More than half of the territory of Montenegro is covered by forest. Wood stocks are estimated at around 72 million cubic meters.
However, the biggest financial benefit from this natural wealth has so far been the concessionaires who have exploited the forests making huge profits.
Damage to forests and the state budget from long-term concessions, introduced during the former government of the Democratic Party of Socialists, is estimated at hundreds of millions of euros - the analyzes of the Ministry of Agriculture and Forestry have confirmed.
The new forest law has the ambition to change that.
It envisages the abolition of concessions and the establishment of a state enterprise for forest management.
However, at the local level, in the municipalities in the north of Montenegro, they oppose that solution.
Pljevlja is one of them.
"The adoption of this law would be catastrophic for Pljevlja. They would lose the biggest source of financing. Last year's revenue from concessions was around 3,5 million, and according to the changes it would amount to around half a million," the head of that municipality, Dario, told Radio Free Europe (RSE). You crow.
Until now, the municipalities on whose territory the forests are located have received 70 percent of the revenues collected by the state on the basis of the given concessions.
Why were the concessions disputed?
Despite this benefit, the residents of the northern municipalities warned for decades about the disastrous policy of forest management by granting concessions, which were obtained by companies close to the former government.
Namely, the state and local administrations received a symbolic part of the profit from the felling of Montenegrin forest trees.
The state received up to 14 euros per cubic meter of wood, while the concessionaire sold it, loaded on a truck, for up to 60, and in cases of export, up to 120 euros per cubic meter.
In addition, the concessionaires abused the so-called sanitary felling, which implies the felling of diseased or fire-damaged trees. They also cut down extra-quality conifers, fictitiously classifying them as trees designated for sanitary felling.
Frequent fires hid illegal logging. In the last ten years, more than 90.000 hectares of forests have been destroyed by fires.
In the same period, over three thousand criminal charges were filed for forest theft and illegal logging.
After the DPS government was replaced, the new government announced a crackdown on the so-called forest mafia.
Former Prime Minister Dritan Abazović said in Berane last October that the state lost more than one billion euros due to the exploitation of forests, and that it is officially declaring war on the forestry mafia.
In order to bring order to the forestry sector, all long-term concession contracts have either been terminated or expired by the end of 2022.
Instead of a concessionaire, the sale of wood continued in the so-called "deep condition", when the buyer pays for felling, hauling and transportation on an annual basis.
Those one-year contracts are essentially the same as concessions, only of shorter duration, the environmental organization Green Home told RFE/RL.
In that organization, they support the abolition of concessions, but point to the slowness of changes, because the law was promised as early as 2021.
What would the new law have to bring?
The Law on Forests, which is expected to be adopted by the parliament in the next two months, should establish sustainable forest management.
It envisages the abolition of concessions and the establishment of a state enterprise for forest management.
Master of Forestry and former director of the Forestry Administration, Srđan Pejović, explains that the solution that local governments receive 70 percent of the state income from concessions was problematic, because there was no obligation to invest that income in forest maintenance.
"The forest is an 'outdoor factory', and it must be invested in so that current and future generations can benefit from it in the long term," says Pejović.
He believes that the forest management system must be reorganized, first of all by introducing professionals in this area.
"And that is difficult in the conditions when politics decides instead of the profession. No matter how good the law is, it will be of no use if the decision-makers do not appoint people with knowledge to lead that business".
He indicates that the number of forestry engineers must be at least doubled, of which there are currently 70 in the Forestry Administration, and a solution must be found for more than half of the staff who are not from the profession:
"Forestry is viewed as party loot"
Pejović was at the head of the Forestry Administration from the end of 2021 to August 2022, while long-term concessions on preferential terms were still in effect.
As he says, at that time, an analysis of the previous concession contracts on 340 pages was done and handed over to the special police department.
"To this day, I have no feedback on that," says Pejović.
How much profit does the state count on?
The Ministry states that changes in the law will bring at least one hundred percent more profit to the state. They also give an example.
If the turnover of wood and wood products in 2022 amounted to 129 million euros, with the application of the new law, it would reach double the amount with the same volume of felling.
And if the production were to increase, the revenue could reach 400 to 500 million euros, the Ministry informed RSE.
In addition, they estimate that the state additionally loses several tens of millions of euros per year from unpaid taxes due to the gray economy.
The plan is to transform the current Forestry Administration into a company that would employ loggers, haulers, drivers, crane operators, and mechanics.
By abandoning the model of "selling wood by the stump", that is, concessions on quantity, we would switch to felling, production of wood assortments and their transport.
EUR 9,5 million should be invested in the procurement of technology, machinery, equipment and labor.
Doubts about the new forest management model
Andrijevici told RSE that municipalities should receive 70 percent of the concession fee, instead of XNUMX percent as before.
Other municipalities from the north did not respond to RSE's inquiry about their position on the announced new law.
There are currently around 400 employees in the Forestry Administration throughout Montenegro.
They fear that the transformation into a new company could leave them without a job in Pljevlja, where the headquarters of the administration with 85 employees was until now.
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