From a coal traders’ fund to a facilitator of sustainable development

Foundation for Research of Natural Resources in Finland has a unique history of origin. The Foundation’s basic capital derives from the price equalization fund of the Finnish Coal Traders’ Association, which served the intention of adjusting price differences of imported coal during the Continuation War (1941–44). In 1952, following plenty of deliberation and negotiations, a decision was made to use the assets accumulated in the fund as the basic capital for a non-profit foundation to be established for the purpose of supporting research activities related to natural resources.

The origins of the Foundation date back to the war years. In March 1942, a coal and coke price equalization fund was established in Finland. As indicated by its name, the fund was intended to equalize differences in the prices of the imported coal and coke. Such adjustments were necessary since the price of energy fluctuated largely during the hard times of war.

After the war, in autumn 1944, Finland was ordered by the Soviet Union to pay gigantic war reparations. The demand for coal energy was great, but its supply was unsecure in war-ravaged Europe. The coal price fluctuated largely, so an equalization fund was very much needed.

The Government of Finland had a very tight grip on the fund. For example, Section 16 of the Rules of the Foundation stated: “If the activities of the fund cease, any surplus assets shall be used in the manner defined by the Ministry of Supply.” The debts, on the other hand, would be the liability of the fund itself. The State thus washed its hands of a possible failure of the fund, but if the fund proved successful, the State would gladly be in line for the profits.

In autumn 1948, discussion emerged about the possibility to end the post-war control of coal and coke. The final decision concerning the abolition of control became effective on 1 June 1949, and at the same time, the equalization fund ceased operating. To be on the safe side, the fund had throughout its years of operation set slightly too high a price for coal and coke. As a result, a considerable profit had accumulated over the years. Now, the question was: which party was entitled to receive the profit capital accrued from the fund’s operations? Formally, the assets were the property of the Finnish Coal Traders’ Association, but its management considered that the Association had no moral right to the money. They felt that the profit had been gained by keeping the prices of coal and coke systematically at slightly too high a level. On the other hand, they were not willing to transfer the money to any other party without a legally binding resolution.

Following negotiations with the State, the Finnish Industrial Union and the Central Association of Finnish Woodworking Industries, a decision was finally made to establish a non-profit foundation to which the funds would be transferred. The purpose of the foundation thus established would be to support future research of natural resources by awarding research grants. Finally, Foundation for Research of Natural Resources in Finland started operation in late 1952.

The Charter stated the purpose of the Foundation: to promote and support research and experimental activities aimed at developing the yield and techno-economic utilization of Finland’s forest and other natural resources. Throughout its history, the Foundation has awarded grants for this purpose as stated in the Charter.

From the beginning, the Board of Directors of the Foundation has included representation from a total of 11 institutions and organisations. Accordingly, the Board consists of 11 ordinary members and their personal deputy members. The Board members have usually been appointed for a term of 5 years.

The institutions and organizations listed below have had the right to appoint their representatives to the Board of Directors. It should be pointed out that many of these institutions and organizations have changed their names over the years:

University of Helsinki

Helsinki University of Technology

Finnish Forest Research Institute

VTT Technical Research Centre of Finland

Finnish Society of Forest Science

Finnish Association of Mining and Metallurgical Engineers

Central Forestry Society Tapio

Forestry Delegation of the Central Union of Agricultural Producers MTK

Central Association of Finnish Woodworking Industries

Industrial Union of Finland

Finnish Coal Traders’ Association, which resigned from the Board in 1997 for the benefit of the Finnish Bioenergy Association FINBIO