Forest for the trees: The human rights issue in deforestation

In 2022 several major UK supermarkets (Sainsbury’s, Iceland and Asda) were amongst a cohort of major brands caught out and forced to make swift corrective action when part of their supply chain (JBS, a meat producer in Brazil) scandalously made the news [1]. Thankfully, the landscape in which we operate is changing and the EU and the UK are putting through regulations to help set the framework to prevent future controversy, and end deforestation and its associated impact on human rights.

What does deforestation have to do with human rights?

Human rights and deforestation are intrinsically linked. Roughly 25% of the global population live in or around forests and rely on them for their welfare, and 90% of those who live in extreme poverty depend on forests for some part of their livelihood [2]. This means any action which impacts forests has a real effect on people’s lives [3].

The gap between the ‘E’ and the ‘S’ in ‘ESG’

Last year, Global Canopy published the results of their analysis of the Forest 500 data, confirming whilst there is a very strong focus on environmental issues, there is a policy gap when it comes to deforestation and human rights:

“The majority of the 350 companies and 150 financial institutions with the greatest influence on tropical deforestation are failing to take sufficient action to prevent human rights abuses associated with deforestation and land conversion.” [4]

Human rights and the EU Deforestation Regulation

The EU Deforestation Regulation (EUDR) has the potential to make a significant global impact by virtue of the size of the market it applies to. This regulation applies to anyone looking to trade with or within the EU. It means that relevant products and commodities imported to or exported from the EU must comply with relevant national laws, this includes [5]:

1. land use rights;
2. third parties’ rights;
3. labour rights;
4. human rights protected under international law;
5. the principle of free, prior and informed consent (FPIC), including as set out in the UN Declaration on the Rights of Indigenous Peoples.

The EUDR came into force last year (with a grace period to comply by the end of this year), but the timeline on UK regulation is less clear. Either way, the principles behind these regulations aren’t exactly novel or new. Voluntary disclosure programmes such as CDP have been encouraging good governance and due diligence when managing forest risk commodities for some time now [6].

Certification is no silver bullet

Certification schemes are not all the same and they are working towards fully aligning themselves [7,8]. Unfortunately, for now, buying certified commodities does not mean automatic compliance with EUDR and it also doesn’t mean human rights abuses aren’t occurring in your value chain. Under the EUDR, the onus still falls on businesses to do their due diligence, so even if your supply chain is 100% certified - you still need to put in the work.

Looking ahead

We’re still waiting on the final detail and guidance, but it’s clear there is no shortcut. In the past year, the EU has experienced a shift in prevailing political ideologies [9] and has been subject to lobbying from both internal and external stakeholder groups. Whilst it’s feasible this law will be ‘softened’, the best approach is to assume the full force of the EUDR will apply and prepare accordingly. It’s worth noting the “the maximum fine must be at least 4% of the total annual turnover in the EU of the non-compliant operator or trade” [10]. The UK is still awaiting the planned secondary legislation to the 2021 Environment Act [11].

With both risks from fines and upside reputational benefits from getting ahead, it’s time for businesses to take action. Top tips include:

• Do your due diligence: Put in the work. Prioritise hotspots the first time you map your value chain.
• Upskill and educate leadership team and employees: Make sure the right people are aware of the issues and the tools available to address them.
• Monitor regulatory changes: Stay informed about regulatory developments and adjust strategies to ensure compliance and ethical integrity.
• Engage with suppliers & communities: Prioritise meaningful engagement with local and indigenous communities in project planning and implementation.
• Follow best practices: Don’t wait for regulation to force your hand, align projects with international guidelines and best practices.

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References

[1] https://www.theguardian.com/world/2022/jun/24/banks-and-uk-supermarkets-accused-of-backing-deforestation-in-brazil-jbs

[2] https://publications.parliament.uk/pa/cm5804/cmselect/cmenvaud/405/summary.html

[3] https://www.globalwitness.org/en/campaigns/forests/

[4] https://www.globalcanopy.org/insights/podcasts/deforestation-and-human-rights-too-many-companies-and-financial-institutions-ignoring-the-critical-link/

[5] https://eur-lex.europa.eu/legal-content/EN/TXT/HTML/?uri=CELEX%3A32023R1115 – Article 2, paragraph 40.

[6] https://www.cdp.net/en/forests

[7] https://uk.fsc.org/legislation/eudr-and-fsc#:~:text=FSC%20certification%20is%20a%20robust,and%20risk%20mitigation%20phases%E2%80%8B.

[8] https://pefc.org/eudr 

[9] https://www.bbc.co.uk/news/articles/c722rq29x7wo

[10] https://www.europarl.europa.eu/news/en/press-room/20230414IPR80129/parliament-adopts-new-law-to-fight-global-deforestation

[11]https://committees.parliament.uk/committee/62/environmental-audit-committee/news/200626/government-rejects-committees-call-to-prohibit-products-from-legal-deforestation/