ZSL (Zoological Society of London) welcomes the proposal from the European Union (EU) Commission for a regulation on deforestation-free products designed to tackle deforestation associated with products placed on the EU market. However, we call on the EU to include natural rubber in the scope of this regulation, to prevent further deforestation driven by the global tyre industry.
The EU plays a key role in the global rubber supply chain, with a quarter of global natural rubber production going to the European common market. The expansion of rubber plantations has been identified by the European Commission and academia as a significant source of deforestation and forest degradation. It is estimated that over five million hectares of tropical forest was cleared across mainland Southeast Asia and sub-Saharan Africa for rubber plantations between 2003 and 2017.
Oliver Cupit, ZSL’s Sustainable Business & Finance Manager, said; “We believe that the EU deforestation regulation should, from the outset, apply to all commodities with a significant footprint on global deforestation and forest degradation, including natural rubber. This will create a level playing field across commodity sectors and ensure the EU plan doesn’t allow loopholes which lead to continued deforestation.”
The proposed EU deforestation regulation will, as it stands, be applicable to coffee, cocoa, palm oil, soya, beef and wood. After initially being included in the scope of the proposed law, natural rubber was removed by the European Commission (EC). However, this week the EU Parliament’s Environment, Public Health and Food Safety Committee countered this move by calling for the scope of the proposed regulation to be increased to include natural rubber amongst other commodities. ZSL supports this move. We also support the committee’s call for (1) companies to be required to verify that goods in scope are produced in accordance with human rights and the rights of Indigenous people protected under international law and in the country of harvest and, (2) for financial institutions to be subject to requirements to ensure that their activities do not contribute to deforestation.
The EU approach to excluding natural rubber would put it at odds with other legislative initiatives aiming to stop deforestation in the USA and UK, which (at the time of writing) intend to include natural rubber within their scope. It would fly in the face of evidence on deforestation caused by the natural rubber sector and it would signal that current private-sector focus on deforestation through voluntary schemes such as the Global Platform for Sustainable Natural Rubber (GPSNR) is not a priority.
ZSL believes that the regulation will benefit natural rubber supply chains by creating a level playing field amongst companies importing into the EU market – notably through harmonised information requirements – and by driving the demand for sustainably sourced raw materials.
Oliver continued: “We saw a lot of concern around transparency and the impacts on trade, ahead of the EU Timber Regulation being brought into force in 2013. However, these concerns quickly dissipated once the due diligence requirement became the same for everyone and illegal sourcing was targeted. I think these concerns are understandable from the natural rubber sector, but I firmly believe that many actors are already implementing robust due diligence, and this regulation will increase innovation in areas that have historically proven to be tricky for the rubber sector to solve, including corporate transparency, traceability mechanisms and landscape level efforts.
ZSL supports the current proposal for a risk-based approach to due diligence, in order to focus resources where risks are highest in supply chains and supply bases. However, we share the concerns of others regarding proposed requirements for ‘geo-localisation coordinates, latitude and longitude of all plots of land’ where rubber is produced and call for further guidance and engagement with the rubber sector to explore options for a sector where 85% of production is derived from 6 million smallholders. Investment in landscape-level initiatives is one potential option to negate the need for traceability to plot level in all cases.
Bilateral treaties and trade agreements should also be considered in addition to the proposed due diligence legislation to address the underlying drivers of illegal and unsustainable activities, such as corruption and bribery. Progress has been made in the timber sector on these issues under the EU’s Voluntary Partnership Agreements (VPAs) and instead of stepping away from this approach as the EU is currently planning, it should expand the approach to cover all commodity sectors driving deforestation, and seek ways to more broadly tackle corruption in partner countries.
The legislation text will next be negotiated between representatives of the European Council, Commission and Parliament in a “Trialogue” due to take place in Autumn 2022, before being finalised and adopted before the end of the year.
- Include natural rubber in the scope of the EU deforestation regulation: The expected regulation must apply equally to a range of products derived from forest and ecosystem-risk commodities. This should include natural rubber from the outset.
- Include supply-side support as well as demand-side regulation: The EU should implement a robust mechanism to support producer countries to tackle deforestation at source. This should include support to reform and revise national legislative frameworks, focus on tackling corruption and bribery, traceability, assurance and licensing systems, as well as capacity building to the trade sector and especially support to smallholder farmers.
- Address human rights protected under international law and the rights of Indigenous people as part of the proposed EU deforestation regulation.
- Ensure a risk-based approach is applied and expected: To ensure that the level of due diligence expected of commercial operators is proportionate to the scale of risk in their supply chains and sourcing areas.
- Take into consideration the specifics of the natural rubber sector: By due diligence expectations being tailored to the specifics of the rubber supply chain, which is smallholder dominated and lacking in transparency. Support to the natural rubber sector may be needed to address traceability mechanisms and use of landscape-level risk assessment tools.
- Provide sufficient deterrents: By allowing fines and custodial sentences that sufficiently dissuade illegal and unsustainable behaviour by non-compliant companies located within the EU.
- Apply due diligence requirements to the financial sector: To effectively tackle deforestation, the EU should require financial institutions to conduct similar levels of due diligence on companies they finance and invest in.