Less than one week after the adoption of the European Union (EU) Deforestation Regulation (EUDR) by the EU Parliament to prevent deforestation, the New York State Senate on April 24 passed the New York Tropical Deforestation-Free Procurement Act (NY-TDPA), a bill aimed at protecting tropical rainforests and human rights in other countries through state government relations with contractors.
The domino effect of the EU deforestation-free label has started to impact eight agricultural commodities and their derivatives, notably palm oil, rubber, coffee, wood, cacao and printed paper. New York will be the first state in the United States to implement such a policy, following in the footsteps of the EU.
The NY bill calls for contractors and business owners that have a partnership with the government to take responsibility for their forest-risk commodities, which include soy, beef, palm oil, coffee, cocoa, wood pulp, paper and wood products. The bill aims to ensure their usage of such products do not come from places where deforestation or forest degradation occurred after Jan. 1.
Similar to the EUDR which also set up a Forest Partnership Program to help developing countries improve their forest management, the New York bill also will establish the Supply Chain Transparency Assistance Program, administered by Empire State Development, to help New York-based small and medium-sized businesses develop more ethical and sustainable supply chains, while ensuring they have the tools they need to compete in the national and global marketplace.
The NY draft legislation will also create a transparency system so that small, medium-sized, minority- and women-owned businesses can gain knowledge and achieve ethical supply chain activities to prevent tropical deforestation and human rights abuses. Under the bill, two representatives from indigenous communities in the areas of tropical rainforests will be required, as well as business and civilian representatives, to form a “Stakeholder Advisory Group” to ensure the act is implemented effectively.
Many businesses throughout the US and across the world are already increasingly engaged in efforts to ensure their supply chains are transparent, traceable, ethical and environmentally sound, whether in reaction to consumer pressure or government regulations, or out of an understanding of corporate social responsibility. The NY-TDPA actually only serves to tighten an existing state ban on the use of tropical hardwoods for government projects, and create a new statute requiring state contractors who deal in forest-risk commodities to certify that their products do not drive deforestation.
However, developing countries have been cynical toward both the EUDR and NY-TDPA and seen the policies as a systematic market intervention to edge out of their markets the highly competitive commodities from tropical countries. The policies come at a time when the deforestation rate has come to the lowest level in history, so there are questions about their urgency, relevance and impacts.
The regulations will erect higher trade barriers to imports of commodities from tropical countries as the agricultural commodities will be subject to elaborate customs clearance procedures and to comprehensive due diligence not only on deforestation but also on human rights.
Palm oil, the most affected commodity by the regulations, is considered central and a flagship commodity for three ASEAN members, notably Indonesia, Malaysia and Thailand, which account for about 90 percent of the world’s palm oil output. These countries also are major producers of rubber, wood and cacao.
Therefore, the Council of Palm Oil Producing Countries (CPOPC), which will hold its 11th Ministerial Meeting on May 17 in Kuala Lumpur, should pay serious attention to the escalating global campaign against tropical deforestation as a proxy market intervention of commodities produced in tropical countries, conspicuously palm oil.
(Selengkapnya dapat dibaca di Majalah Sawit Indonesia, Edisi 140)