The application of the new Law on Forests should begin by January 1, 2025, and by that time the formation of a new state company for managing the forest fund of Montenegro is foreseen.
The company would take over a large number of employees from the existing Forest and Hunting Management Administration and part of its responsibilities, while a maximum of 431 employees could work there.
With the new law, the state, in addition to establishing a forestry company, wants to reduce the shadow economy, achieve higher incomes and sustainable forest management, develop the wood industry, preserve biodiversity and create greater protection, strengthen inspections and controls and abandon the concession model, strengthen controls and inspections...
The Committee for Tourism, Agriculture, Ecology and Spatial Planning recently returned the law for revision in agreement with the Minister of Agriculture Vladimir Joković, because it received a large number of comments from municipalities, representatives of institutions, experts...
Joković's department told "Vijesta" that they expect both the law and the company to see the light of day by the end of the year, and that the main goal is to stop the damage caused to the state coffers and the economy by the system of concessions, i.e. the sale of wood in poor condition.
Consigned trees are sold at tenders in the deeper condition, which the users then cut and transport.
"All the analyzes and studies done so far by the Ministry of Agriculture show that the budget of Montenegro suffers damages from the current way of using forests, and they are expressed in hundreds of millions of euros. Therefore, the question of the rationality of establishing a state-owned enterprise whose establishment will stop the mentioned damages, while being self-financed and in addition allocating another 20 percent of income to the state budget, is misplaced. The new concept of forest management will bring tens of millions of euros of new receipts to the budget, which until now went to informal flows and ended up in the pockets of individuals", said the department.
They point out that, according to the Budget Law, they proposed funding sources to compensate municipalities for the income they received from forest use fees.
Continuation of the current sale of wood in a deeper state with compensation and income distribution, as they say, would lead to further irrational consumption of forests and investment in consumption.
They added that the headquarters of the new company will be known after making a functional analysis of the company and personnel by municipality, which, they say, will begin immediately after the adoption of the law in the Assembly.
In the plan tens of millions of income
Gross earnings for workers in the new company will be from 1.259 euros to 2.011 euros, according to the economic analysis of the use of state-owned forests. Better wages are needed, he says, and to reduce the risk of illegal activities that are present in forestry, including fraud and theft.
It is added that internal control and audits, which will be used to achieve the goals of the new company, will have a great impact on risk reduction.
In the analysis, it is written that several models for sustainable forest management were considered, and that the division of work and the formation of a new company is the most favorable. It is planned that the company will have from 280 to 431 workers, and by 2026, the number of forestry engineers and technicians would increase by 40 percent, as well as production. In 2026, the number of those who protect forests would increase by 10 percent.
The analysis points out that the state forests are not used enough and that the overall implementation of the annual plans is on average almost 61 percent of what was planned. In addition, it also says that forestry accounts for about 0,2 percent of the GDP, that is, that this sector has a huge potential for growth. That is why, after the formation of this company in 2024, it is planned to use a minimum amount of wood, i.e. more than 415.000 cubic meters, in order to fully realize the plan for the first time. After this sale, the revenues would be more than 21.410.000 euros.
It is planned that the volume of felling will be increased annually by 40 percent until 2026, while 20 percent of the income will be given for forest and land use fees. These fees, i.e. payments to the state budget, would be larger over time, and they would benefit the Forest Management for the purpose of financing the development of programs and plans for forests, while the other part would be paid to the municipalities.
"The projected income statement shows that the new company can achieve revenues that are planned for the year 2024 in the amount of 22.884.782 euros, for the year 2025 in the amount of 31.822.254 euros, for the year 2026 in the amount of 45.132.158 euros. The income planned for 2026 only from the sale of wood assortments from state forests certainly represents serious funds, which will have a multifunctional positive impact on the integral development of the entire system. The projection shows that the company operates positively and achieves a profit ranging from 345.492 to 2.520.000 euros," the analysis reads.
According to the Report on the Conducted Impact Analysis (RIA) for this law, 150.000 euros are planned for starting a new company this year, while in 2025, after assuming responsibility, 10.650.000 euros will be needed for working capital for services, as well as 12,8, XNUMX million for the purchase of technology and machinery. The company would integrally manage the state forests, engage in cultivation and protection, have the right to use forests and land, and make profit through the production and sale of wood assortments, as they would carry out felling, production and hauling with their own machinery or assign the work to contractors, who will be selected. on tender. As it is written in the analysis, the sale will be done on the truck road or at the warehouses, at market prices that will be prescribed by the price list, which will be approved by the Government and the Forestry Administration.
"Production service costs consist of felling, manufacturing and hauling wood assortments to the truck route. Looking at prices in the surrounding area and in Montenegro, the analysis calculated that the planned price is 32 euros per cubic meter. The price structure is 12 euros for felling and production and 20 euros per cubic meter for hauling to the truck road, which makes up the total price for felling, production and hauling of wood assortments to the truck road," the document says.
It is emphasized that in the first year of operation, all production would be done by independent contractors who would be selected through tenders. The goal is that in 2025 the company will perform a third of its work with its own machinery, and that in 2026 it will perform 40 percent of these duties, so that its work will be independent and sustainable in the long term. Half of the expenditure in the first year will be only from production, but in the following years, due to the purchase of machinery, it is planned to reduce this part to 28 percent.
"Money to support the establishment of a new company will be provided from the budget, because it is needed for the start of work, primarily for the needs of production services consisting of cutting, cutting and hauling wood assortments to the truck road. Public procurement should be carried out immediately after the establishment and registration of the company, and in order to launch a tender, funds in the amount of 10.663.872 euros are needed. Production costs will be paid from these funds until the first income from the activity is achieved. During the year, these funds would be accumulated, and in the second quarter, the conditions would be met for starting procurement for basic assets (mechanization) and equipment," the document says.
It is also planned that the company will invest half a million euros in the renovation and construction of forest roads during the first year, so these amounts will increase over time. These changes in the forestry sector will also require significant changes within the Forestry Administration and a possible reorganization, as most of the employees will transfer to the new company.
Considered several models
The document states that the current legal and institutional framework for this sector is unsustainable, as forest management measures have not been carried out in the planned scope in any year, as shown by the financial reports. It is emphasized that even private forests have not been planned, as well as some of the state ones, that the forest guards do not have the equipment and vehicles for this work, that based on the available personnel and equipment, only 60 percent of the plan can be covered...
"The lack of funds for the development of forest management plans will result in the impossibility of including the forestry sector in the IPARD program for the next four-year period, which will result in the loss of significant financial resources from the European Union funds for the restoration of privately owned forests. The previous concessional way of using forests did not meet the strategic objectives of the forestry policy in Montenegro and it is clear that a reorganization of the forestry sector should be undertaken", the analysis points out.
That's why three models were considered, that this sector is managed jointly by a new company and the Forestry Administration, or that one of them takes over the responsibilities individually. In the event that the Forestry Administration alone manages the sector, the allocated money would not be sufficient for sustainable forest management, and enormous damages have been caused so far, due to inappropriate management of forests with an economic function. It is pointed out that according to the projections, losses await the Administration and a lack of money to cover the necessary expenses. In addition, it is stated that there would be a lack of money for forestry works, protection, preparation of planning documents, remittances of trees for felling, staff training, but also that insufficient work is being done on fire protection. It was also emphasized that the income in this case would be three times lower than if two companies manage the forests together.
On the other hand, it was also considered that the new company would take full control of the forests, in which the Forestry Administration would initially assist it. It is stated that in this case, monetary losses would grow during each subsequent year, because the Administration already performs a significant part of the work in forestry.
That is why the formation of a new company was chosen as the best and most favorable model, with the fact that the process will require significant changes in the Forestry Administration and a possible reorganization, in order to transfer a larger number of employees. This model will ensure the fulfillment of strategic goals and the sustainability of forest management, the strengthening of forestry capacities and the increase of areas under protection. health status of forests, sustainability of management and illegal activities in forests, arrangement and improvement of conditions in seed facilities, preparation of professional bases for regulations...
The new companies would, among other things, reforest, nurture new crops, build, rehabilitate and maintain forest roads, protect forests from fires, maintain borders between state and private forests, make remittances of trees for felling, issue permits for felling in private forests, issue certificates of origin, produced and sold wood assortments and provided professional assistance to owners of private forests.
The damage is huge, the mafia is strong
Minister of Internal Affairs Danilo Šaranović he recently said that the illegal logging of forests has caused damage to Montenegro of several tens of millions of euros, that numerous roads have been destroyed, but also that the forestry mafia is strong and organized, and that it has connections with part of the state apparatus.
He also said at the session of the Committee for Tourism that there is an initiative to give gamekeepers the status of official persons through changes in the law, which the Ministry of Internal Affairs will support (MUP).
At the session, it was heard several times that the situation in the forests is alarming, and New Serbian Democracy MP Jelena Božović stated that the damage from illegal logging is estimated to be between two and 20.000.000.000 euros.
State Secretary in the Ministry of Agriculture Andrija Delić he said that around 700.000 cubic meters of timber does not exist in legal streams and that the forests have been devastated. He pointed out that he believes that the new law will affect this gray economy.
Municipalities against regulations
Montenegrin municipalities have been opposing the proposed model for forest management for a long time, because through it they will be left without millions in revenue from forest concessions. Because of this, the municipalities have several objections to this Law,
The President of the Municipality of Pljevlja, Dario Vraneš, told the "News" at the beginning of the year that this way, instead of the four million euros received last year, only 700 euros would flow into the municipal coffers...
The General Secretary of the Union of Municipalities, Mišela Manojlović, said at the session of the Tourism Committee that laws are needed that will not interfere with the work of municipalities and that there is a possibility that a good part of them would already be bankrupt.
She explained that the new law violates the constitutional right of municipalities, and that no other financing models have been proposed, which will cause millions of dollars in damage.
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