Public consultation on 'Deforestation and forest degradation - stepping up EU action': ZSL's full statement - europa.eu

Public consultation on ‘Deforestation and forest degradation –
              stepping up EU action’: ZSL’s full statement
The Zoological Society of London (ZSL) welcomes the European Commission’s intention to step up
action on deforestation and forest degradation, and this opportunity to provide input to the process.
We agree with the EC’s assertion that as a key consumer of forest-risk commodities, the EU is a
significant contributor to global forest loss, degradation and associated environmental and social
issues, and thus will also be a vital part of any solution.

Time for action
As the IPCC Special Report1 published October 2018 made clear, we have little more than a decade
left to act in order to avoid an average global temperature increase of greater than 1.5°C. Activities
within agriculture, forestry and land use change currently contribute approximately 24% of all global
greenhouse gas emissions2, and protecting forests is estimated to have the potential to mitigate up to
30% of all emissions3. Therefore, the protection of forests must be a central part of any meaningful
strategy to address climate change.

The destruction and degradation of forests creates a mesh of interdependent impacts upon
biodiversity, people, and economies at both local and global scales. Forests around the globe are a
stronghold of biodiversity, and a vital resource for people, both through direct subsistence and more
widely through the goods and ecosystem services they provide. Forests are home to an estimated 75%
of all terrestrial plant and animal species, and around 1.6 billion people depend directly on forests
globally4. The importance of protecting forests is a social and economic consideration for the EU, as
much as it is an environmental one.

The EU has already taken significant action on deforestation, through existing measures and legislation
such as the EUTR and FLEGT licensing, REDD+, the EU Forest Strategy, and the 7th Environment Action
Programme. Bold moves have also been made by member states in recent years, seen for instance
through the French National Strategy to Combat Imported Deforestation5, and the Amsterdam
Declarations6. The EU now has the chance – indeed the obligation – to step forward and be a leader
in the movement to combat deforestation and forest degradation. In doing so it will be helping to
meet its own commitments under international agreements such as the New York Declaration on
Forests, Paris Climate Accord, Convention on Biodiversity Aichi Targets, and the Sustainable
Development Goals.

The need for an ambitious framework
ZSL believes that in order to effect real change on this critical issue, ‘stepping up EU action’ for forests
should mean not only building on existing policy and tools, but also adding new legislative measures
to strengthen action. Given the speed and scale of forest loss globally, and the severity of its current
and likely future consequences, such measures must be considered a critical component of EU strategy

1
  https://www.ipcc.ch/report/sr15/
2
  https://www.ipcc.ch/site/assets/uploads/2018/02/ipcc_wg3_ar5_chapter11.pdf
3
  https://www.cgdev.org/sites/default/files/Seymour-Busch-why-forests-why-now-full-book.PDF
4
  https://www.cifor.org/thinkforests/facts-figures/#ff-1
5
  https://www.gouvernement.fr/en/ending-deforestation-caused-by-importing-unsustainable-products
6
  https://partnershipsforforests.com/partnerships-projects/the-amsterdam-declarations/

and significant time and resources must be utilised to ensure progress. In considering the more specific
supply- and demand-side actions recommended below, we feel the following broad considerations
should be taken into account across all actions taken under this initiative:

    •   Actions should be integrated across all relevant policy areas, including those relating to
        climate change, biodiversity, finance, industry and trade. This process should be taken as a
        pivotal opportunity to align this initiative for action on deforestation with other existing and
        developing EU policy, to ensure they strengthen, rather than restrict, one another.
    •   The interrelation between underlying drivers of deforestation and their spatial variation must
        be carefully considered in any actions taken, to ensure impacts are really being reduced rather
        than just shifted to another geography or industry.
    •   Measures should go beyond just addressing illegality, as existing laws and regulations vary
        widely and often do not go far enough, or focus broadly enough, to clearly combat
        deforestation and associated environmental and social issues.
    •   As recognised in the 2018 Feasibility Study7 on options to step up EU action against
        deforestation, strong efforts should be made to work with other consumers of forest-risk
        commodities – such as China and the USA – to align and collaborate to push for rapid and
        effective progress.
    •   Although the recommendations in the Feasibility Study are split into actions for the supply
        side, demand side, and financial sector, it must be ensured that actions are taken in all these
        areas and that they are aligned with each other to ensure a coherent effort.
    •   To facilitate the alignments referred to above, and throughout this document, a common
        vocabulary around key words and concepts is essential. Existing initiatives such as the
        Accountability Framework Initiative (AFi)8 should therefore be consulted and drawn upon.

ZSL recommends specific actions the EU should take going forward, in order to make progress in its
ambition to combat deforestation and forest degradation. These are separated below into supply-
side, demand-side, and finance/investment-related activities, in alignment with the 2018 Feasibility
Study. These actions should be considered within the context of the broader points above.

Supply-side actions
1. Support for producer countries
The 2018 Feasibility Study highlights ‘weak governance and law-enforcement’ as a key driver to
address on the supply-side. It is therefore crucial that the EU should increase its financial and technical
support in producer countries at both national and sub-national levels, to facilitate each country’s
protection of its own forests. Where relevant this should include, but not be limited to, assistance in
the development of stronger legislation and institutions to prevent forest loss and degradation, as
well as proper enforcement of existing legal measures to ensure forests are protected not just on
paper but on the ground. All measures should draw on multi-stakeholder dialogues which include
indigenous/local communities and a diverse range of civil society organisations.

Regulation, planning and monitoring: As part of the above, technical assistance should be provided
to producer countries in processes of land-use mapping and allocation, the effective monitoring of
forests and surrounding landscapes, cracking down on corruption and the development of stronger

7
  https://publications.europa.eu/en/publication-detail/-/publication/5f15470c-2bf2-11e8-b5fe-
01aa75ed71a1/language-en
8
  https://accountability-framework.org/about-us/

mechanisms for both identifying and penalising breaches of forest protection laws. The High
Conservation Value (HCV) and High Carbon Stock Approach (HCSA) methodologies should be
considered as key tools to integrate into land planning decisions. Jurisdictional approaches have the
potential for high impact, as noted in the 2018 Feasibility Study, and should be considered as a key
approach to land use planning.

Support should also be provided to producer countries to improve the transparency of companies
registered or operating within the country, including improved disclosure on company policies,
operations, locations and practices on the ground, as well as transparency on ownership and ultimate
beneficiaries (targeting, for example, the prevalence of ‘shadow companies’ in some industries9). Such
improvements in transparency will help ensure companies and individuals can be held to account for
their impacts on forests.

Bilateral partnership agreements: The development of bilateral partnership agreements between the
EU and producer countries, with a specific focus on sustainable and deforestation-free production,
are noted in the 2018 Feasibility Study as having a high potential for impact, as well as being potentially
relevant to all supply-side drivers. Such agreements should also be a key tool under consideration as
part of this initiative, despite concerns around their complexity and administrative costs.

2. Support for small-scale producers
It is important that both new and existing legislative measures do not unfairly impact upon local
communities relying on forests and forest products for subsistence, or upon small-scale farmers and
producers who may be inadequately resourced to meet increasingly stringent regulations on forest
protection. The EU’s initiative should include the continued and improved provision of technical
assistance to small-scale and subsistence producers, to help them meet best-practice requirements
for sustainability and to access international markets.

It should also be remembered that often smallholders are contracted within the supply chains of large
production companies, and look to these companies for technical assistance. Yet such companies
often do not extend sustainability commitments to their smallholder suppliers, or do not make it clear
whether they provide suppliers with adequate support. A recent study10 by ZSL’s SPOTT11 found that
60% of upstream palm oil companies assessed provided details of their support to scheme
smallholders, and less than half of companies assessed extended their sustainability commitments to
cover all their palm oil sourcing. There is therefore much scope for the provision of technical assistance
by the EU on methods and tools for upstream companies to better track and engage with their direct
and indirect suppliers. This must be aligned with increased pressure on such companies to both
adequately scrutinise as well as support their suppliers to be compliant with a deforestation-free
approach.

9
  https://chainreactionresearch.com/report/shadow-companies-present-palm-oil-investor-risks-and-
undermine-ndpe-efforts/
10
   ZSL SPOTT report 2018 “Smallholders: key to building sustainable palm oil supply chains”
https://www.spott.org/news/smallholders-key-to-building-sustainable-supply-chains/
11
   https://www.spott.org/

Demand-side actions
1. Due diligence regulation for forest-risk commodities
The creation of due diligence regulation was identified in the 2018 Feasibility Study as having the
greatest contribution to reducing deforestation and degradation, and thus should be a central
mechanism to incorporate into the EU’s initiative, despite political and technical concerns.

This due diligence regulation should be mandatory and based on a clear set of sustainability
requirements. Such requirements should go beyond legality alone, to ensure key risks relating to
forests, biodiversity and local people are considered and addressed as part of the due diligence
process, in a way which is sufficiently rigorous and is consistent across different countries and
geographies despite large variations in national or local laws. The sustainability requirements should
include some dependence on credible ‘deforestation-free’ sustainability certification schemes, whilst
recognising that schemes vary widely both within and between commodity sectors. Sustainability
certification alone cannot be considered a ‘silver bullet’ for ensuring products are not associated with
deforestation, forest degradation, or other environmental and social issues.

2. Public procurement policies
Some EU member states have already taken a lead on addressing forest-risk products in their
procurement, with the French government now committed to a ‘zero-deforestation’ public
procurement policy by 2022. The EU should now encourage the uptake of similar public procurement
policies from other member states, to ensure they align with a deforestation-free sustainability
agenda. This requires a nuanced approach which considers the complexities of different forest-risk
commodities, their production contexts, and ultimate markets and uses.

3. Revise existing bioenergy policies
Current EU bioenergy policies are entirely insufficient to meet a deforestation-free ambition, and they
should be significantly strengthened as part of this initiative, to ensure they do not incentivise or
legitimise deforestation and degradation. In particular, the Renewable Energy Directive (RED) as it
currently stands indicates a failure to engage fully with the role of forests in the carbon cycle, and the
inextricable links between forests and wider biodiversity and ecosystem services. ZSL believes the RED
should be overhauled to address the serious concerns raised over its contributions to deforestation
and climate change, and reiterates the call from nearly 800 scientists12 from around the world to
restrict its definition of eligible forest biomass for burning to only residues and wastes.

4. Strengthen and expand data disclosure
Pushing for increased and more transparent disclosure of information on the activities and ownership
of forest-risk commodity producers would allow for greatly improved scrutiny and accountability in
key sectors. This should include information on the location of company operations in high-risk
geographies, the actions being taken by companies to monitor and protect forests, and how
companies – including subsidiaries and shell companies – are structured and financed. Such
information can be used by downstream buyers, civil society, investors and banks to push for
improved company practices on-the-ground, as well as accountability in situations where forests are

12
  https://www.euractiv.com/wp-content/uploads/sites/2/2018/01/Letter-of-Scientists-on-Use-of-Forest-
Biomass-for-Bioenergy-January-12-2018.pdf

damaged or removed. Many data initiatives already exist to address this issue13, which should be
considered so that efforts are not duplicated unnecessarily.

Finance and investment actions
1. Integrate with financial-sector policy
Momentum on sustainability and addressing climate change is building quickly within the financial
sector, but the critical importance of protecting forests is too often side-lined in favour of the ‘lower-
hanging fruit’ of the energy and transport sectors. The EU Sustainable Finance Action Plan14 provides
a clear opportunity for the EU to remedy this problem, and to ensure its initiative to step up action on
deforestation is firmly integrated within its financial sector policy. Actions should include the clear
articulation, within the currently developing EU ‘taxonomy’ on sustainable finance, of strict
sustainability criteria for forest-risk commodity sectors, which at a minimum include reference to the
implementation of HCV, HCS, and Free, Prior and Informed Consent (FPIC) approaches prior to any
land clearing. The Sustainable Finance Action Plan should also be used to place clear duties on
institutional investors not to support deforestation or forest degradation through their investments,
and to ensure forest protection is explicitly included in the ‘green supporting factor’ in the prudential
rules for banks and insurance companies.

2. Align EU investment and lending with this initiative
InvestEU and the European Investment Bank should use their investment and lending activities to push
for more sustainable production practices within forest-risk industries. ZSL would welcome a clear
examination in the upcoming Communication on how the activities of such institutions will be aligned
with this initiative to step up action on deforestation.

ZSL (Zoological Society of London) is an international conservation charity with conservation
programmes in Britain and over 50 countries worldwide. ZSL is committed to bringing wildlife back
from the brink of extinction and our work is realised through our ground-breaking science, our field
conservation around the world and engaging millions of people through our two zoos, ZSL London Zoo
and ZSL Whipsnade Zoo. ZSL also hosts SPOTT – Sustainability Policy Transparency Toolkit –a free,
online platform which assesses and scores tropical forestry and palm oil companies annually against
over 100 sector-specific indicators to benchmark their progress over time. For more information, visit
www.zsl.org.

13
   https://www.spott.org/wp-content/uploads/sites/3/2019/01/Proforest-Transparency-tools-in-commodity-
supply-chains-an-overview.pdf
14
   https://ec.europa.eu/info/publications/180308-action-plan-sustainable-growth_en