Government should side with rule of law in timber scandal - Suvajevs

RIGA - The government should take the side of the rule of law in the scandal of support for timber producers, said Andris Suvajevs, head of the Progressives faction of the Saeima, commenting on the report of the investigation commission on the case.

Suvajevs commented that the report confirms earlier suspicions expressed by Progressives that the government was misled and made decisions that were clearly illegal in the context of two long-term contracts.

Despite this, the Cabinet of Ministers, chaired by Evika Silina (New Unity), has decided not to initiate disciplinary proceedings, citing a reluctance to "politicize" the issue, Suvajevs said.

Suvajevs does not understand the prime minister's argument about "politicization", because the issue of the allegedly illegal allocation of EUR 12 million to timber companies should be politicized, in his opinion.

Suvajevs believes that, even if the Prosecutor General's Office and the State Audit Office are already taking action, a case involving a total of EUR 50 million public funds should be investigated at all levels.

As reported, the report of the commission that has been assessing the conditions of state aid to timber producers since December last year will be handed over to law enforcement authorities, but no specific disciplinary proceedings will follow on the part of the government until these assessments are completed.

The commission concluded that financial situation of timber companies that received government support at the end of 2023 had not been systematically or structurally unstable. The commission notes a number of facts that doubt the necessity of the aid granted to the timber industry.

For her part, the prime minister said that the assessment material collected so far would be handed over to law enforcement authorities and that if their conclusions showed that there had been any irregularities in the state aid to timber producers, it would be back to "asking a lot of questions".

The politician said that the Cabinet of Ministers had decided to hand over all the documents, as well as the explanations of Agriculture Minister Armands Krauze (Greens/Farmers), to investigators at the Prosecutor General's Office and auditors at the State Audit Office.

Currently, law enforcement bodies have started investigations into state aid to timber farmers, including the State Audit Office, which has promised to come up with a broader assessment of the state company Latvijas Valsts Mezi (LVM) forest manager in March or April.

Silina argued that the government does not have access to as much material as, for example, the Prosecutor General's Office, so the government cannot assess everything, but the Cabinet of Ministers will certainly return to the issue once it has access to the material collected by other institutions. In the prime minister's view, it would take "an enormous amount of time" to initiate a separate disciplinary case, which is why the law enforcement authorities are there to check who was responsible for what.

It was reported that the commission, after an in-depth review of data from publicly available sources, concluded that although there were significant increases in production costs and a fall in exports at the time, with the price factor accounting for around 70-85 percent, the financial situation of the beneficiary companies was stable and satisfactory.

The commission noted that the 2023 information report 'On mitigating factors negatively affecting the competitiveness of the Latvian timber industry' was of poor quality and the information provided was one-sided, as it was based solely on the views of the industry association and did not provide a comprehensive analysis by the Agriculture Ministry.

Latvijas Valsts Mezi (LVM) state forest manager was not involved in the preparation of the report and that no comprehensive data collection and analysis was carried out, which indicates a lack of objectivity, the commission said.

At the same time, the commission noted that two years have already passed since the drafting, promotion and execution of the report, and therefore disciplinary proceedings cannot be initiated.