Terms of concession agreements

Venezuela has a long history of managing its forests for timber production. The nation’s first forest reserve was created in 1950 in the western Llanos region, in response to the growing encroachment of the agricultural frontier on forest resources. In 1970, the government began granting timber concessions and requiring the development of long-term concession management plans. In the Guayana region, forest concessions average between 80,000 and 160,000 hectares and are granted by the Forest Service for 20- to 40-year cutting cycles. The process of obtaining a forest concession begins with an application, in which the company selected must present a proposed management plan. Concessionaires are chosen on the basis of their technical and financial capacity to operate a timber concession and any additional benefits they may offer (such as establishing research centers), rather than the amount they may offer the government in royalties and area fees.

The proposed management plan allows the concessionaire to extract timber from “research parcels” within three years, after which the concessionaire must present a formal management plan to obtain a signed contract. [44] During this period, the government does not collect any taxes or royalties on the timber extracted. The formal management plan includes components for forest inventories (usually only for commercial timber species), management methods, research, extraction, economic and social analysis, road building, and road maintenance. [45] Once a concession is granted, yearly harvest plans must be submitted to the Forest Service before any cutting can occur for that season, and the Forest Service is responsible for monitoring and inspecting timber extraction on forest concessions. All concessionaires must put aside some portion of their concession for conservation purposes, although the designation of this area is at the concessionaire’s discretion. [46]. According to the Forest Service’s policy, management plans are to be revised every five years to incorporate any changes that may have occurred in that period.

No environmental impact assessment is required for logging on public lands, despite the fact that under Venezuelan law all individuals and corporations must provide an environmental impact assessment if they will be engaging in commercial activities that could damage the environment. In 1996, the Ministry of Environment passed Resolution 506A, establishing that timber extraction does not require an environmental impact assessment, since concession management plans were deemed to fill this role. [47]

Nonetheless, because the concession management plans do not require any assessment or mitigation of environmental impacts, forestry activities face a less stringent requirement to minimize environmental damage than other industries.

References and notes

44. As an incentive to stimulate private investment, in 1983 the Ministry of Environment passed Resolution 506-A, allowing prospective concessionaires to extract timber from so-called “research parcels” without a contract, in order to finance the development of the final concession management plan.

45. J.C. Centeno, Estrategia para el desarrollo forestal de Venezuela, unpublished paper, 1995, p. 16.

46. J. Ochoa G., “Dise