EBRD and FAO set pathway to sustainable forestry investment in Russia’s Far East

By Richard Wallis

23 October 2013, Vladivostok - The European Bank for Reconstruction and Development (EBRD) and the Food and Agriculture Organization of the United Nations (FAO) have joined forces to promote viable forestry investment and innovation in Russia’s Far East based on sustainable use of forest resources.
An Investment Roadmap, defining the pathway to sustainable investments in the region’s forest industry, was presented today at an Investment Forum in Vladivostok, Russia. The event, convened by EBRD and FAO, attracted local authorities, federal government officials, private sector companies, industry experts, academia and non-governmental organizations.

Crucial role of Far East forests
The Far East is Russia’s largest region, occupying one third of the country’s territory. It has more than 9% of the world's forests, therefore a healthy forestry sector in the region is not only important for the regional and national economy but is of international concern. Forests in Russia’s Far East play a crucial role in stabilizing global climate and may largely contribute to the global wood products market.

The forests in the region are also essential to the livelihoods of millions of people, including Indigenous Peoples groups, who depend on them as a source of fire wood, food, water and non-timber forest products. Local coniferous tree species have an enormous industrial potential. However, the Investment Roadmap emphasizes that exploitation of their economic potential must be based on sustainable forest management principles and practices ensuring that appropriate forest areas are protected.

Pathway to sustainable investments
Improving legal frameworks and the inventory of forest resources; developing modern forestry infrastructures and supporting services, in particular railway transportation networks; introducing modern logging, as well as harvesting and wood-processing technologies; providing adequate training at local level; clearly designating and protecting forest areas of high biodiversity value are among the key Roadmap’s recommendations..

“This huge forest domain borders the very large market of China and the rest of Asia,” said Jukka Tissari, FAO Forestry Officer. “It has been subject to varying levels of forest utilization, ranging from intensive use in the coastal region and around main transport corridors, to largely untapped forest frontiers with high biodiversity. Improving forestry information and sustainable forestry management practices, processing raw materials and waste streams more efficiently, and adding value to products in demand by markets, are key opportunities for investment. It is an occasion to turn a new page for the region”.

“EBRD firmly believes that the economic value of forests needs to be optimized by balancing the use of forests for multiple economic activities with their core ecological functions, such as conservation of biological diversity, protecting watercourses and water quality as well as absorbing carbon dioxide to mitigate climate change,” commented Lindsay Forbes, the EBRD’s Director for Industry, Commerce and Agriculture in Russia. “Therefore, it is the highest priority to EBRD to ensure that unlocking of the economic potential of the forests is based on sustainable forest management principles and practices ensuring that appropriate forest areas are protected,” Mr. Forbes added.

Investing in human resources
In particular, EBRD and FAO stressed that the forestry sector in the region lacks qualified workforce which is crucial to stimulate the development of new technologies. The industry would require additional investment in human capital, as well as reforms in the education system. The Roadmap suggests that higher education institutions should include specialized forestry topics in their curricula, for instance on the certification of wood products.

The Roadmap also highlighted the importance of tapping on the availability of low-quality wood and wood wastes to produce bioenergy which will improve the efficiency of current production and create new jobs.

During the forum, delegates agreed on the importance of maximizing synergies between the use of available resources and the adoption of sustainable forest management practices to realize the full the forests’ potential as an important source of timber and improve the quality of the region’s forest resources.

The Investment Roadmap is the result of a joint EBRD/FAO project designed to help the Russian government develop supportive forestry policies and create a favourable investment climate for forest industries in the region.