The UK’s proposed deforestation laws must tackle unfair trading practices.

Written by Alice Lucas, Policy and Advocacy Manager, the Fairtrade Foundation

Last week saw the publication of the latest report by the UN’s Intergovernmental Panel on Climate Change (IPCC). The IPCC Working Group III report, Climate Change 2022: Mitigation of climate change, warns that without immediate and deep cuts to emissions, limiting warming 1.5 degrees will be beyond reach. As IPCC Chair Dr Hoesung Lee said: “We are at a crossroads. The decisions we make now can secure a liveable future.”

It is now more important than ever that governments, including our own, deliver on the promises they made at the COP26 summit in Glasgow. COP26 saw the UK Government commit to a £65 billion Just Rural Transition fund to support lower-income countries adapt to and mitigate against the worst impacts of the climate crisis. During this year’s Fairtrade Fortnight (the Fairtrade Foundation’s annual campaign), campaigners up and down the country called on the UK Government to ensure that its share of the fund reaches those on the front line – the farmers and workers overseas who produce our food.

As part of steps to tackle the climate crisis, the world has rightly acknowledged that it needs to tackle deforestation, with the UK Government committing £500 million to protect rainforests at COP26. The world has already lost one third of its forested land, and without urgent action, the loss of these natural carbon sinks will make it impossible to keep world temperature rises below 1.5°. The world’s forests are also home to indigenous peoples, who have been living on the land for thousands of years, and smallholder farmers and workers who supply our food here in the UK.

Agriculture is one of the primary drivers of deforestation, with some of the biggest contributing commodities being palm oil, soy and cocoa. This is why the UK government has proposed to bring in legislation that will ban the import of ‘high-risk’ commodities associated with deforestation from entering the UK market. The objective is to require businesses to conduct ‘due diligence’ on their supply chains, with the ultimate aim of halting deforestation in producing countries; however, the requirement does not include human rights.

This piece of legislation is a welcome step in the right direction and is the start of a much bigger set of urgent actions needed to tackle the climate crisis. However, Fairtrade is concerned that unless the legislation’s social impact on smallholder farmers and workers is better considered, alongside the environmental impacts, it will not achieve its aim of halting deforestation.

We know that poverty is one of the biggest drivers of deforestation. A cocoa farmer in Ghana, for example, can earn less than 73p a day. Consequently, poverty needs to be considered as a key risk factor in designing any law around deforestation, such that it encourages the payment of higher incomes and investment in communities, rather than a ‘cut and run’ approach that will worsen poverty. If we invest in farming communities, they will be better able to invest in more sustainable production methods, such as agroforestry approaches, and to adapt and mitigate against the worst climate impacts.

Currently, the UK’s proposals for deforestation legislation will ban the import of goods associated with deforestation. But there is a real risk that rather than investing in their supply chains, helping to mitigate and resolve deforestation risks, companies will simply cease sourcing from ‘difficult areas’. This will result in a severe loss of income for already low-income communities, and the consequences for human rights, health and the environment could be disastrous.

It is vital that the UK Government considers who will bear the burden of cost when this legislation is implemented. There is a real possibility that some unscrupulous companies will simply pass down the burden of conducting due diligence to those lower down the supply chain: smallholder farmers and workers who cannot afford to do so.

For example, one of the most useful and important ways of establishing whether a supply chain is deforestation free is to have fully transparent supply chains. This often involves technology known as geo-mapping, which enables full mapping of different farms and production sites in a supply chain. But it is often very expensive, and hard to implement for many smallholders, especially in remote areas. If businesses start to require this from their suppliers immediately, and without investment to do so, farming communities may be unable to meet the cost demands and risk losing their much-needed income.

This is why Fairtrade is calling for any deforestation regulation in the UK to be accompanied by appropriate measures to tackle unfair trading practices by businesses, which contribute to lower incomes. Any guidance on due diligence ought to have explicit reference to trading practices and the prices that farming communities receive. We also want to see the legislation accompanied by investment at farm level, helping communities to adapt to requirements, for example for full transparency, and also investment in more environmentally methods of production. The Government could use funds committed at COP26 to support this work.

There are many encouraging aspects of this legislation, and we are keen to ensure that it is designed in a way that supports smallholder farmers and workers. We believe that the UK Government must quickly introduce complimentary legislation that would encourage a new ‘Business, Human Rights and Environment Act’, modelled on the UK’s ground-breaking Bribery Act. This is based on a 2017 recommendation by the Joint Committee on Human Rights, which we – in partnership with the Corporate Justice Coalition and another 32 UK organisations – are calling for.

Farming communities and indigenous peoples are already suffering from the impacts of the climate crisis. This legislation will affect the environment upon which they depend and so must take their views into account. Listening will help UK law-makers understand better why deforestation is happening, and what is needed to prevent it.