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Supply Chain

EU Deforestation Legislation: Why Retailers Should Be Paying Attention

By Dayeeta Das
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EU Deforestation Legislation: Why Retailers Should Be Paying Attention

Final negotiations have begun between the European Council, Parliament and Commission on a regulation that will ban products from the EU market that result from deforestation.

It will impact what is placed on supermarket shelves, and, importantly, retailers might be held accountable.

The proposal focuses on coffee, cacao, cattle, palm oil, soy and wood products. Among these commodities, the palm oil sector is at the forefront of sustainability, reaching 93% uptake of certified sustainable palm oil in Europe, even before legislation.

The core of the proposal requires that only products that are both legally produced and demonstrably free from deforestation should be allowed on the EU market.

To guarantee this, companies must submit a due diligence statement which states that the product is not only deforestation-free but also shows the exact plot of land where it originated.

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This can be achieved by making the first importer (operator) responsible for this due diligence statement.

All subsequent actors who handle the product commercially (traders), such as retailers, would then ensure that the information they receive from the operator is correct.

However, the Commission proposes otherwise. Although there is an exemption for small and medium-sized enterprises, large traders, such as retailers, are subject to the same obligations as operators.

In addition to gathering information, they will be required to carry out risk assessments and, where necessary, undertake measures to mitigate risk.

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They will also be subject to the same checks by the Member States' competent authorities.

In this final round of negotiations, the three institutions will decide whether this responsibility for traders will remain.

The Council proposes to remove this duplication of obligations so that the responsibility is limited to traders.

This will simplify the procedure for retailers significantly, but whether all three institutions will agree, is something to watch closely in the months ahead.

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For a deeper dive into legislation and the current trends in the sustainable palm oil market, join the Roundtable on Sustainable Palm Oil (RSPO), European Palm Oil Alliance (EPOA) and IDH - The Sustainable Trade Initiative on 20 October 2020 in Hoofddorp, the Netherlands, at the Sustainable Palm Oil Dialogue (SPOD).

Register for SPOD at www.spod-europe.eu. For queries, write to event@spod-europe.

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