Deforestation and Social Risks in the Uk's Commodity
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1 RISKY BUSINESS WORKING TOGETHER TO UNDERSTAND RISKS TO NATURAL CAPITAL DEFORESTATION AND SOCIAL RISKS IN THE UK’S COMMODITY SUPPLY CHAINS Lead authors: Steve Jennings, Richard Sheane and Catherine McCosker This report sets out research commissioned by WWF and the RSPB, carried out by consultancy 3Keel. It calculates the volume and source of UK imports (from 2011-15) of seven key forest-risk commodities: beef and leather, cocoa, palm oil, pulp and paper, rubber, soy, and timber. This data is then used to estimate the location and scale of the land footprint created by UK consumption of these commodities, and explores the risks associated with this footprint. The research uses publicly available data and sets out the assumptions made in estimating the footprint and risks. The findings of this research are summarised and analysed in a separate report, which also includes recommendations on what UK government, companies and citizens can do to address the risks. Risky Business: Understanding the UK’s overseas footprint for deforestation-risk commodities Available at: wwf.org.uk/riskybusiness Reports published October 2017. Contents 1 Executive summary ........................................................................................... 2 2 Introduction ........................................................................................................ 5 2.1 About this document ............................................................................................ 6 3 Overview of method .......................................................................................... 7 3.1 Quantifying the UK’s imports ............................................................................... 7 3.2 Estimating the provenance of the UK’s imports ................................................. 7 3.3 Estimating the footprint of the UK’s imports of commodities ........................... 8 3.4 Risk index .............................................................................................................. 9 3.5 Data challenges..................................................................................................... 9 4 Soy .................................................................................................................... 11 4.1 Overview of production, trade and use ............................................................. 11 4.2 Risk analysis ....................................................................................................... 21 5 Palm oil ............................................................................................................. 23 5.1 Overview of production, trade and use ............................................................. 23 5.2 Risk analysis ....................................................................................................... 33 6 Timber ............................................................................................................... 35 6.1 Overview of production, trade and use ............................................................. 35 6.2 Risk analysis ....................................................................................................... 44 7 Pulp and paper ................................................................................................. 47 7.1 Overview of production, trade and use ............................................................. 47 7.2 Risk analysis ....................................................................................................... 55 8 Beef and leather ............................................................................................... 56 8.1 Overview of production, trade and use ............................................................. 56 8.2 Risk analysis ....................................................................................................... 67 9 Natural rubber .................................................................................................. 72 9.1 Overview of production, trade and use ............................................................. 72 9.2 Risk analysis ....................................................................................................... 81 10 Cocoa ............................................................................................................ 83 10.1 Overview of production, trade and use ............................................................. 83 10.2 Risk analysis ....................................................................................................... 89 11 The UK’s forest-risk commodity land footprint ......................................... 91 12 Deforestation risk index............................................................................... 93 12.1 Overview of deforestation risk index ................................................................. 93 12.2 Country risk rating .............................................................................................. 95 12.3 Commodity risk profiles ..................................................................................... 96 13 Conclusions ................................................................................................ 106 1 1 Executive summary Please note: The research presented in this report underpins policy and business recommendations developed by WWF and RSPB (available separately). As such, this is a technical report that focuses on reporting the data, methods and assumptions used to develop commodity/country risk analyses. Between 1990 and 2015, the world lost 129 million hectares of forest. Deforestation, in the tropics at least, is largely driven by commercial agriculture and forestry, including such industries as soy, palm oil, timber, pulp & paper, beef & leather, rubber, and cocoa. The production of these commodities is an important source of income and employment in many communities, but can also be associated with serious social issues and abuses, including appropriation of land from communities and indigenous groups, and forced and child labour. The UK imports significant quantities of all of the above commodities, and therefore puts people and forests at risk. This study estimates the quantities of these commodities that are imported, their provenance and the land footprint associated with their production. The research presented here estimates that the total land area that was required to supply the UK’s demand for soy, palm oil, pulp & paper, timber, beef & leather, rubber and cocoa was, on average, over 13.6 million hectares per year between 2011 and 2015. This is equivalent to a land area over half the size of the UK, and over six times the size of Wales. Imports of beef and leather have the largest land footprints, followed by timber, soy and palm oil. The UK’s footprint of these commodities is concentrated in a relatively small number of countries across North America, South America, east Asia, southern and western Africa, Australia and the EU (Figure 1). Figure 1: Area of land required to supply the UK with forest-risk commodities from producer countries 2 Commodity imports are rarely traceable back to individual farms or plantations, and so the exact contribution of the UK – via its imports – to deforestation and social problems is unknown. It remains, however, a very real risk. We estimate this risk by rating major exporting countries according to the rate and extent of deforestation, the perceived rule of law and the labour rights conditions within those countries. The land footprint of the UK’s imports of the analysed commodities was then allocated to these risk ratings. Over 44% of the total land area required to satisfy the UK’s demand for these commodities was from countries rated high and very high risk (Figure 2). Looking at the profile of each specific commodity, at least half of the land footprint of the UK’s imports of beef and leather, soy, palm oil, cocoa and rubber was from countries rated as high risk or very high risk. Figure 2: The UK's land footprint for seven imported commodities according to risk category of producer countries Other & Unassigned Low Risk Very High 16% 1% Risk 23% Medium Low Risk 14% High Risk 21% Medium Risk 25% In brief, the risk rating captures the following characteristics of the commodities. Soy: High volumes of soy imports come from Argentina, Brazil and Paraguay – countries that all have high deforestation and social risk. In the EU, 90% of all soy is used to feed livestock.1 There is modest progress on credible, transparent certification with high social and deforestation safeguards (Round Table on Responsible Soy – RTRS), but this accounted for less than 1% of global production in 2015,2 and little supply chain data transparency on certified imports. Greater uptake and reporting of RTRS-certified imports would undoubtedly reduce the risk further. Palm oil: This is imported in high volumes from Indonesia, Malaysia, and to a lesser extent Papua New Guinea – countries that possess high deforestation and social risk. Strong progress on certification (Roundtable on Sustainable Palm Oil – RSPO) partially ameliorates the risk. The UK statement on sustainable production of palm oil in October 2012 and the reporting of certified imports or major imports of palm oil provided both a stimulus for 1 http://www.bothends.org/uploaded_files/document/Soy_Barometer2014_ENG.pdf 2 http://www.responsiblesoy.org/mercado/volumenes-y-productores-certificados/?lang=en 3