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Landmark EU anti-deforestation law proposal could clean up supply chains; could it also reduce global deforestation?

17 November 2021

Landmark EU anti-deforestation law proposal could clean up supply chains; could it also reduce global deforestation?

The European Commission’s proposed EU law to restrict products linked to deforestation from entering the EU is a watershed moment in the battle to end Europe’s major role in destroying the world’s forests. After decades of trusting companies to tackle the problem voluntarily, regulation is finally on the cards. There are many potential pitfalls, however, and NGOs are clear that the proposal is not yet strong enough to protect forests and the rights of people living in them. 

“We are tantalisingly close to winning the long battle to end the EU’s role in destroying forests globally. For years, campaigners in consumer and producer countries have demanded that governments take responsibility for the environmental and social damage caused by imports of soya, beef, palm oil and other commodities. Today the European Commission has become the first major regulator in the world to take such a step.

But their proposal could still be improved. In particular, it relies on producer country laws to determine whether goods are linked to human rights violations, like land grabs. In a country such as Brazil, this would mean relying on the Bolsonaro government to protect Indigenous rights – something it fails to do.

While today is a big step forward, the drivers of tropical deforestation will remain as long as other markets exist for these tainted goods. We welcome the EU’s commitment to reaching agreements with forested countries to tackle the root causes of deforestation, including unclear laws and weak land rights. Work on these should start quickly,” says Nicole Polsterer, Sustainable Consumption and Production campaigner at Fern.

A landmark law

The proposed regulation would require all companies selling beef (including leather), soy, palm oil, timber, coffee and cacao in the EU market to conduct “due diligence” to prove they are legal and have not caused deforestation or forest degradation.

Companies would need to do a different level of due diligence depending on a country’s risk rating. The Commission proposes assigning a high, medium or low rating to producer countries based on deforestation rates verified through satellite monitoring, producer country legal frameworks, countries’ deforestation pledges and agreements between the EU and third countries. It wouldn’t consider human rights violations though, which means companies would only need to conduct low levels of due diligence on goods coming from some countries where land grabs are still happening.

Importantly, companies would not be allowed to rely on certification schemes to prove their deforestation-free status. There would also be sanctions on companies that are shown to be selling illegal or deforestation causing products, sending an important signal to the global market. The regulation would apply to all companies selling in the EU, regardless of where they are domiciled.

Could it reduce global deforestation?

Although the proposed regulation will help clean up EU supply chains, products could still be sold elsewhere. To reduce this risk, the EU needs to build agreements with forested countries to tackle the root causes of deforestation, such as poor forest governance and unclear land tenure.

“Cleaning up EU supply chains won’t stop deforestation in the tropics, because goods may instead be sold to major emerging markets. We call on the EU to use this new regulation to trigger transformative change abroad. Creating strong agreements linked to trade incentives would encourage countries to take the difficult steps to actually lower deforestation. But incentives have to be linked to implementation and results, not just nice words on paper.” says Indonesia based Mardi Minangsari, Fern Board member and President of Kaoem Telapak.

In last minute additions to the text, the regulation does now recognise the need for agreements with producer countries in order to facilitate compliance with the regulation. Such agreements could provide a lever to reduce the drivers of deforestation in producer countries. But they will only work if they are ambitious and effectively implemented. The EU has already started a dialogue with cocoa-producing countries; it should prioritise agreeing those and using them as a model for other sectors.

It is key that producer countries’ civil society is involved in devising and monitoring any agreement – something the draft regulation suggests. The EU should also build on its already existing tools which champion such an approach.

Drawing inspiration from existing tools to tackle illegal logging

Whilst drafting the proposed new regulation, the European Commission had initially considered scrapping key EU tools devised to tackle illegal logging: the Forest Law Enforcement, Governance and Trade (FLEGT) Regulation and the Voluntary Partnership Agreements signed between the EU and many timber producing countries. It has now back-peddled, having listened to the calls to strengthen them and embed them into broader EU efforts to tackle deforestation. This will be widely welcomed, given the key role such tools already play in improving forest governance, a pre-condition to tackling deforestation.   

“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, using the inclusive and deliberative approach that’s at the core of Voluntary Partnership Agreements,” says Marie-Ange Kalenga, Forest Governance policy adviser at Fern.

Not enough on human rights

Fern and partners have also been advocating for companies to comply with international human rights standards to ensure that Indigenous Peoples and local communities’ lands are protected. However, the Commission proposal bypasses international law in favour of ensuring countries comply with their own national laws.

“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 them would not be enough. To lead the world in the fight against deforestation, companies must ensure that products placed on the EU market comply with international human rights treaties.” says Nicole Polsterer.

Other shortcomings

The proposal ignores grasslands and other biodiverse ecosystems such as the Latin American ‘Cerrado’ and ‘Chaco’ ecosystems which are at risk from conversion to agriculture, especially for soya. It also omits processed meat and key commodities such as rubber, despite the devastating impacts it has on forests and people in Southeast Asia and Africa.

“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,” says Paulo Barreto, Associate Researcher at IMAZON, Brazil.

The proposal does not consider how to ensure smallholders are able to comply with the regulation, despite the fact that they produce a significant amount of imported cocoa and palm oil. Agreements between the EU and producer countries should include plans to support smallholders.

"It is of utmost importance that smallholders are supported to comply with the regulation, especially in sectors like cocoa, where smallholders are responsible for a significant part of production," said Obed Owusu-Addai, Co-Founder and Managing Campaigner at EcoCare Ghana.

Categories: Press releases, Sustainable Supply Chains

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