EU Parliament: ‘We have no choice but to ramp up our efforts to halt global deforestation’

13-Sep-2022 - Last updated on 13-Sep-2022 at 16:20 GMT

Members of the European Parliament (MEPs) voted today on the EU draft law on deforestation, including due diligence obligations for EU financiers investing in forest-risk sectors.

The plenary adopted its position on the EU Commission proposal for a regulation on deforestation-free products with 453 votes to 57 and 123 abstentions.

The MEPs supported proposals to strengthen the provisions on supply chain due diligence as well.

While no country or commodity will be banned, companies placing products on the EU market would be obliged to exercise due diligence to evaluate risks in their supply chain. MEPs propose that firms 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. Anonymised data would be available to the public. Based on a transparent assessment, the Commission would have to classify countries, or part thereof, into low, standard, or high risk within six months of this regulation entering into force. Products from low-risk countries will be subject to fewer obligations.”

Michael Rice, lawyer for not-for-profit organization, ClientEarth, reacting to the Parliament’s position, said it has sent “a strong signal that those funding nature destruction are equally responsible and should also be on the hook if they don’t do their due diligence.”

That organization was disappointed, however, that the MEPs did not extend protections to natural ecosystems other than forests, such as savannahs, wetlands and peatlands: ecosystems that are under equal pressure from agricultural expansion. Instead, they have opted to defer the issue to a review 12 months after the law's commencement.

Cut-off date

The EU Commission’s original proposal covers cattle, cocoa, coffee, palm oil, soy, and wood, including products that contain, have been fed with, or have been made using these commodities such as leather, chocolate, and furniture. Parliament wants to also include pig meat, sheep and goats, poultry, maize, and rubber, as well as charcoal and printed paper products.

In addition, the MEPs insisted that products must not have been produced on land deforested after December 31, 2019 - one year earlier than what the Commission proposed.

They also want companies to verify that goods are produced in accordance with human rights provisions in international law and respect the rights of indigenous people.

Dr Julian Oram, senior director at Mighty Earth, said the US environmental campaigners welcomed those particular moves by the MEPs. "Adding natural rubber to the list of forest-risk commodities is also another significant step, as is putting additional measures on banks, financial institutions, and investors to ensure that their activities do not contribute to deforestation.”

Industry reaction

Nathalie Lecocq, director general of EU vegetable oil and protein meal industry association, FEDIOL, told us: "We support the introduction of mandatory due diligence, but we regret that the outcome of the vote in the EP falls short of the ambition to effectively tackle global deforestation in an inclusive manner."

That trade group along with EU grain and compound feed representative bodies, COCERAL and FEFAC, released a joint statement on the EP's stance.

They believe that the approach taken by the Parliament will disincentivize action against deforestation globally, but particularly in high-risk areas, due to the requirement of traceability to plot, which they argue is currently not feasible for many smallholders and risks causing their exclusion from supply chains.

“The country benchmarking system will lead companies to source away from high-risk areas as part of their risk avoidance strategy,” the groups said.

The lack of alternatives to traceability to plot for soy and palm products in combination with some of the trade disruptive measures adopted by the MEPs will most likely affect the availability of these commodities in the EU, warned the industry bodies.

They also call on the Commission, the Parliament, and Council institutions to work with supply chain actors to identify solutions to minimise all the foreseen negative impacts.

Getting the balance right

After the vote, rapporteur Christophe Hansen (EPP, LU) commented:

“We are serious about fighting climate change and biodiversity loss. Acknowledging that the EU is responsible for around 10% of global deforestation, we have no choice but to ramp up our efforts to halt global deforestation.

"If we get the balance right between ambition, applicability and WTO compatibility, this new tool has the potential to pave the way to deforestation-free supply chains.”