Forest Utilization Rights: Content and Problems of Enforcement

M.I. Vasilyeva, Doctor of Law, Professor, the Department of Environmental and Land Law, Faculty of Law, Lomonosov Moscow State University, Moscow, Russia

M.I. Vasilishina, Senior Legal Counsel, Legal Department of Federal Forestry Agency, Moscow, Russia

The content of forest utilization rights depends on several factors: 1) aims of forest utilization; 2) category of land to which the forest parcel belongs; 3) the type of forest utilization; 4) the way of forest utilization (with assignment or without assignment of a forest parcel); with extraction or without extraction of forest resources.

There are different aims of forest utilization. These aims depend on the interests of participants of forest relationships. Legal entities and individual entrepreneurs use forests for doing business. Individuals can be in forests for satisfaction of their subsistent needs (environmental, recreation, aesthetic), including gathering wild fruits, berries, nuts, mushrooms, other edible forest resources, and for storing up non-wood forest resources.

The legal regime of forests differs depending on whether forests are situated on forestry fund lands or on other categories of lands. Apart from forestry fund lands, forests can be situated on agricultural lands, settlement lands, lands of special protected areas, lands for industry, transport and other special purposes, reserve lands. The category of lands named “forestry fund lands” implies the presence of forest, whereas the goal of other categories of land is not saving forest vegetation but carrying out some other activities. The legal regime of forestry fund lands is regulated by the Land Code of the Russian Federation dated October 25, 2001, No. 136-FZ and other land law legal acts. The Forest Code of the Russian Federation dated December 4, 2006 No. 200-FZ regulates mostly the use and protection of forests on forestry fund lands, and, in respect of other forests, has a reference: the use, protection, preservation, regeneration of forests shall be exercised in accordance with the aims of lands where these forests are situated. A crucial role in defining types, ways of use of these forests is played by a category of land. It reveals the dependence of legal regime of a forest as a natural environmental system in legal meaning on the legal regime of an appropriate category of land. At the same time, the legal regime of forestry lands is unique because of special natural characteristics of forests, their ecological and economic value. People’s right of access to forests covers forests that are situated on all types of lands.

According to the Land Code of the Russian Federation, there are the following types of entrepreneurs: harvesting; galipot procuring; procuring and gathering non-wood forest resources; procuring edible forest resources and gathering medicinal plants; hunting activities; the agricultural sector; research activities, educational activities; recreational activities; creating man-made forests and using them; growing wild fruits, berries, and decorative plants, medicinal herbs in forests; growing planting stock of forest plants (young plants, seedling); doing geological exploration of subsurface resources, exploitation of mineral deposits; construction and exploitation of impounded surface waters, other artificial reservoirs, and hydrotechnical constructions and specialized ports; building, construction, exploitation of linear facilities; conversion of timber and other forest resources; religious activities. The list of forest utilization types is open: there could be other types in accordance with purposes of lands where forests are situated (Part 2 of Article 6, paragraph 16 of Part 6, Article 25 of the Forest Code of the Russian Federation).

As a general rule, forests can be used for one or several of the named purposes. Otherwise can be provided in the Forest Code of the Russian Federation, or other Federal Laws.

The list includes not only forest exploitation as the use of forest resources, but there are also some other types of activity that can be implemented only by getting a permission (a right) for this kind of work in a forest. In essence, these are kinds of land use that are not connected with natural qualities of forest but require the use of lands covered by forests (conduct of geological exploration of subsurface resources, exploitation of mineral deposits; construction and exploitation of impounded surface waters, other artificial reservoirs, and hydrotechnical constructions and specialized ports; construction, reconstruction, exploitation of linear facilities; conversion of timber and other forest resources; religious activity).

The Forest Code of the Russian Federation contains a provision that allows using forests with or without granting a forest parcel, with or without extraction of forest resources.

Most types of forest utilization must be implemented with granting a forest parcel. By implication of the Forest Code of the Russian Federation, a forest parcel can be defined as a land parcel in respect to which measures of forest management, including planning, and state cadastral record have been taken. During the planning of forest parcels, the planning documentation on location, boundaries, area size, and other quantitative or qualitative characteristics of forest parcels should be prepared.

A forest parcel can be used on the basis of the right to permanent perpetual use of forest parcel, to the limited use of other owner's forest parcels (easement), the lease right to the forest parcel and the right to gratuitous use of forest parcels during established periods. The rights to forest parcels arise and cease on the grounds and following the procedure laid down in the civil legislation, the legislation of the Russian Federation on concession agreements and the land legislation unless otherwise provided for in the Forest Code (Article 9 of the Forest Code of the Russian Federation). Such a rule means the prevailing use of the forest legislation. The type of the right is predetermined by belonging of a forest user to categories of persons who may use the land parcels on the basis of a particular right according to the land legislation.

Forest parcels on the basis of the right of permanent perpetual use for conducting research, educational, and recreational activity are granted to state and municipal institutions (Article 40 of the Forest Code of the Russian Federation); the extent of duties placed upon them is smaller than that of lessees, because they are not required to implement fire safety and forest regeneration measures. However, the state and municipal institutions, as well as lessees, are obliged to draw up a forest exploitation project, to carry out the forest tending (Article 64 of the Forest Code of the Russian Federation), to fulfill other duties as forest users. State-owned or municipally-owned forest parcels may be acquired on the basis of the right of gratuitous limited use of forest parcels by religious organizations for conducting religious activities (Article 47 of the Forest Code of the Russian Federation) and by individuals for conducting agricultural activities (including bee-keeping) for their subsistence needs (Article 38 of the Forest Code of the Russian Federation). This right does not involve burdening the right-keeper with the duty of drawing up of the forest exploitation project, of carrying out forest regeneration measures, protection and preservation activities. The right of permanent perpetual use of forest parcels, the right of gratuitous limited use of forest parcels may be acquired by the limited scope of persons defined by the law. Therefore, the most common right of forest utilization is the lease right to forest parcels.

The right of a forest user is determined by the scope of permitted actions, provision of opportunity to the right-holder to use or refrain from using the granted rights; this right includes all the powers to carry out certain actions in relation to the object of the right, to require other obliged persons to commit actions in order to exercise the right-holder’s right, and opportunity to apply for protection and restoration of the infringed right. The rights of participants of forest legal relationships should be differentiated from certain types of forest utilization. The right of a forest user is the primary ground for the user’s actions falling under one or several types of forest utilization.

Enforcement of the rights by the persons using the forests is limited to the extent established by Part 2 of Article 36 of the Constitution of the Russian Federation for owners of land and other natural resources: the rights of possession, use and disposal of the land and other natural resources are exercised by their owners freely if they are non-offensive to environment and do not violate the rights and legitimate interests of other persons. These restrictions are universal in relation to any rights of use of natural resources not only arising out of the ownership right to a natural object, but also based on types of the right of forest resources utilization.

The right of forest utilization is exercised on the basis of basic principles of the forest legislation established by Article 1 of the Forest Code of the Russian Federation, and, therefore, any person should provide for exercising of the granted right: preservation of habitat-forming, water protection, preserving, sanitary-and-hygienic, recreational and other useful functions of the forests in the interests of ensuring the right of everyone to a favorable environment; taking account of global ecological value of the forests; multi-purpose, rational, continuous, inexhaustible use of the forests; forests regeneration, improvement of their quality, and also increase in forests efficiency; use of the forests in the ways which are non-offensive to environment and human health; protection and preservation of the forests.

The rights of individuals or legal entities are accompanied by the list of the duties which are to be fulfilled if they become participants in forest legal relations

Duties of individuals consist, first of all, in observance of fire safety regulations, rules of sanitary safety in the forests, rules of reforestation and forest tending, restrictions for stay in the forests stipulated by the forest legislation (Articles 11, 16 of the Forest Code of the Russian Federation).

Legal entities and individual entrepreneurs are to provide protection and preservation of forests in the limits imposed on them according to a type of the exercised right (Article 51 of the Forest Code of the Russian Federation). Measures for protection and preservation of the forests are carried out by the persons using the forests on the basis of the lease agreement, the sale-purchase contract for forest range, the rights of permanent perpetual use of a forest parcel or the right of gratuitous limited use of forest parcels according to the forestry regulations and the forest exploitation project. Failure to fulfill the relevant obligatory activities is the ground for cancellation of the agreement and the compulsory termination of the rights. Legal entities and individual entrepreneurs are to carry out forest exploitation with observance of their designated purpose, to observe fire safety regulations, rules of sanitary safety in the forests, rules of reforestation and forest tending (Articles 12, 16 of the Forest Code of the Russian Federation), etc. The forest legislation imposes the widest duties on leaseholders of forest parcels. Duties of implementation of organizational actions for protection, security, reforestation and design are not imposed on subjects of forest legal relations in the case of the conclusion by them of sale-purchase contracts for forest range or exercise of the right of limited use of other owner's forest parcels (easement).

Thus, the forest utilization right allowing to satisfy private interests is limited to the duties imposed on a forest user for ensuring public interests as well as the rights and interests of other persons. The scope of duties of the forest utilization right-holder is predetermined by the scope of their rights. In the case of the use of forests without extracting forest resources and without granting a forest parcel, the forest user is burdened with the smallest scope of duties while the forest user extracting forest resources who has received a forest parcel for this purpose according to the agreement, is burdened with the maximum weight of the duties following from provisions of the forest legislation and from the agreement. At the same time, differentiation of duties of forest utilization right-holders, the requirement of right-holders’ compliance to special criteria for receiving some rights to forest utilization are the means of legal regulation of forest relationships according to their present condition and for achievement of optimum balance between public and private interests.

Equality of participants of forest legal relationships is guaranteed at stages of emergence and termination of the rights. The forest legislation does not directly establish the principle of equal access to forests and forest resources; however, it follows from the established procedure of acquisition of rights to forest utilization. The existing definiteness of the grounds and the procedure for terminating such rights is important at the stage of terminating the rights.

The most widespread ground for receiving the right to implement the majority of forest utilization types is the agreement for lease of a forest parcel. The right to long-term utilization of a state-owned or municipally-owned forest parcel is exercised by means of the conclusion of the lease agreement.

The conclusion of the lease agreement of a forest parcel is regulated by the general provisions of the Civil Code of the Russian Federation, provisions of the Forest Code of the Russian Federation, Procedures for Preparation and Conclusion of the Lease Agreement for State-Owned or Municipally-Owned Forest Parcel (approved by the Order of the Federal Forestry Agency dated July 26, 2011, No. 319). Exercise of the right by concluding the agreement imposes duties of contractual nature upon participants of legal relationships. Such duties do not follow only from the forest legislation, but, pursuant to the agreement of complex legal nature, are also defined by civil and land legislation.

 According to Article 5 of the Federal Law “On Enacting the Forest Code of the Russian Federation” dated December 4, 2006, No. 201-FZ, the leaseholder under the lease agreement for a forest parcel registered by the state cadastral record, has the right: to hand over the forest parcel (sublease); to transfer the rights and duties under the lease agreement to other persons (lease transfer); to put in pledge the lease rights; to contribute the lease rights as deposit to charter capital of business partnerships and entities or as share contribution to a production cooperative. These legal rights of the leaseholder are regulated by the civil legislation, and the Forest Code of the Russian Federation does not establish special conditions for exercise of such rights. In practice, it can lead to a situation when the lease agreement of a forest parcel is made with one person, but the further usage of the forests within a forest parcel will be carried out by the sublessee. Provisions of the sublease agreement may be different from those established in the legislation for lease agreements because the Forest Code of the Russian Federation does not establish any requirements to such agreement. As a result, actions of the sublessee should correspond only to the general requirements of the forest legislation that ensure public interests as a whole in one way or another, though the institute of sublease is more inherent in private law and may hardly be considered as a positive innovation in the forest law where public law regulation prevails.

The procedure for concluding an agreement provides right-holders with equal opportunities to receive the right to forest utilization. According to the general rule, the conclusion of the lease agreement for a forest parcel is only by the results of the bidding for the right to conclude such an agreement (Article 74 of the Forest Code of the Russian Federation). Besides, according to Article 79 of the Forest Code of the Russian Federation, the bidding should be carried out in an open form that should be reflected in the bidding documentation. Bidding (public sales) in an open form means that any person can take part in the bidding (public sales) (Article 448 of the Civil Code of the Russian Federation).

Exceptions to the general rule are cases of concluding lease agreements for forest parcels without bidding that are provided by Part 3 of Article 74 of the Forest Code of the Russian Federation for such types of forest utilization which are caused by the nature of the implemented activity.

First, this activity is not directed at the extraction of forest resources, but this activity requires forest areas. This activity is forests utilization for hunting, conducting geological exploration of subsurface resources, exploitation of mineral deposits, for construction and exploitation of impounded surface waters, other artificial reservoirs, and also hydrotechnical structures of specialized ports; for construction, reconstruction, exploitation of power lines, communication lines, roads, pipelines and other linear facilities (Articles 36, 43-45 of the Forest Code of the Russian Federation)[1]. In such cases, granting forest parcels is necessary for legal registration of the use of land where the forests grow but not for utilization of forest resources as such. The facilities designed for exploitation of mineral deposits, for conducting geological exploration of subsurface resources, water engineering facilities are subject to preservation or elimination in compliance with the subsoil and water legislation, once the time period for doing the necessary work expires. According to para. 6 of Article 21 of the Forest Code of the Russian Federation, lands used for construction, reconstruction and (or) operation of the non-forest infrastructure facilities are subject to recultivation. These legislative requirements reflect various groups of public interests: on the one hand, interests in the development of fuel and energy sector, transport infrastructure, laying down communication and power lines, and, on the other hand, interests in ensuring preservation of forest resources.

Second, this activity supported by State is the –implementation of prioritized capital investment projects in the forests exploitation sector (Article 22 of the Forest Code of the Russian Federation, the Resolution of the Government of the Russian Federation “On Prioritized Capital Investment Projects in “the Forests Exploitation Sector” dated June 30, 2007, No. 419). Projects of creation and (or) renewal of forest infrastructure facilities (forest roads, forest warehouses, etc.) and (or) wood processing infrastructure (facilities for conversion of timber and other forest resources, bio-energy facilities, etc.) are considered to be capital investment projects if the total volume of capital investments in each of such projects is equal at least to 300 million rubles.

Third, it is the opportunity for timber harvesting on the forest parcels provided to legal entities and individual entrepreneurs for conducting geological exploration of subsurface resources, exploitation of mineral deposits, construction and exploitation of impounded surface waters, other artificial water reservoirs, and also hydrotechnical structures of specialized ports, for construction, reconstruction, operation of power lines, communication lines, roads, pipelines and other linear facilities, for processing the cut timber and other forest resources.

Procedures for the conclusion of forest parcels lease agreements without bidding are established by Federal Forestry Agency Order dated July 26, 2011, No. 319.

From our point of view, the bidding process is not an optimum means of granting lease rights to forest parcels. During the bidding process no special requirements to the lessee are imposed by the law, which from the practical point of view may considerably expand the number of the participants in forest relationships by the admission to forest utilization of such timber cutters that will offer the highest price for a bidding piece, but they may not meet the capacity, experience and knowledge requirements in the sphere of forest management and, therefore, may fail to provide the rational forest utilization. The previous Forest Code of 1997 allowed to conclude the lease agreement by the results of a forest tender, observing the principle of publicity and taking into account interests of the population living on the respective territory. By the results of assessment of the offered conditions and the findings of the tender commission, the forest parcel was handed over to the lessee who had offered the best conditions for the utilization.

The forest utilization is usually carried out with forest resources extraction (procurement of timber, galipot, edible forest resources, procurement and gathering of non-timber forest resources, etc.). Recreational activities, most hunting activities, implementation of religious, research activity, etc., may be carried out without extracting forest resources. The scope of duties of a forest user is different in different cases. As a rule, extraction of forest resources within the granted forest parcel charges the right-holder with the obligation to observe quantitative criteria (volumes) of extraction, implementation of payment for extracted forest resources, and the only instance of free extraction is procurement and gathering edible and non-timber forest resources by individuals for their subsistence needs. The imposition of charges for forest utilization is one of the basic principles of the forest legislation (Article 1 of the Forest Code of the Russian Federation), therefore, the payment for forest utilization is provided in all other cases[2], including when forest utilization occurs without extraction of forest resources, for example, in the cases of agricultural or hunting activities. Therefore, if forest resources are not extracted, the priority is given not to the forest itself, but to the land on which it grows, and from the practical point of view, payment for the use of a forest parcel is payment for using the land parcel.

Under Article 11 of the Forest Code of the Russian Federation, individuals exercise the forest utilization right for recreational purposes without extraction of forest resources freely and free of charge, whereas legal entities, arranging recreational activity on a commercial basis offer various paid health care, sport and outdoor recreation services to the population within the leased forest parcels. Simultaneous exercise of forests utilization rights for recreational purposes by individuals and legal entities may result in imposing charges for exercising individuals’ rights to stay in the forests; however, payment in such cases is carried out on a voluntary basis.

Despite the extensive duties imposed on lessees, legal regulation of restoration of lands on a forest parcel disturbed by geological exploration of subsoil resources, exploitation of mineral deposits, is insufficient. Article 13 of the Forest Code of the Russian Federation establishes the duty to restoration of lands used earlier for accommodation of forest infrastructure facilities; Article 21 provides for restoration of the lands used for construction, reconstruction, operation of the non-forest infrastructure facilities. According to the Federal Forestry Agency Order “On the Adoption of Structure of the Forest Exploitation Project and the Procedure of Its Development” dated February 29, 2012, No. 69, information on restoration of the disturbed lands should be contained in subsection ”Works on Geological Study of Subsurface Resources, Exploitation of Mineral Deposits“ when the project is drawn up; this information should also be accompanied by the lands restoration plan. Thus, unlike the Forest Code of the Russian Federation of 1997 which included compulsory approval of the land restoration plan by the territorial division of the Federal Forestry Agency in a constituent entity of the Russian Federation or with the executive government body of the constituent entity of the Russian Federation, the current forest legislation does not contain the requirement for the lessee to get approval of the lands restoration plan; besides, it does not include effective means of control over the implementation of the restoration duty. Moreover, reassignment of forest lands to lands of other categories is conducted in accordance with the Federal Law “On Reassignment of Lands or Land Parcels from One Category to Another” dated December 21, 2004, No. 172-FZ when preservation or elimination of the facilities needed for subsurface use is impossible, and also in the cases of impossibility to carry out the lands restoration for forestry needs in accordance with the established procedure. Forest land loss contradicts to the principle of rational, continuous, inexhaustible use of forests. Therefore, it is necessary to stipulate compulsory approval of the forest land restoration plan with executive government bodies of the constituent entities of the Russian Federation, and also to develop a procedure for monitoring the activities of forest land restoration.

Conflict of laws arise during the forest protection activities, preservation and regeneration in accordance with Article 19 of the Forest Code of the Russian Federation which imposes obligation to implement such activities on the persons using the forests. If there are no persons using the forests, obligations to implement such activities are fulfilled by government agencies and municipalities that act within their powers through the placement of procurement orders for forest protection, preservation and regeneration through bidding[3]. Forest protection, preservation and regeneration measures are carried out only with the indication of forest range location, i.e., with the indication of a parcel of forested lands received according to established requirements, or with the indication of a forest district, a forest park, a forest compartment, forestry stratum[4]. In practice, executive government bodies of the constituent entities of the Russian Federation in charge of the forest sector, place procurement orders for forest protection, preservation and regeneration through bidding process concurrently with selling the forest ranges for wood harvesting. In the bidding documentation, the forest district for forest protection, preservation and regeneration works is specified, while the maximum allowed volume for sale-purchase is specified in another forest district. The forest legislation does not contain requirements to the sale-purchase contract regarding coincidence of a forest district where forest protection, preservation and regeneration measures are carried out and a forest district for wood harvesting under the sale-purchase contract for forest ranges. Such legal uncertainty should be eliminated through the clear requirement of sale-purchase of forest ranges which are harvested as a result of forest protection, preservation and regeneration measures.