What Makes An Effective Law To Stop Commodity

WHAT MAKES AN EFFECTIVE LAW TO STOP COMMODITY-DRIVEN DEFORESTATION?
Inaction over the last decade has shown that voluntary measures alone are not enough to halt
deforestation. For change at the speed and scale necessary, we need regulation. And it has to be effective.
Helen Bellfield, Policy Director at Global Canopy, on what deforestation legislation should include to
be effective
Ending deforestation is the only way to reach net zero. It is essential to preserving vital ecosystems. It
is necessary to safeguard the livelihoods of the 1.6 billion people who rely on forests. And what’s more, it is
a solvable crisis.
Over the past two years, we have seen growing international consensus over the need to end
deforestation. For the first time, halting and reversing deforestation made it into the final text agreed at
COP28 in Dubai in December 2023. The UK Government used the same conference to set out its intention to
prevent the use of forest risk commodities derived from illegally deforested land in UK supply chains. When
the secondary legislation is passed, businesses with a global annual turnover of over £50 million and who use
over 500 tonnes of regulated commodities will be in scope.
This legislation follows the European Union Deforestation Regulation (EUDR) which became the
world’s first deforestation due diligence law and was passed in June 2023.
In the United States, the FOREST Act has been re-introduced to the US Senate. If passed, this would
prohibit the import of products made from commodities produced on illegally deforested land.
All these international laws vary in their scope and specificity. So what does a ‘good’ law look like for
it to be effective in stopping commodity-driven deforestation?
Legal and illegal deforestation

All deforestation has devastating consequences for ecology, biodiversity, the climate, and human
rights. Laws that only cover legal deforestation are at risk of ignoring a huge proportion of a country’s total
deforestation footprint.
Currently, the EUDR covers all deforestation, while the UK Environment Act only covers illegal
deforestation.
Almost a third of global tropical deforestation is considered legal, as weak laws in some
producer countries permit a significant amount of deforestation.
Determining which deforestation is ‘legal’, and which isn’t, can be very difficult. There are variations
in laws across countries, inconsistent standards, and poorly implemented regulations. Governments can
reverse or dilute existing laws to protect forests, so that illegal deforestation today may become legal in the
future – as seen with the weakening of Brazil’s Forest Code under the Bolsonaro government. This means
that legislation that only targets ‘illegal’ deforestation can run the risk of accelerating deforestation rates by
providing economic incentives for deregulation in producer countries.
Environmental legislation should implement a zero-deforestation standard aligned with
the Accountability Framework, to include both legal and illegal deforestation. This offers clarity and
consistency and promotes collaboration with producer countries to uphold laws preventing commodity-
driven deforestation in line with international standards. Tackling both types of deforestation, illegal and
legal, also means we are eliminating more of the deforestation-linked emissions.
All forest-risk commodities

Between 90% and 99% of all tropical deforestation is driven directly or indirectly by agriculture – to
produce commodities that are traded and consumed around the world.
The three biggest drivers are beef, soy, and palm oil, which account for 60% of all deforestation
globally. But while governments have a clear responsibility to regulate their imports of these commodities,
they should not neglect the deforestation caused by other commodities, including timber, cocoa, and coffee.
Deforestation legislation must be broad enough to cover not only the current state of deforestation but
also to adapt to future scenarios. Applying the same requirements to all forest–risk commodities streamlines
regulations, supports ongoing risk assessment, and allows for policy improvements – speeding up the road to
deforestation-free supply chains and thereby mitigating the impacts of climate change and biodiversity loss.
Read more about why the UK Environment Act should be extended to include all forest-risk
commodities.
All companies regardless of size or turnover

Many businesses are already aware of deforestation risks, yet far too few are engaging voluntarily to
eliminate deforestation from their supply chains.
Without legal regulations, there is less incentive to act – and many are unwilling, believing there is a
competitive disadvantage to doing so. Governments have the power and responsibility to set clear standards
and facilitate industry-wide cooperation to end the market for deforestation-linked goods.
Clear, cohesive, and comprehensive legal requirements for all companies, regardless of size or
turnover, are needed to level the playing field and raise the floor on standards for due diligence and
disclosure to the public.
Including the finance sector

Through their loans and investments, financial institutions provide the capital that drives
deforestation.
Our Deforestation Action Tracker (DAT) shows that even though groups like the Glasgow Financial
Alliance for Net Zero (GFANZ) have said net-zero transition plans are incomplete without action on
deforestation, the majority are still not acting.
75%
of the more than 700 financial institutions assessed by the Deforestation Action Tracker do not have
deforestation policies
Financial institutions have the power and influence to drive change by engaging with the companies
they invest in. The data, tools, and guidance are available to help financial institutions eliminate
deforestation from their portfolios. Laws that include the finance sector will drive action and force the
laggards to act.
Associated human rights

The deforestation crisis is also a human rights crisis. There is no way to tackle deforestation without
addressing the associated human rights abuses. One of the most effective ways to reduce deforestation rates
is to respect the customary land tenure rights of Indigenous peoples and local communities.
Deforestation laws need to include action on human rights because currently companies and financial
institutions cannot be relied on to address their own human rights impacts.
It is essential that governments extend the scope of due diligence measures to address human rights
abuses, in alignment with the UN Guiding Principles on Business and Human Rights and the OECD
Guidelines for Multinational Enterprises.
Other wooded lands

Tropical forests are not the only natural ecosystems essential for biodiversity and mitigating the
impacts of climate change. Legislation that exclusively focuses on rainforests is in danger of shifting the
target of environmental exploitation onto other vulnerable ecosystems – in particular wooded savannah,
grasslands, and wetlands.
Research by data-driven transparency initiative, Trase, has found that restricting the application of the
EUDR to rainforests would leave vulnerable ecosystems unprotected, especially the Cerrado (Brazil), the
Chaco (Bolivia, Paraguay, and Argentina), the Pantanal (Brazil, Bolivia, and Paraguay) and the Pampa
(Argentina, Uruguay, Brazil).
Current EUDR legislation leaves:
Legislation should be extended to protect all natural ecosystems where agricultural commodities are
produced. A narrow focus on forests risks exacerbating environmental destruction in other threatened
biomes.
“Deforestation laws with ambitions on biodiversity and climate cannot just cover tropical
deforestation. They need to be thinking of other ecosystems and other biomes, so particularly dry
forests in the Cerrado, but also biodiversity hotspots in other ecosystems like grasslands and wetlands
as well.”
Helen Bellfield, Global Canopy Policy Director
The responsibility for mitigating the climate and nature crises cannot be left to producing countries.
Importing traders and governments have a crucial role to play. Laws regulating international trade have the
power to transform global supply chains and hold companies and financial institutions accountable for their
role in driving deforestation.
To meet the global pledge made at COP28 in Dubai to halt and reverse deforestation, clear, unified,
and comprehensive legislation is essential. Effective laws can lead the way in protecting our planet from
environmental exploitation and ensuring sustainable commodity production for generations to come.

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WHAT MAKES AN EFFECTIVE LAW TO STOP COMMODITY-DRIVEN DEFORESTATION?

Legal and illegal deforestation

All forest-risk commodities

All companies regardless of size or turnover

Including the finance sector

Associated human rights

Other wooded lands

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