Forest-risk raw materials are goods and raw materials that are extracted or produced from tropical forests and contribute significantly to global deforestation.

The consultation document (37 pages / 370 KB PDF), published by the Ministry of Environment, Food and Rural Affairs (DEFRA) suggested that due diligence regulations would apply to cattle first. for beef and leather, cocoa, coffee, corn, palm oil, rubber and soy. DEFRA said those seven products are responsible for around 65% of the annual risk of tropical deforestation associated with UK supply chains.

The consultation also described the government’s future plan to use secondary legislation to bring other products within the scope of the rules, although illegally harvested timber and timber products are not included, as the regulations British companies on timber are already banning their production and sale.

Fiona Ross, environmental law expert at Pinsent Masons, said: “Even if a phased approach is taken, the product listing can be seen as a sign of things to come, and it is perhaps likely that Such supply chain due diligence requirements will increasingly apply to a wider range of products and raw materials.

DEFRA said the new rules would be designed to tackle illegal deforestation without placing an “undue or disproportionate burden on businesses” and will therefore focus on the large companies with the greatest influence on product supply chains. forest base, using a turnover threshold.

The consultation asked whether companies should use their national or global turnover to calculate the threshold. One option being considered would see companies being assigned different turnover thresholds – between £ 50 million and £ 200million – depending on the risky forest products they use.

Ross said: “Impact assessment defines a very wide range of types of businesses that could be affected. In practice, however, due to the turnover threshold, it is likely to have an impact on large consumer goods companies, large food production and processing companies and large retailers – and could also affect the manufacturing of motor vehicles and tires, as well as the manufacturers and distributors of refined petroleum. and petroleum products.

A separate provision would allow businesses to seek exemption from due diligence regulations if they can prove that the quantity of a product they use in their UK business activities in any given year is less at an exemption threshold which will be set between one and 1,000 metrics. tons.

Companies that fall within the scope of the regulation will be required to assess the risk that “relevant local laws relating to land use and land ownership have not been observed” with respect to regulated products in their supply chains, then “eliminate the risk or reduce the risk as low as reasonably possible,” according to DEFRA’s proposals.

Ross said: “To start with, companies should gather information and think about how they might integrate risk assessment into their practices, think about how they are currently managing these risks in their supply chain, and think about how. what more could be done to mitigate the risk. This could include reviewing vendor contracts, engaging with vendors – both to gather information and to involve them more broadly on the issue – and to determine if changes may be needed to existing vendor policies. “

“Many companies are already looking to make their supply chains more sustainable, driven by corporate goals and commitments to achieve net zero, and factoring in this extra kind of due diligence early on could help. ensure they are ready when requirements are imposed. , “she added.

“The brand’s reputation could also be improved by taking a transparent approach, as proposed in the consultation, with separate reports published by companies on supply chain due diligence and risk management. It is likely to align with corporate carbon and biodiversity strategies and commitments, ”said Ross.

The consultation will run until March 11, 2022.