Due diligence on forest risk commodities

2nd October 2020

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The government is consulting on proposals to make it illegal for businesses to use, either in production or trade within the UK, forest risk commodities that have not been produced in accordance with relevant laws in the country where they are grown.

The aim is to prevent forests and other important natural areas from being illegally converted into agricultural land.

The commodities include those embedded within products such as beef, cocoa, leather, palm oil, rubber and soya. The proposals would require the businesses within their scope to conduct due diligence in order to ensure commodities that have not been legally produced do not enter their supply chain. They must also report on this exercise publicly. 'Relevant laws' would include those that protect natural forests and other natural ecosystems from being converted into agricultural land.

Depending on the outcome of the consultation, it is likely the government would introduce an amendment to the Environment Bill to provide a framework, with powers given to the Secretary of State for implementing the proposals through secondary regulation.

The powers, if enacted, would allow the government to levy fines and other civil sanctions against businesses that continue to use forest risk commodities which have not been produced legally and/or that do not have a robust system of due diligence in place. It is likely that larger businesses, defined in terms of turnover and employee number threshold, would be within the scope of the law; small businesses would not.

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