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The Independent Voice of the Commodity Industry
COMPANIES NEEDS GOVERNMENTS TO HELP STOP DEFORESTATION


The world’s forests are still being destroyed to make way for industrial-scale agriculture despite many companies pledging to eliminate deforestation from supply chains for products, such as palm oil, timber, cocoa and rubber. So says a new report from Fern*.

The Fern survey, ‘Promises and challenges: How companies are meeting commitments to end deforestation,’ takes the innovative step of interviewing senior executives to understand obstacles confronting those companies.

Fifteen leading companies, including Unilever, Nestlé, IKEA, Marks & Spencer, Cargill, and Asian Pulp and Paper, spoke candidly with authors Mark Gregory and Duncan Brack. Many pointed to the chaotic conditions they faced on the ground in high-deforestation countries.

Some said they viewed tackling social issues such as land tenure disputes as a higher priority than previously, and thornier to resolve than purely environmental issues. It is essential, they said, that governments take greater action to clarify and implement consistent policies on customary land tenure, as well as on regional-level land use planning and concession allocation.

They felt that governments should improve forest laws and enforce them more effectively, as well as better protect high conservation value and high carbon stock forests. Companies were however disinclined to press governments on such issues themselves.

Some reported that efforts to obtain free prior and informed consent (FPIC) of affected communities were hindered by difficulties recruiting staff culturally sensitive enough for the task, and willing to spend time in remote areas.

Certain executives reported that developing country governments viewed sustainability standards with scepticism, considering it a new form of colonialism.

Will targets really be met?

Finally, while most companies were confident that they would meet their own deforestation-reduction targets, they did not hold out much hope that global targets like the New York Declaration on Forests would be met – nor even that global performance could be accurately assessed.

Fern’s conclusion is that without governments providing a legal framework, it is likely the pledges will just remain as aspirations.

Most of the companies it interviewed deal in many different commodities, but Fern limited coverage to four: timber (including paper and packaging), palm oil, cocoa and rubber. It said it chose these four because timber and palm oil are two of the main four commodities associated with deforestation (alongside beef and soy). They have also been the main focus of the debate to date, in terms of government action, NGO campaigns and research and analysis.

Cocoa is less important at a global scale, but significant in terms of deforestation in West Africa – and, unlike the other commodities listed here, Europe is the world’s biggest importer. Cocoa supply chains have been the subject of debate for many years, initially focusing on child labour but now also extending to deforestation. There are also parallels with palm oil in terms of the proportion of production accounted for by smallholders. All four commodities’ supply chains are clearly linked to the EU market.

Working with producers

Cocoa and rubber have been less high-profile commodities than palm oil and timber in the debate over deforestation, and achieving specific targets for them was generally seen as more difficult. Neither are included in the New York Declaration’s four priority commodities, and companies tend to have less specific targets for them. For cocoa in particular, several companies have adopted the approach of working directly with cocoa producers rather than setting sourcing and traceability targets, as for palm oil and timber.

One general problem perceived by many companies, however, was the overhead costs of the certification schemes, which made them an expensive means of supplying the products companies needed. In particular, the cost of certifying smallholders – mainly in palm oil, but also in timber and cocoa – was often seen as prohibitive.

Social issues, including disputes over land tenure and ownership, were viewed by many companies as crucial problems, and in general far more difficult to resolve than environmental issues. The lack of clarity over legal concession and plantation boundaries and protected areas – including local communities encroaching on concessions in the absence of clear legal rights – was seen as a particular problem. Labour issues, including the treatment of bonded or migrant workers and child labour, were also seen as problematic.

Stanford study explores risks

Multinational companies are increasingly looking to Africa to expand production, but doing so can have significant impacts on the continent’s valuable tropical forests. Next time you bite into a chocolate bar, think of Africa. The continent produces nearly 70 per cent of the world’s cocoa, a growing output that requires carving more than 325,000 acres of new farmland from forests every year.

Now, a study produced at Stanford University has provided the first comprehensive assessment of how international demand for commodity crops, such as cocoa, is affecting sub-Saharan Africa’s tropical forests. The findings, published in Environmental Research Letters, suggest reason for hope if policymakers tailor decisions regarding deforestation around the region’s unique dynamics and uncertainties.

“We are starting to better understand issues related to large-scale agricultural expansion in the tropics,” said lead author Elsa Ordway, a graduate student in Stanford’s School of Earth, Energy & Environmental Sciences. “In Africa, we have the opportunity to take lessons learned from other regions and recommend preventive policies.”

In particular, the study recommends policies that would alleviate poverty in local regions and incentivize forest conservation rather than the widespread deforestation that has accompanied agricultural expansion in other regions.

Although deforestation rates in Africa remain well below those in South America and Southeast Asia, the region has lost an area of intact forest about the size of Iceland since 2000. These African forests, contained primarily in the Congo Basin, represent almost 30 per cent of the world’s total and are an important source of local income. In addition to regulating climate, safeguarding water quality and controlling disease, the forests feed and provide subsistence means to at least 100 million people living nearby. Forest products such as logs generate an average of 6 per cent of sub-Saharan Africa’s gross domestic product – triple the world average.

Learning from lessons elsewhere

For the time being, expansion of commodity crop production in sub-Saharan Africa has so far been driven primarily by small- and medium-scale local farmers who boost the regional economy and can expand with less disruption to forests, but big change is knocking at the door. In recent years, multinational companies have bought up a land area larger than Costa Rica in the heavily forested Congo Basin. As the multinationals move in, they are more likely to acquire land by clearing intact forest due to property conflicts resulting from the region’s land tenure complexities. However, the study’s authors suggest Africa could be spared the massive deforestation that large-scale monoculture has wrought on regions such as Southeast Asia by implementing policies that prioritize forest conservation and local control of the land.

“Civil society, policymakers and private companies can benefit from many years of trial-and-error with anti-deforestation policies in South America and Southeast Asia to design more effective interventions in sub-Saharan Africa,” said co-author Eric Lambin, the George and Setsuko Ishiyama Provostial.

Among the possible solutions are promoting investment that ensures small and medium-scale farmers continue to drive agricultural expansion in order to alleviate poverty and avoid land tenure conflicts, encouraging shade cultivation of crops such as cocoa to incentivize forest cover conservation, and finding ways to engage African consumers – currently the primary market for most locally produced commodity crops – on deforestation issues.

Top priority for the industry

As highlighted recently in C&CI, tackling the challenge of deforestation and forest degradation in the cocoa supply chain is quickly emerging as a top priority for the global chocolate and cocoa industry, cocoa-producing countries and a range of environmental organizations.

With the launch of the Cocoa and Forests Initiative, the World Cocoa Foundation (WCF) has taken its first collective step to address this challenge. The 20+ signatories have committed to work together to end deforestation and forest degradation in the cocoa supply chain, with an initial focus on Côte d’Ivoire and Ghana. As a new report from Forest Trends’ Supply Change Initiative highlights, this initiative comes at a time when stakeholders across forest-risk supply chains are committing to reduce their deforestation impacts. The 2017 report underscores numerous trends in the “big four” supply chains: palm, soy, timber and pulp, and cattle. The WCF believes that the cocoa sector can learn from the big four.

“Similar to the big four, the cocoa industry is at an inflection point on the path toward ensuring the sustainability of their supply chains and the health of the planet,” said the WCF, noting that WCF members are demonstrating their commitment to addressing key environmental challenges in the cocoa sector. “As the Cocoa and Forests Initiative continues to develop, the cocoa sector can build on the momentum and lessons learned from other sectors to create an inclusive, comprehensive, and transparent approach to ending deforestation in the cocoa supply chain,” it concluded.

 

*Fern is a non-governmental organisation (NGO) and a Dutch Stichting created in 1995 to keep track of the European Union’s involvement in forests and coordinate NGO activities at the European level.

 

This article has been published in the July 17 issue of C&CI, click on subscribe now if you wish to read other informative articles in the July and future issues of C&CI. 

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