EU passes law preventing import of goods linked to deforestation

BRUSSELS/SAO PAULO, Dec 6 (Reuters) – The European Union approved on Tuesday a new law aimed at preventing companies from selling on the European market coffee, beef, soybeans and other products linked to deforestation in the world.

The law will require companies to produce a due diligence statement showing that their supply chains do not contribute to the destruction of forests before selling goods in the EU – or they could face hefty fines.

“I hope this innovative regulation will give a boost to the protection of forests worldwide and inspire other countries at COP15,” said European Parliament chief negotiator Christophe Hansen.

Deforestation is responsible for around 10% of global greenhouse gas emissions that drive climate change and will be a focus at a UN COP15 conference this week, where countries will seek a global agreement to protect nature.

Negotiators from EU countries and the European Parliament reached agreement on the law early on Tuesday.

It will apply to soybeans, beef, palm oil, wood, cocoa and coffee, as well as certain derived products including leather, chocolate and furniture. Rubber, charcoal and some palm oil derivatives were included at the request of EU lawmakers.

Companies would have to show when and where products were produced and “verifiable” information that they weren’t grown on land deforested after 2020.

Failure to comply can lead to fines of up to 4% of a company’s turnover in an EU member state.

Countries that will be affected by the new rules, including Brazil, Indonesia and Colombia, say they are cumbersome and costly. Certification is also difficult to monitor, especially since some supply chains can span multiple countries.

In Brazil, the country responsible for the greatest deforestation, some conservationists have praised the law, but said it doesn’t go far enough. The law did not extend protection because they hoped for “other wooded land” that has trees but is not dense, closed forest.

This means that 600,000 square kilometers of woodland in the Cerrado savannah – the frontier of the most dynamic agricultural expansion in Brazil – would not be subject to the law, according to the nonprofit Brazilian Cerrados Institute. It is an area about as large as Ukraine.

“The European Union thinks it’s normal to consume products linked to the losses of the most biodiverse savannah on the planet? That doesn’t seem smart,” said Yuri Salmona, director of the Cerrados Institute.

The EU said in a statement it will consider whether to add protections for “other wooded land” in one year and other critical ecosystems in two years.

Brazilian and European campaign groups have also criticized its requirement for companies to prove that they respect the rights of indigenous peoples – but only if these rights are already legally protected in the producing country.

Brazil’s Ministry of Foreign Affairs responded to questions by referring to a previous statement that it was concerned that environmental protection could be used as a pretext to unilaterally impose discriminatory trade restrictions. The ministry said it was waiting for the full text of the law to be released for further review.

The country’s coffee exporters association, Cecafe, said it respected global environmental concerns, but was concerned that the industry’s progress towards sustainable production was not being sufficiently recognized.

EU countries and the European Parliament must now formally approve the legislation. The law can come into force 20 days later, after which large companies have 18 months to comply, and small companies 24 months.

EU member countries will be required to carry out compliance checks covering 9% of companies exporting from high deforestation risk countries, 3% from standard risk countries and 1% from low risk countries.

The EU said it would work with affected countries to build their capacity to implement the rules.

Reporting by Kate Abnett in Brussels and Jake Spring in Sao Paulo; Additional reporting by Roberto Samora and Ana Mano; Editing by Robert Birsel, Crispian Balmer, Alexandra Hudson and Lincoln Feast.

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