Project description - Governance of Renewable Natural Resources in Northwest Russia

Project leader: Prof. Soili Nystén-Haarala, University of Lapland/Faculty of Law, Box 122, FIN-96101 Rovaniemi, tel. +358 (0)16 - 341 341, +358 (0)40 7355938, fax +358 (0)16 - 3412500,
soili.nysten-haarala(at)ulapland.fi

1. Background

During the past decade, Russia has gone through major economic, political and societal changes. However, renewable resources - including forests and fish stocks - continue to be economically important in the Russian North and Northwest as well as for the neighboring countries. During the transition period Russia has adopted market regimes for forest management and fisheries. These changes have had major impacts not only on the governance of natural resources, but on the socio-economic situations in the northern regions and localities as well. Today, renewable resource governance continues to change, involving a multitude of economic, legal, political and geographical aspects. However, there are significant differences in local and regional contexts within the Russian macro-scale changes and extensive legal conflicts concerning natural resource management (Kortelainen & Kotilainen 2002; 2003). These variations need focus from research.

The research project analyzes the challenges of renewable natural resource governance in Northwestern Russia from a multidisciplinary perspective by combining the expertise of the Universities of Lapland and Joensuu, various disciplines, and international research networks. 
 
2. Objectives and methods

2.1  Objectives

The central theoretical framework in this study is governance. It refers to institution-building and institutional development (Young & Druckman 1992).  The governance of natural resources is investigated at different scales and in terms of various actors, including the situation in local communities, business enterprises, as well as regional and central administration. Furthermore, the impacts of global processes, such as legal harmonization, and business and administrative cooperation, on Russian governance structures are included in the research setting, as well as a cross-border perspective: Russian socio-economic development has significant impacts on regions bordering that country, and vice versa. Due to its large amount of natural resources, Russia also has a considerable potential impact on global governance and the ways in which international natural resource and environmental policies are organized.

The main concept used for describing dynamics of governance is path-dependency launched by Douglas North, meaning that the "consequence of small events and chance circumstances can determine solutions that, once they prevail, lead one to a particular path" (North 1992). The research group sees that the evolutionary concept of path dependency can help us to understand the individual national, regional and local features of Russian transformation process. The research project seeks to provide answers to the questions: In what ways are the existing governance practices path-dependent and what ways are to be found for breaking away from undesired path-dependence in order to implement fresh institutional solutions for renewable natural resource governance?
The project explores natural resource governance in the context of two sectors of the Russian economy: forestry and fisheries. First, the forest industrial sector of the Russian economy has gone through considerable transformation during the past decade (e.g. Kortelainen & Kotilainen 2003). These transformations can be especially well observed in northwest Russia where, along with East Siberia, a major part of the Russian forest industry is located. Although the role of the government in this industrial sector is still strong, significant new actors have emerged, as Russian forest corporations, investment funds and transnational companies have been purchasing enterprises and mills. These changes affect the ways in which natural resources are governed. Moreover, the Russian forest legislation has been in constant transformation as well. Furthermore, the state administrative structures governing the Russian environment and natural resources, and forests more specifically, have been constantly reorganized during the post-Soviet period (Peterson & Bielke 2000; Kuliasova & Kuliasov 2002a), decreasing the predictability in the practices of natural resource (and environmental) governance.
Secondly, the project investigates the governance of fish stocks in the Barents Sea. Fish production in northwest Russia has national importance in terms of food supply, as well as economically: most of the fish produced in the Russian Barents Sea Region are exported. Regional fishery organizations have dominated harvesting for decades until 2000 when the federal government introduced fish auctions trying to gain a more substantial share of the profit from the fisheries. Legislation on fishery activities is still developing. The fishery auction system is under re-consideration due to strong protests of many actors such as owners of fishing companies and vessels, fishery kolkhozes, various fishery associations, communities dependent on fisheries etc. In the early 1990s Russian fishing vessels started to deliver their catches abroad, which led to considerable overfishing by the Russian fleet. Subsequently, Russian and Norwegian fishery authorities have taken steps in order to coordinate their control efforts in the Barents Sea (Hønneland and Blekkisrud 2001).

In order to answer these questions, the research project is organized into four closely linked and intertwined research themes. It is the interaction, cooperation, competition, contradiction and struggle between the institutions and actors explored in the themes below that produce the varying patterns of natural resource governance in today's Russia. Therefore, natural resource governance has to be explored from these various perspectives which, in turn, have to be compared and brought together using the concept of path-dependency. Thus a multidisciplinary approach truly contributes to the understanding of the processes guiding the utilization and conservation of Russia's natural resources.

1. Legal regulation of natural resource utilization
Law is both a federal and regional instrument for natural resource governance and has therefore been a tool in the struggle between the regional and federal interest groups on the power to control natural resources (Nystén-Haarala 2001). Struggle for ownership, control and profit sharing have generated constant legislative changes. Unofficial institutions also guide implementation of the changing, debated legislation. Forestry is an example of a branch with strong old institutions that have a path-dependent influence on resource management and implementation of new legislation. The fishery activities are regulated by several agreements between federal and regional administrations and on the general level in federal water legislation. In this theme, the focus is on the gap between law in legislation and in international standards of sustainable forestry and fishery and law in action in localities from the users' perspective. The access of local communities to natural resources and their rights are of special interest for this research theme (Eikeland and Riabova 2002).

2. Changing capacities of natural resource administration
Administration enforces legal regulation. In recent years, the state governance of the environment and natural resources has been in flux in Russia and, recently, environmental administration and forest service were incorporated into the natural resource administration structures (Peterson & Bielke 2001; Holm-Hansen 2002; Kuliasova & Kuliasov 2002a). These changes have produced and are constantly producing varying outcomes at the federal, regional and local scales. Contrary to the ideas about institution building, these rearrangements have even been criticized of downsizing the Russian bureaucracy. On the other hand, international environmental cooperation in northwest Russia, especially in the Barents Region, has aimed at advancing the capacities of local and regional environmental administration (Tennberg 2000). This theme will focus on these changing capacities of natural resource administration.

3. Enterprises and natural resources
Corporate governance, according to a narrow definition, can be understood to concern only relations between shareholders and managers. A broader perspective to it takes into account that there are also other interest groups, or in the broadest sense relations to the whole society (Timonen 2000). In a rapidly changing situation, enterprises that utilize natural resources have a significant impact on the outcome of governance practices. In terms of forest industry, the forest resource utilization scene in Russia has become somewhat fragmented, with companies of different type and origin adopting different strategies and engaging in different alliances with other actors (cf. Kotilainen forthcoming; Tysiachniouk & Reisman 2002). In the fishing industry, production has to an increasing extent been geared towards an international market (Eikeland and Riabova 2002). Thus the role of enterprises in the governance of natural resources is most significant and is investigated in this theme.

4. Stakeholders' perceptions of natural resource governance
Stakeholders are defined as those actors that are invested in the current institutional structures (Hemmati 2001). In this theme, this study aims to investigate: 1) the present challenges and opportunities actors perceive for fisheries and forestry; 2) their interaction or influences of different interests; 3) the risks they face in relation to change and 4) the economical and social characteristics and prerequisites (education, work experience, abilities etc) for actors to adapt in institutional changes. These issues are investigated from the perspective of the actors themselves and, additionally, supplemented by other data. Institutions such as fisheries and forestry organizations and networks may constitute not only bodies through which adaptation to changing circumstances and market economy takes place, but they may also hinder this change through the lines of development and dominant actors the institution empowers. Therefore, a crucial step in the study is to determine the roles and possible conflicts between the roles of diverse institutions in forestry and fishing.

The research themes are summarized with the help of the framework offered by the concept of path dependency. This multidiciplinary theoretical framework advances deeper and offers more practical understanding of the complexities of dynamics between official institutional development and concrete social realities.

2.2 Methods, material and case study locations

Empirically, the research is based on partly joint intensive field work periods, during which interviews are carried out and research material such as documents collected. Research should pay attention to the interactions of the institutional structures as well as the personal understandings of them (Macnaghten and Urry 1998, 75-103). The position of actors is also related to institutions that affect them and their views on what actions should be taken. This applies to research on natural resource governance more generally, not only research labeled as "environmental".

Case studies are carried out in four localities in four regions of north-west Russia: Murmansk, Arkhangel'sk and Vologda Oblasts, as well as the Republic of Karelia. The localities have been selected on the basis of their main economic activities in order to cover the two sectors of the economy, fishery and forestry; and on the basis of their status in spatial administrative hierarchy in order to reach a variety of stakeholders (actors within the primary resource institutions) with different social, political and economic interests. Networks in localities are followed in order to investigate the governance of forest resources and fish stocks. Comparisons of these case studies enables making more general conclusions about the state of affairs in the Russian natural resource governance.

Two case study localities, Murmansk and Arkhagel'sk, are regional (oblast') centers with about 400 000 inhabitants. The City of Murmansk is an important harbor and a significant location of the Russian fishing industry. Fishing is one of the largest industries in the region, and Murmansk oblast both supplies a high proportion of the fish supplies domestically and is to a large extent export-oriented, bringing foreign capital to the area. The largest companies are Murmansk Trawlfleet, Murmansk Rybprom structure, and Union of fishery collectives in Murmansk. Case studies in this region utilise previous research and local networks by Riabova and Ivanova (Ivanova and Nygaard 1999).
In the whole Arkhangel'sk Oblast, forest resources form a significant base for the regional economy. As a regional administrative and economic center, also the City of Arkhagel'sk is characterized by a high degree of dependence on the forest industry, particularly pulp and paper production. The region produces some 30% of Russia's exported sawn material and has some of Russia's largest wood product companies such as Arkhangelsk Plywood Plant, and large pulp and paper manufacturing facilities. Fishing is, like forestry, one of the largest businesses in the region and is in the transition to becoming a more export-oriented business, for example through the ongoing development of fishing company Grumant and fish plant Belomorye. Case studies in this region will utilise previous research and local networks especially by Pashkevich (see for instance Pashkevich 2003).

Two case study localities, Kondopoga in the Republic of Karelia and Sokol in the Vologda Oblast are district (rayon) centers with about 40 000 inhabitants. Both towns have been formed in a close relation to pulp and paper mills, and are heavily dependent on this industry. The Kondopoga paper mill has been relatively successful in the transformation of the forest industrial sector of the Russian economy (Kortelainen & Kotilainen 2003). The enterprise is one of the biggest newspaper producers for domestic markets, and it exports its products also to the West. Kondopoga will provide an acutely interesting case study for natural resource governance. While investing in social welfare projects, the mills have been more reluctant to actively promote explicit environmental policy, and their wood procurement policy has been questioned from an environmental perspective (Karpachevskiy 2001).
The town of Sokol has been studied in a previous project by the members of the research team (Kuliasova & Kuliasov 2002a; Kortelainen & Kotilainen 2003). These studies have included analyses of the restructuring at the local pulp and paper mills and natural resource administration. At first struggling with difficulties, the mills have recently been getting financing for investments after they were purchased by a Muscovite investment group, "Gruppa Foks", in 1998. The modernization of production inevitably increases the need to investigate the ways in which raw-material procurement is governed in the surrounding region. However, the governance of raw-material procurement of the Sokol'skiy mills has yet not been analyzed. The proposed project concentrates on forest resource governance, following the networks from the Sokol'skiy mills in the Vologda and Arkhangel'sk Oblasts.
There are three phases in collecting empirical material. In the first phase, statistical material, regional regulations, newspaper articles, and other documentary material are collected and preliminarily analyzed. The findings from these first-phase materials help to structure the relevant actor groups, in choosing key informants for interviews, and in planning the interview questions. The interviews of these key informants (managers, lawyers, entrepreneurs, and local and regional officials in the fields of fishery and forestry) form the second phase for collecting material. In the third phase, more theme interviews are carried out among selected groups (e.g. workers, local residents). Furthermore, to relate back to institutions and check the results of observation and interviews, policy exercises are in a final stage held to provide fora for direct dialogue and feedback to the actors. The fieldwork and case study methods include both qualitative and quantitative material and analysis, and culminate in policy exercises in which feedback is returned to communities studied. These stakeholder processes serve to improve the understanding of conflicts between actors and group. The use of both interviews and group interaction also provide both a triangulation of results (for instance in checking the social relationships so far found during the study) and a legitimate feedback of research into the groups studied dynamics (Hemmati 2001: 97-98).

2.3 Time schedule

2004 - collection and analysis of background information (statistics, legislation and legal regulations on the regional level, research reports, newspaper articles, etc.)- seminar of the research group to coordinate interview and fieldwork strategies and periods- preliminary field work in Russian localities
2005 - analysis of the collected material- field work and interviews in all four case study localities
2006 - policy exercises held in Russia- writing articles and reports for a book based on the research project
2007 - final seminar of the research group: discussing the articles of the book- a book based on the research project submitted for publication- traveling exhibition in Russian, Finnish and English, summarizing the results from the research project (dependent on outside funding)

3. Research team, research associates and cooperation networks

The core of the research team consists of the research leader in charge (Soili Nystén-Haarala), two post-doctoral researchers (Juha Kotilainen and Carina Keskitalo), and two post-graduate students (Anna-Maija Matilainen and Minna Pappila). In addition, there are four Russian research associates (Larissa Riabova, Lyudmila Ivanova, Antonina Kuliasova and Maria Tysiachniouk) who will work closely with the Finnish research team. The research team will also benefit from the participation of three Finnish research associates (Monica Tennberg, Jarmo Kortelainen and Leena Lehtinen), who will carry out their related research and cooperate with the research team.

The director of the project, docent Soili Nystén-Haarala focuses on the theme Enterprises and natural resources (theme 3), and investigates enterprises' practices of contracting on the use of natural resources. This work combines the work of the research group with her other project "Contracting and Governance of Business Relations" funded by the Academy of Finland (2003-2006). This project focuses on economic and legal governance and cooperates with forest sector researchers and lawyers in Finland, Russia and Sweden. She also contributes to theme 1, Legal regulation of natural resource utilization.

Dr. Carina Keskitalo investigates Stakeholders' perceptions of natural resource governance (theme 4). This work is a continuation of the BALANCE project (Global Change Vulnerabilities in the Barents Region, funded by EU Commission, 2002-2005) that so far has included studies in Norway, Sweden and Finland, and are now extended into comparisons on the Russian side of the Barents region. The work includes both individual and group interviews as well as policy exercises.

Lic.Soc.Sc. Juha Kotilainen takes responsibility for theme 2, Changing capacities of natural resource administration, and also contributes to theme 3, Enterprises and natural resource governance. His work is a continuation of the project 'Preconditions of Ecological Modernization in Russian Mill Towns' (financed by the Academy of Finland in 2001-2003) which, focusing on environmental politics in forest industrial localities, has included interviews with representatives of local and regional natural resource administrative bodies as well. His doctoral dissertation "Boundaries for Ecological Modernization" in human geography (Department of Geography, University of Joensuu) will be finished during the winter 2004.

A post-graduate student in law, Anna-Maija Matilainen focuses on theme 3, Enterprises and natural resources, and studies how the interaction with different stakeholder groups of enterprises is arranged and what is the role of managers in this interaction. She has started the work studying shareholder and stakeholder interaction of Russian companies in the project "Contracting and Governance of Business Relations" and is going to extend her study on natural resource management of forest and fishing enterprises and focus on the interaction between the firms and their local stakeholders. Another post-graduate student in law, Minna Pappila studies the Legal regulation of natural resource utilization (theme 1) on different levels of administration, and especially from the point of view of analyzing the obstacles for applying ecological sustainability and international standards in Russia. This study deepens and extends the research that she started in the FIBRE project funded by the Academy of Finland (1999-2003). Her licenciate thesis on the Russian forest legislation from the perspective of international biodiversity protection will be finished in the beginning of 2004.

Four Russian research associates work closely with the core of the research team, and are based in the study areas in Russia. Candidate of sciences Larissa Riabova (economics) has studied resource management in the Barents Region with Norwegian partners. She also has an ongoing project with Monica Tennberg on Russian international environmental politics in the North (RESINA). She participates in collecting material for and analyzing theme 4, Stakeholders' perceptions of natural resource governance.

Candidate of Sciences Lyudmila Ivanova (economics) participates in collecting material for and analyzing the theme 3, Enterprises and natural resources. Her thesis dealt with institutional changes in the Murmansk Oblast's forest sector. She has previously participated the Forest Resources Project at IIASA in Austria as a young summer researcher and helped in arranging policy exercises in the Murmansk oblast.

Candidate of Sciences Antonina Kuliasova (economics) participates in collecting material for and analyzing the themes 2, Changing capacities of natural resource administration, and 3, Enterprises and natural resources. Regionally, Kuliasova concentrates on Vologda Oblast' and Kondopoga. Her dissertation analyzed the conceptions of sustainable development in Russia, and she has recently been participating in the project 'Preconditions for Ecological Modernization in Russian Mill Towns' (funded by the Academy of Finland 2001-2003), which is coordinated by the Department of Geography, University of Joensuu.

Candidate of Sciences Maria Tysiachniouk (biology) has also been cooperating closely with researchers involved in the proposed project from the University of Joensuu by participating in joint publications. Tysiachniouk has previously collected interview material concerning the Russian environmental administration, and this project utilizes this material and contacts for theme 2, Changing capacities of natural resource administration. Tysiachniouk will also contribute to theme 3, Enterprises and natural resources, by investigating the processes of forest certification in Russia. Regionally, Tysiachniouk specializes in Arkhangel'sk Oblast'.

A steering committee, that will meet twice a year, is organized in order to manage and coordinate the project as a whole. The members are Soili Nystén-Haarala, Carina Keskitalo, Monica Tennberg and Juha Kotilainen who are responsible for coordination and communication  within the research project. The research team's working language is English. Finnish members of the research team do also have language skills in Russian.

Three research associates from Finland carry out research in closely related themes, work in cooperation with the research team, and thus contribute to the project. Dr.Soc.Sc. Jarmo Kortelainen (geography, University of Joensuu) has extensive research experience in studying forest industrial localities in Finland and Russia. At the department of Geography, University of Joensuu, he continues his research on Finnish and other foreign companies operating in Russia (theme 3).

Dr. Leena Lehtinen (law, docent at University of Turku) has a long experience in studying Russian law. Her PhD. focused on the development of company law in Russia. She has also written extensively on the legislation and court practices of international trade contracts, property and natural resources. She focuses on themes 1 and 3.
Professor Monica Tennberg (political science, Arctic Center/University of Lapland) has extensive research experience in international environmental cooperation in the Arctic region. She is currently involved in two research programs covering northwest Russia: 1) "RESINA- Politics of Environmental Spaces in Russia: Three Northern Cases" (funded by the Academy of Finland 2002-2004) and 2) "BALANCE - Global Change Vulnerabilities in the Barents Region" (funded by the EU Commission in 2002-2005). She contributes particularly in themes 2 and 4.

The project will benefit from the experience and knowledge of a group of senior advisors: Professor Juha Tolonen (law, University of Vaasa), Professor Ari Lehtinen (human geography, University of Joensuu), Profesor Matthew R. Auer (political science, University of Indiana, USA), and Dr. Hans Bruyninckx (political science, Wageningen University, the Netherlands) all of whom have extensively done research on Russia, other transitional countries, and the governance of natural resources. The Russian members of the group, Professor Dmitri Furman (sociology, political sciences, Institute of Europe, RAS) and Rector Roman Tripolsky (economics, Murmansk Pedagogical University), have long experience in cooperation with western partners and multidiciplinary research in Russia.
In addition, the research group has networks of cooperation partners at several research units in Russia (Petrozavodsk, Arkhangelsk, Moscow), Sweden, Norway, Iceland, Austria and Germany.

4. Expected Results and Dissemination

The results of the proposed project will deepen the understanding of the dynamics of natural resource governance in Russia. The project will highlight the problems and strengths of governance and institution-building. It will also test the assumptions of western governance theories in concrete Russian regional and local contexts, and thus contribute to western theoretical debates. The results will inform political decision-makers, general public as well as other western and Russian stakeholders about local and regional development and natural resource governance in Northwest Russia. The main findings and results will be published in a book.

The project will produce two doctoral dissertations. The results will also be published in international and Finnish refereed scientific journals and in joint reports by the research group, and presented in scientific conferences. They will be disseminated to Finnish and other Western experts dealing with Russian development, environmental, and natural resources issues by writing articles to journals with expert readership, and popularized by writing articles to newspapers. Supposing that additional financing will be found, policy exercise conferences will be arranged in Russia to both survey and encourage interaction between different interest groups, and the research group intends to publish at least main findings in Russian. The group will apply for additional funding for a traveling exhibition in Russian, Finnish and English, to visit the research localities.

References
 
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Holm-Hansen, J. (ed. 2002) Environment as an Issue in a Russian Town, NIBR-report 2002:11. Norwegian Institute for Urban and Regional Research, Oslo.
Hønneland, G. B., and H. Blekkisrud (2001) Centre-Periphery Relations in Russia. The Case of Northwestern Regions. Ashgate, Aldershot.
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