The management of the community woodland

Types of management

Direct management of resources by the community

Traditionally, the burden of managing community woodlands has fallen on the management committees, but over the years and with the increasing complexity of modern economic relations, it has become difficult to carry out that management without the help of external advisers or technicians.

It is the responsibility of the boards of directors to ensure their actions are rational, especially when exploiting the forest resource, avoiding its depletion or abandonment as a result of mismanagement. Should the latter occur, it could be the case that the Forestry Administration would have to declare the woodland to be in a state of serious neglect or degradation and, for reasons of public utility or general interest, might have to assume the management of that community woodland on a precautionary basis.

Direct community management of resources requires:

• Human capital on the Board of Directors;
• Availability of time of the members of that Governing Board;
• Understanding of the forest ecosystem and the productive capacities of the managed community woodland; and
• Professional advice.

Should a community of neighbours opt for the direct management of the woodland, it is advisable to group together with other neighbouring communities in the area in order to provide themselves with shared services, both technical and administrative, as well as the necessary materials, to enable them to exploit and defend the community woodland.

If a community has difficulty organising itself and managing the forest directly, it seems appropriate that an agreement could be reached with the Forestry Administration or with private initiatives with the aim of achieving better use of the forest.

The management of the community woodland by third parties

One of the biggest problems identified within the governing boards of community woodlands is the lack of generational succession, which leads to two very significant consequences:

• The same people have remained at the helm of the Board of Directors for many years; and
• The average age of the members of those governing boards is very high.

This makes it increasingly necessary to seek alternatives that allow for a more professionalised management of the forest, ensuring the necessary dedication to day-to-day management, aligning the execution of works with the provisions of the corresponding management plan and avoiding the potential neglect that can arise from long-term tenure in the same post. These external management agreements can be made in three distinct ways:

1. Engagement of a technical management service;
2. Agreements and consortia with the Forestry Administration;
3. Agreements with private entities.

Engagement of a technical management service

Increasingly, the boards of directors contract external services provided by owners' associations or service companies for the planning and management of their woodlands. This is because, over the years, the difficulty of managing community woodlands has grown as a result of the extensive regulation affecting them.

The representatives of the community woodlands feel increasingly uneasy when carrying out their duties because of the risk of committing some kind of offence or wrongdoing through ignorance of the applicable regulations, which, besides being numerous, are highly changeable.

Taking the above into account, it is worthwhile to seek a management system that provides this support without jeopardising the economic viability of the forest operation. To this end, and except in very specific cases, it is necessary to limit that management service to the strictly essential, distributing the management tasks between the communities' boards of directors and the forest technicians who advise them.

The former must assume a representative role, handling dealings with the neighbouring commune residents and decision-making on various aspects of the work to be carried out, while the forest technicians should focus on advising and planning the tasks to be undertaken, specifying the conditions for those tasks and overseeing their execution.

This constant supervision of silvicultural work by forest technicians, including the preparation of annual plans as part of their duties, will allow the technical standard of community woodland management to be raised, thereby optimising the performance of silvicultural activities.

The preparation of these annual plans will allow for better monitoring of the work carried out in the forest because it is in this type of document that an assessment of the work done during the previous year is made and, from there, any adjustments to the planned activities in the management plan for the current year are proposed. This work provides information that is of particular importance to the management boards, which is why it is essential that it is drafted in a simple and clear manner.

Finally, and as an additional advantage, all this information gathered year after year will ensure that, when the planning instrument is up for renewal, there will be enriching information to help better plan the work to be carried out during the next special plan.

Agreements and consortia with the Forestry Administration

Agreements and consortia are administrative contracts freely established between a community of montes and the Forestry Administration, carrying out one or more of the following investments:

1. To carry out the afforestation of bare land (without trees), the conservation and silvicultural treatment of the resulting stands, their exploitation and the works to improve the woodland (tracks, clearings, timber loading areas, etc.);
2. To carry out the necessary works for the conservation, silvicultural treatment and utilisation of the pre-existing woodland, which will continue to belong to the community of owners;
3. Carry out the works and complementary and auxiliary tasks that may be consistent with the aforementioned purposes.

Contracts and consortia can cover the entire community woodland or only part of it. There are even some woodland communities that have signed several different contracts. As the main objective of this type of contract is to capitalise the woodland, the core of its content was linked to the procedure to be applied in order to finance the works to be carried out under those contracts, as well as establishing the course of action should any exploitation take place on the ceded surface.

The agreements were established under the Forestry Production Promotion Act of 1977.[1], supplemented by the content of Article 25 of Law 13/1989 on communal woodlands.

The original concept of the agreement's figure was based on a line of financing in the form of a grant-in-aid covering a percentage of the works' cost, specifically 50%. The remaining 50% was financed by a repayable advance, which is why a real right of security was established over the flight (the stand) to be created on the surface under the agreement.

On occasions, if there were grant schemes subsidising some of the work to be carried out on the mountain under a convention, the Forestry Administration could increase the grant percentage, even up to 100 per cent (in fact, it did so in many cases).

Until the entire repayable advance has been repaid, the total amount outstanding on that advance accrues interest in favour of the public administration at a variable rate depending on the species planted: 4 per cent for poplar and eucalyptus, and 1 per cent for all other species. As in practice few investments have been made in eucalyptus stands, the interest applied is usually 1 per cent.

Except in rare cases, as the communal land is publicly managed, any uses carried out on the communal land under agreement must be marketed through a public auction procedure. The process, from an economic standpoint, is as follows:

• Once a lot has been awarded, its buyer must pay the VAT to the community of owners.;
• The remaining amount must be paid into the account of the Countryside Department which, after making the necessary entries in the convention's accounts, must proceed to:
  • Transfer the 100 % of the income to the community of owners in the event that there is no credit in favour of the Administration, or where the timber pre-dated the signing of the agreement and this is stipulated therein;
  • Transfer 70 per cent of the income to the homeowners' association in the event that the amount owed to the Administration exceeds 30 per cent of the lot's sale price; or
  • If the amount owed to the Administration is less than 30.13 per cent of the lot's sale price, settle the debt with the Administration and transfer the remainder to the community.

The role assumed by the Forestry Administration in this type of arrangement is to provide a management service (which includes contracting the works that need to be carried out) and to finance the works carried out on the agreed area by means of a combined grant and loan (or repayable advance). At no point does the Administration carry out the operation in a personal capacity.

Under the agreements, it is the community of owners that assumes 100 per cent of the economic risk of the operation, so that, in the event the masses existing on the surface covered by the agreement catch fire, the debt owed to the Forestry Administration would not be cancelled.

At the end of 2017, the debt was forgiven for all agreements where there was no more than 30 per cent wooded area, with non-wooded area defined as any land on which there are no forest stands over five years old.

Over the years, consortia have been replaced by the convention model which, in principle, proved more beneficial for the owners' associations by providing a substantial injection of public capital through grants. Nevertheless, a considerable number of consortia remain in force.

In consortia, standing timber belongs to the Forestry Administration, and the community is entitled to receive a percentage of the timber's sale value as compensation for the occupation of the land throughout the cutting rotation.

In this type of arrangement, the Forestry Administration assumes 100 per cent of the economic risk of the operation, while the community only assumes the risk of receiving nothing for the occupation of the land in the event that the stands cannot be commercially exploited.

Agreements with private entities

The level of funding required to capitalise a woodland is very high, so many communities need to rely on entering into agreements with private entities in order to capitalise and manage their community woodlands. These agreements are typically based on a surface lease that allows a third party, whether an individual or a legal entity, to plant in the community woods, providing the community of owners with an income to compensate them for making their woodland available to a third party. Compensation to the community is usually set under one of the following systems for calculating the rent:

• A fixed annual annuity, in cash;
• An annual fixed cash payment, plus a percentage of the final income from the sale of the timber; or
• A percentage of the final income from the sale of timber.

Normally, these agreements or contracts are made between the community and companies linked to the timber industry, although nothing prevents them from being entered into with individuals or even with community members willing to provide capital. The interest of companies in the industry stems from the fact that it is a way of guaranteeing the future supply of raw materials.

The most common formulas presented are those of a consortium, leasing and a shared management contract, financing and purchase of the production.

Both the consortium and the shared management contract are established on the basis of a surface right or a real right of security over the created airspace, in favour of the company.

The consortia are similar in nature to those with the Administration, with the percentages of distribution between the community and the surface owner varying in this case. Another difference compared with the consortia signed with the Forestry Administration is that the timber is necessarily allocated to a specific entity, already determined in advance.

Shared management, financing and purchase contracts for production involve a greater commitment from the community, but they also entail greater control over forest management. Under these types of contracts, the company acquires the right to purchase all the timber produced in a given forest and, in return, finances all the investments and expenses necessary for the exploitation of the forest.

Normally, the services required for the optimal exploitation of the woodland are provided by the company itself, either directly or indirectly by contracting the service from third parties. The amounts invested are credited to an account set up for this purpose and earn an agreed interest. The community may pay these expenses to the company in full or in part either before felling, or as a result of a final settlement after felling.

—

[1] See Chapter II of Title IV of the Law on the Promotion of Forestry Production.