As we approach 29 October, the day of the 11th International Conference of the Forest Certification Council of Latvia, “Environment and Sustainable Forest and Land Management – Current Solutions”, an interview with Jānis Švirksts, one of the conference speakers – why is an instruction, which some have labelled guidelines, being drafted right now?

As an expert in the forest sector and a certification professional, do you have any idea why the Latvijas Banka guidelines* were created in the first place, and why at this particular time?

Of course, Latvijas Banka can explain that credit institutions must assess environmental risks and that it has a basis for developing a methodology for assessing this risk. The reasons for the development of the guidelines are understandable enough, but the question is about the content of the document produced.

You have been active in the forest sector for a long time and have been involved in the development and discussion of various documents and legislation related to it. In your opinion, why did Latvijas Banka, which to many seems like a certain authority and role model, literally prevaricate, without explaining who exactly participated in the development of these guidelines? “We will say something”, “we won't say something”, “we could have said nothing at all...” I repeat, this is how an institution with a certain authority in society communicated.

In matters related to the environment, forestry and biodiversity, often much more important than a list of experts is how the final conclusions are actually justified. Latvijas Banka has recently published the list of experts, and that is correct.

My question is different – why has the involvement of a wide range of experts resulted in such specific requirements, for example regarding soil preparation, species proportions or specific distances? Expert opinions can differ, and that is normal. Therefore, it is especially important to clearly show why exactly one solution was chosen and how its impact on forestry practice and business has been evaluated.

I recently participated in an event organised by the Latvian Biomass Association, where the development of risk assessments was discussed. Scheme owners often emphasise that it must be clear how a document was created, what sources were used and why specific decisions were made. If the involved and interested parties ask questions after reading a document to which they do not receive clear answers, it does not create a good impression.

What could be the future of the Latvijas Banka guidelines? Will they change them, or not; will they insist on their correctness and infallibility, or not; will they admit a mistake, or not?

Publicly available information shows that the pressure is quite high, and in my opinion, representatives of Latvijas Banka will have to seriously consider revising this document. It must certainly be taken into account that, in the end, it is they themselves who will decide this. The Prime Minister has spoken critically about this document in public, active discussions are taking place at the Ministry of Agriculture, and I will repeat – I think the bank will review the document.

For my part, I will add that they must certainly be changed. If we are talking about the quality of the guidelines, there are two types of objections to them – some are directed at groundless evaluations of forestry practice – what is and what is not environmentally friendly. For example, there can be two experts, both with relevant doctoral degrees and experience, one says A, the other insists on B. That is one situation.

Another matter is actual poor workmanship – for example, if they refer to FSC controlled wood, which is not a full certification system, or if only one certification system is mentioned. Why? The latter, in my opinion, shows that certification terms in the guidelines have not been used with sufficient precision. This is not a question of opinion on how the forest should be managed, but clearly visible poor work.

In conversations with colleagues in the sector who participated in the seminar in Valdemārpils, references to your report (the detailed analysis of the guidelines) usually come up. Are you the only one who has carried out such an assessment, or have others followed your example?

I am not informed. At the beginning of June, I was thinking about what information to include in my report; the guidelines had just appeared and there was an opportunity to talk about a “hot” topical issue.

Many have expressed opinions on the guidelines, including specialists from “Silava”. I wanted to compare them with other standards.

What is or is not sustainable and what is or is not supportable is not exactly what Latvijas Banka should redefine, even based on communication with interested parties. Latvijas Banka can prepare guidelines, but it should not be involved in creating new sustainability requirements for forestry. There are certification systems that have existed and operated for 20-30 years and which, through long-term communication with various audiences, have clearly defined what is understood by sustainability and acceptable forest management practice.

The Latvijas Banka guidelines contain many additional requirements, the majority of which – in my comparison nearly 75% – are not included in any of the world's most popular forest management standards – FSC and PEFC; that is exactly why it is not understood why without a publicly available assessment of the economic and industrial impact someone asserts: “This must be done!”

Another important thing – Latvijas Banka can probably refer to some EU regulations or frameworks, for example on green investments or something similar, but at least I am not aware of any EU-level document that sets exactly these requirements. One cannot assume that we have transposed something 1:1.

Why is the document called guidelines? In the EU, there are directives and regulations. Directives set the goal to be achieved, regulations are directly applicable. If a document is called guidelines, but it stipulates, for example, exactly which species, exactly how many metres, etc., that is not the principle of guidelines; it is effectively an instruction. By content and essence, it is an instruction.

Don't you think that Latvijas Banka has found a shortcut, which for years has been blamed on those drafting various Latvian legal acts – in place of a law, a detailed, finely descriptive instruction has been created, which one must follow with one's finger?

Exactly! I will add one thing, however – even a legal act or guidelines cannot be overly general, so that, for example, the operator or borrower does not understand what something means.

The preparation of this type of instruction, in my opinion, shows that we are once again putting the cart before the horse – instead of fulfilling certain requirements, we are trying to prepare additional reins that could create a less economically advantageous situation for our entrepreneurs compared to other countries, for example our neighbours. We see this especially in the context of lending – it has been much discussed and analysed in the media. In Latvia, companies already borrow less than in Lithuania and Estonia; this also limits the ability of companies to finance investments.

If one creates a working environment for an entrepreneur that significantly reduces the area that can be used for economic purposes or the use of species, the working environment worsens and entire sectors are affected. In the guidelines, mechanical soil preparation in forest regeneration is evaluated as an unfavourable activity, while not doing so is considered favourable. So, if, for example, I work in a soil preparation company or am preparing machinery for such a purpose, the guidelines also indirectly affect the operation of my company.

It is similar with spruce. One can discuss whether spruce monocultures or the excessive dominance of spruce in certain conditions create risks, but it is not justified to automatically turn a formal 50% threshold into a criterion for an unfavourable impact on biodiversity. Especially if the justification primarily talks about climate suitability for spruce, rather than a directly measured impact on biodiversity in Latvia.

I would call it groundless and damaging conduct. It makes me ask whether the consequences for business and management were sufficiently evaluated when creating such a document.

Has anyone started following the guidelines yet, and has anyone already been affected?

I have no publicly available information that commercial banks have already adopted this approach in their practice. But – what is dangerous and what should certainly be rebutted – is namely, “it's not mandatory anyway”, “they are only guidelines”, etc. That is said about many documents. About habitat mapping, too, it was initially said that it would not affect anything, but its impact has been very significant. Every such document, especially if it is developed by a sufficiently authoritative institution, can subsequently be used as a reference in the development of another document, for example, in a risk assessment or in the internal procedures of commercial banks.

I am not aware of any sufficiently broad discussion with the sector regarding the specific requirements found in the guidelines before the document was published. A document has appeared that could have far-reaching consequences that we do not yet realise. I will emphasise and repeat – developers of other documents may only need to refer to this document in their work, and based on it, many things can be concluded.

* Recommendations for identifying economic activities unfavourable and favourable to biodiversity