On 17 November 2021, the European Commission released its proposal for a Regulation on deforestation-free products. It aims to prevent coffee, cocoa, cattle, palm oil, soy and wood, as well as derived products such as leather, chocolate and furniture from entering the European Union (EU) market unless they are legal and free from deforestation.
When the proposal becomes law, operators and traders will need to demonstrate that such commodities were not grown or raised on land that was deforested or degraded after a specified date (currently 31 December 2020), prior to placing them on the EU market. This is less ambitious than the European Parliament’s proposal that “the cut-off date must be set in the past, but no later than 2015”.
Companies will need to conduct a due diligence process, including a declaration of the precise geo-location of where the product was produced. Member States’ Competent Authorities would be accountable for establishing whether commodities, operators and traders comply with the Regulation. Penalties for infringements would include fines, confiscation of the commodity, confiscation of the revenue and/or exclusion from procurement contracts.
The Regulation was widely welcomed, although concerns were raised that rubber (FW 268) and some meat products were excluded: “The proposed Regulation excludes meat preparation products, even though cattle ranching drives 90 per cent of deforestation in the Brazilian Amazon. To stop all deforestation linked to EU consumption, the Regulation must include all meat products,” said Paulo Barreto, Associate Researcher at IMAZON, Brazil.
That the proposal bypasses international law on community land rights and accepts compliance with (often inadequate) national laws as sufficient, caused further concern. Nicole Polsterer, Sustainable Consumption and Production campaigner at Fern explained: “You can’t fix deforestation without fixing land rights abuses. It’s like trying to wrestle with your hands tied behind your back. In Brazil, for example, national laws are being weakened, so implementing only those would not be enough.”
Global Witness also raised the alarm that the proposal fails to address the impact that the EU banking sector has on deforestation.
Despite the many potential pitfalls and the fact that the proposal needs to be strengthened if it is to protect forests and the rights of people living in them, Nicole Polsterer spoke of a mood of celebration that the proposal had been released:
“We are tantalisingly close to winning the long battle to end the EU’s role in destroying forests globally. Today the European Commission has become the first major regulator in the world to take such a step.”
It was also positive that the Commission chose to keep supporting the Forest Law Enforcement, Governance and Trade (FLEGT) Regulation. Marie-Ange Kalenga, Forest Governance policy adviser at Fern explained “The FLEGT Regulation understood that while the EU can send a market signal, the hard work of protecting tropical forests has to happen in country, and have buy-in from all stakeholders. When devising agreements to tackle deforestation, the EU should build on the truly innovative tools it pioneered more than a decade ago.”
On a more negative note, it had been hoped that, following Parliament’s cross-party adoption of a legislative report on corporate due diligence (FW 262), the Commission might swiftly issue a legislative proposal requiring companies to address human rights, environmental and governance risks in their global value chains. It was not to be, however as the politically charged proposal has been delayed for a second time, and is now expected – possibly – in March 2022.
The proposed Regulation on deforestation-free products will be discussed by the European Parliament and the Council throughout the course of 2022, before becoming a law. For our rapid assessment, read Fern’s new briefing.