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Forest legislation, institutional development and forest policy study of the Republic of Srpska - Executive summary, 2001

Forest legislation, institutional development and forest policy study of the Republic of Srpska - Executive summary, 2001



The executive summary summarises the results of my 16-months expert work in Bosnia and Herzegovina (Republic of Srpska) including: ...

The executive summary summarises the results of my 16-months expert work in Bosnia and Herzegovina (Republic of Srpska) including:
1) Situation of forests and forestry in Republic of Srpska with measures undertaken and proposed by forestry authorities;
2) Analysis of organisation, functioning and development of forestry institutions of the Republic of Srpska;
3) International commitments and initiatives on the protection, sustainable management and biodiversity of forest ecosystems and their incorporation in forest legislation and policy of each entity of Bosnia and Herzegovina;
4) Overview of forestry organisation models of the selected European countries (EU and PHARE;
5) Analysis of forest management regions and forest management plans;
6) ssessment of sustainability of forestry and forest management in the Republic of Srpska (using the European criteria and indicators, supplemented with possible national indicators);
7) Analysis of the forest and other laws consistence (the Hunting Law, the Water Resources Law and the Concession Law);
8) Analysis and assessment of the Forest Law and regulations with recommendations for change and harmonisation;
9) Proposal of possible models of reorganisation and functioning of forestry of the Republic of Srpska;
10) Proposal of organisational solution for Republic of Srpska forestry, elaborated by local forestry institutions;
11) Gap analysis of the proposal of organisational solution for Republic of Srpska forestry, elaborated by local forestry institutions.

The entire study (in English and Bosnian Serbian) comprises 300+ pages.



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    Forest legislation, institutional development and forest policy study of the Republic of Srpska - Executive summary, 2001 Forest legislation, institutional development and forest policy study of the Republic of Srpska - Executive summary, 2001 Document Transcript

    • Technical Assistance to the Implementation of the Bosnia and Herzegovina Forestry Programme - Support to Forest Policy Reforms FOREST LEGISLATION, INSTITUTIONALDEVELOPMENT AND FOREST POLICY STUDY OF THE REPUBLIC OF SRPSKA EXECUTIVE SUMMARY by Franc FERLIN International Forest Legislation and Policy Expert
    • 1. STUDY BACKGROUNDIn Bosnia and Herzegovina the National Forestry Programme (NFP) was designed by theWorld Bank in 1998 with the main objective to support the sustainable management offorests and the revival of the forestry and wood processing sectors in order to ensure thelong term economic and ecological sustainability, meet urgent needs for reconstructionmaterial and increase employment in rural areas.The NFP has three main components: (1) Support to forest management, (2) Protection andrehabilitation of forests and (3) Rehabilitation of State Forest Enterprises operationalcapacity. These components are further divided by various sub-components.The PHARE project "Technical Assistance to the Implementation of the Bosnia andHerzegovina Forestry Programme" (BH/FOR/01/98) covers majority of these sub-components, among others also the Support to Forest Policy Reforms, which is the subjectof this study.2. OBJECTIVES AND APPROACH OF THE STUDYIn conformity with the basic ToR of "Technical Assistance to the Bosnia and HerzegovinaForestry Programme (TA)" project, "The World Bank Memorandum" (from August, 1999 andMay, 2000), and the needs and requirements of the Ministry for Agriculture, Forestry andWater Management (MAFWM) and Public Forestry Enterprise (PFE) "Srpske šume", thegeneral working objectives of the Support to the Republic of Srpska Forest Policy Reform,covered by the International and Local Forest Legislation and Policy (FLP) Expert, werefollowing:1. Detailed analyses and assessments of sustainability of forestry, especially institutional frameworks (organisation and functioning) of forestry, and sustainability of forest management;2. Presentation of topical international forestry commitments / initiatives and international forestry organisation-privatisation models to local foresters (based on reviews of international documents and organisation of study tours);3. Detailed forest legislation analysis with proposals and recommendations for change / supplementation, taking into consideration the legislation related to forest and forestry and international forestry commitments (harmonisation); 4
    • 4. Preparation of proposals and recommendations for incorporation of basic international forestry commitments / initiatives and other guidelines from the field of sustainable forest management in national forest(ry) policy.5. Professional support to the process of privatisation in the Public Forestry Enterprise with the assessment of its privatisation strategy;6. Preparation of a proposal of possible State forestry reorganisation model(s) and its institutional development.Because of the complexity of the study, a holistic approach was applied, based on deepanalyses of forest situation, forest management, forestry organisation and functioning, forestlegislation etc., using actual international forestry guidelines, criteria and indicators andpositive experiences of other countries - adapted to the special circumstances in Republic ofSrpska. Philosophy of the main study proposals and recommendations, especiallyinstitutional, was based on step-by-step approach.3. KEY DEFINITIONSWithin this Study the following national terminology 1 has been used (based on Republic ofSrpska forest legislation):Enterprise for Forest Management (EFM or Gazdinstvo) is a relatively independentorganisational unit of the Public Forestry Enterprise (PFE); before the integration into PFEthis enterprises were independent State Forest Enterprises (SFEs).Forest cadastre represents a database for state forests (forest areas, growing stocks,increment, allowable cut etc. by forest categories) which has been renewed every year.Forest management (gazdovanje šumama) includes particularly: silviculture (simpleand expanded forest reproduction), forest protection against all kinds of damages, utilisationof forests and forest lands and other forest potentials (production and transport of forestassortments), production and collection of other forest products, tourist and recreationalservices, breeding, protection and hunting of game, building and maintenance of forestcommunications, and improvement of all (economic and multiple-benefit) forest functions.Forest Management Region (FMR or šumskoprivredno područje) represents thearea of forests and forest lands, which is formed according to the natural, site, geographic,economic and other conditions that provide multiple-benefit forest functions, uniformity and 1 In the local version of the Report some other (international ) definitions are presented. 5
    • complexity of the region, progressive and dynamic sustainability of forest yield and revenuesand forest production, forest reproduction, and optimal openness of forests. FMR consists ofseveral smaller Forest Management Units (FMU or gospodarska jedinica) , whichare further divided to Compartments (odjel) and Sub-compartments (odsjek) as thesmallest units of forests.Forest reproduction: Expanded forest reproduction comprises following measures / activities in forests: reconstruction of degraded and coppice forests, afforestation of bare areas and Karst, biological control of soil erosion, repair planting, tending of forests and plantations in young and mid-age phases, forest protection measures, reclamation of degraded high forests, production of seeds and planting material, building of forest roads, etc.. Single forest reproduction comprises following measures / activities in forest: soil preparation for natural regeneration, tending and cleaning of stands, repair planting and afforestation, forest protection measures, production of seeds and planting material, building of forest roads, etc..Multiple-benefit forest functions are particularly: protective, hydrological, climatic,hygienic-health, tourist-recreational, economic, educational, scientific-research and defencefunctions. 6
    • 4. HISTORY AND DEVELOPMENT OF FOREST LEGISLATION 2 AND POLICYBosnia and Herzegovina have a very long tradition of forest legislation. The first institutional-legal foundation was the Forest Law in 1286, by which forests were divided into municipal-town ("BALTALIK") and the so-called free ("DŽIBOLI MUBAH") forests. In the first half of the19 century, by Omer-Pashas decree (1851), all forests were declared as State forests.Ramadan Law in 1858 recognised the right to private ownership of forests. By Omer -Pashas or Sheval Law on Forests in 1869, the forests of the Turkish Empire were classifiedinto four categories: State, Church, Municipality and private.Between 1878 and 1929, the Forest Law (1852) of the Austro-Hungarian Monarchy was inforce. According to that Law, forests and forest lands were designated the goods of generalinterest (State welfare), administered by the State. In this period, the cadastral surveying,forest maps and land registry were established. A strong system of State authority wasdeveloped. In this period, the provisions of the following Laws were also in force: the ForestLaw of the Kingdom of Serbia (from 1891 to 1904), the Forest Law of Vojvodina (from 1879and 1898), Amendments to the Forest Law of the Kingdom of Croatia and Slavonia (from1894 and 1901), Law on the Protection of Forest Ownership in Bosnia and Herzegovina(1913), Amendments to the Forest Law of the Kingdom of Yugoslavia (passed in 1927). In1929, a unique Forest Law of the Kingdom of Yugoslavia was enacted, by which all forestsand other wooded land were divided into State forests and non-State forests.In 1947, the General Forest Law of the FNRY was passed and in 1948 the Forest Law of theNR BiH. After this Law, all forests were protected by the State. National Parks and ProtectionForests were designated based on this Law. Forest management was supervised byRepublic, district and town organs of State authority.The Forest Law of the NR BiH in 1956 prescribed that forests and forest land in socialownership were administered by forest enterprises, scientific and other organisations. TheFund for the Development of Forestry (FDF) was formed. The Law on Wood Saving of thePR BiH (1957) prescribed the measures for rational utilisation of wood raw material. By theLaw on Amendments to the Forest Law of the PR BiH (1960) forest enterprises weretransformed from the status of institutions into economic organisations. The elaboration of 2 Based on the article: ČOMIĆ, R. 2000: Overview of Forestry and Hunting Legislation History of Bosnia andHerzegovina. Forestry Faculty Banja Luka, 8 p. (in local language, prepared for publishing). 7
    • Forest Management Plans (FMPs) was compulsory, Forest Management Regions (FMRs)were established for the forests and forest land in public ownership.The General Forest Law of the FNRY was enacted in 1961. This Law defined thestrategic measures of forestry and wood industry development in Bosnia andHerzegovina. Based on this Law, the Forest Law of the NR BiH was passed in 1961. Theemphasis was on the formation of FMRs as naturally and economically rounded-up entities.Private forest owners were obliged to pay a part of the means for the elaboration of FMPsand for investments in silvicultural works and forest protection.Forest Law of the NR BiH in 1965 introduced Municipality, district and Republic ForestInspection, for the supervision of forest management in State and private (citizen)ownership. The Social Plan of Forestry and Wood Processing Development of the SR BiH(1965) prescribed and implemented the measures for the enhancement of the condition andstructure of the forest fund, as well as the reconstruction and modernisation of the capacityfor wood processing. Forest Law of SR BiH (1968) prescribed the method and conditions ofmanagement in protection and special-purpose forests, elaboration of Forest ManagementPlans, etc.The Forest Law of the SR BiH in 1971 laid down the commitment to operational projectsdesigned by professionals. The Law defines the organisation for forest management - socalled forest economic enterprise for State forests and Municipality for forests in privateownership. For the management of forests and forest lands in Karst region a special ForestManagement Region was formed, financed by the funds of the community and othersubjects, which have a direct or indirect benefit from this region. The Law on the Designationof Karst Regions in SR BiH (1974) also defined the participation in the financing ofoperations in Karst area. This was the base for the Social Agreement on the establishment ofthe area, extent and dynamics of operations and afforestation of Karst area (1975).The Forest Law of SR BiH in 1978 prescribed that forest protection and silviculture, as wellthe enhancement of forest multiple-benefit functions, were the functions of special publicinterest. The forests of one Forest Management Region was administered and managed byone Basic Organisation of Forestry (BOF). The allocation of the funds for forestreproduction is compulsory. The base for the allocation of these resources was 10% ofwood assortment selling price and 5% in the Karst region. These resources were kept atthe special account of forest enterprises. Forest owners are obliged to pay the funds forforest reproduction to special accounts of the municipalities. From the above funds it was 8
    • th2necessary to afforest at least 14 m of treeless wooded land - for each cubic metre of thegross felled wood volume.In the period between 1978 and 1987, the following significant regulations were passed inthe field of forestry: Amendments to the Forest Law of SR BiH (1981), Resolution on theadoption of the Programme of afforestation of degraded and coppice forests and bare land inBiH for the period 1986 - 2000 (1986) and Public Agreement for the implementation of theProgramme of afforestation of degraded and coppice forests and bare land in BiH for theperiod 1986 - 2000 (1987). This programme contains, inter alia, the following basic principlesor objectives of forest policy in BiH: (1) tending, protection, conservation and utilisation of theforest fund, wildlife and other forest products and forest lands, (2) higher rate of utilisation ofnatural forest resources by the faster reconstruction (of degraded) high and low forests andafforestation, (3) extension of forestry activities by organised and planned utilisation ofsecondary forest products and by adequate evaluation of forest functions, (4) significantlyhigher rate of forest openness by the construction of forest roads, (5) enhancement of theelements and processes of forest production and (6) creation of favourable workingconditions in forest production.The establishment of forestry of the Republic of Srpska within Dayton borders is based onthe Amendments to the Forest Law, adopted by the RS Parliament in 1992. Based on thisLaw, the Public Forestry Enterprise "Srpske šume" was established (in 1993). In 1994 a newForest Law of the Republic of Srpska was enacted.5. SITUATION OF FORESTS AND FORESTRY (ANNEX 1)Overall area of State forests and other wooded land is 972,640 ha, of which 57% are highforests and 26% are low forests. Private forests occupy about 256,000 ha, of which only20% are high forests. The total area of forests and other wooded land in the Republic ofSrpska is 1.228.650 ha, of which 49% are high forests, 33% low forests and 18% otherwooded and bare land (including Karst). 3 3Total growing stock in State forests is 164 million m (166 m /ha), of which high forests 3 3 3 3account for 144 million m (256 m /ha), and low forests 20 million m (78 m /ha). Theproportion of coniferous : broad-leaves is 34 % : 66 %. The growing stock in private forests 3 3amounts to 35 million m . Annual volume increment in State forests is 4.96 million m of 3 3which in high forests 4.30 million m and in low forests 0.66 million m , while in private forests 3it is 0.60 million m . 9
    • According to valid and expired Forest Management Plans (FMPs), allowable cut in State 3 3forests of the Republic of Srpska was 3.956.820 m of which 1.377.040 m conifers and 3 3 32.579.780 m broad-leaves (in high forests 3.546.420 m and in low forests 410.400 m ). In 31998 the planned felling volume was 2.392.131 m of wood volume (net volume 1.662.292 3 3m ) and it was realised 79%. The planned annual cut for 1999 was 2.463.983 m , and it was90 %. In 2000 it is planned at similar extent.The allowable has been realised with 72% when compared with its amount from the validand expired FMPs (from the beginning of the planing periods till 1999), but only at 57,5 % offorest areas (see also Annex 6). The structure of felling in state forests (situation in 1999) ischaracterised by very high (68%) percentage of logs (85% conifers and 53% broadleaves),minor percentage of technical wood (6%) and pulpwood (3 %) and relatively high amount offuelwood (23 %).Openness of high forests is about 8.5 m roads per hectare and 5.6 m per hectare in coppiceforests, which is far below the optimal openness.State forests (99 %) are administered and managed by the Public Forestry Enterprise"Srpske šume" (PFE). It employs more than 6200 workers (data from 1999). Total annualincome from (State) forest management in PFE in 1999 were 123 million KM. There are largedebts by wood industry (more than 18% of the expected total forestry revenues). Annualextent of all forest investments is less than 7 % of the PFE total income. The share of privatesector in the performance of forest operations in PFE is above 50 % in fellings, about 70 % inskidding and about 90 % in the transport of forest assortments. In 2000, the programme offull privatisation of forestry operations/services was adopted. 37 newly Basic StateEnterprises for performing forest operations were formed (after separation from PFE), withthe value of the capital about 16 million DM and with about 2600 employees (see alsoAnnex 2).The prices and sale of forest assortments are regulated by the State (see also Annex 8).Log prices are far below central European prices, especially for broadleaves. The demandfor logs is extremely high (see also Annex 6 and sub-study of SCHARPENBERG 3). Theexport of logs was prohibited in 1998 (in the entire BiH), and in 2000 it was liberated again,with the introduction of a special export tax. 3 Wood Pricing and Marketing Study (draft), PHARE TA, München 2000. 10
    • In the Republic of Srpska today there are more than 700 primary wood-processingenterprises. Most of them are illegal (total number of registered wood industry enterprises is270). The total processing capacity of these enterprises is high above the present and alsothe potential capacity of forest production (of high quality assortments). Pulpwood factories inthe Republic of Srpska do not work and there is no reliable market for pulpwood and lessvaluable wood (smaller quantities are exported to Serbia and Slovenia).6. SITUATION OF FORESTRY INSTITUTIONS (ANNEX 2)The supreme forestry authority is the Ministry of Agriculture, Forestry and WaterManagement (MAFWM) of the Republic of Srpska with its Department for Forestry. TheDepartment is headed by the Assistant-Minister. The Department systematises the positionsof Councillors to the Minister for four Sectors: forest management planning and utilisation,silviculture and forest protection, National Parks, and hunting. MAFWM also includes theRepublic Inspection for forestry and wildlife management as the supreme supervision organfor (all) forests. Along with the Republic Inspection, there is also Municipality and townforestry inspection, as the first-degree organs of supervision.The Public Forestry Enterprise "Srpske forests" (PFE) was established in 1993 for theadministration and management of State forests and the performance of professionaloperations in private forests. The PFE integrated the former State Forest Enterprises (SFE),as the independent forest enterprises or as parts of the previous State enterprises for woodindustry. By Forest Law (1994), they were separated and all SFEs were integrated in thePFE. Internal organisation of the PFE (before status changes) are based on relativelyindependent organisational units as legal persons: Research-Development and ProjectCentre (RDPC), Enterprises for Forest Management (EFM or Gazdinstvos) (42) andProduction, Trade and Services Enterprises (PTSE) (5). The central administration of PFE isperformed by General Directorate (Banja Luka) and its one Department (Sololac). In thePFE, all forestry functions/activities are integrated (situation before privatisation). TheEnterprise performs professional forest service for State and private forests (based oncontracts with the latter), certain State-administrative functions, ownership-administrationfunctions (in the name of the State as the owner of State forests), and production-commercialfunctions in the fields of forestry, hunting and in other fields. Productional activities (except ofseed-nursery production and hunting) are planned for privatisation (by the privatisationprogramme in 2000). 11
    • Along with the PFE, there are other two public enterprises (National Park Sutjeska andNational Park Kozara) and the Army of the Republic of Srpska, which manage State forests(only 1 % of forest of special purpose).University education of forestry engineers and research is carried out by the newly-established Faculty of Forestry Banja Luka (1994). Forestry technicians and forest workersare educated at Secondary Forestry Schools (Banja Luka and Srbinje). Other State forestryinstitutions do not exist.Along with State institutions, there is a non-governmental organisation of forestry:Association of Forestry Engineers and Technicians of the Republic of Srpska.7. INTERNATIONAL LEGAL AND POLICY DOCUMENTS ON SUSTAINABLE FOREST MANAGEMENT AND BIODIVERSITY PRESENTED AND USED (ANNEX 3)In the FPR study framework following international legal and policy documents on theprotection, sustainable forest management and conservation of biodiversity of forestecosystems are presented and used: Geneva Convention on Long-Range Transboundary AirPollution (1979), Rio Agenda 21- The UN Programme of Action for Sustainable Development(1992), Rio Principles on the management, conservation and sustainable development of alltypes of forests (1992), Rio Convention on Biological Diversity (1992), Resolutions onprotection and conservation of forests in Europe (1990, 1993, 1998), Pan-European Strategyon the Conservation and Enhancement of Biological and Landscape Diversity (1996) with itsWork-Programme for Forest Ecosystems (1997-2000), EU Strategy on Biological Diversity(1998) and EU Forestry Strategy (1998) with the forestry action programme andcorresponding regulations.Bosnia and Herzegovina has not signed these international documents yet because ofobjective reasons (with the exception of Geneva Convention, which was undersigned by theformer Yugoslavia).8. FORESTRY ORGANISATION MODELS OF EUROPEAN COUNTRIES PRESENTED (ANNEX 4) 12
    • For the needs of the study a greater number of European countries forestry organisationalmodels (seven PHARE and five European Union Member States) has been reviewed andpresented. Selected European forestry organisation models have been summarised intofollowing general models:(a) Model with integrated supervision, ownership-management and support functions (Germany, France, Poland, Czech Republic),(b) Model with integrated supervision and support functions and separate ownership- management function (Austria, Sweden, Finland, Slovakia, Latvia, Hungary),(c) Model with integrated ownership-management and support functions and separate supervision function (Lithuania),(d) Model with all organisational functions separated (Slovenia).Cognition of organisational models of these countries has been one of the importantgrounding for local foresters and institutions (besides the study tours to the selectedEuropean countries in transition, their own experiences in the development of the existingorganisation, as well as the experiences of foreign experts) in searching for the mostappropriate future forestry organisation model.The actual situation of forestry organisation in the Republic of Srpska generally correspondsto the model "C", with a strong ownership-management function, small forest inspection andrelatively weak support to private forests.9. ASSESSMENT OF SUSTAINABILITY OF FORESTRY AND FOREST MANAGEMENT (ANNEX 6)The assessment of the Republic of Srpska forestry and forest management sustainability isbased on a deep analysis of the existing legal, institutional, economic and informationalframeworks, cognition of the situation of forest, forest management and forestry, workingmeetings with the policy working group and discussions with numerous other local experts.Assessment was made with a help of the international (European) forestry criteria andindicators, supplemented by (possible) national indicators.9.1 L EGAL / R EGULATORY F RAMEWORK (F OREST L AW )In the Republic of Srpska exists a firm forestry legal and regulatory framework (Forest Law,1994 with amendments to the Forest Law till 1999 and regulations), which in principle 13
    • ensures the sustainability of forest management (continuity of yields and revenues), forestprotection and enhancement of multiple-use functions (see also Annex 8).The Forest Law contains various provisions which enable sustainable forest management,such as: obligation for performance of forest management inventories, elaboration of forestmanagement planes (FMPs) and operational projects for all forests; a new amendment forestablishing of bigger forest management regions (FMRs) - as a naturally and economicallyrounded-up forest areas - for State forests; united State forest administration andmanagement (predominantly by one public enterprise); regulation of operational forestmanagement and utilisation in all forests (by an important obligation for professional markingof trees in all forests and strict control of the movement of felled trees from State forests);obligation of financing of forest simple reproduction (by allocating or paying of 10 % value ofsold wood assortments); obligation for payment of an extra-budgetary tax (0,1 % of the totalturn over from all economy subjects in the country) for enhancement of multiple-use forestfunctions; regulation of protection forests, special-purpose forests and general forestprotection (e.g. prohibition of forest clearing and devastation, prohibition of felling of rare andvaluable tree species) and regulation of the use of other forest products; regulation ofrevitalisation and management of Karst forests and forest lands; obligation for keeping forestdatabase (cadastre) for State forests; provisions for forestry inspection with a widecompetence, which is organisationally separated from the forest management; transitionalprovision for separation of forestry from the wood industry enterprises, etc.The Law enables also privatisation of forest operations and services by auctioning theoperations to private forest entrepreneurs. Long-term arrangements (contracts up to 10years), which are very important precondition for qualitative and sustainable performing offorest operations, are anticipated.The Law contains also various provisions which disable or make sustainable forestmanagement difficult, such as: the definitions of simple as well as expanded forestreproduction are to wide (collected / allocated means could be used also for other purposes);the 10 % rate for simple forest reproduction is to low; an important legal barrier regarding thecross-financing of simple reproduction of forests exists (solidarity between the richer andpoorer FMRs is disabled); forest service functions (with some administrative functions) areintegrated with, and subordinated by the production (commercial) functions within the PFE;PFE (or municipalities for private forests) is responsible for the adoption of FMPs instead ofthe Ministry; prices of wood assortments are regulated (by the Government) and are theminimum and maximum prices at the same time; selling of wood is regulated by Law (local 14
    • wood processing enterprises have the priority right to buy wood assortments); penalties forserious offences (e.g. forest devastation, non-realisation of the FMP, non-allocation or non-purposed use of founds for forest reproduction) are much to low (both, for forest managersand individual persons) , etc..Important legal provisions for enabling sustainable forest management, which do not exist,are particularly following: obligations for implementation of international commitments in thefield of protection, conservation and sustainable management of forests (e.g. performing ofinventories and monitoring of forest health condition and biodiversity); obligation for multiple-use forestry planning with appropriate inventories at a higher spatial level (larger regions)independently of the forest ownership; obligation for formation FMRs, which would include all(also private) forests; obligation for a centralised collecting of means for simple reproductionof forests (within the PFE and / or a Forest Fund for single reproduction within the MAFWM));independent institutional solution for gathering and use of means for expanded reproduction(e.g. within a Found for expanded reproduction); obligation for keeping the forest cadastredatabase also for private forests (e.g. as an obligation for the forest service within the PFE orMAFWM); obligation for co-ordination of forestry with the Federation (by possible institutionalsolution) etc..In general, the degree of implementation of the Forest Law provisions, crucial for sustainableforest management, is much to modest, what is the central problem of the legal / regulatoryforestry framework in Republic of Srpska.There exist also other Laws related to forest and forestry (National Parks Law, Water Law,Hunting Law, Concession Law etc.). The first three are well harmonised with the Forest Law.The Forest Law and Concession Law are not correspondingly harmonised (e.g. while theForest Law grants the forest management right to the PFE - for state forests, the ConcessionLaw enables concessions for management and exploitation of State forests at the same time,or, the Forest Law imposes harmonisation of contracts for performing operations with theConcession Law, although the institute of concession is totally different from that one ofauctions of forest operations) (see also Annex 7).9.2 I NSTITUTIONAL F RAMEWORK (F ORESTRY O RGANISATION )In the Republic of Srpska there is a firm and centralised institutional framework regarding theadministration and management of State forests, which was (by the Law on Amendments tothe Forest Law in 1992 and by the new Forest Law in 1994) entrusted to the Public Forestry 15
    • Enterprise (PFE). The capacity of this framework is strong and in principle it enables thesustainable management of State forests. However, the capacity of State forestry authorityand supervision is very poor, and other State forestry institutions do not exist (see alsoAnnex 2).The elements of the institutional framework (organisation) of forestry, which enable thesustainable forest management, are especially the following: firm and integrated organisationof State forest administration and management (in the PFE); strong personnel capacity of thePFE (more than 450 forestry engineers); existence of special service for forest managementplanning in PFE (RDPC); possibility of integral approach to management of State forests(thanks to the integration of the functions of planning and operational forest management inone PFE system); professional support to private forests (through PFE / EFMs(Gazdinstvos)); existence of firm elements of State forest management policy (within PFE) aswell as basic principles of forest policy at the non-governmental level (in the framework of theAssociation of Forestry Engineers and Technicians); the separation of the functions of forestinspection from the functions of administration and management of State forests (in principle,independent supervision is possible), etc..The elements of the forestry institutional framework, which make difficult or disable thesustainable forest management, are especially the following: subordination of Forest Servicefunctions to production-economic functions (in the framework of PFE); a powerful politicalinfluence on the PFE functioning; low qualification, professionalism and capacity of privatecontractors; poor material and staff capacity of the separated enterprises for performingforest operations (which will be privatised); very low capacity of State forestry authority andsupervision (personnel and material); due to material and other reasons, in practice theinspection does not function independently (from PFE or Municipalities), etc.Institutional elements, which are an important precondition for the sustainable management,but do not exist, are especially the following: a special section for private forests (within thePFE) or an independent Forest Service (in the framework of MAFWM); State institutionalframework (e.g. Forest Fund) for the centralised financing of forest reproduction; other Stateforestry institutions (e.g. Forestry Institute); shortage of scientific and research workers; non-governmental forestry organisation, which would be independent from the governing policy,etc..9.3 E CONOMIC F RAMEWORK 16
    • The degree of sustainability of forestry economic framework is very low and it results in a lowdegree of economic sustainability of forest management. This is the greatest problem offorestry.The positive elements of the economic framework of forestry are the following: extremelyhigh demand for quality wood assortments (logs); special Sector / Service for marketing andprices of wood assortments (within the PFE); elaborated programme of the privatisation ofproduction activities / operations in forestry, in order to improve the economic situation offorestry (rationalisation); a small-scale, non-budgetary source of means for the financing ofmeasures for the enhancement of multiple-benefit forest functions, paid by all economicenterprises, and the latest Decision (at the level of BiH), by which budgetary means fromexport taxes (for saw-logs) are used for the needs of forest reproduction.The elements of the economic framework of forestry, which make difficult or disable thesustainable forest management in the economic sense are especially the following:unfavourable general framework of economic policy in the country; absence of free market inforestry (the prices are fixed by the Government, they are simultaneously minimal andmaximal and therefore too low; in the sale of wood products, there is a legal monopoly of theState wood industry enterprises); high amounts of liabilities of the State wood industryenterprises to PFE (total debts in 1999 were 22% of PFE revenues); prohibited export of logs(after 1998) and export taxes for logs and sawnwood (introduced in 2000); there is nocapacity and a reliable market for less valuable roundwood (pulpwood); capital outflow fromforestry (to wood industry, for additional needs of Municipalities and for other purposes);barrier for centralised collection of revenues in the State forests (between FMRs); outflow ofmeans of multiple-benefit forest functions into the State budget; absence of a budgetarysource of funds for the financing of measures of sustainable forest management (incentives,subventions); low capacity of the State budget for the financing of the State forestryadministration, etc..The consequence are the considerably lower revenues from forest management andtherefore a very low accumulation capacity of forestry, which does not allow sufficientinvestments in biological and technical forest reproduction and forestry.9.4 I NFORMATIONAL F RAMEWORK 17
    • The general informational framework in forestry is still modest for the time being. It does notoffer much required information for the implementation of sustainable, multiple-use forestmanagement and conservation of forests / biodiversity.The elements of the informational framework of forestry, which support sustainable forestmanagement are the following: a long forestry tradition; existence of forest inventories (forFMP drafting) and the elaboration of Forest Management Plans (FMPs), based on which thecadastre of (State) forests is made annually; tradition of forest management planning on theprinciples of continuity of revenues and yields; existence of a unique methodology ofelaboration of FMPs (special Role-book), based on the original BiH school of forestmanagement (Professor Matićs school); existence of classical guidelines for theimplementation of forest management system in practice; Forest Management Regions(divided into Forest Management Units) as the territorial informational framework; elaborationof operational projects of forest operations; existence of annual production-financial plansand reports on State forest management (in the PFE framework), etc..The elements of the informational framework of forestry, which do not support sustainableforest management are especially the following: expiration and low coverage of forests withvalid FMPs (only 43% State forests have valid FMPs), particularly in private forests; outdatedmethodology of forest management planning and elaboration of operational projects; poorquality of FMPs and operational projects (e.g. regarding selective approach to forestmanagement); unreliable forest cadastre as regards the basic information on forest conditionand development (e.g. of areas and growing stocks per forest categories); out of date andinadequate curricula at the Faculty of Forestry, etc.The elements of the informational forestry framework significant for the sustainable forestmanagement, which do not exist, are the following: multiple-purpose forest inventories andmultiple-purpose planes of forests development at a higher spatial level (larger regions); up-to date FMPs and operational projects; modern guidelines for sustainable forestmanagement and conservation of biodiversity; the cadastre for private forests; information onhealth condition, natural values and forest biodiversity; annual reports on the situation offorests and forestry (responsibility of MAFWM); modern informational (e.g. GIS) andcommunication tools (e.g. Internet); deficiency of scientific and research work and workers;training and extension for private sector (contractors and forest owners); participation ofstakeholders and the public in the process of decision making in forestry, public relations,etc.. 18
    • Regarding the system of forest management planning, the assessment of gaps is as follows(see also Annex 5): planning methodology is not based on the so-called selective approachwithin management classes and compartments (as regards the real situation, forestaccessibility, conservation of forest functions, etc.). This results in unreal high plans ofallowable cuts, which non-selectively take into account the overall area of forests (e.g. for thecalculation of the allowable cut, which is in practice implemented over substantially smallerareas, also due to objective reasons); FMPs do not contain all the necessary information onforest situation (e.g. health condition, conservation of stands, natural values and rarities,other forest functions); prescribed average relative errors of individual taxation elements arevery low (allowed errors could be higher), so the cost of forest inventories are very high; themethod of current increment determination (by boring and measuring in the field) is burdenedwith high possible errors (especially in broadleaves), because it is not based on the controlmethod (on permanent sample plots); allowable cut (for FMRs, FMUs and FMCs) is generallybased on the increment measured in the above way, which is considerably higher than thereal usable increment; increment and allowable cut are represented in the so-called totalwood volume, and the realised fellings are calculated from the net volume (by the deductivemethod); site class is assessed by the average tree height in the stands (instead of by socalled Site Index), which results in lower estimated site classes and therefore the lowernormal growing stock (in all stands, in which natural structure was disturbed by themanagement); in felling volume, the data for management classes are not presented perdiameter structure, so that it is nearly impossible to assess the diameter structure of thefellings, as one of the key indicators of sustainable management; in the planning ofsilvicultural works (in high and coppice forests) too much attention is focused onafforestation, compared to tending and selective thinnings (the latter are not even planned inmany FMPs), by which the development of younger natural stands and plantations is notimproved from the aspect of the stability of quality; operational projects do not have thecharacter of complex, long-term operational plans of forest management (managementsystem as a whole), etc.9.5 F OREST M ANAGEMENT S USTAINABILITYRegarding the maintenance and enhancement of forest resources (first Helsinkicriterion) the assessment is following: The area of high forests is most probably also furtherdecreased (reliable information is not available) due to excessive fellings and degradation inaccessible forests. A very modest economic capacity of forestry does not enable a largeextent of afforestation, an appropriate maintenance of the growing stocks and tending / 19
    • thinning of young stands. The decreasing of growing stock has been recorded in accessiblehigh forests, which may result in the reduction of the total growing stock of all forests.Consequently, the degree of maintenance of forest resources at the national level is verylow. Forest management still does not contribute to the appropriate enhancement/increase offorest resources.Regarding the maintenance of forest health and vitality (second Helsinki criterion) theassessment is following: The degree of maintenance of forest health and vitality (regardingall aspects of damage) at the national level, for the time being, is also relatively low, but thetrends are encouraging in this respect (with international assistance).Regarding the maintenance and enhancement of production functions (thirdHelsinki criterion) the assessment is following: The theoretical balance between annualgrowth and removals at the national level is favourable, but the real balance resulting in theactual growing stock trends, is not favourable. The trend of fellings is permanentlyincreasing (after the war), but it is not followed by an appropriate level of biological andtechnical investments in forest. Because of forest inaccessibility and non-openness, thefellings are not performed throughout the whole area of high forests. Consequently, theintensity of fellings in accessible forests is significantly higher. Mainly, only the highest qualitytrees are removed from the forests. The consequence is an intense degradation of diameterand quality structure of accessible / open high forests. The feelings have mainlyexploitational rather than silvicultural character. Therefore, the degree of maintenance andenhancement of production functions of forests at the national level is still very low,particularly because of the low accessibility / openness of forests and very low investments inbiological and technical forest reproduction.Regarding the maintenance and conservation of biological diversity (forth Helsinkicriterion) the assessment is following: Active maintenance and conservation of biologicaldiversity in production forests, except for the certain protection measures (e.g. prohibitedfelling of some rare tree species) and natural regeneration (of lower extent), is absent.Measures for the appropriate enhancement of biological diversity in production forests do notexist. On the other hand, the passive maintenance of biological diversity in the conserved(inaccessible) forests is very important. Biological (primarily structural and functional)diversity is reduced in the accessible forests.Regarding the maintenance and enhancement of protective forest functions (fifthHelsinki criterion) the assessment is following: In practice, insufficient attention is focused on 20
    • the maintenance and enhancement of protective forest functions (the level of maintenance islow and there is no enhancement) primarily because of the non-existing economicframeworks, although legal framework enables it.Regarding the maintenance and enhancement of other socio-economic functionsand conditions (sixth Helsinki criterion) the assessment is following: The degree ofmaintenance of socio-economic functions of forestry for the society is rather high (in thesense of direct material support and the local population employment), although the extent ofdirect support decreases. The public participation, public access to forestry information,popularisation of sustainable forestry and public relation do not exist yet. Other socialfunctions of forests and forestry are also not developed, and they are also not yet actual inthe present stage of social development. ***Taking into account special circumstances in Republic of Srpska, where forestry has startedpractically from the beginning in 1992, faced with the war and its consequences, and where itis still faced with the exceptionally poor general situation in the country (great economic andsocial problems, great pressure/impact of politics at the Republic and local levels, general"non-legality" of the State institutions, non-market economy, difficult economical problems inthe wood industry, lack of active capacities for the processing of less valuable timber,general problems of transition etc.), it can be concluded that the present forestry and forestmanagement, particularly if it is compared with the Federation, has already reached a solidlevel, although it can not be proclaimed as sustainable yet.10. ASSESSMENT OF PRIVATISATION STRATEGY AND ITS SUSTAINABILITY (ANNEX 2)In accordance with the Privatisation Law and the corresponding regulations, as well asaccording to the guidelines in the framework of the Forest Policy Reform Study, the Statecapital in PFE, i.e. its organisation units, has been divided into strategic and non-strategiccapital. In addition to forests and forest land, which are not the subjects of privatisation, thestrategic capital also includes forest communication (roads and bridges), forest nurserieswith the accessory facilities and means of production, facilities in the function of hunting andforest infrastructure in the function of administration and management of State forests,except for the infrastructure for forest exploitation. In 2000, the non-strategic capital, whichmainly refers to the performance of forest operations, was separated into special, so-called 21
    • Basic State Forestry Enterprises (BSFE) for the performance of forestry operations. TheBSFE are going to be fully privatised (by direct or voucher sale). The number of such newBSFE is 37 (44 enterprises were separated out, seven of them were joined to theneighbouring ones). Overall book value of the State capital in the newly established BSFEsis 16,4 million DM. The value of the majority of these BSFEs is very modest (about half ofthem is below 300.000 DM, only few BSFEs the State capital is higher than 1 million DM) aswell as the capacity for professional, qualitative and efficient performance of forestoperations. Altogether 2.633 workers were transferred to these BSFEs, which means that stilla great share of production manpower (along with administrative employees) remained withinthe strategic part of the PFE.As the RS Government has decided that the PFE strategic capital is not privatised, theelaboration of the privatisation strategy for the strategic part (within the special privatisationprogramme), required by the Privatisation Law (1998), is no more actual. The privatisation ofPFE has thus been practically concluded. By separating (privatisation) of forest operations,PFE has considerably reduced the scope of its own productional activities. The performanceof these activities will be offered by auctions to private contractors. The productional activitiesstill performed by the PFE are seed and nursery production, hunting management andutilisation of other forest products. The PFE will also have commercial functions (marketingand sale of timber and other forest products) which will not be privatised (see also Annex10).By the privatisation of forest operations/production services, the PFE has been reorganisedin a form of forestry organisation with State forest service (for State and private forests) andcommercial (with the remaining production) functions. Forest service in State forests withinPFE will perform predominantly professional, co-ordination and supervision functions(supervision of private contractors) to ensure the commercial (and the remaining production)functions of the Enterprise.Mean problems of such a (re)organisation i.e. privatisation are the following (see also sub-study of GERELY 4): The strategy of privatisation of the non-strategic part did not lead to a privatisation of overall forest utilisation (performing of all operations/productional services in forestry, including the sale of timber products), which would result in (State or privatised) Enterprises for operational forest management. Therefore the motivation for the 4 Privatisation of forestry in Bosnia and Herzegovina. Final Report, PHARE TA, Sarajevo and Banja Luka,2000. 22
    • allocation of capital and manpower (professional and productional) to the separate enterprises was much lower. Preparation of the strategy of privatisation for the non-strategic part was not performed parallel with preparation of the privatisation strategy for the strategic part - within the special privatisation programme, which would also include the future model of organisation of the present PFE and resolve its major problems (problem of surplus manpower by social and other programmes, problem of large debts by State wood industry, problem of including external capital, etc.). The income from the privatisation (sale) of non-strategic capital will not remain in forestry, which is very unfavourable (i.e. because of the need for resolving its own economic and social problems). The separated BSFEs, which are going to be fully privatised, have a very poor material and often also personnel (professional) capacity. The prospects of these Enterprises are uncertain, and also the maintenance of professionalism and the quality of performing forestry operations, as the main precondition of sustainable operational forest management. This is especially important because of the previous unplanned privatisation of the means of production in many EFMs (Gazdinstvos), before passing the Law on Privatisation of State Capital in Enterprises (in 1998), which was not followed by an adequate extent of allocation of (professional and production) manpower. Such an unplanned privatisation weakened the PFE capacity for the performance of operations and it resulted in an exceptionally high number of small private contractors (mainly non- foresters), poorly equipped and insufficiently qualified for forest operations. On the other hand, in addition to numerous private contractors, the PFE was charged with the surplus manpower without the analogous capacity (means of production) for its own performance of operations. Such an unplanned privatisation was a large step backwards regarding the quality and sustainability of performance of forest operations. After the preparations for the privatisation of non-strategic capital, some production functions still remained in the Enterprise (e.g. seed and nursery production, other forest products), which could be the subjects of further privatisation. At the moment, it is better (because of surplus manpower) that these activities remain in the strategic part of the Enterprise which will perform them on its own. An important problem of the PFE status transformation is (still) the issue of merging the functions of forest service (and some administrative functions) with the commercial functions of the Enterprise i.e. the problem of subordination/dependence of forest service (profession) on commercial functions. 23
    •  Due to a fact that the sale of forest assortments is not privatised, and that it remains in State hands (PFE), it is real to expect a further strong impact of unfavourable general economic, social and political conditions and interests (at State and local levels). This will (at least for several years) make the PFE business on market principles difficult also in the future (e.g. free pricing and sale of wood assortments). One of the problems is also the problem of suitability of PFE internal organisation (with relatively independent EFMs (Gazdinstvos)) for performing its future mission (such State Enterprises, which also include the forest service functions, are most often fully centralised in other countries).For the time being, such strategy of privatisation (except for the unplanned "privatisation" ofthe working means, which occurred before passing the Law on Privatisation of State Capitalin Enterprises in 1998), resulting in separated enterprises for performing forest operations,can generally be assessed as acceptable - taking into account a very poor starting conditions(regarding capacities and value of working means), unplanned "privatisation" partlyconcluded, and pre-decided general privatisation policy (by the PFE) - although the finalresults of privatisation regarding both the quality and the capacity (of separated enterprises)are not encouraging.After this privatisation and especially also the privatisation in wood industry has beencompleted, and the market conditions have been established, a substantial enhancement ofthe economic situation of forestry of the Republic of Srpska can be expected.Forestry in Republic of Srpska excels forestry in the Federation regarding privatisation and itis on its good way to carry out the reforms necessary for its transition to market economyrelatively quickly.11. PROPOSALS AND RECOMMENDATIONS FOR CHANGE AND HARMONISATION OF FOREST LEGISLATION (ANNEX 3, ANNEX 8)Principal proposals and recommendations for changes and amendments of the Law(concrete organisational solutes not included here) are following: General legal provisions:1. Amendment the general legal commitment regarding the method of forest maintenance, regeneration and utilisation, by the international (Helsinki) definition of sustainable forest management; 24
    • 2. Redefine the multiple-benefit forest functions (e.g. with the extension regarding nature conservation functions and functions of biodiversity conservation), which would not include production functions; International legal commitments:3. Current legal provisions should be amended by the obligation to adopt the national forestry policy and national forestry programme (programme of sustainable forest development) by the Government and the Parliament;4. By Law Amendment, ensure the participation of stakeholders in the forming of forest policy and forest management planning;5. The Law should include the obligation of monitoring and assessment of forest biological diversity;6. The current provision regarding the monitoring of health condition of forests, endangered by emissions should be amended with the commitment for performing inventories and monitoring of health condition in all forests; the methodology should be defined by a special regulation (apply ICP methodology);7. The Law should include the commitment to establish / extend the protected forest areas, forest reserves and representative or unique examples of forests. Forest administration and management:8. Correct the definition of forest management (which now also contains other functions, such as hunting, tourist and catering functions, fishery), based on the standard forestry definition;9. Define the function of ownership-administration of State forests (independent of the functions of forest management);10. Correct the inconsistency of the Law regarding the administration and management of private forests (which should be administered and managed by the owners, no matter whether the private forests are within or outside the FMRs):11. Define the functions of the (professional) Forest Service for the directing of forest management, which are in public interest (for all forests), together with the definition of the institution(s), which perform(s) the service; Administration functions of the Public Forestry Enterprise:12. The certificates to forest engineers for tree marking in private forests should be the responsibility of State administration or a special independent institution (e.g. Chamber of Engineers); 25
    • 13. Licences for felling in private forests should be transferred to be the responsibility of State administration (e.g. Forest Service for private forests in the framework of MAFWM).14. Licences for the clearing of forests (also below 0.5 ha) should be transferred to MAFWM, at the proposal of PFE / EFMs (Gazdinstvos) ;15. Adoption of FMPs, wildlife management plans (WMPs) and programmes of forest management in the Karst area should be transferred to MAFWM, at the proposal of PFE / EFMs (Gazdinstvos); Forestry planning:16. The Law should include the provision for the establishment of FMRs, which include all (inclusive private) forests;17. Consider the potential establishment of larger spatial units of forests and wooded lands (larger regions) for the need of regional forest development planning (and its possible introduction) with the appropriate forest inventories;18. Supplement the methodology of forest management planning (the Rule-book) so as to ensure the needs of sustainable forest management and biodiversity conservation (based on the European criteria and indicators of sustainable management, as well as the European operative guidelines for sustainable management);19. Include the commitment to maintain the cadastre for private forests (e.g. the commitment to Forest Service within PFE or MAFWM); Forest reproduction:20. By the amendment of the Regulation, the private forest owners should also be able to use the resources of multiple-benefit forest functions and extended forest reproduction;21. Eliminate the legal provision, which prevents the cross-financing of simple forest reproduction between FMRs;22. Introduce the commitment to central accumulation of the funds of simple forest reproduction for State and private forests, including the appropriate institutional solutions;23. Redefine the measures of simple and extended forest reproduction (primarily in the sense of clarification of definitions) and exclude the purposes which do not belong to forest reproduction (e.g. purchase of the means of production);24. Increase the legal rate of allocation or payment the funds for simple reproduction of State and private forests (to minimum 15% of the value of sold forest assortments); annual allocation of means above the legal minimum should be specially regulated for State forests (e.g. by the Ministers Regulation); Forest protection and conservation: 26
    • 25. The Law should include the commitment to establish the Prognostic-Diagnostic and Reporting Service (for forest protection);26. The Regulation on Forest Order should be amended or a special regulation should be adopted, which would include even the minimal ecological requirements regarding the forest management techniques and biodiversity conservation (e.g. based on the European operational guidelines for sustainable forest management);27. The Law, i.e. Regulation should define the method and limitations of the utilisation of other forest products (in the sense of nature conservation), especially rare and endangered species (i.e. plants);28. Introduce the commitment to forest fire monitoring and database keeping (according to the provisions of the European "databank" on forest fires). The Karst Area:29. Solve more efficiently the problem of financing the protection, afforestation and reconstruction of forests in the Karst area, optimally by a special Law (especially because of the need for introducing budget funds) and by the corresponding national programme on its basis. Forest utilisation, timber sale and prices:30. Adopt the Regulation on the minimal (personnel and other) conditions, which must be satisfied by contractors in forests (per categories of forest operations);31. Change the legal provision regarding the contracts for the performance of forest operations / services in forestry based on auctions, which should be harmonised with e.g. the Public Procurement Law (instead of with the Concession Law);32. Repeal the legal provision of the priority right of the local wood industry to buy forest assortments;33. The Law should define additionally that the prices, fixed by the Price List (the Government, i.e. PFE) should be used approximately as minimal; by the Law amendment, a special commission should be formed for pricing, composed of stakeholders and supported by the corresponding professional service for marketing and prices; Forest Inspection and penalties:34. Penalties for major offences should be higher (e.g. for forest devastation, non- implementation of FMPs, non-allocation or non-purposed utilisation of the funds for forest reproduction) both for forest managers and for responsible and individual persons, all penalties should be defined at the lower level only (that they can be only higher). 27