EU supply chain law isn’t enough to keep nature safe

Julia Christian is a campaigner at Fern, a forests and rights NGO.

“The fate of the entire living world” is at stake at the COP15 biodiversity summit in Montreal this week, according to scientists.

While representatives from 193 governments negotiate an agreement to protect the Earth’s environment, earlier this month in Brussels, the European Union (EU) agreed on a law which could play an important part in doing so.

The timing of the final agreement on the EU’s regulation on deforestation-free products was no accident. On the eve of COP15, the EU intended to send a signal to other nations that the world’s largest trading bloc is leading the way in the fight for a habitable planet.

The new EU law is the culmination of years of campaigning, intense political debate and behind the scenes lobbying. It will mean that, for the first time, companies selling commodities on the EU market which contribute to global deforestation will be punished for it.

Irresistible momentum

Whether it’s palm oil from Indonesia, beef or soy from Brazil, cocoa from West Africa, or several other specific commodities, companies will have to produce due diligence statements proving that their supply chains are deforestation-free - or face hefty fines.

The momentum for such laws has grown irresistible in recent years.

Britain has concluded a consultation on implementing due diligence provisions in its Environment Act. The United States is also pushing ahead with laws to remove the taint of deforestation from its supply chains. And, perhaps surprisingly, the shift towards using legal force to protect the world’s forests has the backing of some major food producers and businesses.

This marks a welcome departure from years of failed voluntary commitments from companies, which broke promises they made - often with great fanfare - to end deforestation by 2020.

But for the EU regulation and the other laws in the pipeline to succeed, the countries where goods are produced need to be brought on board.

Unfortunately, this isn’t yet the case.

How big will the regulation’s impact be?

In July, 14 nations, including Brazil, Argentina, Ivory Coast, Ghana and Indonesia, wrote to European institutions to express their “serious concerns” over the lack of consultation they’d had with the EU over its deforestation regulation.

“It [the regulation] disregards the local conditions and national legislations of developing producing countries [and] their efforts to fight deforestation,” they wrote, adding that it was likely to penalise the smallholder farmers who produce the goods driving deforestation.

In addition, goods stained by deforestation can end up being sold elsewhere.

This is exactly what happened when the EU restricted imports of ‘unsustainable’ palm oil from Malaysia and Indonesia, ostensibly because of their role in driving deforestation. China simply increased its palm oil imports from Malaysia and Indonesia, which have filed a complaint against the EU at the World Trade Organisation (WTO).

This highlights a stark truth.

While the EU regulation represents an historic breakthrough in holding companies to account for the deforestation in their supply chains - and can help assure concerned consumers that they aren’t helping destroy the Amazon or Congo Basin rainforests when they go shopping - as it stands, it may also not fundamentally alter the forest destruction on the ground.

To do so, the EU needs to work in partnership with producer countries to help them tackle deforestation across the whole country, rather than simply the EU supply chain.

Unfortunately, so far, the European Commission has shown little willingness to come up with a strategy for working with these countries, appearing to rely mostly on the regulation itself as a motor of change. This is risky. Once the EU loses market leverage in deforestation frontier zones, it will be very difficult to get it back.

This holds wider lessons for policymakers working to halt our triple planetary crisis, including those trying to reach an agreement in Montreal this coming week.

A Brazilian delegate speaking at COP15 on behalf of a large group of tropical forested countries pointed out that, as the “home to most of the biological diversity in the world”, they would bear a higher burden than others for implementing biodiversity protection, and called for support to do so.

If such calls aren’t heeded, we have little chance of protecting our vanishing natural world.