English documents

Terneyles-priority project - 2014

Around March 2008 “Terneyles” applied to regional Forest Service in Primorye for the forest lease of 685000 cu meters annual capacity to feed it’s prioritized national project. According to governmental decree of 2007, such projects, as soon as adopted by the Ministry of Economy, had to be granted with forest lease without bidding procedure and by 50 % of regular resource fee. Remarkable, that to this time FSC certified company already had leased forest lands with annual capacity 1 235 000 cu meters, and used only half – 634 000. Obviously, “Terneyles” did not need new forests to feed it’s new lumber facility, the more that there is a strong deficit of free forests for logging in Primorye. 

Also, trying to get the project adopted on the national level, “Terneyles” holding officials pointed out in their Concept note that they can actually feed their future new facilities with appropriate volume of raw logs, produced by it’s 3 “daughter’s”, also certified – “Amgu”, “Melnichnoye” and “Roschinski”. Currently they mainly export that logs and pay to the budget for their use full price. Nonetheless, Forest Service formally followed legislation and presented requested forest lease to “Terneyles”. And, during last 3 years company continued requesting and received more and more forest areas, justifying them by the priority project, already more than twice fed with raw timber. Company simply used temporary absence of clear governmental regulation of this procedure, adopted only in 2010, and actually had stolen millions from the budget, paying half of the obligatory fee for that new leases.        

Obviously swindler style trick was demonstrated by “Terneyles’ in June, 2011. Company entered next auction to get more 10380 cu meters, and artificially sharply raised the price, target to get all competitors off the process. “Terneyles” certainly won, but refused to sign lease agreement. Thus it simply disrupted auction and brought serious loss to the budget. This case could not be ignored by SGS auditors and should lead to stop-over of FSC certificate validity. But, it did not happen. By the Russian anti-monopoly law, “Terneyles” had to be allocated after that into special list of irresponsible companies, and illegally taken leases to be cancelled.          

Actually, vice versa, being unpunished and remaining still certified, company newly applied for the same forest plot which it won before, but now once more for the priority project, which meant getting it without any auction and for 50 % fee. Fortunately, strict order of this procedure was already adopted, and Forest Service rejected that appeal. 
Simultaneously, foresters reminded to “Terneyles” officials, that this just forest plot is already designated for another priority national project, being implemented by another company, “Biotop-wood”. Nonetheless, stubborn “Terneyles” applied to arbitration to take other’s forest off.  

We consider such behavior of certified company outrageous and absolutely not acceptable regarding FSC standards. We also reminded to ASI officials, that we and WWF many times reported about irresponsible audit of this company, conducted by SGS-East, which led to such rude violation of national legislation and FSC principles under FSC logo. Now it is a time to stop this certificate of “Terneyles” and accreditation of SGS-East.    

UN Forest Hero - 2011