Latvia's Competition Council head: timber firms tried to influence agency's ruling on state forestry company
Competition Council chief Ieva Šmite revealed that during its probe into long-term timber harvesting contracts by state forestry company Latvijas Valsts meži, several attempts were made to influence the agency's work, which she called unprecedented. The Council nonetheless proceeded with a fine of nearly 8 million euros against the company.
Latvia's Competition Council (KP) announced at a press conference on Thursday, August 13, that it has fined state forestry company Latvijas Valsts meži (LVM) nearly 8 million euros over so-called long-term timber harvesting contracts. The contracts granted preferential access to timber, bypassing public auctions, to six timber companies — Pata Saldus, Metsa Forest Latvia, Berivs, Krebsar, Pata Strenči and Pata Jēkabpils — while other industry players had to compete in public auctions.
Multiple attempts to influence the probe
KP head Ieva Šmite said that during the investigation, the agency encountered several parallel processes that did not affect the final decision but reflected the overall situation. One of the contract parties filed a complaint with the Prosecutor General's Office, alleging that KP's record of a negotiation meeting was inaccurate, even though the party itself had not taken part in that meeting. After reviewing the audio recording and the transcript, the Prosecutor General's Office found no distortions.
There were also administrative proceedings over the suspension of interim regulatory contracts — on July 31, the interim measures concerning Pata Saldus and Pata Jēkabpils were lifted. Earlier in the year, Pata Saldus had asked KP to recuse several officials from the case, questioning their objectivity, a request KP rejected. The company also went to the Administrative Regional Court, claiming a violation of the presumption of innocence over statements KP officials made on Latvian Television's programme "de facto", but the court likewise found no wrongdoing by KP.
Call to suspend the Council's head
Šmite said that earlier in the year, an association of timber harvesting companies had asked then-Prime Minister Evika Siliņa, the Prosecutor General and Economy Minister Viktors Valainis to suspend her from her post for the duration of the investigation, after she disclosed on LTV's programme "1:1" that the contract partners had filed a complaint with the Prosecutor General's Office. Since no action followed that appeal, Šmite concluded the complaint had been unfounded, describing the episode as an unprecedented attempt to influence an independent institution. Despite these processes, KP has completed its investigation into the LVM contracts and issued its ruling.
