CHERNIVTSI, Ukraine – Ukraine’s forests are rapidly disappearing as foreign corporations import thousands of tons of illegally cut timber through the nation’s western borders.
Environmental and anti-corruption activists allege that companies operating sawmills near Ukraine’s border with Romania, Poland and Hungary are processing the illegally cut wood, in violation of Ukrainian forestry and customs law, as well as a recent moratorium on log exports.
World Wildlife Fund Ukraine coordinator Bohdan Prots said the customs service is largely to blame.
“Without the customs, none of this would be possible,” Prots said. “The state is losing tens of millions of hryvnias.”
Illegal logging inflicts massive budgetary losses on the Ukrainian state through tax revenue lost to smuggling. But the sheer quantity of the logging is fast destroying the Carpathian forests: flooding and landslides have increased in the area as trees which would have normally sucked up water and prevented erosion are no more, while mud dragged into local rivers pollutes the water supply.
The destruction of the forest places many rural communities in danger. According to Prots, water that the trees would otherwise soak up is allowed to flow more freely.
“It’s a very serious situation, but nobody is thinking about it seriously,” Prots said. “We have situations where there was rain for four days, but the river water is still dirty because there were no trees to filter it.”
Contract data obtained by the Kyiv Post shows that Austrian firm Holzindustrie Schweighofer concluded agreements with 129 separate state-owned forestry enterprises in Ukraine for the export of lumber. Schweighofer operates a number of sawmills in Romania along the border with Ukraine. One of these, according to company statistics, located in the Romanian city of Radauti, imported 95 percent of the company’s Ukrainian supply in 2015, at 940,000 cubic meters.
State Fiscal Service statistics say that 1,239,545 cubic meters of logs were exported from Ukraine to Romania in 2015, meaning that around 75 percent of all Ukrainian wood exports to Romania went to Schweighofer.
However, the state-owned forestry enterprises that supply Schweighofer’s wood regularly violate the law in their logging.
A World Bank-funded forestry project estimated that 15.9 million cubic meters of wood were cut in 2015, while the creation of new forests dropped by 20,000 hectares to 2,400 in the same year, even though Ukrainian law mandates that foresters replant cut areas within two years.
Schweighofer would not make any of its employees available for an interview. When a company spokesman was informed of the story, he suggested that the Kyiv Post choose a more “interesting and dynamic” topic than the rape of the country’s forests. A later request led to Schweighofer saying, “We respect the laws of the countries where we are present.”
The regional customs office in Chernivtsi, a city of 255,000 people located 527 kilometers southwest of Kyiv, did not reply to repeated requests for comment.
A lumberjack cuts down a tree in Zakarpatia Oblast. (Oleksandr Zobin)
Lumbering schemes
Ukraine’s government owns around 74 percent of the country’s forests through the State Forest Agency. But according to Volodymyr Boreyko, the director of the Kyiv Ecological-Cultural Center, illegal logging is occurring “across the entire territory of Ukraine.”
Those who run the logging schemes tend to be connected with state-owned forestry enterprises, 307 of which exist in Ukraine.
Andis Priendieks, a Latvian businessman working in the Vinnytsia forest industry, told the Kyiv Post he was shot at after exposing a scheme under which a local state forestry enterprise was selling off its forests by marking down the exports as firewood.
Much of the logging is concentrated in the historic region of Bukovyna, where the forests had until recently remained almost untouched. Activists with the Patriotic Community of Bukovyna now say that up to 60 percent of Bukovyna’s forests have been destroyed in the past few years.
In the center of the area, among the foothills of the Carpathian Mountains, sits the State Forestry Enterprise of Berehomet.
Mykola Petichenko, an activist with the Patriotic Community of Bukovyna who has the dangerous hobby of driving around the Chernivtsi countryside, chasing and exposing smugglers, said that Berehomet is a regional center for illegally cut wood. The Berehomet state enterprise is located next to a railway line that leads to Romania.
Evidence of the illegal business is not hard to find. While out on an expedition with the Kyiv Post, Petichenko came across a truck on a forest road with a full load of wood, its engine idling, around a mile downhill from the logging site.
None of the wood was tagged, and all of it was of different qualities, with a large, rotten log sitting at the center, known as a “balance” in Ukrainian.
Petichenko said that the lack of tagging was illegal. He added that in such cases, the entire load would be labeled as cheap, low-quality, rotting wood to be used as fuel. In reality, Petichenko said, the shipment’s recipient would get a load that was mostly composed of quality wood, while on customs documents it would be marked as wood of the lowest quality in order to lower the tariff amounts.
The truck driver, who declined to provide his name, said that the load of wood was headed for Berehomet.
While specific figures are hard to come by, experts familiar with Ukraine’s illicit cross-border trade say that the top five illegally smuggled imports are clothing, electronics, cars, appliances and fuel. The top illegal exports: cigarettes, liquor, nuts, lumber and coal.
Springtime for Schweighofer
Ukrainian law stipulates that loggers must mark the quality of the wood at the place at which it was cut down, so as to prevent fraud. But the Berehomet log supply was without any markings.
According to contract information obtained by the Kyiv Post, Berehomet concluded a contract with Schweighofer that saw the state-owned enterprise sell roughly $700,000 in lumber in 2015.
When presented with the number, Schweighofer said that it had not received any logs from Berehomet since the moratorium was in place. While the Kyiv Post was at Berehomet, a postal worker walked in saying he was carrying mail from Schweighofer.
“If they receive a certificate confirming the origin of the goods, (customs) have no right not to block the export,” said Andrew Zablotskyi, a partner at Sayenko Kharenko who focuses on customs law.
Petichenko, along with Valeriy Airiniy, another Bukovyna activist, claims that Schweighofer would be unable to import the wood without bribing customs officials.
Alina Semeniuk, the editor of Weche, an independent Chernivtsi website, said that the company was notoriously “careful” when it came to dealing with the customs service, but that it would be difficult to complete the exports without some sort of approval from the institution.
The customs service’s obligation to verify the wood, combined with the mass fraud which allows the export trade to occur, means that Schweighofer must be implicated in the violation, the activists claim.
In 2013, Schweighofer was at the center of controversy after Romanian journalists revealed that the company was illegally cutting wood in their country, and is under criminal investigation over the allegations.
Schweighofer said that it complies with all local legislation.
Moratorium
Ukraine instituted a moratorium on the export of logs, apart from pine wood, in a July 2015 law passed with the intention of stimulating domestic wood production.
Although Fiscal Service statistics suggest that the law has succeeded in stimulating 15 percent growth in lumber processing centers since it went into effect, a closer look reveals that the law has in fact created an entirely new smuggling market, making reams of otherwise legal wood contraband.
“Part of the forest is still being cut down,” said Herman Taslitsky, the head of the customs committee at the Ministry of Finance. “For us, it couldn’t be any other way. It’s forbidden, but for some people (logging) is still possible.”
Prots, the World Wildlife Fund coordinator, said that “holes in the law” mean that the moratorium is not being observed.
“The easiest hole is presenting any kind of lumber as firewood on paper, when in reality its high-quality wood,” Prots said.
Since pine is the only species of tree permitted under the moratorium (it too will be banned from 2017), many exporters mark their loads as pine trees. In Bukovyna, very little pine grows, even though most of the lumber exports from the region are marked as being of that type.
Cut-down trees in Verkovyna region of Ivano-Frankivsk Oblast in 2016. The ecological consequences of deforestation include massive landslides and flooding. ( Yurko Dyachyshyn)
Schemes and consequences
For the villagers who perform the actual tree cutting, the work can be profitable.
“Part of the money earned from export stays at the state enterprise,” said Semeniuk, the Chernivtsi journalist. Semeniuk added that villagers could earn up to Hr 10,000 ($400) a month from the schemes.
“For a villager, that’s good money,” Semeniuk said.
Storozhynets General Prosecutor Dmytro Ilka, an appointee of former Prosecutor General Viktor Shokin, whose area of responsibility encompasses Berehomet, said that his office had not yet opened any investigations into the state forestry enterprises. When confronted with the fact that the Kyiv Post was able to see direct violations on a day trip, he demurred, saying that the prosecutor’s office had not seen any evidence.
“But we’ve opened investigations into private forest enterprises for illegal logging,” he said.
Semeniuk said that a clean customs service plus the state divesting from its forestry enterprises could solve the problem.
“For the state, it’s a business,” said Semeniuk. “The whole system needs to be changed.”
