MOSCOW, MARCH 17 (RIA NOVOSTI) - The new Russian Forest Code provides for the imposition of private ownership of forests and toughens environmental-management demands to their users, Mukhamed Tsikanov, Russian deputy Minister for Economic Development and Trade (MERT), said to reporters. He was commenting on the draft law to be discussed at a cabinet session on Thursday.

"If a lease-holder has proved to be an upright user, fulfilled all the contractual and public (environmental protection) norms, after 15 years he may obtain a forest plot as property, paying the ten-year sum of lease," Tsikanov said.

Privatization will not extend to forests on the border and what is called "protective forests" (along river banks and water reservoirs, natural preserves and especially valuable woodlands). The right to use other forests plots will be granted for 10 to 99 years not administratively, as is the case now, but by auction, Tsikanov said.

The initial price at auctions will be set on the basis of the pay rate per cubic meter of timber of a wood grade, set by the Russian government. Auctions will be held by federation entities to which the federal center delegates the right to use forest plots.

Forests will be items of turnover between citizens and objects of pledge, Tsikanov noted. "This will increase the investment attraction of the wood complex," he believes.

According to the ministry, the new rules will raise the price of forest resources by at least three- to fourfold.

The present Forest Code does not allow making full use of the economic resource of the forest complex, Tsikanov noted.

"Wood cutting is now made on only 25 percent of the estimated cutting site. Actually, between 120 and 150 million cubic meters is felled instead of the possible 550 million," said Tsikanov.

He also noted that in the majority of today's woodlands the ecosystem has been wrecked because there are no mechanisms to encourage the normal environmental condition of forests. The new code will maximally toughen the ecological component.

The state will also impose on the leaseholders of forests the obligations to rehabilitate forests, protect them from fire, pests etc., Tsikanov said.

The new code will make it impossible by administrative order without public hearings to move protective forests into another category.

"There will be no instructions, clauses, orders or decrees to deprive of the right to use forest blocks. The parties (proprietor and leaseholder) will be able to sever the agreement either on mutual consent or through court," he said.

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