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    Misunderstandings in governance reform

    Nauris Jotautas, forest management official of Švenčionėliai, owner of forester’s and manager’s diplomas, speaks about continuous struggle to occupy state forests, state asset management reform, increase of recreational potential of forests, modernization of fire protection in forests, and related concerns.

    “Business and Exhibitions”
    7-8, 2012

    The last three years have been the period of continuous attacks on the state forests. Foresters are disturbed by tales about allegedly inefficient activity of forest enterprises, taxes increased almost each year, unclear changes of the management of enterprises. I think that they coherently seek for one purpose only. And the purpose is to occupy state forests or at least to create such legal possibilities, which would allow various interest groups making great influence on the decisions adopted in the economic activity of forests.
    A few years ago, experts of the Free Market Institute (FMI) announced their study, where they are trying to justify the necessity to privatize III and IV group commercial forests. The offer, in regards to the state and the society, is inexpressibly faulty, but it is handy for various interest groups, which are engaged in wood business. There is one argument – forest enterprises work inefficiently, and the state does not receive as much income as it could. The authors, of course, do not try to provide any efficiency analysis. They just claim. And add that Sweden and other countries manage forests more efficiently. It is strange that this state forest privatization initiative received great resonance, there were a lot of discussions, and articles were written. There was almost an impression of collusion. It is likely that under the initiative of FMI experts, there was a secret agreement with someone from the authorities, and the resonance caused was only necessary to find out the society’s moods. Fortunately, the society followed the banner of forests. Then there was a project “Visuomis”, the purpose of which was to transfer all state assets, including state forests, of course, into the hands of one company, where decisions would be made by independent experts. The experts and their independence remained secret. Most probably these would be experts from a private sector. It was impossible to find out, how they would have passed their experience for the management of “Lithuanian railways”, regional road companies or state forests. Neither the society, nor the members of the Seimas understood the ideas of the project “Visuomis”.
    Foresters were very concerned about the plans, which were matured in the Ministry of Economy, to dismantle the model of complex farming. In case the idea was successful, forest preparation would be carried out by private companies, and foresters would only have to clear the logged places, to plant a new forest and to look after it. This way, by far the most efficiently functioning farming system in the East Europe would be liquidated, and would processors would become the masters of forests. Such anti-reform was successful in the neighboring Latvia and their foresters are terrified with its consequences. Only persistent position of the Ministry of Environment and General forest enterprise helped to preserve the complex farming model. The support of the Environmental protection committee of the Seimas was also significant.
    There was a lot of talking about the management reform of state companies. I think that this is some kind of misunderstanding. In a managerial point of view, management reform should be called the distribution of functions among separate links, or better justification of decisions. Unfortunately, there are no changes in either direction. In my opinion, the reform is just being imitated.
    Moreover, the sector of state forests works efficiently and there is no need to start any management reform. There are certain illogical things when assessing the efficiency of the activity of forest enterprises.
    Calculating the indicators of capital and asset return of the sector of state forests, the value of the growing forest is added, which equals to more than 3 billion Litas. Probably the analysts do not know, that forest enterprises may only dispose of the annual cutting fund, which is approved by the Government and they cannot exceed the established amount. Or probably this circumstance is simply ignored with a view to provide perverse activity efficiency indicators?
    The establishment of coordination center and the changes in the composition of companies’ boards should be considered the innovation of state management system. It is intended to transfer a lot of functions, which are currently carried out by the Ministry of Economy which is preparing and promoting the reports of the state governed companies, to the management coordination center. There are a lot of questions about the formation of companies’ boards, especially about their composition. In my opinion, such boards in forest enterprises are made and function quite fluently and productively. However, it is intended to change the principles of their composition, including independent members into the composition. Who are those independent ones? In the state resolution, they are vaguely mentioned, it is only indicated that they must conform to certain selection criteria. One of the criteria is the experience and knowledge of an economy sector, in which the state governed company functions. Thus, in a board of every forest enterprise, a representative of some competing private logging company will have to work. Doesn’t this pass the company’s commercial activity confidentiality requirements?
    Such thoughts come into head when facing the improvement of forest enterprise management. However, despite all endeavors, the activity indicators of Švenčionėliai forest enterprise are good. In 2011 we received 17 million Litas income, of which 15,8 million Litas is forestry revenue, 1,1 million Lt for transportation income. We restored and planted 331,8 ha of new forests, including the areas destroyed by the squall. In our enterprise, the squall tore 70 thousand m3 of trees. We implement a lot of other compulsory forest clearing and protection works. Their total value made 3,1 million Lt last year.
    Recreation load, increasing in the forests of Švenčionėliai, raises more and more concerns. Last year we spent 62,7 thousand Lt for the installation and maintenance of recreation and environmental protection objects. Before the crisis we were able to allocate much more funds for these purposes. Forestry specialists kindly handle the inventory of forest resorts and recreation places, they are full of ideas making outdoor furniture or sheds. However, we constantly face cases of vandalism, devastation of resorts or information stands. Protected areas in our enterprise occupy 75 percent of its total area. There are Labanoras and Sirveta regional parks established, which are eagerly visited by tourists, in summer – by berry or mushroom pickers as well. Water tourists like Žeimena and Lakaja rivers. Unfortunately, there is the other side of it all – it is forest pollution, waste, packages, and other garbage. This work, of course, requires money and people’s work. The more recreation objects we build and equip, the more troubles and work we make for ourselves. We have estimated, that waste collection and taking out costs about 20 thousand Litas per year for the enterprise.
    Wouldn’t it be worth considering that these expenses of the enterprise could be compensated at the expense of the package fee? After all, various packages, plastic bottles, etc. make the biggest part of the waste. The companies, which import and produce drinks or food products in various packages, pay special package fee, which goes for the waste handlers and processors. A certain part of this money could be allocated for those forest enterprises, the forests of which are especially polluted. For example, municipalities compensate damage caused for the forest plants from a special fund. Analogous principle should be applied in case of handling the waste left in forests.
    The repair and maintenance of forest roads also require quite a lot of attention. Forests roads are necessary for taking out wood, they are used by village residents, holidaymakers, mushroom and berry pickers. If a part of a certain forest road becomes hardly passable, we immediately receive phone-calls from dissatisfied people. We spent 741 thousand Litas for the repair and maintenance of roads in 2011. Quite many forest roads are in the balance of the enterprise asset and capital.
    Special concern of foresters is the fire protection of forests. The forests of Švenčionėliai forest enterprise are very flammable, therefore we do not spare efforts for their protection. It is a pity that recently we receive unearned criticism and even attacks because of this. In order to improve fire protection, most forest enterprises installed automatic fire observation and fixation systems. Before installing these systems, general forest enterprise carried out huge preparatory work analyzing the experience of other countries. Automatic fire observation system has been functioning in our enterprise for two years already. It consists of four observation points, which have smoke detectors and central operator’s point, accepting signals and observation tower, installed. I must say that the forests have become safer, and fire protection – more modern. Why are the foresters reproached? People say that the price was too high, observation cameras do not cost that much, the works were not carried out clearly. They do not consider that these are not primitive observation cameras, but they are protection systems, which automatically react to the smallest smoke and send a signal into the central desk. Software, which processes the view fixed in the observation area, makes a big part of its value.

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