NGO BROC traditionally conduct monitoring of high value investment projects into timber industry, trying to protect human rights and environmental values of our intact forests from serious and traditional destruction, caused also by governmental privileges on economically prioritized territories like one around Komsomolsk and Amursk in Khabarovsk region. This region was an object of high public attention during recent winter in framework of governor’s elections, where voters tried to replace former governor of unpopular party United Russia by new liberal democrat from LDPR.
There was a hard political battle, as usual followedby deep revision of business groups, controlling the key assets. It was the more complicated and hard that more and more business groups at the Far East are trying to get off the Moscow based control by using political parties, alternative to governing one, United Russia. Actually, trying to overcome it’sheavy administrative resource, new governor SergueiFurgal won elections in September on the second stage with serious excess over his competitor from Entire Russia.
As influential businessman and politician (member of Federal and Regional Congress during several years as representative of Liberal-Democratic Party - LDPR), getting public support on elections, Furgal – governor immediately demonstrated his resolutive position on practice, mainly in the fight against corruption and official privileges. He firmly reduced level of salaries and pensions of all officials in regional government, including his own one, cut many unreasonable and expensive governmental purchases.Accordingly, he started to revise all set of remarkable investment projects, which traditionally in current Russia are the popular source for controlling officials to steal budget or investor’s money. Obviously, Amursk Pulp Mill project, which creation was granted by Chinese pulp monopoly last October, also became a subject of serious scrutiny, which could not remain invisible for Chinese investors.
Such practice for governor in Russia is quite unusual, and caused serious opposition to his actions from the side of regional Legislature (Duma), obviously controlled by majority of United Russia party. They undertook several efforts to limit governor’s official power, which were not successful, but also essentially reduced interest to the region from both foreign and Moscow based investors. Also, regional Legislature should be re-elected later in 2019, and governor’s party LDPR seriously hopes to strengthen it’s position in the body and overcome influence of United Russia, obviously supported by President. So, analysts forecast that hidden battle against Furgal will continue in both political and business fields, including timber industry.
By the recent media report, Furgal stated that Chinese investors keep deep silence about any movement ahead with Amursk Pulp mill. And, which seems more significant, governor said that his government is not in a rush to go ahead with it as well. “Chinese have enough own pulp mills and seem not highly interested to develop such deep timber processing in Russia, - Furgal reportedly said. – They still are much more interested to import raw logs and thus keep their huge lumber industry alive. And we here have some other plans to develop our timber industry. For example, we would like first to reanimate Arkaim lumber facility in Vanino, until recently the top global quality FSC certified lumber enterprise”. Arkaim Joint Venture run bankruptcy several years ago, when Moscow based coal monopoly EurAz enforced regional government and took off main shipping terminal from Arkaim in Vanino for coal shipping.
Such statement of Furgal looks strategically reasonable and responsible, since he was himself involved into timber business during several yearsand know all the good and bad regional trends in it. As to Amursk, RFP-Group, the owner of most lumber facilities in this town, now keeps silence about formerly designated pulp-paper production there, and concentrate all attention of holding upon much more marketable lumber. Production of different kinds of it there at the Komsomolsk Advanced Development Zone (ADZ) with some financial and export privileges looks more attractive for new RFP management. This holding, united 7 FSC certified logging companies, recently changed certification system from FSC to PEFC, which opened access for them to many intact forests in Khabarovsk Krai, not accessible under FSC strict standards. In combination with privileges of ADZ this shift may help RFP to attract another foreign investor – if not to pulp, then to lumber production. For intact forests of the region there will be no difference.
In addition to that, serious intrigue to the hidden regional political and economic battle was added by recent arrest of former long term governor of Khabarovsk region and even presidential “gaulaiter” of the whole RFE Victor Ishaev, which openly backed Furgal in the recent election. Analysts consider this gesture of state power with quite unclear and not serious accusations as warning, alarm signal from Moscow to any regional intentions to get more independence from Kremlin, as it used to occur in 1917-1922 and in 1990-s.RFE as resource colony for national oligarchy is crucial both economically and politically, so any signs of prevailing regional interests over Moscow basedis traditionally accepted as extremism and separatism, despite that most national and Chinese monopolies working here are far not respectable to current resource legislation and human rigts.