Valdas Kaubrė: after changing the legal status of SFE, the forests will remain the property of the state

The change in the legal status of the Lithuanian State Forest Enterprise is part of a consistent process of restructuring state-owned companies. Therefore, we have prepared for this step in advance: for almost a year, we have been informing the company’s employees about the upcoming changes and discussing them internally. The management team has assessed the significance of this change to the company’s operations, observed public reactions, and highly values the significant interest in this international obligation for Lithuania and the company.

The OECD highlights depoliticizing decisions as one of the essential features of good governance enabled by becoming a public limited company (PLC), helping to address challenges related to the company’s operations more flexibly and quickly.

We note that with the Lithuanian State Forest Enterprise becoming a public limited company, forests will remain the constitutional property of the state. The Lithuanian State Forest Enterprise manages the forests under a trust right, meaning it is not and cannot be their owner, despite such concerns being heard. Becoming a PLC does not change the way the entrusted forests and forest infrastructure are managed.

After changing its legal status, 100% of the company’s shares will belong to the state, and their security will be guaranteed by the Law on the Protection of Objects of Importance to National Security. According to this law, the company, managing Lithuanian state forests under trust rights, is classified as a first-category company important for ensuring national security. For such companies, whose legal form is either a private limited company or a public limited company, the transfer of any part of the shares requires the approval of the Parliament.

Forest management activities will continue to be strictly regulated, as they are now. The State Forest Enterprise will continue its operations based on the values of transparency, openness, wisdom, attention to people, and love for nature. As a public limited company, there will be more opportunities to expand activities into areas related to nature conservation and forestry, invest in innovative services, thus diversifying activities and ensuring a greater, not only economic, return to the state. The change in legal status will also ensure smoother risk management.

Currently, the State Forest Enterprise carries out special state mandates at its own expense, encompassing economic, social, and ecological functions. Its activities are certified according to the principles of the international organization FSC (FSC-C007388) (Forest Stewardship Council), which indicates sustainable and balanced forest management. After changing its legal status, the State Forest Enterprise’s goals will remain the same, continuing to focus on afforestation and reforestation, environmental protection, nature management, recreation, forest road maintenance, fire prevention not only in state forests but also in privately owned forests, educational activities, tree breeding, and genetics. Notably, the State Forest Enterprise provides high-quality seedlings to private forest owners as well. Therefore, there are no plans to abandon these activities or any part of them with the change in the company’s legal status. The change in the legal form of the company will not affect the scope of the State Forest Enterprise’s activities.

The company’s changes are directly discussed and presented to our employees, so colleagues understand that employment relations will continue unchanged after the change in legal status without affecting economic and social conditions.

We believe that the international obligation to restructure Lithuanian companies, including the State Forest Enterprise, has a rational and value-based foundation, and we see these changes as an opportunity to create an even stronger organization.

Useful links:

Information on the Law on the Protection of Objects of Importance to National Security

(https://e-seimas.lrs.lt/portal/legalAct/lt

Learn about the Forest Law

https://e-seimas.lrs.lt/portal/legalAct/lt/TAD/TAIS.6036/IUyuJHgMpr

Information about the State-Owned companies becoming PLC

https://governance.lt/apie-imones/vvi-sarasas

More information about the Trust Right

https://www.e-tar.lt/portal/lt/legalAct/TAR.8A39C83848CB/asr