Kuala Lumpur, 14 September 2022 – On 13 September the European Parliament voted on the proposal to ban products in the EU internal market which are linked to deforestation or forest degradation. The Roundtable on Sustainable Palm Oil (RSPO) supports the ambitions of the proposal. However, it also recognises that there are several challenges with the current version that either limit its capacity to solve the deforestation problem itself or may create damaging side effects on vulnerable communities.

RSPO’s primary concern is the possibility that the legislation pushes European companies to regard smallholder farmers as too high risk to include in their supply chain, largely because they are unlikely to meet the requirements of the legislation in time. This could result in smallholder farmers losing access to the EU market, threatening the socio-economic development that sustainable palm oil has brought to local communities in producing countries. The extra financial and technical support proposed by the European Parliament will not be sufficient if the timeline for implementation is not extended to allow companies to include smallholders in their supply chain. The RSPO therefore argues for an implementation time of 18 months.

The RSPO also calls upon those involved in future deliberations to ensure that the requirements for all parties in the supply chain are clear and not overly burdensome. To reduce the burden of obligations as outlined in the Regulation, only the first importer should declare due diligence, whilst at the same time operators that are SMEs should be included in this obligation to prevent the possibility of companies creating loopholes.

RSPO notes that the European Parliament proposes to widen the scope by including derivatives, amongst others. This would complicate the practical implementation of the proposal severely and risks delaying the implementation of the legislation.

RSPO is supportive of strengthening the proposal to ensure it leads to cleaning up the EU supply chain while also effectively helping to minimise global deforestation and avoiding situations where unsustainable palm oil is simply diverted to another market. The RSPO looks forward to engaging with all stakeholders throughout the trilogue negotiations to enhance the Commission’s proposal.

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