Pēters Putniņš speaks with Māris Liopa, Chairman of the Forest Certification Council of Latvia, and Pauls Rēvelis, editor of zemeunvalsts.lv.
As Chairman of the Board of “Latvijas valsts meži” (LVM), how do you see the place of a large company, a major state-owned enterprise, in Latvia in the current situation (the Green Deal, war, resource shortages, price increases for everything)?
The question is very, very fundamental, and I have given it a great deal of thought.
As the head of the company, it is important to me that every representative of Latvia's forestry sector understands that we, the joint-stock company “Latvijas valsts meži”, are nothing special – we are one of the many forestry companies in Latvia. I particularly want to stress the “one of”! Of course, we have our specifics, but we cannot consider that there is “Latvijas valsts meži” and then there are the rest. That is not the case! Yes, every company in the sector has its owner—in our case, the Latvian state, in others, someone else—but we all, without exception, exist and work in the very same business environment, which is not always competitive, but its basic tasks are clear.
The core task of LVM stems from business principles: to carefully and efficiently manage the state assets entrusted to us and to generate profit. Of course, there follows a series of other, also very significant issues, but they are all subordinate to these two most important ones. There can be no talk of prosperity, development, or well-being if we do not create value and are not a financially successful company. This, in turn, means that LVM competes with companies of its specific nature or business direction under equal conditions, both in Latvia and in the world. Just like everyone else, we are situated and operate in conditions dictated by the business environment.
This is a very important aspect that I often try to remind and emphasise in conversations.
By strengthening this understanding of the situation, many misunderstandings could be excluded from the agenda, or they would simply disappear on their own. We can only maintain sharpness, efficiency, and precision in our operations in a dynamic business environment—we are a company whose task is to produce.
Speaking of the need for the company to make a profit, during the previous government, non-governmental organisations representing entrepreneurs spoke quite loudly about this issue; specifically, as the new government began its work, needs (even demands) for finances have been echoing from every side (one only needs to turn on the TV, radio, or look at social networks), with some politicians again forgetting that this money must be earned. What should a state-owned enterprise, whose task is to make a profit, do?
A state-owned enterprise must make a profit, there is no doubt about that. It is also important to correctly orient oneself to the existing circumstances. The direction a state company takes depends not only on the owner but also on the company's management. In my opinion, the only right path, in these and other circumstances, is to stick to core values and core tasks—the better the company's strategy and methods are developed—for example, not to fear competition, to get involved in all processes, and to effectively try to earn as much as possible—the more it will lead the state towards prosperity. LVM dividends reach the state treasury, augmenting the state budget every year with substantial sums.
Answering the question, policy directions and priorities can change, but the core values and basic tasks will always remain—I will repeat myself—to look after assets, grow them, and generate profit. If the company management maintains these classic values, the state-owned enterprise will not err in its work.
Then there is the European Green Deal, which—contrary to the goal of a state-owned enterprise to make a profit—provides for, for example, a reduction in economically usable areas.
During my term on the LVM Board, this will be one of the most important, if not the most important, issue. The development of the Green Deal and the opportunities and challenges associated with it become more visible and topical every year. We are paying serious attention to this issue within LVM.
If the European Union and Latvia as a member state do not want to fall into the trap of exaggeration, there is one solution: balance. I think every European and every Latvian resident supports a green Europe and Latvia, supports climate change mitigation and the preservation of biodiversity; there are no disputes about this. What is more, I believe that Latvia is a forerunner in this regard, starting from the time when the first nature reserves were established here (Moricsala in 1912).
It is important to avoid unnecessary sacrifices, to put it figuratively. The view of the ongoing processes must not be blurred.
What is the Green Deal? A philosophical policy direction that has been accepted and agreed upon. It is clear that it will remain so, and it is impossible to change it objectively, but... We must not cause economic harm to ourselves, our country, and its people through a dogmatic approach. No one has repealed nature conservation norms and principles; in Latvia, all of this “works,” starting from the responsibility of every landowner as set out in laws and ending with non-governmental organisations. For example, in “Latvijas valsts meži,” about 30% of the territories entrusted to us have limited possibilities for economic activity—these are large areas in terms of hectares, and at the same time, we assess the potential impact on the environment in every action we take.
The question is different: if large areas are reserved (left) for the preservation of biodiversity, are we leaving these territories in abandonment—literally, not touching them—or do we want to increase these areas even more? Do the people of Latvia realise that this is essentially a wish to see and preserve large areas of unmaintained, neglected forest? No one will willingly enter such jungles, and no one will enjoy them. Surveys clearly show that people traditionally choose to walk, pick berries, pick mushrooms, or exercise in a well-maintained, accessible forest. Our forest management traditions are more than 200 years old—the forest is grown, planted, and tended, and it is not untouched jungles that create a green Latvia, but rather a forest that someone has tended and cared for.
The greatest danger in the future is the possibility that the Green Deal might lead us to a confrontation between forest management and increasing its areas, as opposed to large areas of unmaintained forest. An unmaintained forest creates a series of problems—the forest is not healthy and resistant to wind, snow, and other damage; the question of carbon dioxide (CO2) sequestration is topical; and the risk of pest infestation increases significantly. I will add that even greater attention will have to be paid to the issue of pests—the eight-toothed spruce bark beetle; the last year clearly shows that the situation is developing unfavourably for us. If there are large areas next to maintained forests where any activity is prohibited, one must ask what will happen to the spruce forests and whether people truly want forests where the bark beetle “farms” or feasts undisturbed?
Can people who are “supporters of untouched forests” truly imagine what the Latvian landscape will look like? It will be contrary to everything that has happened in Latvia and what we have seen in the last few centuries. A large part of the forests where we currently work were planted in the Tsarist era, in fact, during the period of the manors.
The issues I mentioned undoubtedly relate not only to “Latvijas valsts meži” alone—we have quite a number of private forest owners. By withdrawing large territories from active management, one must count on a decrease in the use of the renewable resource—wood—in the national economy, which will be replaced by fossil resources, lower carbon dioxide (CO2) sequestration, lower revenues, and corresponding consequences for the national economy—a reduction in jobs and a decline in the well-being of the population.
I would like to emphasise that growing trees and rapidly growing forest stands are one of the main tools we have to capture carbon dioxide from the atmosphere, thereby mitigating global climate change. “Latvijas valsts meži” invests a lot of work and financial resources every year to increase forest productivity and forest growth rates, thereby also increasing carbon storage in wood in the forest areas where we work. This complex of measures is aimed at fulfilling the goals of the Green Deal—sustainable resource management, and quite specifically, removing carbon from the Earth's atmosphere and using renewable resources based on wood and replacing fossil fuel sources.
Of course, the state as an owner can decide differently, and tasks can also be different. LVM, as I have already emphasised, is one of the players in the sector—we cooperate with loggers, transporters, and timber processors—these are jobs, they are our own Latvian people—acquaintances, friends, and neighbours. This issue must also be viewed in the context of our neighbouring countries, which have shaped their business view of the forest based on production and profit principles—we grow the forest and harvest the crop while simultaneously caring for biodiversity and not polluting the environment. We would very much like for such a principle to be maintained in the future as well, not forgetting the important social aspect—because the more funds we have, the more we can give to people—this refers to recreation areas, hunting opportunities, forest trails, and the maintenance of lakes.
A very significant part of our business is the production of seeds and seedlings; in the near future, due to all the aforementioned circumstances and considerations, we intend to focus more on birch seedlings and their selection. With seeds and seedlings, we supply both Latvian forest owners and successfully compete in our climatic zone. We plan to increase the volume of seedling cultivation, which is why it is important to clearly know that we still want new forests, want new stands, and want to renew and tend the forest in the future. It is important to me that people outside the sector and people in politics understand that it is not just about LVM, but about a large number of specialists and professionals from various fields who are involved in this work.
Very precisely stated regarding the Green Deal as a philosophy. How can we keep it from becoming cumbersome? The philosophy and good ideas are already hidden deep, deep under the huge burden of documents, regulations, and rules.
The most dangerous thing is dogmatism. We know well where that led Latvia in the period from 1945 to 1985. No dogmatism is healthy; flexibility of mind and a connection to reality and human needs are objectively necessary. If we approach the philosophy of the Green Deal while maintaining this flexibility, we can also deal with the bureaucracy. If something is done just for the sake of doing it, the result could be sad.
Looking at this issue only in the European context—Europe is not the largest part of the world, but it is quite different in terms of both traditions and climatic conditions. For example, in our region and Scandinavia, the forest is viewed as a resource; in Sicily, on the other hand, there are not many trees, and they would be worth protecting, which is a completely different matter. We cannot treat everyone in Europe the same way.
I recently read a scientific-political article about the Deforestation Regulation, where we in our region are actually being “connected” to tropical forests and the situation in them, as well as with territories where there are no forests at all. So... I will emphasise again that it is important for us—Latvia—to formulate our wishes and equally important to defend our interests!
I understand the seriousness of the Green Deal and that, at its core, it is correct—anthropogenic pressure is increasing because the population on Earth is growing. In Latvia, we do not feel it that much, which is also understandable. There must be clarity—what exactly in the whole list of problems is applicable to Latvia—what is a real problem, and what is a made-up one, without forgetting national interests.
In “Latvijas valsts meži,” we will work on Green Deal issues even more, both now and in the future. I believe that competence centres for the implementation of the Green Deal should also be established in state institutions and state business structures. Paraphrasing the saying about the birth of truth, I would like to note that truth lies in aligning interests, not in arguments. In this way, we would arrive at a balanced and clear conclusion—how best to implement the Green Deal. In order to be able to judge competently, to be able to converse and discuss on an equal footing, knowledge and appropriate competence are necessary.
It is also very important that we are informed about all current events in a timely manner—Latvia’s misfortune for decades has been the fact that sometimes something important is missed, the necessary reaction does not follow at the right time, and as a result, it is already too late to act. At university, I was taught that there is no point in picketing the Saeima on the day the Saeima is deciding or will decide on the relevant decision. One must speak about an issue even before a working group is formed to prepare it. It is about information flow and content—it is good and welcome if such a significant topic that concerns every resident of the country—the Green Deal—is discussed as broadly and loudly as possible. That also makes the process much more democratic.
Speaking of the level of public awareness, there is a problem coming from the so-called “old” European countries, namely, “searching for the Congo in Latvia,” not only by saying “everything is bad” but, for example, by applying the problems of the equatorial belt to our latitudes.
The core interests of the forestry sector are not in the slightest contradiction to the interests of our country’s residents. This question is very important, and it is entirely the concern of the forestry sector. Statistics show that the growth of wood in our forests significantly exceeds the volume of logging every year; the net increase in wood stock is about 2 million cubic metres; more forest is being tended every year; and the quality of maintenance is improving; which accordingly means that the forest is becoming increasingly vibrant and viable, and we are better meeting the requirements of the climate and the Green Deal. “Latvijas valsts meži” plants two trees in place of one that is cut down. If we look at one forest growth cycle—from seed to timber processing, periods of decline have not been experienced in Latvia. The sector has been going up and in the right direction all the time.
In this regard, cooperation with the sector’s non-governmental organisations is very important.
At the moment, I am devoting almost half of my time to this issue, contacting colleagues in the sector specifically on Green Deal issues. It is clear that these issues affect and will affect our direct business. We understand that it is not and will not be just about forestry or timber processing, because the range of issues is much wider. Every decision that affects and influences the sector in the context of the Green Deal gives a correspondingly positive or negative result for the business. In this regard, it is very important to remember that we are not talking only about a specific decision that affects us directly, but also about colleagues working in the construction sector, transporters, etc. The forestry sector is large and is one of the main sectors of the Latvian economy.
In parallel with the market situation, technical innovation, and novelties in wood use, there is a series of issues to be solved (also problematic ones), where the Green Deal is just one of a broader list. But—it must be remembered that the Green Deal is significant enough in this context because it directly affects the areas of territory being managed.
In the Green Deal itself (the aforementioned very broad set of documents), we can already see and read many contradictions.
Exactly! If we return to the philosophy of this idea or plan that we spoke about earlier, it is the increase of territories untouched by human activity and the intensive and correct development of traditional forestry. Wood is one of the most sustainable materials and a completely renewable resource. What, in my opinion, must not be allowed? The solidification of a confrontational course in politics, which would be the worst possible thing.
What should be expected from forest science in this situation?
Speaking of science, I have little to add; I am very grateful to the Latvia University of Life Sciences and Technologies (LBTU), the Faculty of Forestry, and the forest science institute “Silava,” which is one of the most powerful in its field in Europe. Our plans are to deepen cooperation and deepen our long-term research programmes. Competence centres must be established. I know that private forest owners also cooperate with scientists, and I am sure that from the LVM side, we will cooperate and use the given opportunities. I know that representatives of the production sphere are also strong in this area; for example, JSC “Latvijas Finieris” is engaged in its own science programmes.
We are interested in ensuring that senior students at LBTU are in our sights so that we can interest them and employ them in the sphere of practical (applied) forestry. At the Faculty of Forestry, young people gain an education that can be used in practical work. Qualified foresters and forestry specialists should immediately be “put to use” in the labour market.
Mentioning non-governmental organisations and education, it is very important to inform specifically the younger generation—students, vocational school pupils, and secondary school students—about current industry issues. For example, the Forest Certification Council of Latvia already created the Latvian Forest Programme in 2015, with which it visits the LBTU, Daugavpils University, Ogre Technical College, municipalities, etc. It is very important for young people to receive broad and comprehensive information. In our opinion, almost every graduate of the Faculty of Forestry should, to some extent, perform the functions of an ambassador (explainer) regarding what is happening in the sector.
Absolutely! Patriotism for the industry is formed during study years.
It is similar with hunting management. As is well known, there are people who are always ready to accuse hunters of animal murder, entertainment, etc. What is it like in reality? Hunters are often the only ones who help forest animals survive periods of deep snow or harsh winters, provide food in feeders, and assess plagues, etc. We must not lose competent people in a “mush of ideas.” Young people need work.
At the end of last year, representatives of the LVM Board and Council met with Dean Prof. Linards Sisenis at the Faculty of Forestry in Jelgava, and we talked about what and how we can support, and what would be necessary.
Everyone who plans to obtain a higher education diploma in forestry is welcome at “Latvijas valsts meži.” We are happy to invite senior students, and we are interested in having Jelgava graduates work for us. It is a hopeful view of a healthy future for the industry.