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National Audit Office: RMK's activities in selling timber at a negotiated price were not transparent and allowed special treatment

Госконтроль: деятельность RMK по продаже древесины по договорной цене не была прозрачной и допускала особое отношение

The rules for negotiating and agreeing on the price of long-term contracts concluded by the State Forest Management Center (RMK) do not create prerequisites for selling timber at a market price, which is a requirement of the Forest Law. In an audit report published today, the National Audit Office said that the opportunity to generate more income from the sale of timber was missed. Forest. The photo is illustrative. Forest. The photo is illustrative. Photo: Arvo Meeks

The rules for negotiating and agreeing on the price of long-term contracts concluded by the State Forest Management Center (RMK) do not create prerequisites for selling timber at a market price, which is a requirement of the Forest Law. In an audit report published today, the National Audit Office said that the opportunity to generate more income from the sale of timber was missed.

The National Audit Office believes that RMK should encourage competition in the sale of timber and conclude long-term, sustainable contracts based on open auctions. The system for concluding and amending contracts should be clearer and more transparent.

Although, in accordance with the Forest Act[1] and the Government of the Republic of Estonia[2] resolution adopted on the basis of the Forest Act, the State Forest Management Center must ensure that timber is sold at market prices, the audit showed that the prices agreed in long-term contracts were significantly lower than prices at open auctions in the audited period 2017-2022: The State Forest Management Center sold wood under long-term contracts at 30% lower than these prices.

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