The European Parliament reached an agreement early Tuesday morning with European Union (EU) governments on a new deforestation-free products law that affects, among others, coffee, cocoa or palm oil, and will oblige companies to verify and issue a so-called «due diligence» statement that goods placed on the market have not led to deforestation and forest degradation anywhere in the world after December 31, 2020.
According to the agreed text, although no country or commodity will be banned as such, companies will not be able to sell their products in the EU without such a declaration, in addition to having to verify compliance with relevant legislation in the country of production, including that relating to human rights and respect for affected indigenous peoples.
The new law will assure European consumers that the products they buy do not contribute to the destruction and degradation of forests and thus reduce the EU’s contribution to global climate change and biodiversity loss.
The products covered by the new legislation are livestock, cocoa, coffee, palm oil, soy and wood, including products containing, fed with or manufactured using these raw materials (such as leather, chocolate and furniture), as in the European Commission’s original proposal.
During the talks, MEPs have also added rubber, charcoal, printed paper products and a number of palm oil derivatives to this list, as well as a broader definition of forest degradation that includes the conversion of primary forests or naturally regenerating forests to forest plantations or other wooded land and the conversion of primary forests to planted forests.
The Commission will assess, at the latest one year after entry into force, whether to extend the scope to other wooded land and, at the latest two years after entry into force, the Commission will also assess the scope to other ecosystems, including land with high carbon stocks and high biodiversity value, as well as other commodities.
Brussels will also analyze the need to oblige financial institutions in the EU to provide financial services to their clients only if they consider that there is a negligible risk that such services will not lead to deforestation.
The European Parliament and the Council will have to formally approve the agreement and the new law will enter into force 20 days after its publication in the EU Official Journal, although some articles will apply 18 months later.
RISK CONTROLS EU competent authorities will have access to relevant information provided by companies, such as geolocation coordinates, and will carry out controls and will be able, for example, to use satellite tracking tools and DNA analysis to check where products come from.
The Commission will classify countries, or parts of countries, into low, standard or high risk within 18 months of the entry into force of this regulation, and the proportion of checks on operators will be made according to the country’s risk level: 9% for high risk, 3% for standard risk and 1% for low risk. In the case of high-risk countries, Member States will also have to control 9% of total volumes.
Penalties for non-compliance will be proportionate and dissuasive, and the maximum amount of the fine is set at at least 4% of the total annual EU turnover of the non-compliant operator or trader.
