Workers on oil palm plantations harvesting palm fruit in East Kalimantan, Indonesia.
- Five green labels – FSC, RTRS, RSPO, Fairtrade International and Rainforest Alliance – were the focus of a new study in Forest Policy and Economics, representing EUDR-covered commodities timber, rubber, soy, palm oil, coffee and cocoa
- The study found that none is fully aligned with the most important requirements of the EUDR relating to deforestation and legality
- The study also found that all schemes assessed had a lenient attitude towards non-compliance, with actors being allowed to retain certification despite violating laws, increasing the risk of EUDR non-compliance
- Earthsight has previously highlighted that this is because the burden of proof set by certification schemes, which allows entities to retain certification status despite glaring evidence of wrongdoing, is the opposite of the EUDR’s ‘negligible risk’ approach
- The study provides fresh evidence for why policymakers must continue to ensure that such schemes are not relied on for EUDR implementation, either in theory or practice
- Though some schemes are in the process of introducing changes in light of EUDR requirements, early indications are that these will be insufficient to address the many flaws identified
Not a single certification scheme fully aligns with EUDR requirements.
A scarcity of independent studies
The EUDR offers an unprecedented opportunity to curb the flow of commodities tainted by forest destruction and related abuses to the EU, one of the world’s wealthiest markets. Businesses will have to comply with the regulation from 30 December 2024. Its implementation is a welcome development for campaigning groups and forest communities who have long called for it. The commodities covered under the regulation include cattle, cocoa, coffee, oil palm, rubber, soya and wood, as well as a list of products derived from them. Together, these commodities are the principal drivers of global deforestation, which in turn contributes some 12 per cent of climate-changing emissions.
Under the EUDR, companies will need to ensure that relevant commodities and products imported to the EU are deforestation-free and compliant with the laws of producer countries. The regulation only briefly references sustainability certification schemes, to say they can form a part of the risk assessment procedures used by companies, but stresses that they should not substitute companies’ responsibilities to conduct due diligence (Article 10).
Earthsight, Friends of the Earth Netherlands and many other organisations have long issued warnings about the inherent flaws of certification schemes, in particular, their unsuitability (both in theory and practice) to meet standards set by laws such as the European Union Timber Regulation (EUTR) and the EUDR, which succeeds it.
However, no independent studies existed on the interplay between these schemes and the EUDR. In 2021 the European Commission published a study – carried out by a certification body for wood and therefore hamstrung by an inherent conflict of interest – on wood certification labels and their ability to deliver on EU Timber Regulation requirements. The recent study states that although this 2021 paper had pointed to these schemes’ ability to deliver ‘substantial assistance’ towards meeting due diligence obligations, further research was necessary to evaluate the schemes’ performance against the elements introduced by the EUDR.
The new study aims to remedy that. In reviewing relevant literature to date, it notes that “in general, existing literature provides mixed and limited evidence regarding the effectiveness of [certification schemes] in systematically promoting deforestation-free commodities” and that in fact several studies pointed to their limited positive impact or even their inefficacy in this regard.
Loaded timber truck transports logs in the Carpathian, Ukraine.
Failure across the board to fully meet core EUDR requirements
The authors of the study started by establishing a framework based on the EUDR’s definitions of key terms and requirements for due diligence, and assessed five certification schemes using this framework. ISEAL Alliance membership was established as the prerequisite for choosing the schemes that were to be included in the study. ISEAL was created to codify international best practice on the design and implementation of certification schemes.
The schemes chosen were Fairtrade International for coffee and cocoa, Forest Stewardship Council (FSC) for wood and natural rubber, Rainforest Alliance for coffee and cocoa, Roundtable on Sustainable Palm Oil (RSPO) for oil palm, and Round Table on Responsible Soy Association (RTRS) for soya. There was no scheme selected for cattle, the biggest driver of deforestation in tropical forests. The schemes were assessed across 24 indicators. Not a single scheme’s standards fully aligned with the framework. Although FSC was the scheme with the highest percentage of ‘fully covered’ indicators, it only scored 58.3 per cent under the framework. RTRS scored 45.8 per cent, Rainforest Alliance scored 41.6 per cent, and Fairtrade International and RSPO both scored 37.5 per cent.
The study concludes that certification schemes are “limited” in providing deforestation-free products and that that they “fall short” in assuring production according to relevant legislation. It also found that the assessed labels’ “traceability systems do not fully cover EUDR requirements” and that therefore these schemes “can support due diligence, but not demonstrate compliance with the EUDR.”
Summary of the results of the application of the assessment framework to the selected schemes
Table showing framework for the study and results, adapted from the full study.
The authors recommend schemes enhance their criteria to ensure comprehensive prohibition of deforestation and forest degradation and remove exceptions that allow these two things to take place under certain circumstances. The study recommends they make amendments to ensure all relevant legislation as outlined in the EUDR is covered, and that requirements to comply with legislation are extended to subcontractors and to both production and supply chain tiers. Finally, it calls on the schemes to make their audit reports public and develop better strategies for dealing effectively with non-compliance.
The study acknowledges that some schemes have started working to close identified gaps and improve their alignment with EUDR. However, Earthsight’s monitoring of those ongoing efforts suggests that they will not be able to fix all of the many discrepancies identified by the study. Huge holes are likely to remain.
In most cases certificate holders continue to maintain their certificates even when they violate national laws and are implicated in deforestation and forest degradation.
Legal and deforestation-free?
The study found that, apart from Fairtrade International, the schemes allowed exceptions to their deforestation-free requirement. For example, in the case of FSC, conversion is permitted if it does not exceed 5 per cent of the management unit, produces clear, substantial, secure and long-term conservation and social benefits, and does not damage high conservation values (HCV). RSPO does not consider clearance of less than 10 hectares as new land clearings within already-certified units. RTRS allows for conversion if it is up to 5 per cent and no more than 20 hectares of the total size of the farm.
The study also found that not all forms of forest covered by the EUDR were covered by the schemes in question. Regarding this cornerstone of the EUDR, the study concludes that schemes aspiring to provide certified products that align with EUDR requirements should enhance their criteria pertaining to deforestation and forest degradation. Prohibiting the conversion of natural forests, protected areas, HCV, and HCS (high carbon stock) is insufficient for ensuring the delivery of deforestation-free products.
All the schemes analysed allow the mixing of certified and non-certified products under their traceability systems, the authors found. They concluded that a “lack of systems to control the social and environmental attributes of the non-certified material entering the supply chain of certified products” meant there was an inherent risk that traceability systems offered by the schemes “are associated with deforestation and non-compliance with legislation.” Often, mixed products are certified even if they come from deforested lands. No scheme except FSC had any requirements for uncertified material entering certified supply chains to be deforestation-free or produced in accordance with relevant legislation. However the authors caution that further research is needed to determine whether FSC’s requirements on uncertified material – managed under its ‘controlled wood approach’ – meet EUDR’s.
Gaps were identified in the schemes' requirement to comply with the relevant legislation of the country of production. It was noted that several of Fairtrade’s standards did not have specific requirements for compliance with legislation. Rainforest Alliance only requires compliance with laws at higher levels in the supply chain and only in relation to specific topics, while RSPO and RTRS did not require compliance with legislation for the full supply chain. Additionally, it was also highlighted that for most schemes, subcontractors are often excluded from having to comply with national laws.
The authors also underlined the lenient attitudes these schemes have towards non-compliance. In most cases certificate holders continue to maintain their certificates even when they violate national laws and are implicated in deforestation and forest degradation. The study notes that the schemes’ use of “soft mechanisms” to deal with violations of their principles “increases the risk that certified products do not comply with the EUDR.”
As Earthsight has previously pointed out, this is due in large part to the fact that the burden of proof required by certification schemes is the reverse of that mandated by the EUTR and EUDR. While the latter require companies to only trade goods with a ‘negligible risk’ of non-compliance, the former fail to kick out bad actors even when the “preponderance of evidence” is against them.
Earthsight’s analysis has shown how systemic issues with certification schemes undermine their efficacy. For example, while FSC performed a little better than the other schemes analysed by the study, several groups have urged it to reform and fix issues which make it unfit for purpose, calls which FSC has failed to heed. Such systemic issues were not taken into consideration by the study, which evaluated the schemes based on alignment with EUDR alone.
