Industry associations whose members include Cargill, Bunge, and ADM pushed the EU to soften its anti-deforestation plans eight days after the traders unveiled major climate pledges
Trade groups representing some of the world’s biggest soya traders lobbied the EU to weaken its landmark deforestation policy just days after those same companies signed a public pledge to end commodity-driven deforestation, according to documents obtained by Unearthed. In a letter sent to EU climate commissioner Frans Timmermans in the final days of the COP26 climate conference, three leading agricultural trade associations warned that the EU’s proposed deforestation legislation “would not have the desired impact,” and would cause “major price increases and problems of availability” for grains and animal feed.
If implemented, the EU law would be the strongest of its kind in the world, requiring traders of several commodities grown in deforestation hotspots to demonstrate their product was not produced on deforested land before it could be sold on the European market. The groups which signed the letter represent the cereals, oils, and animal feed industries across Europe. Three of the four biggest exporters of soya from Brazil to the EU – Cargill, Bunge, and ADM – are on the board of and are or have recently been in leadership positions at two of these associations.
Cargill have been repeatedly linked to deforestation in Brazil, including in a series of Unearthed investigations, while Bunge were connected to deforestation in their supply chain by a recent Global Witness report. At COP26 the companies released a statement of purpose that described “a shared commitment to halting forest loss associated with agricultural commodity production and trade” and a promise to deliver a “roadmap for enhanced supply chain action consistent with a 1.5 degrees Celsius pathway” by COP27.
Heidi Hautala, a Green MEP from Finland and a vice-president of the European Parliament, told Unearthed: “It is disappointing, but not surprising to hear that big importers of soy have been lobbying the Commission to weaken deforestation rules. It is still too often the case that companies’ public pronouncements do not match with what happens behind closed doors when it comes to climate action and sustainable business conduct. Business leaders need to accept that making good on climate pledges is part of long term value creation.
“Companies at the forefront in the fight against climate change are shaping their business models to align with the 1.5C goal. The big importers of soya have a lot to do in this regard. Meat production and its vast land use is perhaps the biggest culprit of climate change. Importing soya from Brazil to feed animals at factory farms is hardly in line with ambitious climate goals.” Spokespersons for Cargill, Bunge, and ADM told Unearthed that they were committed to eliminating deforestation from their supply chains, and that the letter to Commissioner Timmermans was intended to offer better ways of achieving that goal.
The Commission’s current proposal called for “actions that will create a two-tier market, one for Europe and one for the other regions of the world,” said a spokesperson for ADM. “We have provided suggested adjustments to the policy that we believe will be more effective in achieving our common goal to end deforestation.”
Documents shared with Unearthed show that the commodity traders’ industry associations have repeatedly argued against measures in the EU’s ambitious deforestation law. These documents range from briefings from an October meeting with the Commission’s department of trade, which were obtained by NGO Earthsight and shared with Unearthed, to private correspondence with French environment minister Barbara Pompili.
They released a detailed public position on the law two weeks ago. Their concerns focus on two key components in the law, both measures intended to ensure imported agricultural products are not linked to deforestation. The first relates to creating a “segregated supply chain” of deforestation-free products for the European market, which they describe as “technically and effectively not feasible at full market scale.”
They suggest that implementing this policy will be costly for European livestock farmers, industries, and consumers, and that smallholder farmers of certain commodities – such as palm oil – in known deforestation hotspots will be negatively impacted. Commodity companies, they say, “might abandon areas of sourcing in order not to have to deal with the increased red-tape and bureaucracy of importing from a high-risk country,” suggesting that soya traders in particular would “lose interest in supplying the EU market,” preferring instead to sell to China, which has lower sustainability standards. In buying commodities from fewer countries, the EU would lose leverage to tackle deforestation in high-risk areas, they claim.
Instead the groups advocate for ‘mass balance,’ which is when suppliers procure at least some of their product from sustainable sources, but that can then be mixed with crop from deforested land. Under mass balance, buyers can only purchase a volume of the commodity that matches the amount that was certifiably sustainable.
Critics call these schemes greenwashing that allow deforestation to continue. Nico Muzi, formerly the Europe Director of Mighty Earth, told Unearthed: “Traders’ solution is mass balance, which is business as usual.” “While most soya coming into Europe is deforestation- and conversion-free, the remaining 10% is the problem. And traders refuse to clean up that remaining 10%. Mass balance is pure greenwashing and a non-solution to the problem of deforestation.”
The second reform the groups take issue with is intended to improve traceability, by requiring traders to provide a geolocation for the farm or plantation where the commodity was grown, thereby establishing whether it came from deforestation.
The groups told Timmermans the EC’s “high requirements” for traceability were laden with “confidentiality concerns” – some farmers may refuse to share this data with the EU – and “commercial sensitivity.”
However, some smallholder farmer groups argue that these EC proposals would benefit their members, and that opposition to geolocation is intended to protect the power of major commodity traders over small-scale farmers.
In a letter seen by Unearthed, groups representing nearly 35,000 smallholder cocoa farmers in the Ivory Coast argue that these measures are “not only about tackling deforestation,” but about “social equity and an opportunity to put in place mechanisms that allow producers, the first actors in the supply chain, to make a decent living from their work.” The letter states their support for a clear traceability requirement that could help clean up the cocoa sector, from facilitating secure electronic payments to simplifying the supply chain and cutting out middlemen.
It also takes issue with the European Cocoa Association for joining other trade associations in criticising the proposed traceability reforms — an allegation which the ECA rejects. “The industry who are against a traceability system involving the geolocation of plots and the identification of each producer,” it reads, “are in reality campaigning for nothing to change.”
“They wish to protect a status quo in which they maintain their control over the sector and safeguard their interests and profits, at the expense of small farmers and forests.” “We know that certain actors are used to speaking on our behalf. We say that no one knows us better than we do and no actor, whoever this may be, can claim to defend our interests and work for our happiness better than we do.”
The trade associations were contacted and directed Unearthed to their recent position paper. The European Cocoa Association also provided its position on the law, and said: “We strongly oppose the claim that we are against traceability systems and geo-mapping. On the contrary, we support any effort to strengthen existing systems as this is an essential condition for achieving a sustainable and modernised cocoa sector.” Bunge said: “Considering the full context of the letter and not selected excerpts, it is clear that the associations’ suggestions are part of an open consultation process that aim to support the design of an effective framework to achieve sustainable transformation of our industry’s processes and global deforestation reduction, not simply focusing on improving EU’s supply chains through a simple segregation of supplies.”
ADM said: “The current proposal requests actions that will create a two-tier market, one for Europe and one for the other regions of the world. We have provided suggested adjustments to the policy that we believe will be more effective in achieving our common goal to end deforestation.”
Cargill said: “We are fully committed to eliminating deforestation as outlined in the Corporate Statement of Purpose, and we are working both as Cargill and with industry associations on the most effective way to do so. To eliminate deforestation, we must transform the food supply chain by implementing mechanisms allowing for protection of native vegetation in a way that is economically viable for farmers.”