EIA response to consultation on a new UK due diligence regulation to combat deforestation

The UK is acknowledging that new laws will be necessary to better protect forests and the people who live in and around them.

The latest development is a proposal by the Department for Environment, Food and Rural Affairs (DEFRA) to regulate trade in the UK of ‘forest risk commodities – agricultural products such as palm oil, soy and cocoa which can drive deforestation, corruption or impact the rights of forest people.

EIA is demanding that the regulation ensures commodity production is not destroying forests or done at the expense of human rights or the rights of forest communities. On 5 October, we submitted our response to DEFRA’s consultation on the proposal.

DEFRA’s proposal was for a regulation focused on ensuring commodities being traded in the UK were not derived from illegal deforestation and included the following elements:

  • a ban on businesses using forest risk commodities (such as soy, pulp and paper, cocoa, palm oil and rubber) that have not been produced in accordance with laws protecting natural forests and other ecosystems from being converted into agricultural land;
  • an obligation for businesses to conduct due diligence to ensure forest risk commodities which have not been legally produced do not enter supply chains;
  • enabling the Government to levy fines and impose other sanctions for violations of either the ban or the due diligence requirements;
  • limiting the regulation to large businesses.

EIA very much welcomes the consultation by DEFRA and recognises that legality and governance reforms are central to more sustainable natural resource management practices globally. The precise approach to be taken by DEFRA on legality, however, raises some concerns and in other instances is unclear.

We have made the following recommendations to ensure a new law will achieve the goal of ensuring commodities traded in the UK are not contributing to the destruction of forests and natural ecosystems, are not contributing to the violation of human rights or the rights of local communities and indigenous peoples and that UK policy is supporting reform in producer countries.


The UK should set the standard for protecting natural forests and ecosystems

EIA recommends that DEFRA revises its proposal to make clear that agricultural commodities must be produced only where natural forests and other natural ecosystems are protected. The law should apply to legal as well as illegal deforestation.

This would recognise the fact that many forests and ecosystems are cleared legally, ensure the regulation can be effectively enforced and be consistent with the UK and other countries’ commitments under international instruments such as the Paris Agreement, UN Convention on Biological Diversity and UN Forest Strategy and Sustainable Development Goals.


The standard set by the UK should be inclusive of human rights

Tapping rubber in the forests of Muara Tae (c) EIAimage

Land conflicts, weak tenure security and land rights are closely associated with forest-risk commodities and land-use change. For example, in Indonesia the plantation sector, mostly in the form of palm oil, is the one most commonly associated with land disputes.

Solely focusing on laws that protect forests and ecosystems may cause those laws relating to land rights to be less well enforced or under-prioritised. There may be lands with legal forest conversion permits in place, but also various social issues including land conflicts. Just focusing on laws that protect forests may have the unintended consequences of exacerbating the undermining of the rights of local communities and indigenous peoples, driving conflict and ultimately being counterproductive to attempts to protect natural forests and ecosystems.

The UK regulation should show clear support and incentives for national legislation and processes that addresses land tenure rights and respect the rights of local communities and indigenous peoples, including Free, Prior and Informed Consent (FPIC), such as those that provide legal land titles for farmers, recognise customary land rights and resolve conflicts between customary and statutory land laws.


The scope of the ‘relevant laws’ proposed is too limited

DEFRA has proposed defining relevant laws as those that “protect natural forests and other natural ecosystems from being converted in to agricultural land”. This could exclude many types of illegal deforestation. The law must encompass illegalities relating to the permitting process, land rights, lack of community consent, corruption and bribery.

Additionally, deforestation may be illegal at time of forest clearance, but is often legalised later and this creates confusion for applying the proposed law. Much past illegal deforestation may have been retrospectively legalised by legal reforms, forgiven or is too long ago to be prosecuted or detected.

Countries may also look to deregulate by making environmental protections weaker and more deforestation legal. This is a real risk in countries such as Brazil and Indonesia, which are currently considering deregulation that would weaken current laws supporting the protection of forests. Indonesia passed an “omnibus bill” that significantly weakens laws protecting forests on the same day this consultation ended, underlining how real this risk is.


The regulation must apply to all companies

The proposed regulation would only apply to large businesses. It is risky to assume that most of these commodities are used by large businesses, such as major retailers and consumer goods manufacturers.

The users could be smaller companies in lesser known sectors that face less consumer pressure and therefore have lower standards.


A new law must reflect a partnership approach and not green lane certification schemes

We fully support the UK Government taking a bilateral partnership approach and this should be written into the regulation.

Any such bilateral agreement must provide clear support and incentives for governance reform and the enactment of existing commitments by countries, ensuring these align with international commitments. There is the need to define legality in any country through a multi-stakeholder approach and such agreements must provide incentives for reform and existing commitments by countries to be honoured.

Any regulation should not automatically green lane national standards or certification schemes and the use of such schemes should not absolve the company of liability. Certification schemes can suffer from critical flaws such as auditors conducting substandard assessments or colluding with companies to cover up violations, resulting in the certification standard not being adhered to and failures in achieving significant change.


Enforcement must be provided adequate resources

Oil palm plantation on deforested land in Papua, Indonesia

The body charged with compliance and enforcement will have to conduct checks on companies and be able to evaluate whether risks have been adequately identified and mitigated across complex, international supply chains.

It will also have to be empowered to take adequate action to ensure compliance, in some instances by very large companies, and to investigate and prosecute trade in illegally sourced commodities.

Adequately performing these tasks will require additional resources. In order to evaluate whether risks have been identified, a regulator will itself need to know the risks of sourcing commodities from particular locations and suppliers – in effect, the regulator will need to conduct a certain amount of due diligence itself to evaluate the due diligence being conducted by companies.

It will also need to be able to impose penalties sufficiently dissuasive to motivate changes by (in some instances) very large companies.


Additional requirements

Finally, the law must ensure transparency, an appropriate mechanism for complaints and a mechanism for review to ensure the law is working.

It must cover processed as well as raw forms of commodities, have an appropriate evidential basis for determining what counts as a “forest risk commodity” and account for how smallholder producers can comply with it.