Forestry industry: cleaning and total control

16 października 2023

For a year now there have been no forestry enterprises in Ukraine. What are the results of the market during this time? Including from the point of view of the fight against corruption

A year ago, Ukraine lost its forestry system. One of the main reasons – this is corruption. Purchases of valuable cars, payments for fictitious work, inflated staff with “dead souls.” In some forestry enterprises they stole everything.

In 2021, we enlarged the forestry enterprises, leaving 150 directors instead of 350. There is more order. But even in this form the system was difficult to control. Therefore, we carried out the second stage of the reform, creating the DP “Forests of Ukraine”.

Although even today we are still raking up the forestry heritage. Overpayments, shortfalls, murky contracts, alienation of plots. However, the situation is gradually leveling out.

In the structure of the State Enterprise “Forests of Ukraine” The established Security Department, which collects and analyzes information from various sources, conducts independent checks. Based on the results, we clean the frames.

Since the beginning of the year, 40% of the management team at the regional level has been renewed. 56 directors were fired. Many materials have been transferred to the police and the State Bureau of Investigation, more than a hundred criminal proceedings have been opened. 

We conclude annual employment contracts with branch managers – and everyone knows that at the end of the year the contract may not be renewed. And if you see one or two illegal logging, then you automatically prepare to “go out with your things.”

But institutional changes are no less important. Transparency and competition.

The old days have passed, today not a single top manager of “Forests of Ukraine” will not help you “with timber”, because all timber is sold exclusively through the exchange.

No manager is able to push through his supplier of fuel, equipment, services, because all purchases go through Prozorro.

Last major purchase – insurance of transport and special equipment It is no secret that insurance at state enterprises is often associated with kickbacks. But we held a tender for Prozorro. Four companies participated, and the price was reduced threefold!

Of course, you can nominate your company, but the winner is still determined at an open auction.

For the first time, we even put timber harvesting services up for auction! This is a real reform within a reform. Coming out of the shadows, becoming civilized, a new huge market worth billions of hryvnia is being formed.

We are transferring our wood processing workshops to the State Property Fund for further privatization. There is often no point in curing corruption; only radical solutions will help.

We deliver three powerful blows to illegal wood. The key task is – prevent it from being legalized and taken out of the forest.

Wood loaded onto timber trucks is now photographed from three angles, after which the photo files are uploaded to the Electronic Timber Accounting (EDI) system. Forest guards and law enforcement agencies can stop the car, go into the EDI and compare the type of wood with the photo at the time of loading.

We are planning to introduce GPS monitoring of the movement of cargo and specialized vehicles in forest areas. The pilot project will start this year. We will record the route, places and times of parking, fuel consumption. This is total control, leaving no chance for more or less large-scale schemes.

Finally, we are putting things in order with the warehouses. Today we see the remains of wood in the branches, but where are they physically located? Because there can be many storage places. Therefore, we will load the coordinates of all existing compositions of harvested wood in forests into the EDI, which will significantly simplify and speed up inspections.

This is only part of what has already been done and what is being done. In fact, overcoming corruption is not only about desire and political will. This is a great job by a team of professionals. This is also an investment.

For example, “Forests of Ukraine” purchases a batch of smartphones (not iPhones!) – so that each forestry has one terminal for making non-cash payments, entering information into EDI and photographing timber shipments on timber trucks. These are fairly cheap devices. If the presence of such a smartphone does not allow you to sell your car and take out at least firewood from the forest, then the device will already pay for itself at least twice!

But I am convinced that there will be more than one such machine. Schemes that have existed for decades will be closed. And we will definitely see this due to the growth of state budget revenues.

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