Speech by Minister Väyrynen at the Russian Wood and Timber 2011 Conference

Keynote Address by Dr. Paavo Väyrynen, Minister for Foreign Trade and Development, Finland
Russian Wood and Timber 2011
12th April 2011, Moscow

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Colleagues, ladies and gentlemen,

My theme is “Re-thinking forest management in Russia. Improving the investment climate by providing stable wood supply”.

These two sentences already include an answer to one of the key questions: stable wood supply is one of the preconditions in improving the investment climate in the Russian forest industry. So, I can concentrate myself on the issue of forest management in Russia.

I am not an expert on the Russian forest management. What I can do is to tell about the Finnish experiences in order to give you a possibility to consider if there is something you can learn from the our forest management principles and practices.

In Finland we have long traditions in sustainable forest management. Actually we started government policies to that effect already in the 19th century, when we were an autonomous part of the Russian Empire.

Finnish forest resources have grown rapidly especially during the last 40 years. In the 1970's, our growing stock was 1.5 billion cubic meters and today it is almost 2.5 billion. Respectively, the forest growth has doubled from 55 million cubic meters to more than 100 million cubic meters as a result of sustainable forest management.

One of the most important reasons for this favorable development is the sustainable forest management practices which are widely accepted and followed by the forest owners in Finland. This is why the forest resources growth is exceeding the industrial use of wood.

Forest owners tend their young stands, do thinnings two or even three times during the rotation period before final felling. Additionally, after final felling the soil is prepared and regenerated according to the forest code. Silvicultural activities are driven by economics.

At the same time, the great natural values of Finnish forests have been conserved for future generations. In fact, compared with the total forest area, the area of strictly conserved forest area is larger in Finland than in any other European country.

Ecological aspects are taken into account also in other forests. As only a minority share of the Finnish forests are owned by the companies or the state, private forest owners, families, have an increased role through forest certification measures and implementing voluntary conservation methods.

Finnish government has an important role in building the competitive operational environment for the local forest industry. In order to make sure that the forests can be used also in the future, it is very important to guarantee the acceptability of using wood. Government's role is to make sure that all the interest groups of the several uses of forests are balanced and taken into consideration when developing forest policies.

In this respect we have strong traditions, too. As I already mentioned, government driven forest policy goes more than one hundred years back in history. During the 1990s, the forest policy and legislation was thoroughly reformed. At that time, the concept of sustainable forestry was defined, and the ecological and social aspects of sustainability were given an equally important value.

Currently, the government is outlining the National Forest Program 2015, which is the roadmap to the future of the Finnish forestry sector. It aims to increase sustainable welfare from multipurpose forests. The program envisions year 2020 with the Finnish forest sector as an innovative and liable forerunner of the bioeconomy.

In order to guarantee first class forestry practices, the government supports the forest owners with subsidies and loans for silviculture. These subsidies support capital intensive operations like forest road building and unprofitable long-term operations such as management of young stands. These investments are worthwhile as they favor the national economy in the long run by securing steady raw-material flow to the market.

The Finnish forestry and forest industry has adapted for many changes in the demand for their products. Some products have lost their markets, but at the same time new needs have created new possibilities.

Today the birch based Finnish and Russian pulp and paper industries are facing the hard competition of fast growing tropical plantation forests and industries based on them. We have a chance to maintain the market for our birch based pulp and paper industry, if we have a well functioning market for the raw material. The Russian export duties have been harmful for both countries. Fortunately they are going to be decreased when Russia enters the WTO. The export duties should be abolished as soon as possible. Free flow of round wood over the borders to both directions is an important element in stable wood supply.

At the same time we have new opportunities for our forestry and forest industry because of the climate change.

Production of forest based bioenergy can be one of the key solution in mitigating the climate change in Finland and in Russia. At the same time it promotes sustainable forest management by providing markets and market value for the wood from thinnings.

Another promising possibility is the increased use of wood in construction and in wood working industry. Burning waste wood for energy in order to replace fossil fuels is already promoted in the EU and elsewhere. Even more valuable is storing of carbon in wooden buildings, wood panels, furniture and other products of wood working industry.

Ladies and Gentlemen,

Finland and Russia have long traditions in cooperation in the fields of forestry and forest industry.

In the Finnish-Russian Intergovernmental Commission for Economic Cooperation we have two working groups - one for forestry industry and one for sustainable forest management.

Since 1997 we have had the Finnish-Russian Development Programme on Sustainable Forest Management and Conservation of Biodiversity in Northwest Russia financed from our side in the framework of our bilateral Neighbourhood Policy instrument. We hope that this programme can indirectly promote sustainable forestry also in other parts of Russia.

Three top level Finnish-Russian Forest Summits have taken place during the last few years - latest in 2009. These meetings promote industry investments, innovations, the use of forest resources and bilateral cooperation in the field of education and research.

During the Summit in 2009 PM Vanhanen took the initiative to propose PM Putin to establish Finnish-Russian forums to provide a joint platform for improving the competitiveness of northern forestry and promoting the creation of a common Finnish-Russian understanding on the efficient and sustainable use of the boreal forest resources. Objective of the forum is to enhance interaction between the forest sectors in our countries.

The first Finnish-Russian Forest Forum was held in Finland last month and some of you have already participated the event. Very many positive statements have been made concerning this event, but I strongly believe that there is still room for improvement.

This year the Finnish forest sector together with four Finnish Ministries will organize two further forums for Russian and Finnish decision makers. People invited represent all relevant stakeholder groups in the use of the forest resources: governmental and regional authorities, decision makers in business, NGOs, forest research, education and the media. I strongly believe these forums will open new ground in Finnish-Russian discussion on the opportunities of our northern forest sector.

These examples show that the Finnish-Russian government partnership is essential in promoting the basis for the competiveness of our northern forest sectors.

Despite the fact that the Finnish forest resources are growing, the Russian forest resource base is in its own league and provides you with great opportunities. For example, the annual allowable cut only in Northwest Russian Federal District is some 95 million cubic meters. Russian Federation has the largest unused softwood potential in the world.

There is a great potential for mutually beneficial cooperation between Finland and Russia in the fields of forestry and forest industry. We have to intensify our efforts on both sides.