I have a number of amendments to address, but before I do, I will take a step back and emphasise what these measures are designed to achieve. Worldwide agricultural expansion drives almost 80% of deforestation. A significant proportion of deforestation is illegal—in some of the world’s most important places, it is closer to 90%. Decades of voluntary action have failed to end our contribution to deforestation through the products that we buy. Our measures will change that. Businesses will be required to ensure that the forest risk commodities that they use are not produced on illegally deforested land. We will consult on the commodities to be included soon, but these could include beef, cocoa, leather, palm oil, rubber, soya and so on.
It has been said in a number of contributions today that we are lagging behind and need to catch up, but it is worth reiterating that we are not only the first country in the world to introduce anything like this legislation but the only country to do so. Of course, we must do much more, but we are doing much more.
No one would pretend that this is our sole, single answer to deforestation, but it is an extraordinarily important part of our answer to tackling global deforestation.
To address one further point before I go into the details of the amendment, the noble Baronesses, Lady Bennett and Lady Hayman, suggested that we reluctantly accepted this amendment on the back of campaigning. It was the Government who initiated and commissioned the GRI report which made this recommendation, and we have been working for many months to get this right. It is not something that just popped in as a last-minute concession in Committee in the other place.
I shall start by speaking to Amendments 264, 264A and 264ZA, tabled by my noble friend Lord Lucas, the noble Baroness, Lady Meacher, and the noble Baroness, Lady Jones of Whitchurch. Given the fundamental role of producer countries in protecting their forests and ecosystems, and the huge proportion of illegal deforestation, our due diligence requirements are based on legality, and I want to explain why. Our experience has shown that we get the best results for both people and the environment when we work as closely as we can with producer country Governments and communities —something which is crucial in this year of COP 26 and COP 15 on biodiversity. Working in partnership with timber-producing countries on implementing the timber regulation and the Forest Law Enforcement, Governance and Trade action plan has contributed to increased natural resource governance in those countries. We want to replicate this approach for forest risk commodities.
In response to comments made by the noble Baronesses, Lady Meacher and Lady Sheehan, adopting these amendments would be a departure from the Government’s approach and would come at a cost. The UK is a big market in global terms, but on our own we are not big enough to cause the shift globally that we need in the way that commodities are grown. We can have an impact but not a huge impact. To have that kind of shift, we need other countries to join us, and we know from the extensive diplomatic outreach that we have already done, and which I have been involved in, that we can only build that coalition using the approach that we have adopted, based on legality. That has been very clear in the discussions that we have had.
We are working hard right now to build a global movement of consumer and producer countries committed to working with us to tackle this problem, and we are making enormous headway. If other countries are beginning to consider doing something similar, that is because of UK leadership. Incidentally, the EU has not yet decided what it is going to do; it has announced an intention to tackle due diligence but has not committed to any particular form. But if Japan, New Zealand and even the USA—we heard—are looking favourably at doing something on due diligence, that is because of the work that the United Kingdom has done. I do not believe it would be happening without the leadership that the UK has shown. There is a tendency to self-flagellate and always see the worst in our country, but there are certain areas—and this is one of them—where I think we can be proud of the leadership that we have shown.
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Changing our approach would grind that progress to a standstill, and while the UK would subsequently be sending a strong signal—I have no doubt about that—a signal is all it would be; and we need radical change. This is the biggest problem in the world, and if we are going to break the link between commodity production and illegal deforestation, which accounts for such a huge proportion of deforestation, signals are not going to be enough. We need action, and the process and method that we have chosen is one that we believe, based on intense outreach, will lead to the action we need, not just the sending of some great virtue signal.
The UK also recognises the vital role that indigenous people and local communities play in protecting forests. We are one of many countries supporting work to secure the rights of indigenous peoples and local communities to forest lands—for example, through our forest governance, markets and climate programme. I would like to reassure the noble Baronesses, Lady Meacher and Lady Jones of Whitchurch, that producer country laws protecting the land rights of indigenous peoples and local communities are in scope of our legislation already, including laws that require obtaining free, prior and informed consent.
Additionally, the new FCDO land facility programme will work with central Government, land agencies and local communities and businesses to promote reform of land governance and administration. This will include tackling barriers to the recognition and protection of communities’ land rights. We are working also with non-governmental organisations through the FCDO’s global “Land: Enhancing Governance for Economic Development” programme to build a global network of paralegals helping indigenous communities and local communities defend and protect their land rights.
As part of the forest governance, markets and climate programme, a grant of £2 million to the Asia Foundation in Indonesia is supporting action to improve sustainable forest and land governance effectively by helping communities assert their ancestral rights over the land they inhabit. I am keen, as colleagues are, to extend this work dramatically. To that end, I recently held a round table with the NGOs working in this space and indigenous groups to understand how we can most effectively intervene to enable indigenous people not just to protect themselves but to assert their land rights in such a way that they can live in perpetuity in the forest that they have protected for generations. It is not a coincidence that 80% of the world’s forests that are intact are lived in by indigenous people. So, we have a lot more work to do there.
On Amendment 265A, tabled by the noble Baroness, Lady Parminter, we are actively supporting and developing tools to drive sustainability in the finance sector, including as part of our response to the Dasgupta review. This includes, for example, the recently launched Taskforce on Nature-related Financial Disclosures, which was endorsed by G7 Finance Ministers. If, as we hope, the Taskforce on Nature-related Financial Disclosures grows in the way that its carbon equivalent has—which a number of noble Lords mentioned in previous debates —we will see real results. We believe that using these
bespoke tools offers the best way of influencing the financial sector in the way we know we must. Adding financial services to the requirement in the Bill could create a lot of additional work for little gain. We have already committed to targeting influential larger businesses through this legislation which have a greater sway over supply chains. Extending these measures to cover financial services could duplicate the requirements that the regulation will already place on larger businesses operating in the UK.
I turn to the remaining amendments tabled by my noble friend Lord Lucas, beginning with Amendment 263. I would like to assure him that the definition of “forest” as set out in paragraph 1, is based on that of the Food and Agriculture Organization, which is:
“land of more than 0.5 hectares with a tree canopy cover of at least 10%”.
This includes forested wetlands and peatlands and sparsely forested savannah. As well as this, once a forest risk commodity is brought into scope, the legislation will apply wherever that commodity is produced.
On Amendment 265, it is important to emphasise that these measures are not designed to give an advantage to products that have been subject to due diligence—that is not their purpose. Their purpose is to ensure that all regulated businesses will be legally required to undertake due diligence. If businesses in scope do not meet the requirements set out in legislation, not only will they not get the advantage, they will be subject to fines and other civil sanctions. This includes, under the prohibition, the import of specified products that have not been produced on land that was legally occupied and used.
I assure the noble Baroness, Lady Sheehan, on her Amendment 264B that the Government recognise that risk mitigation is an important part of an effective due diligence system. Setting the risk mitigation level in this Bill would limit the scope of the legislation to commodities where risk mitigation to a negligible level is possible. Instead, we have chosen to give ourselves the ability to set the risk mitigation level in secondary legislation, so that we are able to change it whenever we need to, over time—for example, in response to technological innovation that allows risk to be reduced to a lower level.
The noble Baroness also raised the question of consultation through Amendment 265ZA. I assure her that the Government will engage extensively with a wide range of stakeholders when developing the annual reporting requirements. This will help ensure that our measures can be as effective as possible in the first instance. The Government will consult publicly to gather views on further details of the due diligence requirements, including on reporting.
Turning to the noble Baroness’s Amendment 265AA, I assure her that the Government are committed to ensuring our regulations are as effective as possible in order to have the greatest impact on illegal deforestation. There may be cases where a business may take all reasonable steps as part of its due diligence exercise but, for reasons beyond its control, may breach the prohibition. This amendment would mean that there would be no defence available for businesses in such a case, which we do not think is proportionate or right. After all, businesses would have to have undertaken due diligence to discover the breach in the first place.
In response to Amendments 260B and 260C from my noble friend Lord Randall of Uxbridge, I reassure him that the regulations that would be subject to his amendment are detailed and technical in nature, so the negative procedure is most appropriate. These regulation-making powers are clearly delimited by the framework set out in primary legislation, and I note that the Delegated Powers and Regulatory Reform Committee did not make any recommendations on altering the powers in our schedule.
My noble friend Lord Randall of Uxbridge also raised, in his Amendments 265B, 265C and 265D, the importance of regular reviews and transparency. He is right, and a number of noble Lords have made the same point. Schedule 16 contains a provision that will require the Secretary of State to conduct a review of the law’s effectiveness every two years once it comes into force and to set out steps he intends to take as a result. That will include a particular focus on the impact of our legislation on deforestation. We can, and will, take action if we are not seeing the results we hope for and expect. For example—and it is a point made by the noble Baroness, Lady Meacher—if a country were to start legalising activities that are currently illegal to get around the new laws we are bringing in, that would clearly be a problem. It would also become apparent in our review process, and we would act. We are committed to doing so.
I also thank my noble friend Lord Randall for tabling Amendment 293B. As I have said many times in this debate, the Bill gives us the power to set long-term legally binding targets on any matter relating to the natural environment, including contributing towards objectives on reducing our global footprint. The UK Government are committed to leaving a lighter footprint on the global environment, as set out in the 25-year plan. We have commissioned the Joint Nature Conservation Committee to develop a global environmental footprint indicator to help us understand the UK’s global footprint. The first phase of this work was published in May this year, with further development to follow later in the summer. The outcomes of this work will help inform our future thinking on the most appropriate approach to drive change in this area.
I know I have not been able to answer all the points raised on the legislative framework in detail today so, in the interests of time, I commit to write to Peers. We are undoubtedly pioneers in these measures, and I appreciate the interest in getting them right. We know we need to continue consulting to get them right, so I welcome further discussions as we develop the detail on the secondary legislation.
These due diligence measures show, as I said earlier, that the UK is a world leader and is serious about tackling illegal deforestation in our supply chains. But I reiterate that deforestation is a global issue that requires global collaboration. We need a shift in the entire global market, if we are to protect the world’s precious forests. As COP 26 co-president, the UK has launched the forest, agriculture and commodity trade dialogue, which I mentioned earlier; we will work with other Governments to discuss and agree an inclusive vision and road map to take actions globally on forests, agriculture and the commodity trade. In the last few
weeks alone, that process has already yielded results beyond what we expected. I thank noble Lords for their amendments on this matter and ask my noble friend Lord Randall to withdraw his.