Context: The European Union’s approval this week of new deforestation regulations poses a threat to Indian exports of items like coffee, leather, paper and wooden furniture.
What is the law?
- The EU Deforestation-free Regulation (EUDR) is the new EU initiative to limit deforestation caused by forestry and agricultural activities all over the world.
- EU Deforestation-free regulation (EUDR) defines those obliged as ‘operators’ and ‘traders’. Operators (companies who first place products in the single market) will be required to implement the due diligence on their supply chains to ensure they are deforestation and forest-degradation-free, while traders will be responsible for storing and sharing information on their supply chain to operators.
- The legislation seeks to prohibit products such as palm oil, coffee, cattle, cocoa, rubber, soya, timber, printing paper and derived products in the EU, that came from land that was deforested after December 31, 2020. The rules cover imports and domestic production.
- Four levels of penalties have been planned for any violations of this norm, which include monetary fines up to 4% of a firm’s annual turnover in the EU, confiscation of products, confiscation of revenues gained from a transaction and exclusion from public procurement processes.
- To implement the regulation, the EU, within 18 months from now, will classify countries as low, standard, or high-risk. High-risk countries must meet more obligations and be subject to more checks. For instance, EU Customs will check 9% of firms or consignments from high-risk countries, 3% from standard-risk countries, and 1% from low-risk countries
- The EU itself has extensively expanded agricultural land by cutting down primary forests, which now account for less than 0.7% of its total forest area, compared to the global average of 33%.
- Many other countries, facing the need to convert primary forests into cultivable land to feed growing populations will stand at loss.
- Arbitrary categorization of countries violates both the national treatment and most favoured national principles of the WTO
EU Deforestation Regulation appears to use real issues of deforestation to promote its selfish interests by prioritising its own farm sector and making imports difficult