Is Property Liability of Communities for Illegal Logging Fair?

As part of the project “Advocacy for Forest Protection Against Illegal Logging:  Removing Legal Barriers for Efficiency,” an analytical study was conducted on the application of Part 2 of Article 107 of the Forest Code of Ukraine. This provision effectively places financial liability for damage caused to forests on local self-government bodies in cases where the perpetrators of illegal logging are not identified.

The background of this provision is linked to broader state policy in the forestry sector. In 2021, the initiative “Large-Scale Afforestation of Ukraine” was launched, aiming not only to expand forested areas but also to introduce systemic changes in forest accounting and management. As early as 2022, legislation was supplemented with the concept of “self-seeded forests”—areas that have naturally become covered with forest vegetation. At that time, the mechanism that now generates the most debate was introduced: if a forest is located within a community and the offender is not identified, the damage is compensated from the local budget.

Since late 2024, this provision has been actively applied in practice. Prosecutors’ offices and the State Environmental Inspectorate have been systematically filing claims in commercial courts against local councils. Case law indicates that such claims are satisfied in most instances. According to official data, between 2022 and 2024 alone, 95 cases of illegal logging by unidentified persons were recorded, with total assessed damages reaching approximately UAH 90 million.

Several court cases have been particularly illustrative in shaping the application of this provision. For example, in a case involving the Rokytne settlement council, courts of all instances concluded that the local authority had failed to ensure adequate forest protection, which resulted in the illegal logging of nearly one thousand trees. Consequently, over UAH 2.9 million in damages was recovered from the local budget. Similar decisions have been issued in other regions, with amounts ranging from tens of thousands to millions of hryvnias. The subject of disputes includes not only traditional forest areas but also shelterbelts and territories that merely exhibit characteristics of self-seeded forests.

At the same time, judicial practice is not uniform. In a number of cases, courts have refused to satisfy claims, pointing to the absence of official forest or self-seeded forest status, unclear boundaries, or insufficient evidence. This indicates that law enforcement practice is still evolving and is accompanied by significant legal ambiguities.

The financial aspect deserves particular attention. In practice, communities are compelled to compensate for damage resulting from offenses they did not commit and often cannot effectively prevent. This creates a kind of budgetary paradox: after payments are made, part of the funds returns to local budgets through the redistribution of environmental charges. Such a model appears complex and not always logical from the perspective of efficient resource management.

Moreover, a significant share of the territories where illegal logging occurs is not legally formalized: cadastral numbers are missing, boundaries are undefined, and no proper land user has been designated. This creates a situation where liability exists, but management tools are limited. The problem is especially acute in regions with large areas of naturally afforested land.

The response from local self-government bodies has been swift. Relevant associations have repeatedly called for revising the approach to liability, emphasizing risks to the financial capacity of communities and violations of the principle of fairness. However, as of early 2025, the legislator has not supported the proposed changes.

In conclusion, the current liability model functions more as a strict coercive mechanism pushing communities to transfer forests to specialized enterprises. At the same time, its practical application has revealed a number of significant issues—from legal uncertainty to disproportionate financial burden. In contrast, the European approach is largely based on economic incentives and the promotion of effective forest management.

In this context, revising the current model and introducing more flexible liability mechanisms appears justified. This could include differentiating the amount of compensation, taking into account the actual status of land, and strengthening the role of economic incentives. Such an approach would help balance the interests of the state, local communities, and forest users, while also improving the effectiveness of forest protection.

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The publication is produced by NGO «ForestCom» with the support of the Askold and Dir Fund as a part of the Strong Civil Society of Ukraine –  a Driver towards Reforms and Democracy project, implemented by ISAR Ednannia, funded by Norway and Sweden. The contents of this publication are the sole responsibility of NGO «ForestCom» and can in no way be taken to reflect the views of the Government of Norway, the Government of Sweden and ISAR Ednannia.