification of the origin of its timber supply in Russia.
SÖDRA’s operations in Estonia and Latvia (SÖDRA Eesti and SÖDRA Latvia)
are certified according to ISO 14001. SÖDRA is in the process of transferring its own certification system to the PEFC system in Sweden. SÖDRA is
working in stages in the Baltic countries towards a future goal of third party
certification of its suppliers. The PEFC system will be used in the Baltic
countries.
◆ A number of FSC
certificates have been
issued in Russia and
Estonia and national
and regional
standards are being
developed
A number of FSC certificates have been issued to operations in Russia and
Estonia and national and regional standards are being developed. FSC certification is also in development in Latvia and Lithuania. PEFC, which has
recently been launched in Sweden, is in the early development stage in
Russia and the Baltic countries. Using certification as a mechanism provides
an opportunity, if developed, for Swedish companies to take on an active
role in ensuring that timber comes from well-managed forests and that the
level of impact is acceptable. The FSC certification system is supported by
environmental organizations as the only certification system currently
available that provides the standard and framework needed to meet their
demands for sustainable management of forest resources.74 Because of the
very early stage of the PEFC development it is impossible at this point to say
whether or not it will be a positive force in the future in ensuring ecologically sustainable management of forests in Russia and the Baltics. This
depends on the standards set and their implementation. According to environmental NGOs a balanced representation of environmental, social and
economic interests and competence is lacking in the PEFC system. The same
NGOs have not found that the PEFC scheme is adequate in ensuring proper
forest management.
Table 8 on the next page shows the company specific responses regarding
verification of origin and of impact of imports.
73
Hans Persson, Lemo Agencies AB,
personal communication, 31 August
2000.
74
“Statement of European NGOs on
Certification”, Taiga News, Taiga
Rescue Network, No. 27 May 1999.
“PEFC does not fulfill minimum
Some companies have developed specific tracking systems down to the harvesting area. Other companies employ mechanisms to increase their knowledge of origin and impact or use combinations of several of the instruments
presented above. Some of these mechanisms are passive and some are more
active and their effectiveness may vary. In the following two sections the
actual state of knowledge in relation to origin and impact of the Swedish
timber imports – i.e. the effectiveness of the mechanisms presented above –
will be analyzed.
credibility requirements”, NGO
statement, Antwerp, 8 April 2000 at
www.snf.se/trn/publications/ngostat
ements.html
51
Table 8: Questionnaire responses regarding verification of origin and impact
Company
Do you have a routine or system
Can you guarantee that you do
to verify the origin of the raw
not buy wood or products from
materials/ products?
ecologically valuable areas?
AssiDomän
use of contracts
act after base demand for
environmental forestry in
company’s environmental policy
Holmen Skog
use of contracts
can not guarantee 100%
Korsnäs AB
“can verify origin to geographic and no, the system is not fully impleadministrative level”
mented or fully covering all issues
Modo Paper AB
yes, have also used training and
trust rigor of local laws, carry out
long-term presence in for example, random checks on supplies
the Baltics.
Rottneros AB
use logging permits, try to buy from no
known suppliers
SCA Forest Products trust country laws, own site visits
StoraEnso
under development
Scaninge Timber AB trust supplier, own site visits
“can not be there everyday”
Älvsbyhus
trust supplier
Martinsons Trä KB no, site visit Estonia
Rolfs Såg
no regular imports
AB Möckelns Sågverk trust country laws
Kährs-WernerTrä AB no
no
Weda Skog
trust supplier, travel to Russia
every other month
Camfore AB
no, trust supplier
laws of country
Rörvik Timber AB trust suppliers, chose Lemo because
of its system of tracking
Västskog
visit regularly (1/3 of working year), not 100%
trust local laws
Skogsägarna Norrskog no
trust local laws
SÖDRA Skogsägarna use of contracts, cooperation with trust local forest management
local authorities
legislation; work towards future
goal of third party certification of
suppliers
Aranna OY
yes
yes
Lemo Agency AB
yes
“of course there is the risk that
one can be tricked”
ScanCompForest/
logging permits for all purchases
“can guarantee that they only
Uniforest
buy those with logging permits
issued by state laws”
Thomesto Sverige AB yes, in Baltics
no, but limit suppliers
Vänerved
in Russia no, in Estonia they buy
buy timber in Estonia with
concessions
State’s mark
note: not all respondents answered these questions, those who supplied no answer have been left out of
52
the table.
The Procurement Areas of the Swedish Import
◆ The vagueness of
the answers may
indicate that
knowledge available
in the offices of the
companies in Sweden
is incomplete
The 1997 report, Swedish Forest Industry Goes East called attention to the difficulties to verify origin of timber coming from Russia and the lack of systems for attempting to do so. Several respondents to the present study, with
longer experience in the region expressed a feeling that there had been
some improvements in this field. That it was becoming more feasible to
track timber back to its origin in Russia with some level of accuracy and
trustworthiness. Table 9 below shows the responses received from companies participating in the survey about their suppliers and the origin of their
import. Most companies were able to give some details about the geographic origin of the timber however the vagueness of the answers may
indicate that knowledge available in the offices of the companies in Sweden
is incomplete.
Table 9: Suppliers and Origin of Swedish Imports as Reported by Respondents
Company
Suppliers
Origin Russia
Origin Baltics
AssiDomän
AssiDomän Baltfor Ltd. Onega, “a little from “90% Latvia”
Kaliningrad”
Holmen Skog
Holmen Mets,
Vologda
Konda, Pernu, Islands,
Modo Paper, Thomesto
in Latvia and Lithuania
through Modo Paper
Korsnäs AB
would not give
Leningrad: Gatchina, Est.: Hiumaa, Saremaa
Luga, Tosna, Volosovo and some from mainland,
Latvia: Aizkraukles,
Jekabpils, Rezeknes,
Lithuania: No answer
Modo Paper
business secret
Leningrad, Vologda,
Vierga, Podporozhje,
Karleen, Kirosviky
Rottneros AB
Rottneros Baltic,
St. Petersburg
Ventspil, Riga,
Thomesto, StoraEnso,
Salaskripa
Lemo
SCA Forest Products business proprietary “not from Karelia”
Latvia
StoraEnso
business proprietary Pskov
“everywhere”
suppliers + own company
Scaninge Timber AB “one big supplier”
between Archangelsk
and Ladoga
Bäckhammers Bruk AB a Danish supplier
Peterson Scanproof refer to StoraEnso
Gotlands Flis
Korsnäs
“don’t know”
Älvsbyhus
“Vemo Holtz”
St. Petersburg
Enbuske Såg
no import
Martinsons Trä KB Norra Skogsägarna,
“don’t know”
outside Kogda
Timmertrans
Rolfs Såg
individual Swedish
“east of Kostomuksha”
entrepreneur
53
Company
Suppliers
AB Möckelns Sågverk R/G Kraft, Vänerved,
Petersen Scan-Baltic
AB Viking Timber
Estonian agent
Kährs-WernerTrä AB SÖDRA Eesti, Alveste,
Vänerved
Weda Skog
Lemo, Moelven, Esswell
Camfore AB
would not give
Rörvik Timber AB Lemo
Västskog
Thomesto, Esswell,
R/G Kraft/Swewood
Vida Timber AB
Lemo
Skogsägarna Norrskog Thomesto, Söderhamns
Trävaror AB
SÖDRA
Telemark, SÖDRA Eesti,
SÖDRA Latvia
Origin Russia
Karelia
Origin Baltics
“Estonia-all”
“don’t know”
“know, can’t remember”
“all over”
Leningrad, Ladoga/Onega
St. Petersburg region Perno in Estonia
refer to Lemo
Leningrad, Pskov,
Eastern Estonia
Ladoga/Onega
refer to Lemo
Leningrad
Hiumaa or Saremaa?
Vologda, Cherepovets Estonia: Tartu region,
Latvia: all over, port in
Liepaja, Lith.: northern
Aranna OY
Leningrad, Vologda
Esswell Int. AB
Leningrad
Lemo Agency AB
Lemo’s own logging in Leningrad, Pskov,
Estonia, islands
Russia
Novgorod, Komi
ScanCompForest/ from Russian logging Leningrad, Novgorod, Riga, “buy in the port”
Uniforest
firms
Pskov, Vologda plans
for Archangelsk, Komi,
Perm, Nizhni Novgorod
Thomesto Sverige AB Thomesto’s own logging Vologda, Leningrad, NW Latvia
companies in Latvia Novgorod, Pskov, and All over Estonia,
and Estonia + outside Tver
40% Tartu district
suppliers in Russia
Vänerved
they own an Estonian “don’t know, within
SE Estonia
logging company
100 km of St. Petersburg”
note: blank spaces indicate no answer received from the company
54
The Vologda and Leningrad regions are central in the Russian timber trade
to Sweden. The Norwegian import agents are also active in this area but
also in Archangelsk. Karelia is for the most part Finnish “territory” by way
geography and because of some sort of unspoken gentlemen’s agreement. A
representative from one of the large import agents estimates that of the
total exports from Russia to all the Nordic countries, 1 million m3 of this
comes from the Vologda region and its system of canals between lakes
Ladoga and Onega. The exact volume of the Swedish import from this
region is difficult to estimate. In general, timber is easy to access through
the Volga-Balt canal system. Many of the ships traveling in the canal can
make it over the Baltic Sea all the way to Sweden. The canal system is navigable during the “river season” from around May to November. Timber
originating from the canal system does not go through the ports in the St.
Petersburg and Vyborg region.75
◆ The Vologda and
Leningrad regions are
central in the Russian
timber trade to
Sweden. The
Norwegian import
agents are also active
in this area but also in
Archangelsk. Karelia
is for the most part
Finnish “territory”
75
Håkan Alexandersson, Thomesto
Sverige AB personal communication,
2 September 2000.
The Leningrad Oblast is another main source of timber coming to Sweden.
In the winter and early spring only the ports of Vyborg and St. Petersburg
are free from ice. These ports are supplied by the railroads taking timber
from areas east and south of the city of St. Petersburg. Almost all timber
coming from Russia to Sweden is imported through the import agents. Table
10 shows an estimation of the origin of the timber coming through
Thomesto Sverige AB’s port operation in St. Petersburg, Petrolesport.
Thomesto Sverige AB exports 75% of its Russian timber through
Petrolesport.
Table 10: Origin of Thomesto Sverige AB’s Import coming through Petrolesport
Leningrad
Novgorod
Pskov Other (Tver
Total
%
%
% +others)%
100%
Coniferous Saw logs
50
30
15
5
100
Coniferous Pulpwood
65
30
10
5
100[sic]
Birch Pulpwood
70
15
10
5
100
Source: Internal Memo, Thomesto Sverige AB, 2000
Lemo Agencies AB, the dominant import agent in Russia, is for the most
part using the railway for transport to its ports in St. Petersburg and Vyborg.
They are procuring timber from Leningrad Oblast, Pskov, Novgorod in
Starjie Russa (Zailmenskoje), and Komi just north of Syktyvkar. When presented with the maps published with the Taiga Rescue Network report, The
Last of the Last, showing the old-growth areas of Fenno-Scandia and
Northwest Russia, a representative from Lemo Agencies AB responded that,
“We are not in the red areas of your maps,” referring to the unprotected oldgrowth areas marked on the maps in red. According to Lemo Agencies AB,
60% of the timber they handle is coming from the Leningrad Oblast.76
Esswell International, another import agent, which is also predominantly
working in Russia, reported in response to the questionnaire that the origin
of all its Russian timber and wood products is the Leningrad Oblast.
Many companies were not willing to name their suppliers because of fear of
revealing business sensitive information. As can be seen in table 8 and 9, for
the most part, the Swedish companies responding to the questionnaire are
not sourcing timber from the current NGO old-growth moratorium areas in
Karelia and Northwestern Russia. It can also be seen that some companies,
although a limited number, actually report imports from Karelia,
Archangelsk and Komi. These areas are rich in old-growth forests and
include areas covered by the old-growth moratorium.
76
Hans Persson, Lemo Agencies AB,
personal communication, 31 August
2000.
The Baltic countries are a larger source of timber for Swedish companies.
Most companies importing are importing from both Russia and the Baltics.
One aspect of this is that the timber from the Vologda region coming
through the canal system is not available in the winter due to ice so companies may shift their procurement to the Baltics during the winter
55
months.77 The specific origin of the timber coming from the Baltics was less
easy to track. For the most part the responses from the questionnaires did
not give clear answers denoting specific concentration of timber going to
Sweden from one particular area. A number of respondents mentioned the
large islands just west of Tallin in Estonia as sources of their timber. More
research is needed to produce a more detailed map of the specific origin of
the timber from the Baltic countries being imported to Sweden.
◆ The specific origin
of timber coming
from the Baltics was
less easy to track
Very specific information about the origin of Thomesto Sverige’s timber
from the Baltics was obtained. Thomesto Sverige AB is the largest import
agent active in the Baltics. The company accounts for approximately 12% of
the total Swedish import from both Latvia and Estonia. Thomesto Sverige
AB procures around 40% of its timber from Estonia in the Tartu region. The
rest of the supply comes from throughout the country. Thomesto Sverige’s
joint owned sawmill, AS Toftan, is located in the Tartu region. Much of the
timber procured from this area stays in the country supplying the Toftan
mill, this accounts for the dominance in wood procurement from that region
of Estonia.78
Thomesto Sverige AB’s logging and wood procurement in Latvia is concentrated in the northwest region of the country. Thomesto Sverige AB operates primarily through its subsidiary Silva Ltd. headquartered in Babite, outside of Riga. The logging takes place almost entirely within 150 km radius
of their joint-owned Vika Wood Ltd. sawmill located in Talsi. The logging
districts used by Silva are: Varme, Vainode, Zvarde, Skrunda, Aizupe, Biksti,
Bene, Benkava, Alsunga, and Ugale. Silva Ltd. has long term concessions on
all the areas except Ugale, which is an auction territory.79
On completion of the study, it appears that the large established Swedish
import agents and forest industry corporations buying timber and wood
products from Russia and the Baltics have knowledge of where their raw
materials come from and in many cases if asked, could source products
down to the harvesting area. This information is also available to their customers in Sweden. The smaller import agents and sawmill companies seem
to have more limited knowledge about the origin of their imports.
Impact of the Swedish Import
56
Knowledge of the geographic origin of the Swedish import seems to have
improved over the last years and the larger actors have developed or are
developing systems to track the origin of imports. Knowledge of the environmental impact of forest management in Russia and the Baltics supplying
the Swedish import, on the other hand, seems limited across the sector.
Many actors surveyed agreed to the need for and the benefits of gaining
more complete knowledge about the origin and impact of the timber
imports. In working towards improved knowledge actors are employing different mechanisms as were presented in the section above. In order to prop-
◆ Knowledge of the
environmental impact
seems limited across
the sector
◆ Many actors
agreed to the need for
and the benefits of
more complete
knowledge about
origin and impact
77
Sören Eriksson, SÖDRA, personal
communication, 8 September 2000.
78
Håkan Alexandersson, Thomesto
Sverige AB, personal communication,
2 September 2000.
79
Håkan Alexandersson, Thomesto,
Sverige AB, personal communication,
2 September 2000.
erly assess the ecological impact of imports to Sweden more knowledge is
needed about: forest type, species mix, age, history, conservation values, as
well as how the local forest management and harvesting processes used
impact these components. Socially responsible trade requires knowledge
about the social conditions and impacts of forestry operations and practices.
◆ Much of the forests
in the Leningrad and
Vologda region are
highly productive,
biologically diverse
and include high
conservation values
◆ The ecological
impact is impossible
to assess on basis of the
available information
◆ When striving for
responsible trade the
social impact must
also be considered
and addressed
80
Sture Karlsson, National Sawmill
Organization, personal communication,
Some respondents questioned the framework of the discussion about protecting forests in Russia, which is being driven by the environmental movement. According to a representative for the National Sawmill Organization
there is the risk that we go into the area wearing our Swedish or Western
European glasses and that we can not see that by using our notions of, for
example, key biotope protection, that we stifle needed development of the
forest industry and the local people’s rights to develop that industry. This
action can cause even more difficult problems in the future for the Russian
forests and forest communities.80 When asked about the legitimacy that the
wood imported have a clear point of origin with possibility for verification,
the representative stated that he was not familiar enough with the trade to
make a statement. “Of course logging in national parks and such should
understandably not be allowed” but there are large areas of forest in Russia.
“Current logging levels in Russia are a drop in the ocean” and the forests
should be utilized, said the representative.81
As was noted in the section on the procurement area of the Swedish import,
the majority of the timber imported to Sweden is sourced outside of the
areas of the voluntary moratorium in Karelia and Northwest Russia.
However, this does not mean that the Swedish import outside of the moratorium areas is completely free of timber originating from old growth or
high conservation value forests. Much of the forests for example in the
Leningrad and Vologda region, which would not be classified ”old growth”
in the traditional definition are highly productive, biologically diverse and
include high conservation values.82 Knowledge about the values of these
forests, which form core areas of Swedish timber imports, is generally poorly documented when compared to those maps available for Karelia and the
northern areas of European Russia. Consequently, ecological impact is
impossible to assess on basis of the available information. It should also be
noted that as was presented in Table 9, a number of companies responding
to the survey have reported timber sources from areas which are rich in old
growth forests, such as Karelia, Archangelsk, and Komi. Further research
and inquires are however needed in order to find out whether these activities actually involve logging of old-growth or high conservation value
forests.
1 September 2000.
81
Ibid.
82
Karin Lindahl, et. al, Swedish
Forest Industry Goes East, Swedish
Society for Nature Conservation,
1997. pp. 33-34.
When striving for responsible trade the social impact of the trade must also
be considered and addressed. This requires knowledge of the social qualities and issues in the countries of origin. Currently the Swedish trade is
based on resource extraction with little value-added production staying
with the local communities. There is social vulnerability on both sides of the
57
sea. Swedish roundwood imports do not stimulate value-added production
on the Russian and Baltic side. However, one can also view the increased
Swedish involvement in the region, especially when operating companies in
the resource origin countries, as a boost for the overall economy of that
country. In addition there is the potential impact on the Swedish industries
and communities. Growing reliance on imported timber and wood products
may replace forest sector activity in Sweden. The overall social impact of an
increasingly consolidated timber market in the Baltic Sea region must be
considered in the wider perspective when trying to assess the social impact
of Swedish imports from Russia and the Baltics.
58
V.
◆ Economic studies
indicate that Swedish
companies will
continue to find
imports a viable
source for raw
material needs
◆ Efforts need to be
made to regulate the
environmental and
social impact of this
trade
◆ Lemo and
Thomesto Sverige
have their own
logging companies in
Russia and the Baltics.
Many of the forest
industry corporations
have set up their own
wood procurement
companies in the
Baltic countries
83
As mentioned above it is not
possible to separate out what
portion of the trade reported by the
forest industry corporations came
through import agents and which
portion came through the
companies’ own procurement. Also,
the numbers presented are not exact
numbers for 1999 trade levels. Some
Analysis and Conclusions
The total Swedish import of timber and wood products from all countries
was more than 11 million m3 in 1999 and this is expected to rise in 2000.
The imports of timber to Sweden from Russia and the Baltic countries have
increased by 70% between 1995 and 1999. Total imports from Russia and
the Baltics in 1999 was more than 9 million m3. This accounts for more than
80% of the total import for timber and wood products to Sweden. Imports
are in part driven by the market price for timber, the dollar exchange rate,
and the production levels of the Swedish industry. Future trends in the
import levels are difficult to forecast however economic studies indicate
that Swedish companies will continue to find imports a viable source for
raw material needs. What can be stated firmly is that the increase in
dependence by the Swedish industry on Russian and Baltic timber is undeniable. This along with the conservation values at stake in Russia and the
Baltic states, and the investments being made in ecological improvements
in forest management in Sweden, give weight to efforts to regulate the environmental and social impact of this trade.
The timber trade between Sweden and Russia and the Baltics has four primary actors: forest industry corporations, independent sawmills, forest
owners associations, and import agents. Of these, the major actors are the
import agents and the forest industry corporations. The import agents
responding to the study reported imports of almost 4.1 million m3 annually from Russia and the Baltics. The forest industry companies responding
reported imports of almost 7 million m3.83 The independent sawmills
reported almost 1.1 million m3 coming from Russia and the Baltics. The central and southern sawmills are the predominant importers within the independent sawmill industry. The forest owners associations, with the exception of SÖDRA, which is importing over 1.4 million m3 from Russia and the
Baltics, are minor actors in the trade. All respondents importing timber and
wood products who were not classified as import agents were buying some
timber through import agents either in Russia or in the Baltics or both.
respondents gave 1999 figures,
some estimates of past trade and
some projections for 2000. These
numbers intend to give a picture of
the dominance of the actors and
their current general level of import.
The larger import agents, such as Lemo Agencies AB and Thomesto Sverige
AB have their own logging and wood procurement companies in Russia and
the Baltics respectively. Many of the forest industry corporations have set up
their own wood procurement companies in the Baltic countries. Korsnäs AB,
Holmen, and StoraEnso, in addition to wood procurement companies also
59
have logging companies in the Baltics. The independent sawmills are
importing through import agents and the forest industry corporations or
SÖDRA. Increasingly in Sweden many small independent sawmills are consolidating their wood procurement into single larger wood procurement
companies. Some of these companies are relatively large importers of timber from Russia and the Baltics.
The nature of the trade has changed since 1997 when the study, Swedish
Forest Industry Goes East was published. The number of actors, especially
middlemen involved in the trade seems to have decreased. Also in 1997
Swedish forest industry corporations were more established on the ground
in Russia owning logging or forest industry operations. Most of these corporations have pulled out of logging and processing activities in Russia and
are concentrated on imports of roundwood through the import agents. With
a diminished presence on the ground in Russia, the Swedish forest industry
corporations along with SÖDRA and the import agent, Thomesto Sverige
AB have established themselves on the ground in the Baltics primarily in
Estonia and Latvia.
◆ Most of the
corporations have
pulled out of logging
and processing
activities in Russia
The changes in the nature and concentration of the Swedish involvement,
especially in Russia, over the last few years are important in the discussion
about the ecological and social impact of the trade. Reliance on import
agents and middlemen in Russia rather than logging operations in direct
control of, for example, the Swedish forest industry corporation, may make
the production chain less transparent. It may also prove more difficult to
obtain accurate information about the origin of timber and the impact of
logging if many actors are involved. Whether or not the reliance on imports
through import agents is indeed less favorable from an ecological and social
perspective does depend of course on the practices employed by the import
agents and suppliers in question.
A positive development in the trade is that most importers seem to employ
a limited number of well established agents who have made efforts towards
improving their level of knowledge about origin and impact of their trade.
However, it must be considered that, a shift from Swedish investment in
production and processing to imports of roundwood may prove to be less
beneficial socially for communities in origin regions and countries. The
increased on the ground presence of the Swedish companies in the Baltic
countries may improve the transparency and ability to follow timber and
wood products from forest to finished product produced in Sweden. In addition some companies have made efforts to establish close connection with
local logging companies or employ local people in company owned logging
companies, increasing trustworthiness but also creating greater possibilities
for continued local employment.
60
In 1999 Sweden imported a little over 3.0 million m3 of timber and wood
products from Russia. Vologda and Leningrad Oblasts in Russia are the cen-
◆ A shift from
Swedish investment
in production and
processing to imports
of roundwood may
prove to be less
beneficial socially for
communities in origin
regions and countries
tral source of timber for the Swedish market. Novgorod, Pskov, Komi,
Archangelsk, Tver, and Karelia also supply the import but to a far lesser
extent. Of the Baltic States, Latvia is the largest supplier of timber and wood
products (3.4 million m3 in 1999) followed by Estonia (2.2 million m3 in
1999). The trade with Lithuania was less than 500,000 m3 in 1999. The
source of the Swedish import from the Baltic States does not seem to be
concentrated in any specific regions in the respective countries.
◆ The level of
knowledge that the
actors have about the
timber remains for
the most part at the
first level of
knowledge, that of
geographic place
names
◆ It seems as if the
largest and most
established import
agents have the most
developed systems in
place to track and
verify the origin of
imported timber
There are two steps of knowledge that companies must achieve to move
towards “responsible trade”. The two levels are: knowing and verifying geographic origin of imports and the second is, knowing and verifying the
impact of the forest management supplying the import. The level of knowledge that the actors have about the timber and wood products they purchase remains for the most part at the first level of knowledge, that of geographic place names. The detail of this knowledge of origin reported by the
companies is mixed across the actors and the sector. The established import
agents and most forest corporations can provide information about the specific harvesting area and this information is available to their customers in
Sweden. The large import agents responding to the inquiry have different
internal systems, which can track and verify origin. The smaller companies
appear to have less established systems for tracking and verifying timber
purchases. Some companies seem to have very limited or no knowledge
about the origin of their imports. They do however seem to represent a relatively small portion of the overall trade.
In Russia, Lemo Agencies’ system for tracking its timber to the harvest site
seems the most active and advanced. The active system employed by Lemo
Agencies AB was developed as a response to the demands of the major customers in Sweden, primarily the large forest industry companies making
paper. A representative of Lemo Agencies AB expressed doubts about the
other actors in Russia without similar systems and their ability to know
where their timber is coming from. Thomesto Sverige AB also has a tracking system in Russia, which can give specific information on origin and can
provide specific information down to the harvest site if asked. ScanComp
Forest/Uniforest relies on the state logging permits. Korsnäs AB reportedly
also has a tracking system and routine in place in Russia. In the Baltics,
Thomesto Sverige AB, which is the largest import agent in the Baltics, has
an internal marking and registration system for all timber, which can track
each log to the harvesting site. The small import agents did not report the
use of an established system for tracking timber. From the information
received, it seems as if the largest and most established import agents have
the most developed systems in place to track and verify the origin of imported timber. It should however be noted that other companies may have similar systems which were not thoroughly researched during this study.
Thomesto Sverige AB and the other import agents, as well as the forest
industry corporations procuring timber in the Baltic countries rely on the
61
state system of issuing and enforcing logging permits to verify origin and
impact. As was mentioned in the section above on mechanisms used for
gaining knowledge on the origin and impact of imports, a representative of
the Estonian Green Movement questioned the trustworthiness of the Baltic
state systems for verifying the origin and impact of logging in the region. It
was beyond the scope of this inquiry to assess the legitimacy of these tracking systems for verifying origin or the veracity of the claims that the state
systems in the Baltic countries are trustworthy.
In the Swedish offices of the companies contacted, across all actor groups,
there seemed to be very little knowledge, if any about the qualities of the
forests from which the timber is coming and the impact of the forest practices, both in the Baltics and Russia. The social impact of the Swedish
import is also important to keep in the debate. This is relevant in both the
country of origin and in Sweden. Little knowledge about the social impacts
of the Swedish import seems to exist among actors today.
Those companies, both large and small, buying through agents or other
companies rely on the systems of the agents or the laws of the country of
origin to verify the impact and origin of their import. The import agents also
rely on the laws of the countries and the workers on the ground to verify
origin and that environmentally valuable areas (according to local forestry
laws) are not logged. As long as the national legal systems constitute such
a central part of the importers strategy to ensure timber imports from
appropriate areas and operations, verification that forestry legislation is
appropriate and enforced is necessary for ensuring responsible trade. A
recent reports by Russian NGOs highlights the fact that there are many cases
in which licenses and permits are issued for logging in violation of the documented Russian forestry legislation.84
Many respondents refer to their company environmental and/or purchasing
policies as means to express core demands. Other mechanisms employed
include site visits, written contracts with suppliers, limiting the number of
suppliers, using local logging companies and expertise, educating partners
operating on the ground in the countries, and cooperating with environmental organizations. It was explained that regardless of the mechanism
used, there is always the risk to be fooled and it is not possible to guarantee 100% that all demands have been met and all rules have been followed.
62
Despite this risk, the mechanisms mentioned above are all in fact useful
steps in the effort to move towards “responsible trade”. However, they are
not sufficient to exclude negative ecological and social impacts. Some
Swedish companies have committed to the voluntary old-growth moratorium. It must be noted that most Swedish actors are operating outside of the
regions where these moratorium areas have been established. This does not
mean that old growth and forests of high conservation value are not affected by the Swedish import. On the one hand, some respondent companies
◆ In the Swedish
offices of the
companies contacted
there seemed to be
very little knowledge,
if any about the
qualities of the forests
from which the timber
is coming
◆ The mechanisms in
place are useful steps
to move towards
“responsible trade”,
but are not sufficient
to exclude negative
ecological and social
impacts
84
Alexey Morozov, ”Illegal Forest
Felling Activities in Russia”, Russian
Forest Club,
www.forest.ru/eng/publications/illeg
al/. Visited 11 September 2000.
◆ Companies
sourcing from
Leningrad and
Vologda regions, are
operating in forest
areas from which
little data is available
regarding the
ecological qualities of
the forest and
location of key
biotope areas
◆ Swedish
companies may play
an important role in
speeding up the
development of
certification
◆ The actual
ecological and social
impact of the Swedish
import cannot be fully
measured at this time
reportedly source their timber from Karelia and between ”Archangelsk and
Ladoga”. These regions have known and mapped old growth and high conservation value forest and moratorium areas have been established. More
research needs to be done to establish the ecological impact of logging activities in these areas. Companies reporting their sources outside of the moratorium areas, for example in Leningrad and Vologda regions, are operating
in forest areas from which little data is available regarding the ecological
qualities of the forest and location of key biotope areas. It seems that little
data is available about the location and qualities of old-growth forests and
high conservation value forests in the Baltic States. Also responses to the
survey did not yield very specific information about the exact areas of origin of the Swedish import from the Baltics. This makes it difficult to assess
the ecological impact of the Swedish actors at this time. More research in
cooperation with Russian and Baltic partners is needed.
Certification is another mechanism, which may give Swedish companies the
ability to gain knowledge and verify their impact in the origin countries.
However, certification schemes and processes are not fully developed at
present in Russia and the Baltic countries making it difficult to rely on this
mechanism to mediate the impact of imports at this time. The Forest
Stewardship Council (FSC) has issued a number of certificates in Russia and
one in Estonia and this number is likely to increase. Swedish companies
may play an important role in speeding up the development of certification,
by taking an active part in standard development processes in cooperation
with national stakeholders and by demanding certified raw materials.
This report provides information about the timber trade from Russia and the
Baltic States to Sweden: the actors, their activities and general trends of the
trade. The report also makes an attempt to evaluate the level of knowledge
of origin and impact of the trade among the actors involved as well as the
mechanisms used to gain this knowledge. The actual ecological and social
impact of the Swedish import of timber and wood products from Russia and
the Baltic States however cannot be fully measured at this time. The current
level of knowledge obtained by the actors involved in the import does not
allow them to sufficiently evaluate the ecological and social impact of their
activities and on the ground evaluations of impact in the countries of origin
are outside the scope of this study. Considerable efforts, especially by some
companies, have been made to increase transparency and control of the
supply chain, to increase knowledge about the origin of the timber as well
as to gain knowledge of the impact of the import and to mediate potential
negative effects. However, additional efforts and improvement must be
made if these companies want to ensure that their activities are not damaging to the forests and communities of the countries of origin. Companies,
which have not yet reached the first level of knowledge about the origin of
their imports urgently, need to do so in order to move towards a more
responsible trade
63
Guidelines for responsible timber
trade with the Baltic States and
European Russia
These guidelines have been developed and undersigned by the
environmental NGOs listed at the bottom of this document
Introduction
There is a clear trend that timber imports from Eastern European countries,
including Russia, into Western European countries in general, and Nordic
countries in particular, are growing. Russia and the Baltic States are increasingly important suppliers of timber and wood products to the Nordic countries. For instance, Sweden imported 11,3 million cubic meters in 1999,
which was almost seven million cubic meters more than in 1990. Eightyone percent of Sweden’s total import of timber and wood products came
from the Baltic States and Russia. Economic studies indicate that Swedish
companies will continue to find imports a viable source for raw material
needs.
For Russia, the current economic model of forest use, with its focus on the
export of raw materials and logging in primary forests cannot provide longterm economic growth and prosperity for the region. This model, although
it may be represented as including ecological considerations, in reality
destroys old growth forests and other high conservation value forests, which
have now become one of the most threatened natural ecosystems.
In the Baltic States forests and forestry play and important role for the
national economy. Those forests also harbour important biodiversity values.
The forest sector has undergone drastic changes over the last years, resulting in new ownership structures and institutions. The knowledge of sustainable forest management amongst forest owners and the enforcement of
existing regulations for the forest sector however, is showing clear weaknesses.
64
Many of the Nordic forestry companies using imported timber from Russia
and the Baltic States have made considerable attempts to improve environmental safeguards in forest management and practices at home. Some of
the companies are FSC-certified or plan to obtain certification under the
FSC certification scheme for forestry operations in their home-countries.
Many of these companies have a fairly good knowledge of the origin of the
timber (whereas a lot of smaller companies don’t). However, at present,
most of these companies have little or no information about the impact of
the forest management supplying the trade. This lack of knowledge on the
ecological and socio-economic impacts of their imports (and in some cases
of the origin of the imports as well) may bring companies in the position of
contradicting their own purchasing policies and undermining their credibility.
* High Conservation Value Forests
are forests that possess one or more
Companies could play a positive role in the development of sustainable forest management and forest protection in exporting countries if importing
companies would: apply comparable standards in countries of origin as they
do at home, set clear ecological and social demands for forest management
supplying imports, and invest in the implementation and auditing of good
forest management practices.
of the following attributes:
a) forest areas containing globally,
regionally or nationally significant :
concentrations of biodiversity values
(e. g. endemism, endangered
species, refugia); and/or
large landscape level forests,
Given the need for regulation of the environmental and social impact of the
trade, companies are urged to adopt guidelines for responsible timber trade
as presented below. One of the underlying principles of these guidelines is
that companies bear prime responsibility for knowledge (and verification)
of origin of the timber and wood products and impact of the forest management supplying this timber and wood products.
contained within, or containing the
management unit, where viable
populations of most if not all
naturally occurring species exist in
The guidelines are of a stepwise approach. The guidelines are formulated in
general terms. The guidelines (and their implementation) should be adapted and further refined to meet national or regional circumstances.
natural patterns of distribution and
abundance
b) forest areas that are in or contain
rare, threatened or endangered
ecosystems
c) forest areas that provide basic
services of nature in critical
situations (e. g. watershed
protection, erosion control)
d) forest areas fundamental to
meeting basic needs of local
communities (e. g. subsistence,
health) and/or critical to local
1. Companies have an active policy and take active measures to
avoid using timber of the following categories:
• Timber that has been illegally harvested;
This applies to the legality of harvesting methods, sources, and timber
trade, and the fulfilment of national regulations covering fees and other
rules.
For Russia this means that all requirements of the laws of the Russian
Federation On Environment Protection, On Protected Nature Areas, On
Environmental Impact Assessment, On Wildlife, Forest Code and Water Code
must be fulfilled. All contradictions between the requirements of special instructions or other administrative regulations and the above laws
shall be considered in favour of these laws.
communities’ traditional cultural
identity (areas of cultural,
•
Timber from areas where there is a clear demonstration of violation of
traditional, customary or civil rights, or of serious extant disputes with
indigenous peoples or other social stakeholders, involving confrontation or violence.
•
Timber from old-growth forests and other high conservation value
forests*, unless FSC certified
Note that for Russia no logging at all should take place in areas iden-
ecological, economic or religious
significance identified in cooperation
with such local communities)
(source: Forest Stewardship Council,
Report of the Principle 9 Advisory
Panel, Draft Recommendation
(version 1), 2000; p.19)
65
tified by Russian NGOs; these include large tracts of old-growth forests
– roadless intact natural ecosystems – greater than 50,000 ha.**
2.
Companies have active and transparent tracking mechanisms to
ascertain and verify the geographic origin of imports
Companies will monitor the origin of materials used in the products
imported with sufficient geographical resolution to ensure compliance
with their policy; in most cases this is down to the forest management
unit. If it proves impossible to identify the origin of some of the timber,
the company will switch to timber that can be sourced with confidence.
The companies will also describe the system for verifying and monitoring of the sources, the proportions of timber which have not yet been
verified, and the steps being taken to replace timber of unknown origin. The system for verifying and monitoring the origin of timber will
be independently verified.
3.
Companies ensure that timber comes from well-managed sources
and introduce methods to assess the environmental and social
impacts of forest management supplying the trade.
The results of these assessments will be publicly available. If the assessment proves that the timber comes from a poorly managed forest,
which cannot be altered within reasonable time, the company will
replace it with timber that can be sourced with confidence.
It should be noted that this third step is very close to step number four,
which calls for the FSC-certification of forest management. Therefore
this step may include measures that feed well into step number four
such as having an FSC pre-assessment done by the supplier.
4.
Companies should use timber from FSC certified forests only.
Companies should actively promote and support FSC-certification of
the forest management supplying the trade. Companies request from
their suppliers to certify their forests according to FSC-standards.
November 2000
66
WWF Sweden
Friends of the Earth Sweden
Fältbiologerna
Swedish Society for Nature Conservation
WWF Latvia
Estonian Fund for Nature
Biodiversity Conservation Centre, Russia
Forest Campaign of Social-Ecological
Union International, Russia
WWF Russia
Greenpeace Russia
WWF Norway
Friends of the Earth Norway
Finnish Nature League
WWF Finland
Friends of the Earth England, Wales and
Northern Ireland
Friends of the Earth the Netherlands
** Position of Non Governmental
Organisations on Key Criteria of
Sustainable Forestry in Russia, as
adopted in Pushkino, July 11, 2000;
available at www.forest.ru
Source List
•
•
•
•
•
•
•
•
•
•
Askenov D., M. Karpachevskiy, S. Lloyd, A. Yaroshenko, The last of the
last: The old-growth forests of boreal Europe. Taiga Rescue Network,
Jokkmokk, 1999.
Department of Forest Production (Institution för virkeslära), Swedish
University of Agricultural Sciences-Ultuna, Sawmill Inventory 1995,
Uppsala 1996.
Lindahl, Karin, et. al., Swedish Forest Industry Goes East, Swedish
Society for Nature Conservation, 1997.
Morozov, Alexey, Illegal Forest Felling Activities in Russia, Russian Forest
Club, www.forest.ru/eng/publications/illegal/. 11 September 2000.
Nilsson, Mats, Five Essays on Forest Raw Materials Use in an
International Perspective, Doctoral Thesis, Department of Business
Administration and Social Science, Division of Economics, Luleå
University of Technology, 2000:13.
PEFC does not fulfill minimum credibility requirements, NGO
statement, Antwerp, April 8, 2000. Available at www.snf.se/trn/
publications/ngostatements.html
Statement of European NGO’s on Certification; Taiga News, Taiga Rescue
Network, No 27, May 1999.
Swedish Forestry Board, Annual Forest Statistics Book 1980, 1990,
1991, 1992, 1993, 1994, 1997, 1998, 1999, 2000. The most recent
book is available at www.svo.se
Swedish Timber Measurement Agency, Summary of Total Timber Use
and Production of Forest Products (Sammanställning over total virkesförbrukning och production av skogprodukter) Region 1, 2, and 3 & 4.,
May 2000.
Thomesto Sverige AB, The Environmental Policy of Thomesto Sverige AB,
August 1996.
Company Websites used:
www.sca.se
www.holmenskog.com/Virke
www.lemo.ru
www.sodra.se
Personal Interviews were carried out with:
Hans Persson, Lemo Agencies AB, 31 August 2000
Håkan Alexandersson, Thomesto Sverige AB, 2 September 2000
Sture Karlsson, The Swedish Sawmill Organization, 1 September 2000
Along with the data gathered from the questionnaires and telephone
follow-up calls, longer telephone interviews in connection with the
67
questionnaire and seeking general information were carried out with:
Sören Eriksson, Södra Skogsägarna
Henrik Asplund, Såg I Syd
Tor Mantell, Västskog
Sven Lundell, LRF-Skogsägarna (Swedish Federation of Farmers, Forest
Owners)
Ingemar Eliasson, Rottneros AB
Appendix 1
Summary of results of 1998 Fältbiologerna inquiry
Company
volume
type of product
origin
STORA
business secret
pulpwood spruce,
“SW of Petersburg,
pine, and birch
Pskov, Ladoga region”
AssiDomän Skog &
40,000 m3 fub
pulpwood, spruce,
—
Trä AB
pine and birch
Rottneros AB
25,000 m3 fub
sawlogs, pine and
Leningrad and Pskov
birch
regions
Mellanskog Ek För
30,000 m3 fub
sawlogs, pine
—
MoDo Skog
200,000-300,000 m3 pulpwood, pine and Vologda, St. Petersburg,
birch
Novgorod, Pskov
SÖDRA Skog
250,000-300,000 m3 pulpwood, pine and Vologda
birch
3
AB Forssjö Bruk
5000 m fub
sawlogs, spruce and —
pine
Korsnäs AB
250,000 m3 fub
pulpwood, pine and birch
Leningrad
fub = unit for timber volume: cubic meter solid volume exclusive bark
68
68
Appendix 2: Questionnaire
Questions to Forest Industry Companies
Company:
Contact Person:
Telephone:
Email:
Type of Company:
Annual flow of raw materials:
1.
❏
2.
❏
❏
Does your company buy timber or wood products from Russia?
❏ No
Does your company buy timber or wood products from the Baltic countries?
Yes
❏ No
from Estonia
❏ from Latvia
❏ from Lithuania
Yes
If you answered yes to 1 or 2 please answer the following questions, please differentiate
between the different countries of origin.
3.
How much do you buy and of which type of raw material/product? Specify volume
for each country of origin.
Raw Material/Product
Spruce pulpwood (massaved)
Spruce saw logs (sågvirke)
Pine pulpwood (massaved)
Pine saw logs (sågvirke)
Birch pulpwood (massaved)
Birch saw logs (sågvirke)
Finished Products (specify product type)
Other (specify)
Volume
Country of Origin
5.
Who are your suppliers (wholesalers as well as Russian and Baltic
suppliers)?
6a.
What is the geographical origin of the raw materials and products your company
purchases? Please specify how much of the import comes from the respective areas. If
from Russia please specify to the oblast level and more specifically if possible.
6b.
From which type of forest does your raw material/product come
(plantation/secondary forest/“old growth”)?
6c.
Do you have a routine or system to verify the origin of the raw
materials/products?
7.
Can you guarantee that you do not buy wood or products from
ecologically valuable areas (future nature reserves, areas with threatened species, etc.)?
8.
What end use do the raw material/products have in your company?
69
9a.
Does your company have a documented environmental or
procurement policy which includes relevant environmental and social aspects concerning
your Russian and Baltic import?
❏ Yes
❏ No
9b.
If yes please enclose a copy or describe the general goals and
methods.
9c.
What steps have been taken to implement the goals described above (education,
investments, changes in routine/procedures, etc.)?
9d.
What further steps do you plan to take in the next five years?
10a.
Is your Swedish production/raw material certified? Totally/partially/not at
all/planned?
10b.
Which certification system do you use? (FSC, PEFC, other)
10c.
If yes do you plan to or do you already demand the same of your Russian and Baltic
imports?
11a.
Are you aware of the voluntary moratorium concerning logging in and purchasing of
old-growth forest/forest products in Karelia and northwest Russia?
❏ Yes
❏ No
11b.
If yes, has your company signed on to, or does your company plan to sign on to this
moratorium?
❏ Yes
❏ No
11c.
If not, why not?
12.
What difficulties or potential problems do you find in trying to achieve your goal of
operating in an environmentally and socially responsible way when doing business in Russia
and the Baltics?
13.
What measures (legislation, economic, social, etc.) do you think may be appropriate
in order to be able to work in a socially and environmentally responsible way in operation in
and trade with Russia and the Baltics?
70
70
Appendix 3
Companies contacted during the survey
The following companies responded to the questionnaire reporting imports from
Russia and the Baltic States:
Forest Industry Corporations
AssiDomän
Holmen Skog
Korsnäs AB
Modo Paper AB
Rottneros AB
SCA Forest Products
StoraEnso
Scaninge Timber AB
Bäckhammers Bruk AB
Independent Sawmills
Melltorps Såg
Gotlands Flis
Älvsbyhus
Enbuske Såg
Martinsons Trä KB
Rolfs Såg
AB Möckelns Sågverk
AB Viking Timber
Kährs-WernerTrä AB
Weda Skog
Camfore AB
Rörvik Timber AB
Skånetimmer AB
Västskog
Vida Timber AB
Forest Owners Associations
Mellanskog
Skogsägarna Norrskog
Södra Skogsägarna
Import Agents
Aranna OY
Lemo Agency AB
ScanCompForest/Uniforest
Telemark Wood Company
Thomesto Sverige AB
Vänerved
The following companies responded to the questionnaire but reported no current import
from the region:
Munkedals AB
Munksjö AB
Peterson Scanproof (procures timber through
StoraEnso, referred to them)
Dala-Gästrike Skog
Fagerlid (import in the past now in
bankruptcy)
Siljans Sågverk AB
Fjällbonäs Trävaru AB
Föllinge Sägverk AB
Gällö Säg AB
Krekula & Lauri AB
Edsele Såg
AB Karla Trä
Skånetimmer AB
Norraskogsägarna
Skogsägarna Norrbotten
Västra Skogsägarna
The following companies were contacted but did not respond to the questionnaire:
Klippan AB
Årjängs Såg AB
BA Carlssons Såg och Hyvleri AB
Bodafors Trä AB
AB Forssjö Bruk
AB Geijer & Söner
Åtvidabergs Trävaruaktiebolag
71
Appendix 4
Comparison of Historical Import Origin (into Sweden)
Exporting Country 1980
EU
Belgium-Lux.
Denmark
255,722
Finland
1,225,689
France
Netherlands
3,547
Spain
UK
212,268
Germany**
373,297
Norway
882,680
Poland
425,499
Estonia
Latvia
Lithuania
Russia*
217,726
Brazil
Canada
101,954
USA
562,766
Myanmar
Other
17,515
Total
4,278,663
% of total
1980
1990
% of total
1990
28,840
428,950
331,570
9,000
6,727
3,330
97,880
1,272,284
711,276
209,502
0.6%
9.1%
7.1%
0.2%
0.1%
0.1%
2.1%
27.1%
15.1%
4.5%
5.1% 1,239,270
26.4%
6.0%
28.6%
0.1%
5.0%
8.7%
20.6%
9.9%
2.4%
13.2%
704
0.0%
0.4%
357,030
100.0% 4,696,363
7.6%
100.0%
1995
1,795,272
1,994
230,695
547,169
5,504
35,022
0
18
974,853
650,698
33,368
797,954
2,377,918
467,807
1,736,211
291,334
45,912
2,958
0
139,887
8,339,302
% of total
1995
21.5%
0.0%
2.8%
6.6%
0.1%
0.4%
0.0%
0.0%
11.7%
7.8%
0.4%
9.6%
28.5%
5.6%
20.8%
3.5%
0.6%
0.0%
0.0%
1.7%
100.0%
1999
1,127,835
82
84,245
521,939
38
780
3,018
14
532,009
828,505
29,405
2,202,838
3,416,919
490,111
3,042,029
78,950
96,428
16
233
1,415
11,328,974
% of total 1995-1999
1999 change in %
10.0%
–11.6%
0.0%
0.0%
0.7%
–2.0%
4.6%
–2.0%
0.0%
–0.1%
0.0%
–0.4%
0.0%
0.0%
0.0%
0.0%
4.7%
–7.0%
7.3%
–0.5%
0.3%
–0.1%
19.4%
9.9%
30.2%
1.6%
4.3%
–1.3%
26.9%
6.0%
0.7%
–2.8%
0.9%
0.3%
0.0%
0.0%
0.0%
0.0%
0.0%
–1.7%
100.0%
*1990 and earlier figures are for the former Soviet Union as a block
**1990 and earlier figures are the sum of figures for East and West Germany
72
72