Editor's note: Enrico Partiti
is Assistant Professor of Transnational Regulation and Governance at Tilburg
University and Associate Fellow at the Asser Institute. His expertise centres
on European and international economic law, sustainability and supply chain
regulation. In particular, he studies how private standard-setters and
corporations regulate globally sustainability and human rights
Upcoming Event: Fighting global deforestation through due diligence: towards an EU regulation on forest and ecosystem risk commodities? - 4 November 2020 - 16:00 (CET) - Register Here!
The recent vote in the
Environment, Public Health and Food Safety (ENVI) Committee of the European
Parliament on binding legislation to stop EU-driven global deforestation is a
watershed moment in the global fight against deforestation, ecosystem
conversion and associated human rights violations. The ENVI Committee report, that will
soon be voted by the plenary, requests the Commission (as provided in Art. 225
TFEU) to table a legislative proposal for a measure disciplining the placing on
the EU market of products associated to forest and ecosystem conversion and
degradation, as well as violations of indigenous communities’ human rights. The
Parliament’s initiative takes place in a policy context increasingly concerned
with deforestation, in the framework of a Commission Communication on stepping up
EU action to protect and restore the world’s forests which left a door open for
legislative intervention.
The proposed
measure would aim to severe the economic link between demand of agricultural commodities, especially by
large consumers markets, and negative environmental impacts - including on
climate change. Beef, soy and palm oil alone are responsible for 80% of
tropical deforestation, and consequent CO2 emissions. In 2014, EU demand was
responsible for 41% of global imports of beef, 25% of palm oil and 15% of soy,
as well as large shares of other commodities at high risk for forests and
ecosystems such as such as maize (30%), cocoa (80%), coffee (60%), and rubber
(25%). Protecting just forests is not sufficient, as it risks to displace
conversion to other non-forests ecosystems such as the Brazilian cerrado. In
light of their negative impact on both forests and other natural
ecosystems, such commodities have been labeled as forest and ecosystem risks
commodities (FERCs).
The Parliament
motion lays down a rather detailed overview of a WTO law compliant measure that
the Commission shall propose and that builds upon the previous EU experience in
regulating placing on the EU market of agricultural products such as timber and biofuel crops. However, it
goes beyond establishing a requirement of legality of product origin such as
under the EU Timber Regulation. Instead, it would require that only FERCs and
derived products that do not originate from land obtained via the conversion of
natural forests or other natural ecosystems, do not originate from natural
forests and natural ecosystems undergoing degradation, and are not produced in,
or linked to, violations of human rights can be placed on the EU market. The
obligation would apply to economic operators placing on the market commodities
and derived products regardless of their EU or non-EU origin. This obligation
of result would be operationalised through an obligation of conduct for
economic operators placing covered products on the EU market, i.e. they would
have to exercise due diligence in line with the human rights due diligence process
laid down in the United Nations Guiding
Principles on Business and Human Rights (UNGPs). A
2018 feasibility study indicated that
mandatory due diligence centred on deforestation criteria would generate the
highest impact among all possible regulatory and non-regulatory options.
The alignment
of due diligence with the UNGPs represents a notable improvement from the
requirements in the EUTR that are limited to performing a risk assessment in
view to gather information about timber origin and assessing and mitigating
risks of non-compliance. The proposed measure would instead include all
relevant steps in human rights due diligence including involvement of affected
stakeholders at all relevant moments in the definition and implementation of
due diligence, reporting to the public and to enforcement authorities, ensure
remediation and establish grievance mechanisms to improve accountability and
access to remedy. The proposal in its current draft also contains strict
enforcement and sanction provisions building on the national enforcement
structure currently in place under the EUTR. As under the EUTR, enforcement
will thus be determined by the practices of enforcement authorities at the
Member State level. Civil society monitoring would be strengthened as individuals,
NGOs and undertakings are given the possibility to challenge non-compliance
before national judicial and administrative authorities. Sanctions for non-compliance
would include fines, seizure of products, suspension of authorisation to place
products on the internal market, exclusion from public procurement and criminal
penalties for individuals. The proposal would also establish civil liability
and, interestingly, it clarifies a vexed question about the relation between
due diligence and liability. It notes that, while operators remain jointly and
severally liable for human rights and environmental harm which they caused or
contributed to, for harm to which they are directly linked, proper
exercise of due diligence would lead to a discharge of liability. As the
Regulation would also apply to ecosystem conversion taking place in the EU, a
potential tension with the system of liability under the Environmental
Liability Directive may arise.
Due diligence
will have to focus on specific environmental and social criteria. This measure
can therefore be seen as a sector-specific or risk-specific add-up to a future
across-the-board human rights due diligence
Directive. Notably, the environmental and social criteria
against which due diligence is performed go beyond legality of land conversion,
testifying to the awareness of the impossibility to arrest ecosystem
destruction where countries willingly relax the enforcement of land-use
regulations to favour agribusiness. A zero gross deforestation approach is adopted
that allows placing on the EU market only FERCs and derived products that
originate from areas that have not lost their status as forests and natural
ecosystems, under the definitions that will be set forth in the measure, at a
designated cut-off date. In addition, covered commodities shall not be
harvested, extracted or produced from land obtained or used in violation of
human rights and especially indigenous communities traditional land-use rights,
free prior and informed consent and access to water. The operationalisation of
due diligence obligations would require economic operators to map the entire
value chain in question, and acquire information about the status of land of
origin, including possible presence of formal and customary right, as well as
human rights violations. Operators should ensure full traceability and, where
needed, segregation to ensure that only compliant products are traded.
Extending due
diligence responsibility to conversion clarifies the close link between human
rights violations and ecosystem conversion. Apart from the clear connection
between ecosystem conversion and degradation on the one hand, and human rights violations especially
suffered by indigenous communities on the other, considerable human rights
impacts originate from environmental harm. It is also well established that
climate change, to which deforestation and ecosystem conversion greatly
contribute, detrimentally affects the enjoyment of various internationally
recognised human right. The proposal is also in line with various soft law
instruments linking together social and environmental harm in the context of
agricultural production, such as the OECD/FAO Guidance on
Responsible Agriculture Supply Chains - that includes various
social and environmental impacts including deforestation and conversion as part
of the expected risk assessment that companies should undertake. Also one of
the most high-profile voluntary pledges entered into by the industry together
with other stakeholders, the UN New York Declaration on Forests, establishes a
clear link between conversion of forests and ecosystems and human rights
violations.
The proposal
suggested by the European Parliament represents a strong starting point for a
legislative process on a regulatory measure disciplining the placing on the EU
market of products associated with forest and ecosystem conversion and
degradation, as well as human rights violations. The clarification of the
environmental component of human rights due diligence is particularly relevant
not just as it makes clear what are the expected boundaries of human rights due
diligence. It also puts pressure on companies to design, both individually and
collectively, effective means to ensure that their supply chains are not
associated to detrimental impact, and forces them to step up their so far
voluntary and limited efforts towards deforestation-free value chains.