Metsähallitus

Metsähallitus (State Forest Enterprise) is a state-owned enterprise that runs business activities while also fulfilling many public administration duties. In Lapland the duty of Metsähallitus is the Arctic forest management. Metsähallitus administers more than 12 million hectares of state-owned land and water areas, which form one third of Finnish forests, swamps, shores and water bodies. The majority of state-owned lands are in Northern and Eastern Finland.

The Act on Metsähallitus was revised in the spring of 2016. The most significant change was the incorporation of the forestry profit centre into Metsähallitus Forestry Ltd. The company has the exclusive right to practice forestry in state-owned multiple-use forests. The state has the right of property over the forests. The change in legislation did not cause changes to the use of national parks, wilderness areas and other conservation areas, and they are maintained under the supervision of the Ministry of the Environment.

The various duties of Metsähallitus

The duties of Metsähallitus are divided into business operations and public administration duties, which are primarily financed by the budget. The business operations of Metsähallitus consist of four subsidiaries: Metsähallitus Forestry Ltd, Fin Forelia Oy, Siemen Forelia Oy and MH Kivi Oy, as well as Metsähallitus Property Development. Public administrative duties are carried out by the Natural Heritage Services and Game and Fisheries Services units.

In 2016, Metsähallitus Group’s turnover was €333 million. While the unrevised Act was in effect (between 1 January and 14 April 2016), Metsähallitus contributed €10 million to state revenue, with €86 million more over the rest of the year. Metsähallitus Forestry Ltd pays tax for its profits to the state. In addition to carrying out business operations, the Metsähallitus Natural Heritage Services and Game and Fisheries Services units have a great deal of influence. The financing used by these units reached almost €63 million last year. Among other things, Metsähallitus maintains 38,000 kilometres of forest roads, more than 6,300 kilometres of hiking routes and nature trails, and almost 3,000 rest areas.

An advisory board consisting of members of various interest groups appointed by the Ministry of Agriculture and Forestry operates in the Lapland area. The board’s duty is to give Metsähallitus statements regarding issues related to the use of state-owned land and water areas that are significant from a regional policy perspective.

Reindeer husbandry affects Metsähallitus’ operations as well. Metsähallitus and the Reindeer Herders’ Association have an agreement, the goal of which is to improve the co-operation between reindeer husbandry and forestry operators as well as their conditions for conducting business. The goal is to mutually develop Arctic forest management methods that take the needs of reindeer husbandry into account.

Restricted business operations

Metsähallitus’ Arctic forest management operations are restricted in Northern Lapland. The delicate environment and the needs of the Sámi people and reindeer herders are paid special attention in forestry operations. Logging is carried out primarily manually and only on approximately one tenth of the overall area. Metsähallitus’ business operations form a system in which at least one euro’s worth of non-monetary benefits are produced for the state for every two euros produced.

The change in legislation did not affect the social obligations set for Metsähallitus, and the recreation use of multiple-use forests in economic use, as well as protecting natural diversity and the conditions for reindeer husbandry, will continue to be taken into consideration on state-owned lands. In 2016, a total of €56 million was invested in fulfilling these social obligations. It has been estimated that without the aforementioned investment, the operating result would have been €56 million greater.