EUDR to Become Law to Save Forests.
Now what?
Rachel Olo, a Cameroonian cocoa farmer whose one hectare of land brings 800 kg of cocoa per year. CIFOR Photo/Ollivier Girard
The EU Parliament has adopted a new law to fight global deforestation on April 19, 2023.
The ambition of the new law stated in general terms:
Global Witness labeled the new law as a “historic anti-deforestation law”
Such high praise for EUDR may be undeserved
The EU has bowed down to pressure from soy producing countries with its narrow focus on forest impact on commodities rather than climate change impact.
As Earthsight tweeted:
Other wooded lands & precious biomes such as parts of the Cerrado and Gran Chaco are not covered under the law’s definition of ‘deforestation-free’ and therefore remain at risk
This is a problematic omission identified as well by FERN Ngo . Its briefing on EUDR highlighted that the omission of sugar and bioethanol as well as poultry, ignores key drivers of deforestation and human rights abuses. Yet these would be given a preferential duty free entry into the EU under the EU-Mercosur trade deal.
The thing is, the EU cannot risk re-offending trade partners like Argentina or the US, both major exporters of soy to the EU. If the EU had included wooded land and precious biomes under EUDR, it would have meant risking the EU-MERCOSUR trade talks or worse, aggravating the US on "green issues."
Greenpeace called out EU-Mercosur as a Nightmare for Nature:
The point of the deal is to boost trade in agricultural products like meat and soy, chemicals like pesticides, and cars and car parts. It is in direct opposition to the goals of the European Green Deal. The devil is not just in the details – the whole agreement is set up to take us backwards on climate action and nature protection, for the benefit of the European automotive and chemical industries and for large-scale South American agribusiness.
Greenpeace’s opinion is in stark contrast to EU Commissioner, Virginijus Sinkevičius, who hastily tweeted that:
The ambition of the new law stated in general terms:
- An area larger than the EU was lost to deforestation between 1990 and 2020, with EU consumption causing around 10% of losses
- Cattle, cocoa, coffee, palm-oil, soya, wood, rubber, charcoal and printed paper products are covered by the new rules
- Human rights and the rights of indigenous people added as additional requirements
Global Witness labeled the new law as a “historic anti-deforestation law”
Such high praise for EUDR may be undeserved
The EU has bowed down to pressure from soy producing countries with its narrow focus on forest impact on commodities rather than climate change impact.
As Earthsight tweeted:
Other wooded lands & precious biomes such as parts of the Cerrado and Gran Chaco are not covered under the law’s definition of ‘deforestation-free’ and therefore remain at risk
This is a problematic omission identified as well by FERN Ngo . Its briefing on EUDR highlighted that the omission of sugar and bioethanol as well as poultry, ignores key drivers of deforestation and human rights abuses. Yet these would be given a preferential duty free entry into the EU under the EU-Mercosur trade deal.
The thing is, the EU cannot risk re-offending trade partners like Argentina or the US, both major exporters of soy to the EU. If the EU had included wooded land and precious biomes under EUDR, it would have meant risking the EU-MERCOSUR trade talks or worse, aggravating the US on "green issues."
Greenpeace called out EU-Mercosur as a Nightmare for Nature:
The point of the deal is to boost trade in agricultural products like meat and soy, chemicals like pesticides, and cars and car parts. It is in direct opposition to the goals of the European Green Deal. The devil is not just in the details – the whole agreement is set up to take us backwards on climate action and nature protection, for the benefit of the European automotive and chemical industries and for large-scale South American agribusiness.
Greenpeace’s opinion is in stark contrast to EU Commissioner, Virginijus Sinkevičius, who hastily tweeted that:
The EU Commissioner has a point as EU citizens have consistently overshot their consumption according to Earth Overshoot Day.
Economic Reality vs Green Wishes
Now that the NGOs and politicians have had their moment on the EUDR, it is time to come back to earth and face the challenges that lie ahead of the EU’s Deforestation Regulations. The problem here is that policy makers in Brussels are very disconnected with what happens on the ground.
Voting in favor of an action to “save the world’s forests” and “take responsibility for our consumption” is very good to earn popular favour for politicians whose only duty is to approve some text. Lawmakers in Brussels are having the same problem with putting their green wishes for the EU landscape into reality as EURACTIV reported.
Corporate Europe has warned for years, that simplistic ambitions at the political level will be hard to meet at the practical level. This is why major European trade associations like FEDIOL, OVID Verband and many others, have called for the EU to be more realistic with EUDR.
Oilseeds trade associations COCERAL, FEDIOL, and FEFAC reacted with a:
“Call on the European Commission and Member States to work with stakeholders to facilitate the implementation of the Regulation. Many implementation challenges remain unaddressed and will require multistakeholder collaboration, involving the European Commission, Member States, and producing country government and stakeholders. Furthermore, uncertainties around how the provisions translate in practice should be addressed as soon as possible to allow supply chain actors to prepare for implementation.”
Jaana Kleinschmit von Lengefeld, President of OVID, the Association of the Oilseed Processing Industry in Germany, issued a politely worded criticism of EUDR:
"We welcome the EU initiative and want to help ensure that the regulation passed today really brings measurable progress in protecting the forests". However, legal, technical, logistical and administrative hurdles are currently standing in the way of implementation. In the future, hundreds of thousands of geolocation data will have to be passed on with every shipload of soybeans or palm oil. Added to this is the expansion of the storage and transport infrastructure and extensive declarations of due diligence for all imports into the EU.
“Since time is of the essence, we expect immediate clarity and raw material-specific guidelines from the EU on how the new regulations are to be implemented in a legally secure manner. The transitional period of 18 months is far too short for this mammoth task. The problematic start of the German supply chain law, which is currently putting a considerable strain on the economy, should be a warning to the legislator,"
Corporate Europe’s warnings that industries involved in imported beef, soy, coffee, cocoa etc are ill-prepared should be heeded by legislators as this could leave the EU behind in all the trade negotiations happening elsewhere.
Malaysia’s Deputy Prime Minister who is also the Minister of Plantations and Commodities issued a harsh response to EUDR, calling it unjust and an act of the EU Parliament turning its back on ASEAN partners.
The EU did offer up an olive branch to palm oil producing countries like Malaysia, which have been demanding that palm oil producing countries cannot be rated as “High Risk.”
According to Argus Media’s coverage of EUDR:
“Following approval by EU ministers, entry into force will see all countries assigned a "standard" risk level. The European Commission will then benchmark countries within 18 months. The law sets a total of 9pc of operators and traders being subject to checks if importing products from "high-risk" countries.”
As EU citizens face another increase in food prices in these 18 months as companies gear up for EUDR, who will pay for EUDR?
Filing the necessary paperwork for Due Diligence is cheap enough for EU importers but whose word will these reports be based on?
National Commitments to EUDR through geolocation of Smallholders Must Count
The Ivory Coast, one of the biggest exporters of cocoa to the EU, has done the groundwork to meet EUDR requirements. According to this report from Afrik 21, “more than one million cocoa producers have been registered. They have been issued with name cards and the geolocation coordinates of their plots.”
For many observers, the EU law on imported deforestation is only a first step towards the desired objectives. “The European approach is good, but how can it be applied?” asks Bakary Traoré of the association Initiatives pour le Développement communautaire et la conservation de la Forêt (IDEF). “How can we check? With what means can we check the beans on site and justify their origin?
The cocoa industry in Ivory Coast can take a page from Malaysian palm oil production where every single producer, big or small, is registered. The registration at the Malaysian Palm Oil Board (MPOB) marks down the size of licensee and expected yield which means that the licensee, that is submitting more harvests than possible under their licensed area, will be called out.
This is something that the Ivory Coast can copy with more investments into meeting EUDR requirements but the problem with cocoa and the EUDR is that “most cocoa farmers in these countries live in extreme poverty, earning well under one US dollar a day. The EU is the leading destination for Ivorian cocoa, accounting for about 67% of the country's exports. But a newly proposed EU law could force cocoa traders to drop some suppliers because they use unethical practices.”
It is highly doubtful that EU lawmakers can force private corporations into paying a fair price as Susannah Savage reported.
“The stakes are high: For the EU, cocoa is a test case for how companies and producers react when the bloc tries to impose higher standards.
In public, big chocolate manufacturers and traders, including Barry Callebaut, Cargill, Ferrero, Hershey, Lindt, Mars, Mondelez and Nestlé, welcomed the initiative.
Yet behind the scenes many of the firms — which between them account for about 90 percent of the industry's $130 billion in annual profits — have done everything possible to avoid paying the premium and to drive prices back down, according to the Ivorian Coffee-Cocoa Council (CCC), the Ghana Cocoa Board (Cocobod) and their joint Initiative Cacao Ivory Coast-Ghana (ICCIG).”
Palm oil smallholders are familiar with this push from Europe for sustainability that threatens to drive more smallholders into a vicious cycle of poverty. The President of the Dayak Oil Palm Planters Association (DOPPA) from Malaysia posed the problem in stark terms.
“The Dayak peoples share the EU’s vision for a sustainable society. Some of the Indigenous Dayak Smallholders have even gone to the expensive way of certifying their farms under the RSPO (Roundtable on Sustainable Palm Oil) in order to share their common views for sustainable palm oil. Unfortunately, most of the indigenous Dayak smallholders in Sarawak cannot afford to pay for NGO certifications. Given the choice of whether to spend our hard-earned income on NGO certification or our children’s college funds, we would prefer to save for our children’s education.”
DOPPA has made repeated calls for the EU to accept the Malaysian Sustainable Palm Oil (MSPO) standards as a credible body for quality assurance under the EUDR. This makes financial sense to smallholders as all the costs of certification is born by the state through its export revenue.
National efforts to meet EUDR requirements like what Malaysia and the Ivory Coast has committed to, must be acknowledged by EU lawmakers as EUDR stomps its way through becoming law.
Published April 2023. CSPO Watch
Economic Reality vs Green Wishes
Now that the NGOs and politicians have had their moment on the EUDR, it is time to come back to earth and face the challenges that lie ahead of the EU’s Deforestation Regulations. The problem here is that policy makers in Brussels are very disconnected with what happens on the ground.
Voting in favor of an action to “save the world’s forests” and “take responsibility for our consumption” is very good to earn popular favour for politicians whose only duty is to approve some text. Lawmakers in Brussels are having the same problem with putting their green wishes for the EU landscape into reality as EURACTIV reported.
Corporate Europe has warned for years, that simplistic ambitions at the political level will be hard to meet at the practical level. This is why major European trade associations like FEDIOL, OVID Verband and many others, have called for the EU to be more realistic with EUDR.
Oilseeds trade associations COCERAL, FEDIOL, and FEFAC reacted with a:
“Call on the European Commission and Member States to work with stakeholders to facilitate the implementation of the Regulation. Many implementation challenges remain unaddressed and will require multistakeholder collaboration, involving the European Commission, Member States, and producing country government and stakeholders. Furthermore, uncertainties around how the provisions translate in practice should be addressed as soon as possible to allow supply chain actors to prepare for implementation.”
Jaana Kleinschmit von Lengefeld, President of OVID, the Association of the Oilseed Processing Industry in Germany, issued a politely worded criticism of EUDR:
"We welcome the EU initiative and want to help ensure that the regulation passed today really brings measurable progress in protecting the forests". However, legal, technical, logistical and administrative hurdles are currently standing in the way of implementation. In the future, hundreds of thousands of geolocation data will have to be passed on with every shipload of soybeans or palm oil. Added to this is the expansion of the storage and transport infrastructure and extensive declarations of due diligence for all imports into the EU.
“Since time is of the essence, we expect immediate clarity and raw material-specific guidelines from the EU on how the new regulations are to be implemented in a legally secure manner. The transitional period of 18 months is far too short for this mammoth task. The problematic start of the German supply chain law, which is currently putting a considerable strain on the economy, should be a warning to the legislator,"
Corporate Europe’s warnings that industries involved in imported beef, soy, coffee, cocoa etc are ill-prepared should be heeded by legislators as this could leave the EU behind in all the trade negotiations happening elsewhere.
Malaysia’s Deputy Prime Minister who is also the Minister of Plantations and Commodities issued a harsh response to EUDR, calling it unjust and an act of the EU Parliament turning its back on ASEAN partners.
The EU did offer up an olive branch to palm oil producing countries like Malaysia, which have been demanding that palm oil producing countries cannot be rated as “High Risk.”
According to Argus Media’s coverage of EUDR:
“Following approval by EU ministers, entry into force will see all countries assigned a "standard" risk level. The European Commission will then benchmark countries within 18 months. The law sets a total of 9pc of operators and traders being subject to checks if importing products from "high-risk" countries.”
As EU citizens face another increase in food prices in these 18 months as companies gear up for EUDR, who will pay for EUDR?
Filing the necessary paperwork for Due Diligence is cheap enough for EU importers but whose word will these reports be based on?
National Commitments to EUDR through geolocation of Smallholders Must Count
The Ivory Coast, one of the biggest exporters of cocoa to the EU, has done the groundwork to meet EUDR requirements. According to this report from Afrik 21, “more than one million cocoa producers have been registered. They have been issued with name cards and the geolocation coordinates of their plots.”
For many observers, the EU law on imported deforestation is only a first step towards the desired objectives. “The European approach is good, but how can it be applied?” asks Bakary Traoré of the association Initiatives pour le Développement communautaire et la conservation de la Forêt (IDEF). “How can we check? With what means can we check the beans on site and justify their origin?
The cocoa industry in Ivory Coast can take a page from Malaysian palm oil production where every single producer, big or small, is registered. The registration at the Malaysian Palm Oil Board (MPOB) marks down the size of licensee and expected yield which means that the licensee, that is submitting more harvests than possible under their licensed area, will be called out.
This is something that the Ivory Coast can copy with more investments into meeting EUDR requirements but the problem with cocoa and the EUDR is that “most cocoa farmers in these countries live in extreme poverty, earning well under one US dollar a day. The EU is the leading destination for Ivorian cocoa, accounting for about 67% of the country's exports. But a newly proposed EU law could force cocoa traders to drop some suppliers because they use unethical practices.”
It is highly doubtful that EU lawmakers can force private corporations into paying a fair price as Susannah Savage reported.
“The stakes are high: For the EU, cocoa is a test case for how companies and producers react when the bloc tries to impose higher standards.
In public, big chocolate manufacturers and traders, including Barry Callebaut, Cargill, Ferrero, Hershey, Lindt, Mars, Mondelez and Nestlé, welcomed the initiative.
Yet behind the scenes many of the firms — which between them account for about 90 percent of the industry's $130 billion in annual profits — have done everything possible to avoid paying the premium and to drive prices back down, according to the Ivorian Coffee-Cocoa Council (CCC), the Ghana Cocoa Board (Cocobod) and their joint Initiative Cacao Ivory Coast-Ghana (ICCIG).”
Palm oil smallholders are familiar with this push from Europe for sustainability that threatens to drive more smallholders into a vicious cycle of poverty. The President of the Dayak Oil Palm Planters Association (DOPPA) from Malaysia posed the problem in stark terms.
“The Dayak peoples share the EU’s vision for a sustainable society. Some of the Indigenous Dayak Smallholders have even gone to the expensive way of certifying their farms under the RSPO (Roundtable on Sustainable Palm Oil) in order to share their common views for sustainable palm oil. Unfortunately, most of the indigenous Dayak smallholders in Sarawak cannot afford to pay for NGO certifications. Given the choice of whether to spend our hard-earned income on NGO certification or our children’s college funds, we would prefer to save for our children’s education.”
DOPPA has made repeated calls for the EU to accept the Malaysian Sustainable Palm Oil (MSPO) standards as a credible body for quality assurance under the EUDR. This makes financial sense to smallholders as all the costs of certification is born by the state through its export revenue.
National efforts to meet EUDR requirements like what Malaysia and the Ivory Coast has committed to, must be acknowledged by EU lawmakers as EUDR stomps its way through becoming law.
Published April 2023. CSPO Watch
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