Getting the incentives right

Getting the incentives right

Converting forest land for agricultural crops is the main cause of tropical deforestation. The EU is a major importer of forest risk commodities (FRCs), i.e. beef (41 per cent of global imports in 2014), maize (30 per cent), cocoa (80 per cent), coffee (60 per cent), palm oil (25 per cent), soy (15 per cent) and rubber (25 per cent). The majority of these commodities come from just seven countries: Argentina, Brazil, Paraguay, Indonesia, Malaysia, Ghana and Côte d’Ivoire. Deforestation frequently goes hand in hand with human rights violations, notably the violation of land rights of local communities and Indigenous Peoples, and the violation of labour rights, including the use of child labour, notably in the palm oil and cocoa sectors.

Over 440 companies have committed to free their supply chains of deforestation, and seven European countries, through the Amsterdam Declaration Partnership, are also working towards deforestation-free, sustainable supply chains. In 2021 the EU is expected to table a corporate governance law requiring companies to execute due diligence across the supply chain, aiming for a do-no-harm approach, as well as specific legislation to tackle deforestation and human rights violations in FRC supply chains.

These are all positive developments, but more is needed. Halting or reducing tropical deforestation lies predominantly in the hands of the forested countries. They need to have the incentives to address deforestation and human rights violations as well as the tools to improve governance in the forest and agricultural sectors, because good governance is an essential condition to tackle deforestation.

That is because deforestation is a ‘wicked problem’, an academic term for a problem that cannot be framed and understood in linear cause–symptom–effect relationships; it is a problem that evolves unpredictably over time and that involves conflicts of values among different stakeholder groups. These problems cannot be addressed by simple commitments, such as removing bad products from supply chains or providing more development aid. They require governance approaches instigating deep and broad systemic change.

So, what is the role of the EU in supporting good governance in producer countries to address deforestation, and how can EU trade in FRC be used as leverage? These are the questions this paper aims to explore.

Area of focus: Other

Author(s): Saskia Ozinga

Organisation/institution: Fern