Debate: Deforestation Regulation
Date: MONDAY, 12 SEPTEMBER 2022
Speaker: Virginijus Sinkevičius
Language: EN

First of all, several of you have mentioned the rights of indigenous people. And I can only share your concerns that deforestation and forest degradation have a dramatic impact on the livelihoods of the most vulnerable people, including indigenous peoples who rely heavily on forest ecosystems and are the best defenders of forests. The regulation will ensure that no commodity or products issued from deforestation or forest degradation of the lands inhabited by indigenous people is allowed to enter the EU market. The cooperation structures foreseen in the regulation should allow the full participation of all stakeholders, including civil society, indigenous people and local communities; partnerships will strengthen the rights of forest—dependent communities. We will, of course, closely look into your and the Member States’ position on these issues and assess the co—legislators’ position. However, let me stress that whenever considering additional references, we must also take into account that other legislative initiatives – in particular the Corporate Sustainability Due Diligence Directive – also comprehensively address this issue, so as to avoid any duplication. I heard also your strong calls to extend the scope of the regulation to other commodities. Let me briefly reiterate the Commission position on this matter and our concerns. The six commodities included in our draft regulation have been proposed taking into account the impact assessment of the initiative. They already cover over 80% of products that contribute to deforestation, and if we propose new products, we need proof that they are really the ones where the Union is contributing the most to the global deforestation. And as I mentioned in my introduction, without that proof, our regulation could be challenged, especially at the international level. And we of course should avoid that by all means. Our proposal therefore sets out a progressive scope that will be updated regularly, according to new deforestation trends and data. And again, the aim of progressive scope is to focus first on the commodities where the EU’s impact on global deforestation and forest degradation is the largest, and the regulatory intervention promises to have the most impact. Some final comments also on financial institutions, which are proposed to be included in the scope of the regulation. The European Union has several laws already in place or under development that address the environmental responsibility of financial institutions. However, the regulatory system functions via entirely different authorities. Therefore I need to make you aware that including them in our proposal would require setting up two completely different tracks for monitoring and enforcement. In the area of sustainable finance in the Sustainable Finance Disclosure Regulation, financial market participants and financial advisers are required to disclose adverse impacts on sustainability matters at entity and financial products levels. The revised Corporate Sustainability Reporting Directive, as well as the broader sustainable finance framework that is being put in place, will significantly improve transparency, and complement and support the legislative initiative on deforestation. So our proposal is forward looking and it is designed to prevent further deforestation. It is an opportunity to level the playing field for the many businesses who are already cleaning up their supply chains. It is a chance to underline the EU’s leadership in addressing urgent global problems – not just deforestation, but forest degradation as well. But we also need to move fast. That matters because we are confident that when others see our system working, they too will follow. In the coming weeks and months, the Commission will work with all of you to deliver an outcome that is ambitious, realistic and easy to put in place. That means protecting the essential elements of this pioneering proposal: coverage of deforestation in all of its forms, both legal and illegal, strict traceability, strong due diligence, good definitions based on international work. And lastly, it means avoiding loopholes wherever possible, and appropriate coverage for the largest traders. The Commission has been supporting the technical discussion from the outset. We stand ready to continue working with you and the Council as an honest broker to find compromises that are agreeable to all. With matching levels of commitment on all sides, I very much hope to see a solid agreement before the end of this year.