03/09/2020

UK Government Consultation: Due Diligence on Forest Risk Commodities

The UK government has identified leather as a commodity associated with deforestation and intends to include it in proposed legislation designed to reduce deforestation linked to products sold in the UK. Full details of the consultation can be found in the email appended below.

Seven commodities have been identified, whose rapid expansion is associated with deforestation, often in contravention of local laws: beef and leather, cocoa, palm oil, pulp and paper, timber, rubber and soya.

As such, the Government is proposing to introduce legislation that would:

  • Make it illegal for businesses in scope to use, either in production or trade within the UK, forest risk commodities that have not been produced in accordance with relevant laws in the country where they are grown.  ‘Forest risk commodities’ include those embedded within products.  ‘Relevant laws’ include those that protect natural forests and other natural ecosystems from being converted in to agricultural land.
  • Oblige businesses in scope to conduct due diligence to ensure that forest risk commodities that have not been legally produced do not enter their supply chain, and to report on this exercise publicly.
  • Enable the Government to levy fines and other civil sanctions against businesses that continue to use forest risk commodities that have not been produced legally and/or that do not have a robust system of due diligence in place.
  • Require that the Government regularly review the law’s effectiveness.

Only larger businesses over a turnover and employee number threshold would be in scope of the law – small businesses would not be in scope. The threshold for inclusion will defined in subsequent secondary legislation.

This approach is designed to reinforce the existing efforts of producer countries to enforce their laws, so contributing to the sustainability of all the produce they grow, not just that exported to the UK.

Leather UK believes that there are two issues here:

  • Leather is not a driver of deforestation, it is a consequence of beef production. Any measure that addresses deforestation from beef production will automatically extend to leather from those hides. However, there is a risk that supply chain partners seeking to avoid association with deforestation, may move away from leather. This is unlikely to affect beef production in the affected parts of the world (Brazil, China and Australia are identified as the key risk countries for leather – this is not an exhaustive list), the bulk of which goes to other countries and will not be impacted by UK legislation. As such, leather production and use could be negatively impacted without actually affecting the desired changes.
  • While the legislation is aimed at large companies, the due diligence requirements for leather will inevitably be passed on to any smaller companies in their supply chain. This could see UK manufacturers forced into extensive and expensive due diligence exercises, to demonstrate that their products are not ‘Forest Risk Commodities’. For buyers and importers of leather, this will require them to obtain robust data from their suppliers, many of whom will be under no obligation in their own countries to provide it. This has the potential increase costs and damage supply chains. Again, this would not achieve the desired affect if beef production in the affected regions continues unabated.

Leather UK will be responding to the consultation on this basis. It is important that Government also understands the potential negative impacts on leather businesses in the UK. As such, I would urge you to respond to the consultation.

Please contact us if you have any questions on this issue,

Leather UK

 

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