The aim of the project was to develop innovative market-based mechanisms that counteract illegal logging in Latvia, as one important step in the protection of biodiversity in Latvia’s forests. One of the main factors in the destruction of the biologically rich forest environment in Latvia is large-scale illegal logging, which takes place particularly in privately owned forests.
The project set up and tested an auction sale system, where standing trees from privately owned forests are sold directly at auctions. The system resulted in higher prices per volume and thus increased profit for the forest owners, while at the same time generating larger tax revenues for the Latvian state, and legally based timber companies gain a wider access to timber from private forests.
The project involved two key institutions within the forestry sector in Latvia: The Latvian State Forest Service and Forest Owners Consulting Centre (FOCC). FOCC is the largest producer of management plans for privately owned forests in Latvia.
Results and impact
The project operated under rather difficult conditions, inter alia including great storm damage to Latvian forests during the project implementation period, which resulted in a lowering of prices. In spite of this, the system proved to function as envisaged and showed a positive commitment from large buyers of wood in Latvia. The auction sales system is expected to be continued and further promoted in future.
The project received the Global Marketplace Development Award from the World Bank in 2003.