By Jenny Brunton, Senior European Policy Advisor, British Agriculture Bureau.
On 19 April, the European Parliament voted in favour of a landmark regulation to ensure that products sold in the EU do not come from deforested or degraded land. The regulation introduces mandatory due diligence rules for all operators and traders who place, make available or export the following commodities from the EU market: palm oil, beef, timber, coffee, cocoa, rubber and soy. The rules also apply to certain derived products including chocolate, furniture, printed paper and selected palm oil based derivatives. A review will be carried out in two years to see if other products need to be covered.
The co-legislators set the cut-off date of the new rules at 31 December 2020, meaning that only products that have been produced on land that has not been subject to deforestation or forest degradation after 31 December 2020 will be allowed on the Union market or to be exported. The Council and Parliament agreed to set a definition for deforestation, based on a definition from the Food and Agriculture Organisation (FAO). They set an innovative concept for the definition of ‘forest degradation’ meaning the structural changes to forest cover, taking the form of the conversion of naturally regenerating forests and primary forests into plantation forests and other wooded land and the conversion of primary forests into planted forests.
Businesses of all sizes that trade in the selected products will have to meet stringent due-diligence obligations that trace the products they are selling back to the plot of land where it was produced. The European Commission will establish a bench-marking system which ranks countries according to their risk of deforestation: low, standard and high. Products made in high-risk countries will be subject to closer scrutiny and more stringent rules. While no country or commodity will be banned, companies placing products on the EU market will be obliged to demonstrate that their supply chains are not contributing to deforestation. They can use satellite monitoring tools, field audits, capacity building of suppliers or isotope testing to check where products come from. EU authorities would have access to relevant information, such as geographic coordinates.
The Council and Parliament also tasked the competent authorities to carry out checks on 9% of operators and traders trading products from high, 3% for standard-risk countries and 1% from low-risk countries, in order to verify that they effectively fulfill the obligations laid down in the regulation. In addition, competent authorities will carry out checks on 9% of the quantity of each of the relevant commodities and products placed, made available on, or exported from their market by high-risk countries.
The agreement also takes into account human rights aspects linked to deforestation, including the right to free, prior and informed consent by indigenous peoples.
The agreement maintains the provisions regarding effective, proportionate and dissuasive penalties and enhanced cooperation with partner countries, as proposed by the Commission. It provides that fines proportionate to the environmental damage and the value of the relevant commodities or products concerned should be set at the level of at least 4% of the operators' annual turnover in the EU and include a temporary exclusion from public procurement processes and from access to public funding.