Schweighofer threatens to withdraw from Romania due to the new Forestry Code

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A huge scandal is ongoing in Romania's forest industry. On one side, the population which accuses the destruction of the country's forests, domestic wood processers who face bankruptcy, mass-media and NGO's who support both sides. On the other side, politicians, often accused as complices to the clearcutting of large portions of Romanian forests for profit and for failing to control illegal logging. All of this, Romanians say, for the interest of large foreign companies such as Holzindustrie Schweighofer. 

Schweighofer has already for many years become the dominant player of Romania's wood industry. A new Forestry Code, which many say, would limit the company's cvasi-monopoly has been adopted by the Romanian Parliament this February. One of the aspects of the new code, is that a single company can process only 30% of a certain type of wood. Schweighofer manufactures at present 27% but intends to open a new production centre in Romania, in Reci, which would mean that the company's processing capacity would go well beyond this quota. 

Romanian President, Klaus Iohannis, has last month returned the Forestry Code back to the Parliament for re-examination saying that the new law will affect competition by limiting the activity of some companies while favouring others, which may prompt penalties from the European Union. Some politicians accused Iohannis of supporting the Austrian company, saying that the President's request is identical with some of Schweighofer's complaints to the Forestry code. The President responded rapidly, and denied all allegations. Moreover, following May protests in the country against illegal logging and deforestation, Iohannis immediatly called the protests "legitimate" and said illegal logging would be discussed at the country's next national security meeting.

However, Romania's Environment, Agriculture and Legal Committees within the Chamber of Deputies rejected on May 12 President's request to re-examine the Forestry Code. This basically means that the new forestry code will soon be enforced, and the 30% processing quota will become law.

Representatives of Schweighofer reacted on Friday, threatening to leave the country and fire all employees. They said that the impact of the new Forestry Code cannot be foreseen, therefore the Austrians might consider closing business in Romania, a decision that could affect 3,000 employees. 

Holzindustrie Schweighofer currently employs 2,670 in Romania, but with the opening of the new sawmill in Reci the number would reach this year over 3,000. 

There is no doubt that this problem will continue. Massive protests in the country aiming rapid deforestation and illegal logging are now announced for this month and in June. Romania's Prime-Minister, Victor Ponta, said on a TV show this weekend that the Government might also consider a temporary ban on all types of wood exports (both unprocessed or processed) and called for the Ministry of Justice to find solutions for stopping illegal activities in the wood sector.  

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Showing 3 comments:

Catalin Dragostin
Rafael my dear, 3 GC of ~29 EUR/GC each (this is the minimum price today for 1 GC) is ~100 EUR, isn't it ??. OK, maybe it is not quite 100 EUR, it is "only" 90 EUR/MWh, BUT, I have considered this as an "average" for the last 5 years, and yet, this 100 still it is too low ! (it should have been ~150-170 EUR
Rafael Morilla
One GC = 100 eur/MWh???? Where??? When??? How????
Catalin Dragostin
Who cares ?...besides the huge amount of resources which Schweighofer is using, the Romanian energy consumers are supporting (through the green certificates scheme) the energy produced and consumed internally in their factories ! Or, the bottom line is that with Romanian fuel wood resources, Schweighofer receives subventions of Green Certificates for energy produced and consumed for themselves ! As a rough calculation: with an installed capacity of ~40 MWe in all Schweighofer plants, per year they produce ~320.000 MWh/year for which they get as subsidy for Green Certificates ~100 EUR/MWh. In total, the amount is ~32,000,000 EUR/year !!! That's their "threat to leave Romania" is absolutely a gross misleading lie...there is no bear leaving the honey behind ! Could one imagine how many cities we could heat up in winter cheaper and cleaner with the resources which Schweighofer "exports" !?!?!?!????