The EBA Subsoil Use Committee met with the specialists of the State Forest Resources Agency

03/ 03/ 2023

On March 2, the EBA Subsoil Use Committee representatives met with Igor Budzinsky, Head of the Forestry and Forest Restoration Department of the State Forest Resources Agency of Ukraine. The meeting was focused on the procedure for granting the right to use a land plot by establishing an easement or concluding an exploration and production agreement. Also, Roman Opimakh, Head of the State Service of Geology and Mineral Resources of Ukraine, were among the participants. To date, the registration of land plots for subsoil use, whose deposits are located under forestry lands, is still a problematic issue. Despite some positive developments in updating the regulatory framework, many issues remain unresolved and require legislative changes to address gaps, namely for understanding and proper regulation. In September 2022, the forestry reform was launched. According to CMU Resolution No. 1003 Some issues of reforming the management of the forest industry, the regional offices of the State Forest Resources Agency will become regional offices of forestry and hunting, and 158 forestry enterprises will be merged into a single state forestry enterprise Forests of Ukraine. Mr Ihor emphasized the procedure for concluding an easement or concluding an exploration and production agreement. It provides for: In the case of concluding an agreement on the easement, the subsoil user applies to the State Enterprise Forests of Ukraine under Article 124-1 of the Land Code of Ukraine with the initiative to conclude the agreement, which in turn coordinates the position on concluding the agreement with regional authorities; Application of the subsoil user (who develops amber deposits) to the regional state administrations with the initiative to enter into the Agreement under Article 97-1 of the Land Code of Ukraine, which in turn approve the draft Agreement with the State Forestry Agency; For subsoil users engaged in the extraction of other minerals, the procedure for concluding Agreements is under the provisions of Article 97 of the Land Code of Ukraine and involves applying to the landowner (regional state administrations or the State Enterprise Forests of Ukraine). The State Enterprise Forests of Ukraine as the legal successor of local state forestry enterprises will become a party to easement agreements and recognize all concluded agreements. According to Lesya Glushchenko, a lawyer at the State Forest Resources Agency, prolongation of the agreements for the agreed period will be carried out by the entry into additional agreements to the existing agreements with information on the change of the party to the agreement. The discussion also touched upon the procedures for approving technical documentation for the establishment of an easement and/or an agreement and signing the abovementioned documents. According to the subsoil users, the clear deadlines for record keeping in accordance with CMU Resolution No. 55 Some Issues of Documentation of Management Activities are not observed by the departments of the State Forest Resources Agency, which creates problems for business entities that cannot plan their activities. Thus, it was agreed to report each case of violation of reasonable terms of concluding contracts and agreements for further response to requests. He also emphasized the importance of keeping records of the terms of approvals and conclusion of documents for land use, as well as statistics on refusals and recommendations on how to avoid them. According to Mr Budzinski, the most painful issue is the demolition of trees within the developed fields, as it has not been sufficiently regulated. CMU Resolution No. 105 dated February 4, 2023 On Approval of the Procedure for Cutting Down Trees and Shrubs and Using the Wood Obtained in the Event of Changing the Purpose of Land Forest Plots or Establishing an Easement for the Purpose of Using Them for Purposes Other Than Forestry and Transferring Land Forest Plots to Non-forest Land does not regulate the possibility of cutting down trees when concluding agreements, thereby making the agreement not sufficient for subsoil users to use the land plot. The European Business Association sincerely thanks the representatives of the State Forest Resources Agency for the dialogue. We look forward to further fruitful cooperation!

To date, the registration of land plots for subsoil use, whose deposits are located under forestry lands, is still a problematic issue. Despite some positive developments in updating the regulatory framework, many issues remain unresolved and require legislative changes to address gaps, namely for understanding and proper regulation.

In September 2022, the forestry reform was launched. According to CMU Resolution No. 1003 “Some issues of reforming the management of the forest industry”, the regional offices of the State Forest Resources Agency will become regional offices of forestry and hunting, and 158 forestry enterprises will be merged into a single state forestry enterprise “Forests of Ukraine”.

Mr Ihor emphasized the procedure for concluding an easement or concluding an exploration and production agreement. It provides for:

In the case of concluding an agreement on the easement, the subsoil user applies to the State Enterprise “Forests of Ukraine” under Article 124-1 of the Land Code of Ukraine with the initiative to conclude the agreement, which in turn coordinates the position on concluding the agreement with regional authorities;
Application of the subsoil user (who develops amber deposits) to the regional state administrations with the initiative to enter into the Agreement under Article 97-1 of the Land Code of Ukraine, which in turn approve the draft Agreement with the State Forestry Agency;
For subsoil users engaged in the extraction of other minerals, the procedure for concluding Agreements is under the provisions of Article 97 of the Land Code of Ukraine and involves applying to the landowner (regional state administrations or the State Enterprise “Forests of Ukraine”).

The State Enterprise “Forests of Ukraine” as the legal successor of local state forestry enterprises will become a party to easement agreements and recognize all concluded agreements. According to Lesya Glushchenko, a lawyer at the State Forest Resources Agency, prolongation of the agreements for the agreed period will be carried out by the entry into additional agreements to the existing agreements with information on the change of the party to the agreement.

The discussion also touched upon the procedures for approving technical documentation for the establishment of an easement and/or an agreement and signing the abovementioned documents. According to the subsoil users, the clear deadlines for record keeping in accordance with CMU Resolution No. 55 “Some Issues of Documentation of Management Activities” are not observed by the departments of the State Forest Resources Agency, which creates problems for business entities that cannot plan their activities. Thus, it was agreed to report each case of violation of reasonable terms of concluding contracts and agreements for further response to requests.

He also emphasized the importance of keeping records of the terms of approvals and conclusion of documents for land use, as well as statistics on refusals and recommendations on how to avoid them.

According to Mr Budzinski, the most painful issue is the demolition of trees within the developed fields, as it has not been sufficiently regulated. CMU Resolution No. 105 dated February 4, 2023 “On Approval of the Procedure for Cutting Down Trees and Shrubs and Using the Wood Obtained in the Event of Changing the Purpose of Land Forest Plots or Establishing an Easement for the Purpose of Using Them for Purposes Other Than Forestry and Transferring Land Forest Plots to Non-forest Land” does not regulate the possibility of cutting down trees when concluding agreements, thereby making the agreement not sufficient for subsoil users to use the land plot.

The European Business Association sincerely thanks the representatives of the State Forest Resources Agency for the dialogue. We look forward to further fruitful cooperation!