Relying on green labels to address our thirst for products of deforestation would be a disaster

Why the EU’s new deforestation law must learn the lessons of the past and avoid relying on flawed industry ‘certification’ schemes, either in principle or in practice

• Fresh promises on forests at COP26 will be meaningless unless they are coupled with real action. A key test will come shortly after the conference concludes.
• Deforestation and associated human rights abuses are driven by overseas demand for agri-commodities like palm oil, soy and beef. They won’t be stopped until that demand is stopped. New draft EU legislation – expected to be released next week - could cut off one of the biggest sources of that demand.
• However, while decision-makers debate the finer points of the law, such as the commodities it will cover, none of these will matter if they do not address a wider problem: the flawed ‘independent certification’ schemes it looks likely to end up relying on, whether they are given a formal ‘green lane’ or not.

Commentary | Sam Lawson, Earthsight director

We cannot expect forest countries to halt the bulldozers if we keep paying for the fuel. Yet that is what we will continue to do if the EU doesn’t get its new law right. By far the largest driver of forest loss is industrial agri-business. In south-east Asia, forests are being razed to make way for vast monoculture plantations of oil palm, rubber and acacia. In Latin America, for cattle-grazing and soy. In most cases, the commodities being produced on this land are destined for export. Among the biggest consumers are the countries of the rich world.

The world has now woken up to this problem. But the new UK-led initiative on Forests, Agriculture, Commodity and Trade (Fact) launched with great fanfare at COP is little more than a talking shop. It’s goals of ‘exploring options’ and ‘building understanding’ show no appreciation of the urgency of the crisis the planet faces. It is so meaningless that even Jair Bolsonaro’s Brazil – the most unashamedly pro-deforestation administration on the planet – has been happy to sign up to it.

What happens shortly after the cups and plates are cleared up in the conference rooms in Glasgow is likely to be much more important for forests than any of the promises made during it

For this reason, what happens shortly after the cups and plates are cleared up in the conference rooms in Glasgow is likely to be much more important for forests than any of the promises made during it. On 17 November, the EU is expected to publish a new draft law meant to address the huge harm that the bloc is having overseas through its consumption of forest-risk commodities like beef, soy, palm oil, wood and leather. If successful, it could be ground-breaking, blazing a trail for other key markets to follow, the first step to finally cutting off the supply of fuel to the bulldozers.

Other important markets are also starting down the same path. Similar draft legislation has been tabled in the UK and USA. But the EU is a much larger market for the commodities concerned, and its approach is more ambitious. Getting its law right is therefore hugely important.

If successful, the EU’s new law could prove to be the first step to finally cutting off the supply of fuel to the bulldozers

There are many ways in which it could go wrong. Environmental and human rights groups from around the world have been campaigning hard in recent months on many crucial questions, such as which commodities the law covers, how forests are defined, how to deal with past deforestation, how indigenous rights are addressed, and whether financing as well as consumption is included. To give just one example, it seems the law won’t include leather – thereby doing nothing to address how EU car giants are currently driving the illegal destruction of the forest home of an ‘uncontacted’ tribe.

Getting these things right is important. But such debates could turn out to be irrelevant if a much more fundamental problem with the planned law is not addressed. It won’t matter what the law includes and what it doesn’t, if it isn’t implemented. And if the past is any guide, it won’t be.

It won’t matter what the EU’s law covers, if it isn’t implemented. And if the past is any guide, it won’t be

The new EU law is using as its template an existing law, the EU Timber Regulation (EUTR). This law, meant to prevent the consumption of wood felled illegally overseas, has been in place since 2013. But it hasn’t worked.

Compared with previous legislation meant to address ethical questions regarding trade in commodities, the EUTR was truly ground-breaking. It pioneered a twin-track approach, in which a general prohibition on buying illegally sourced wood was coupled with a parallel requirement for importers to ensure that the chances of breaching that prohibition were reduced to a ‘negligible’ level.

Because it is so hard for authorities in Europe to know for certain whether goods had breached laws overseas, the second, ‘due diligence’ part of the law is crucial, since it reverses the burden of proof. Leaked early drafts of the new EU law suggest it will follow the same approach. This much is good news. The problem lies in how due diligence is enforced in practice.

Earthsight has been monitoring the implementation of EUTR since day one. What we have found, time and time again, is that the most authorities ever demand in terms of evidence of due diligence is the purchasing of wood which was ‘certified’ as legal and sustainable by one of a number of global green labels. As a result, the use of these schemes has skyrocketed. They now cover around a third of the world’s production forests. Yet these certification schemes are fundamentally flawed. As a result, they have repeatedly rubber-stamped illegal and high-risk wood.

These certification schemes are fundamentally flawed. As a result, they have repeatedly rubber-stamped illegal and high-risk wood

In 2018, Earthsight revealed how illegal wood from Ukraine bearing the imprimatur of the world’s biggest green wood label, the FSC, has been flooding into Europe. In 2020, we showed how timber from the biggest illegal timber scam in Russia this century had been laundered by FSC’s biggest competitor, PEFC, and 100,000 tonnes of it entered the EU as a result. In 2021 we exposed another scandal involving an FSC-certified forest in Siberia, where the illegal harvesting of four million trees by a corrupt politician-cum-businessman had gone unnoticed by auditors. The wood ended up in Ikea children’s furniture, including that sold in the EU and USA.

The reasons certification schemes cannot ensure compliance with EUTR are baked into their DNA. First and most importantly, the burden of proof with certification schemes, including FSC, is the complete reverse of that required by EUTR. The certification schemes assume companies are innocent until proven guilty, whereas the EUTR (and the expected wider EU Deforestation law) requires ‘negligible risk’. Auditors used this excuse to take no action after Earthsight exposed how multiple FSC-certified firms in Ukraine were under formal investigation for high level corruption. They cited it again in explaining how they had ignored all the publicly documented court cases involved in the Siberia case study. FSC’s Policy of Association specifically states that firms can remain inside the tent even where the ‘preponderance of evidence’ suggests they are guilty of massive illegal logging or serious human rights abuses.

Green wood label FSC allows firms to remain inside the tent even where the ‘preponderance of evidence’ suggests they are guilty of massive illegal logging or serious human rights abuses

Secondly, the certification schemes don’t even assure what they claim to. Riddled with structural flaws and conflicts of interests, and captured by industry, they systematically fail to spot illegal timber and rights abuses by certified companies.

In July 2021 the EU issued official guidance, approved by member state authorities, stating unequivocally that certification schemes cannot be relied on to ensure wood from Ukraine is legal. Companies must be made to do more if they want to continue importing timber from there. But the guidance isn’t binding, and certification’s problems are not limited to Ukraine.

The week before COP, 34 NGOs from around the world sent an unprecedented open letter to FSC, calling on it to make immediate changes to its systems to adequately reflect the global deforestation crisis. 

The FSC logo on household items worldwide is meant to signify products made from good wood ✅🌳

Sadly, it's failing forests 🌍

"No system is completely free from issues. But for number of failures to have occurred, it means FSC’s weaknesses are systemic"https://t.co/rDgtds9aZY

— Earthsight (@earthsight) October 25, 2021

Meanwhile suspect certified wood continues to flood into Europe. That the EU has failed to learn the wider lesson from the case of Ukraine is also clear from the flawed study on the use of certification in EUTR which it commissioned and was finalised earlier this year. This study was supposed to judge to what extent certification schemes could ensure compliance with the law, but completely ignored the fundamental difference in burden of proof between the two. As a result it gave a falsely positive assessment of the schemes’ value. This is perhaps unsurprising, given that the company which authored the report receives millions of dollars a year auditing logging and timber companies against these very same certification schemes.

A recently leaked draft of the new EU Deforestation law doesn’t give certification schemes a formal ‘green lane’. But neither does the EUTR, and in practice it hasn’t made any difference. Though they clearly cannot ensure compliance, authorities in the EU keep accepting flawed green labels or suspect documentation issued by source country governments. Why? Perhaps because they are unwilling to accept the reality, which is that implementing the law properly would mean completely blocking all imports from certain countries. This does not appear to be something authorities are willing to contemplate – possibly because of pressure from the billion-dollar EU firms dependent on this wood.

What has proved to be a terminal problem for wood will be a worse problem for soy, beef or palm oil. Most of the forest-risk commodities the new law seeks to address have their own ‘green labels’ already. As a major study released by Greenpeace earlier this year showed, these are even more flawed than those for timber.

What has proved to be a terminal problem for wood will be a worse problem for soy, beef or palm oil

Without a stronger will on the part of EU authorities to treat these schemes for what they are, all the new law will do is trigger their expansion. It certainly won’t achieve its goal of preventing the EU continuing to drive deforestation and human rights abuses overseas. Given the urgency of the planetary emergency, the EU cannot afford to wait and fix the law later. It needs to be right from the outset. Anything less, and the forests it seeks to protect will be doomed.