EU governments miss chance to strengthen anti-deforestation law, letting banks and the tyre lobby off the hook

Brussels, June 28 – In response to national Environment Ministers agreeing their position on the draft EU anti-deforestation law at the EU Environment Council, Giulia Bondi, Senior EU Forests Campaigner at Global Witness, said:

“EU member states have today missed a crucial opportunity to strengthen a draft law to stop Europe’s role in fuelling deforestation around the world. Under their proposal, big drivers of forest destruction like rubber imports would remain unchecked and banks would continue to be able to get away with financing deforestation. EU countries have also not done enough to fully protect the land rights of Indigenous communities.”

Environment Ministers meeting today in Luxembourg largely backed the European Commission’s draft anti-deforestation law, supporting restrictions on imports of coffee, soy, cattle (including derived products such as beef and leather), cocoa, oil palm and timber that are linked to deforestation.

However, they failed to introduce measures to oblige EU banks to conduct due diligence to prevent the financing of deforestation, did not add crucial commodities like rubber to the product list, and made only minimal improvements to stop land grabbing and violence against Indigenous communities. Other critical ecosystems like the Cerrado in Brazil have also been left out from the Council’s agreement.

Global Witness revealed earlier this month that rubber is the European import that poses the biggest threat to West and Central Africa’s tropical forests. Rubber appeared in early Commission drafts of the law but was removed after tyre industry lobbying.

Last year, we showed how EU-based financial institutions struck €30.6 billion worth of deals with 20 agribusiness companies accused of deforestation between 2016-2020.

“EU banks and asset managers are helping drive the destruction of climate-critical forests and the devastation of indigenous and forest communities. The Environment Council’s failure to address this and other weaknesses in the deforestation law means EU governments are not practicing what they preach when it comes to leading on the climate crisis, biodiversity loss and human rights protections,” Bondi continued.

“All eyes are now on the European Parliament to close these loopholes and raise the ambition of the law if it is to be effective in ending EU-driven deforestation,” she concluded.

Notes to editor:

See below more information in some of the key gaps and weaknesses in the general approach agreed today by the EU Environment Council on the anti-deforestation legislation:

Financial sector: The Council did not make any reference to the role of the financial sector.
Product scope: The Council has added some new wood products but failed to include rubber, maize, and other livestock products other than cattle.
Human rights: in the definition of ‘relevant legislation of the country of production’, Council has added language on human rights protected under international law, including as set out in the United Nations Declaration on the Rights of Indigenous Peoples (UNDRIP). This language simply reiterates the Commission’s proposal that any international human rights law applicable in the country of production should be upheld – hence failing to make it a consistent and core obligation for operators. Adding reference to UNDRIP is not enough, given the limited number of countries who adopted the UN Declaration and current gaps in its ratification and implementation process. However, the Council has added reference to human rights violations in the risk assessment article, which is an essential component of the due diligence steps, i.e., not tied to any condition of legalities or national frameworks, the requirement for operators would be to assess whether there has been any risks of violations of human rights in international law, which is an improvement from the Commission’s proposal.
Due diligence obligations exemptions:

Council keeps the option of ‘simplified due diligence’ for products coming from low-risk countries and removes the obligation on EU member states to carry out a minimum number of checks on operators claiming to source from this low-risk category.
Traders are not obliged to do due diligence themselves but (non-SMEs) traders need to ensure that operators conducted due diligence and retain responsibility for non-compliant products.

Enforcement: EU member states reduce the number of checks proposed by the Commission requiring competent authorities to check annually at least 1% of operators sourcing from standard-risk countries, and 5% of the operators sourcing from high-risk countries. The Commission’s proposal instead had a target of 5% on operators sourcing from low and standard risk countries, and 15% of checks for operators sourcing from high-risk country.
Traceability requirements: exemption introduced for feed for cattle, which if already been subject to due diligence steps in the supply chain, it will not be necessary to prove again it is not originated from deforestation
Other ecosystems: The Council introduced the notion of ‘other wooded land’ in the definitions but excluded ecosystems such as savannahs in the Brazilian Cerrado, which is impacted by agriculture expansion for soy production
Cut-off date: date has been moved to 31 December 2021, meaning that no products produced on deforested or degraded land after this date are allowed to enter or be exported from the EU market
Certification schemes: Council leaves possibility in the review clause for future recognition of certification schemes. Council also suggests reviewing how certification schemes could be granted to third countries – for instance, via cooperation partnerships.
Entry into force: the application of the Regulation has been moved to 18 months for large companies, hence delaying action six months later than the Commission’s initial proposals.

EU governments miss chance to strengthen anti-deforestation law, letting banks and the tyre lobby off the hook

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Notes to editor: