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As always, it's complex. The EUDR is focused on items originating outside the single market. It does not outline specific measures or tooling, outside of mand
by furyg3 3y ago
As always, it's complex. The EUDR is focused on items originating outside the single market. It does not outline specific measures or tooling, outside of mandating things like containers must be accompanied by documentation showing the specific locations of origin (polygons of fields, or GPS points if the fields are small), as well as quantities from those locations and accompanying due diligence reports, that are to (eventually) be submitted to a central repository. If they don't, the products cannot be sold on the market, and companies may be susceptible to fines.
Deforestation is something that is possible to monitor in various ways, including via satellite imagery. But some form of independent risk analysis and ground-truthing will almost certainly be part of any due-diligence process. I'm already seeing companies shy away from some 'legal' fields that are suspiciously close to protected areas that are undergoing / have undergone recent deforestation (which is also a risk, by the way, that farmers are punished for things outside their control). But what I'm saying is that right now companies either a) make their own rules, and own the communication space when they don't achieve them or b) subscribe to voluntary programs (rainforest alliance, fair trade, etc) which also have limited resources and where some conflict of interest can exist. Soon, companies will be legally responsible and this is a large culture shift, basically moving the problem from the CSR/ESG department to the sourcing department, which is where the deals are truly made.
I expect that initial enforcement will be lax as everyone gains experience and adjust to the new situation, and there will (of course) be fraud. This will probably be mostly done in origin (when Nestle says jump a chocolate exporter says 'how high?'). But soon regulatory authorities will have databases of (traceable) products to field level and can correlate... only so much of product X can come from field Y, etc. And, by virtue of companies having to implement traceability to field level, much more can be said about other issues (child labor, wages and premiums, etc). An importer can no longer say "well we can't be totally responsible for everything that happens since we don't have that level of granularity on our products."