amfori welcomes Landmark Text on EU Deforestation Regulation

Yesterday, EU Member States endorsed the final text of the EU Deforestation Regulation (EUDR). The text was first approved by the European Parliament on 19 April and will soon be published in the Official Journal of the EU and will enter into force 20 days later.

After that date, the provisions of the EUDR will apply to large and medium-sized companies after 18 months and to small and micro-sized companies after 24 months.

amfori has supported the development the EUDR even before the initial proposal was published and welcomes the legislation as the right step forward to prevent deforestation embedded in EU supply chains, which is responsible for around 10% of forest loss worldwide.

What is it?

The EUDR combines a market prohibition with a three-step due diligence process of data collection, risk assessment and risk mitigation. Companies importing into, trading in and exporting from the EU market will be required to conduct due diligence and ensure that their products have been produced legally – in compliance with the applicable legislation in the country of origin – and are not linked to deforestation, before they are placed or made available in the market.

What is new?

Compared to the initial proposal, the final text expands the scope to rubber and other products such as printed paper and certain palm oil based derivates used as components in personal care products.

The final text keeps the full traceability and geolocation requirements at its core, yet it makes the process more efficient by making a distinction between ‘main’ operators, small and big operators downstream and small and large traders, who have differentiated obligations.

Regarding the legality requirement, the text adds labour, human and indigenous rights as well as the principle of free, prior and informed consent to the list of “laws applicable in the country of production” that companies will need to verify to ensure that the product was legally produced.

Finally, the level of checks by competent authorities has been reduced from 15% for companies sourcing from high-risk countries and 5% for companies sourcing from other countries to 9% for high-risk countries, 3% for standard-risk countries and 1% for low-risk countries.

What is next?

amfori sees the EUDR as a step in the right direction to create a level-playing field for companies to operate sustainably. This said, its implementation will not be easy.

Where no due diligence guidelines exist, the added complexity of the EUDR significantly expands the personal and product scope and the legal obligations of the EU Timber Regulation (EUTR).  This might create ambiguities and legal uncertainty for companies and implementing bodies.

In addition, EUTR experience tells us that the implementation of the EUDR could vary significantly across EU Member States. Therefore, amfori recommends that further guidance is given for companies and EU Member States to create a real level-playing field in the EU market. Concepts such as basic definitions and the concrete procedures and actions expected by national Competent Authorities from the companies (including on risk assessment and mitigation) need to be further clarified.

In addition, the implementation of the EUDR will require a thorough recognition by the EU of the socioeconomic and legal contexts in sourcing regions, together with the establishment of a comprehensive engagement framework to support those countries.

This framework should be linked to the country benchmarking system that the EU is working on and provide incentives to accelerate jurisdictional progress at the local level, notably on land tenure, land registry process, national traceability systems and support for smallholder farmers.

Similarly, efforts to align with demand countries on a legal framework for deforestation must continue to avoid global shifts in commodity markets.

Finally, amfori advocates for the acknowledgement of the role that industry collaborative initiatives can play to support companies with their due diligence. While those initiatives are never meant to replace a company’s due diligence entirely, they can facilitate peer learning, build capacity, gather data and offer efficiencies in the due diligence process.

amfori will continue its engagement with the Commission and relevant partners to facilitate a smooth implementation of the EUDR, including an ongoing revision of amfori tools and services.

For more information, please contact Amanda Soler, Environmental Policy Advisor at amanda.soler@amfori.org

Related News:

EU Policymakers reach Landmark Agreement on upcoming Deforestation Regulation

European Parliament Scales up Ambition to Tackle Deforestation in Global Supply Chains

amfori Reacts to the EU Proposal for a Regulation on Deforestation-Free Products (EUDR)

EU Deforestation UPDATE – Greater Scope, Extended Obligations and Next Steps