It is often difficult or impossible to stop deforestation directly in the place where it is happening. But forest products (timber) and products grown on deforested land (e.g. palm oil, soya, beef) often enter the global supply chain. It may be possible to take legal action against those in the supply chain (people who buy and sell these products) in other countries under the laws of those other countries.
The timber and agricultural supply chains are both major drivers of deforestation. The commodities produced by these industries fuel deforestation and environmental degradation which results in a number of environmental and social impacts. These commodities are known as “forest risk commodities.” They include (but are not limited to) timber products, soy, palm oil, and beef/cattle products. As such, commercial companies have a number of obligations in terms of preventing deforestation and environmental degradation in their activities and supply chains. However, complications in litigation may arise as there are numerous actors along the supply chain that may be liable for deforestation.
Key Resource: Forest 500 Index
Global Canopy Programme has a Forest 500 index which assesses the conduct and policy of 500 of the main “powerbrokers” in the global deforestation.
It also contains country-specific data for the countries involved in producing and trading forest-risk commodities, as well as data on deforestation policies of financial institutions.
This section contains information on how to hold supply chains accountable for deforestation and illegal logging. In some countries, there are laws prohibiting the import of illegally logged timber. If a company breaks these laws, regulatory (civil and criminal) action can be taken.
A general, and highly important, tip to note in this sub-page is that some laws have extraterritorial reach, particularly where a corporation or financial entity is causing, or failing to stop, illegal deforestation in your country, their supply chains or their financial practices. This may be a useful option if you are unable to seek effective redress in your country’s domestic courts.
It is important to note broadly in this chapter that legal action may be more effective if it is combined with campaigns and larger advocacy efforts directed at the people involved in the ultimate financing of and benefit from deforestation. Even where there are no laws against importing timber, campaigns can be helpful to raise awareness about the corporate reputations of the companies that import illegal timber.
US retailers of timber products committed to product changes following allegations of links to Indigenous rights abuses and illegal logging activities in Papua New Guinea
The Global Forest Atlas defines illegal logging as the harvesting of timber against a country’s national logging regulations. This may involve activities that exceed logging quotas, cutting trees in protected areas and/or harvesting protected species. For more information on the wood supply chain, including tools for supply chain traceability, see here.
For more information about supply chains and forest risk commodities, see the below resources.
This Forest Trends information portal contains detailed information regarding a number of companies’ deforestation commitments. Companies are divided by industry, such as palm, soy, timber & pulp and cattle.
Trase is another useful resource for tracking specific supply chains and the countries they originate in. It provides data on the fully supply chain, which will be useful for identifying exporting and importing countries as well as business interests in the supply chain.
If you are looking to bring supply chain accountability claim (where possible), you will generally be using supply chain timber or forest risk commodity legislation (i.e. national or regional law). The EU Timber Regulations, Australian Illegal Logging Prohibition Act 2012 and Regulation, and the U.S Lacey Act are all important supply chain legal frameworks.
In Europe, Australia and other countries, there are laws that make it illegal to import illegally harvested timber (i.e. wood from trees that have been illegally cut down in the country of origin) in that country if imported goods (such as timber) have been produced in a way that is contrary to laws in the country of origin.
The EU Timber Regulation makes it illegal within the European union to supply timber which has been logged in a way that is against the law in the country of origin. Legal actions can be taken when these regulations are broken. However, the existing text of the Regulations will soon be replaced by a new regulation on deforestation-free products.
The EU Timber Regulation, and eventually its successor, can be used as a legal basis for your cause of action, which can be a complaint to a regulatory body. The EUTR includes two important steps that must be met by entities first placing timber on the EU market (otherwise known as the “operator”).
First, operators are prohibited from placing illegally logged timber (or related products) on the market.
In 2017, the Netherlands food and consumer product safety authority (NVWA), which enforces timber regulation, issued a preventative measure against two companies that import teak from Myanmar to the European market. These companies did not comply with EU Timer Regulation. The companies were required to pay a sum of money for every teak shipment they continue to place on the market.
Second, operators must establish an appropriate Due Diligence System to ensure that the timber has not been illegally logged. This step relates to the traceability obligation (to ensure that no unknown or illegal timber enter the supply chain or market).
A Swedish company that imported teak via a Singapore trader was held to have violated the EU Timber Regulations. The Court confirmed that the certificate issued by Myanmar Forest Products Merchants’ Federation’s failed to adequately prove the teak shipment had been legally harvested.
From a legal action standpoint, the EU Timber Regulation is the key legislative basis for any cause of action. Voluntary Partnership Agreements (VPA) cannot be used as a legal cause of action but complement the EUTR and are important to keep in mind. A VPA a trade agreement between the European Union (EU) and a timber-exporting country outside of the EU. A VPA seeks to ensure that any exported timber comes from legally harvested sources. It is also placed to assist the non-EU VPA country to combat illegal logging through improved forestry regulation and management.
FLEGT is an EU initiative to improve forest and supply chain governance. The FLEGT website contains several useful resources aimed at increasing awareness of and reducing illegal logging.
This guide contains extensive information about procuring forest products. It includes a key chapter on legality. You can view a range of countries’ public procurement policies, logging and export bans, and private sector legality requirements.
The logging process may have a direct impact on Indigenous, forest and local communities. Customary land rights, Indigenous People’s rights and other human rights remain dependent on the laws of the timber-exporting country. For more information, see the Forest Peoples Programme’s guide on Human Rights in Timber Supply Chains.
In the United States (US), the Lacey Act bans the illegal trafficking of fish, wildlife and plants. It establishes both civil and criminal penalties. It applies to relevant violations of both US and Native American tribal law.
Key Resource: Lacey Act Fact Sheet
The World Resources Initiative has compiled a detailed fact sheet on the Lacey Act. It also contains a FAQ section for further information.
Further Resource: Forest Legality Initiative
The Forest Legality Initiative has provided a useful breakdown of the Lacey Act, as well as a number of external links for further guidance on the Act.
A 2008 amendment expanded the Lacey Act to include a prohibition on products made from illegally logged woods, such as paper and timber products.
The Lacey Act establishes strict liability (i.e. you do not need to prove fault). Third party certification and lack of knowledge will not discharge liability under the Act.
Key Example: Gibson Guitar Enforcement Action
The US Department of Justice brought an enforcement action under the amended Lacey Act against Gibson Guitar. The company allegedly purchased and imported illegally harvested wood products into the US from Madagascar and India.
Gibson Guitar was required to pay a penalty of $300,000 (USD), pay a community service payment of $50,000 (USD) to the National Fish and Wildlife Foundation, implement a detailed compliance programme and relinquish its civil claims to the wood seized by the Government during the investigation.
The Australian Illegal Logging Prohibition Act and Regulation establishes the import of illegally logged timber as a criminal offence.
Like the EU, the Australian Act and regulations also place due diligence requirements on a company importing or processing certain regulated timber products.
A number of other countries and bodies have introduced legal frameworks for the regulation of timber:
Key Resource: Forest Policy, Trade, and Finance
This 2017 Forest Trends report series sets out the status of timber import regulations in Asia. It is a useful starting point for assessing supply chain regulations across the region. Note that China’s legislation has since been introduced.
Although timber supply chains contribute to global deforestation, there are other supply chains that cause environmental destruction. Many of these supply chains are subject to various regulatory frameworks that may be of use for stopping deforestation.
An important point to note is that much of the legislation outlined in this section is quite new. The laws can be used creatively, but this must be done in a legal way and may not always work. You must check the text of the relevant legislation, gather your evidence in a truthful way and link this evidence to existing claims.
In Brazil, the Brazilian Institute of Environment and Renewable Natural Resources (IBAMA) places bans known as embargoes on slaughterhouses and farms that engage in, or purchase cattle from other businesses that engage in, illegal deforestation or other environmentally degrading activities. This means that farms are required to cease all economic operations.
Example: Operation Carne Fria (Cold Meat)
The IBAMA placed an embargo on JBS, the world’s largest beef producer after an investigation revealed it purchased cattle from 26 embargoed farms.
Several other countries and bodies have introduced legal frameworks for the regulation of forest risk commodity and other potentially socio-environmentally destructive supply chains. For example, conflict minerals, such as gold, supply chains are known to cause environmental degradation.
Conversely, some of these regulatory frameworks may be focused on human rights abuses within supply chains, but nevertheless may be relevant to brining a claim to prevent deforestation or protect the rights of forest communities. For example, where a beef supply chain is exploiting people through modern slavery, it may be more effective to target these human rights abuses under modern slavery legislation, whilst also highlighting the environmental impacts of the supply chain.
Make sure to carefully check the text of the relevant laws or principles and consider when they are applicable from, upon what supply chain actors and the exact content of the duties (particularly whether they place any extraterritorial obligations) they place on supply chain actors, including downstream or upstream suppliers within the supply chain.
Claims against and by lenders, investors and shareholders can be influential in applying pressure to companies that fail to stop deforestation in their supply chains. Deforestation and its environmental impacts pose a number of financial risks to companies and those that invest in them, including (but not limited to):
Example: The Bunge Report
Bunge, a global agribusiness, is the leading soy trader in Piauí. Despite Bunge’s stated commitment to achieve zero-deforestation supply chains between 2020-2025 and take action to establish soy farms in non-forested areas, according to this report it continued to source from producers involved in legal deforestation. Its lenders and creditors have deforestation policies in place.
Lenders and investors have a duty to ensure their financial investments are compliant with national and international laws. The legal basis for this type of claim arises from the fiduciary duties that investment managers owe to the beneficiaries of the fund or the people they advise.
Investors have several fiduciary duties to uphold in their investment decision making. In addition to standard fiduciary duties such as due diligence, the UNEP Finance Initiative has noted that most markets, excluding the US, have incorporated environmental and sustainability concerns into fiduciary duties, including:
Investment managers or companies that fail to follow these duties may be liable to litigation for failing to prevent or mitigate deforestation and forest degradation in their supply chains. If you are a beneficiary of an investment fund that is failing to adhere to its fiduciary duties and/or incorporate or report on ESG issues, you may wish to bring a claim for breach of these duties or under your national (or regional) laws regulating companies and their accounts.
The European Commission has established stricter disclosure and reporting requirements for listed companies, banks and insurance firms about non-financial information, including environmental and social matters, as well as human rights, anti-corruption and bribery and diversity.
The European Commission adopted technical standards for financial market participants’ disclosure of sustainability-related information. These standards fall under the Sustainable Finance Disclosures Regulation. These rules may reduce greenwashing and account for the impact of investments on environmental and social sustainability.
You may also be able to bring a complaint to the relevant authority in your country. If you suspect a company has not made an adequate disclosure or report of its deforestation or biodiversity policies/risks, you can report this to the relevant regulatory authorities in your country.
Lenders and creditors must also comply with the national and international laws regarding deforestation and sustainable supply chain management. Financial regulators and other national regulatory bodies can hold financial institutions liable if they finance deforestation or forest degradation.
Key Example: Operation Soy Sauce
An investigation in the Brazilian Matopiba region found a number of transnational grain trading companies and their supplying farmers to be accountable for illegal deforestation. The companies had cleared native brushland without deforestation licences and in breach of a federal embargo on soy crop cultivation and harvesting on protected land.
Over 5,000 tonnes of soy was seized during the course of the investigation. The companies were issued fines by the Brazilian Institute of the Environment and Renewable Natural Resources (IBAMA).
The IBAMA also fined institutions, such as Santander Bank, that financed the cultivation of these crops in the Amazon rainforest region.
You can investigate the supply chain here.
However, these duties can also be used by shareholders and investors to prevent deforestation in supply chains. If you are an investor, these duties can be especially important tools where a company has committed to reducing deforestation but have not fulfilled these commitments. You may be able to use these duties to pressure companies to take action in their supply chains.
One way to enforce these duties is to raise issues of deforestation and forest degradation in the supply chain at shareholder meetings. You or your organisation may be able to table a resolution to address these issues.
A majority (67%) of shareholders of Proctor & Gamble voted to address supply chain loopholes that contribute to deforestation and forest degradation. Green Century Fund, the mutual fund that put up the resolution for a vote, noted that Proctor & Gamble’s failure to address deforestation in its supply chains ‘was a material financial risk to the company and its shareholders.’
A coalition of investors with over €1.8 trillion in assets have tracked forest cover changes in Malaysia and identify companies involved in the palm oil supply chain involved in deforestation. The investors are demanding companies to disclose supplier lists for forest risk commodities and take action to mitigate and prevent deforestation in their supply chains. The investors’ request is based on their ‘fiduciary duty to lead the transition into a more sustainable society’.
If you are an investor at a company, the threat of removing financial support is a powerful way to hold trading companies in the supply chain accountable for their obligations (whether legal or self-imposed) to reduce and prevent deforestation.
The analysis revealed that British and European banks and financial organisations have provided financial backing (more than $2 billion) through bonds, loans, underwriting and shares to beef companies linked to deforestation in the Amazon.
Some of the financial institutions in the analysis told TBIJ and Unearthed that they may reconsider financial support in the future if there is not sufficient progress on the companies’ management of deforestation in their supply chains.
Apart from the options listed above, which may have extraterritorial reach depending on the context, there may be a specific claim based on ownership of illegally harvested products remaining with the communities that occupied or owned the land. Here, you may be able to bring a case in a foreign court against a transnational company who has contributing to deforestation by purchasing illegally harvested timber or timber products
A group of Cambodian villagers sued Tate & Lyle in the United Kingdom. Tate & Lyle bought sugar emanating from land which had been converted from forest and farming land. The villagers previously living there alleged it had been illegally cleared and occupied land. They argued that they were the legal owners of the land and the sugar which had come from cane grown on it and that the Tate & Lyle had wrongly taken it when they bought it. The villagers alleged that Tate & Lyle had committed the tort of conversion. The case has not been yet resolved by a court.
Litigation against transnational companies can be a useful tool for fighting deforestation in global supply chains. Here you will be arguing for a company’s transnational corporate accountability for the illegal acquisition of products and harms caused by illegal deforestation in their operations. Specifically, you will need to show that the company that purchased the goods (e.g. forest risk commodities, timber or timber products) has violated your ownership of the forest products through the transaction.
You will need to prove that the violations were so extreme that the foreign court has good reason to examine the validity of the laws in your country.
It will support your claim if you bring it in a national court in a country where the company has business connections. For example, bringing the claim in the country where the parent company of the violating company is based, or the country where the illegal timber or beef products ended up.
You will also generally need to show that you have exhausted judicial processes in your country before pursuing this type of claim. You will also need to demonstrate that the Court you are bringing it in has jurisdiction over the case.
For general information generally, see “How Can I Bring a Civil Claim Against a Business in a Foreign Court?” in the A4J Business and Human Rights Module.
At the consumer level of the supply chain, there are systems for forest product certification or ecolabels for food and consumer products that are meant to adhere to sustainability or certification requirements.
A common issue is the “greenwashing” of products or sustainability policies in supply chains, in which companies misrepresent their environmental activities in their campaigns, advertisements or disclaimers, or their certification status or ecolabels, and do not actually meet the standards they are meant to adhere to. It may be possible for consumers to bring legal action or make complaints where companies give misleading information about their deforestation and sustainable supply chain policies and products.
Voluntary Forest Certification Schemes are one example of product certification in supply chains. These schemes have been developed to allow the market, as opposed to government regulation or laws, to improve logging practices and control deforestation and forest degradation.
Two major examples of these schemes include the Forest Stewardship Council and the Programme for the Endorsement of Forest Certification.
Key Resource: Forest Stewardship Council (FSC) GIS Map
The FSC is an important body for global forest management. Its standards include Forest Management Certification, Chain of Custody Certification and Certification Body Accreditation.
The organisation has compiled an interactive map of FSC-certified forests and operations. The map makes it easy to assess data regarding important aspects of the FSC system, such as certified forests, international membership and regional presence.
However, these certifications are not always obtained in good faith and, more generally, they may not be sufficient in preventing illegal deforestation.
Example: IKEA Illegal Logging in Ukraine
An investigation by Earthsight found that Ikea was selling furniture products made from wood that was illegally felled in Ukrainian forests that are home to endangered species. The illegal wood was also FSC-certified. The report called for IKEA to adopt more stringent standards in its supply chains, going beyond those of the FSC.
In addition to these schemes, there are several other ecolabels for wood and paper products, as well as forest risk commodities. Examples of some of these voluntary ecolabelling certification schemes include:
Individuals and organisations have a number of options for reporting or complaining about the actions of Bonscuro members, auditors or actors across the sugarcane supply chain.
If you are concerned about a certification or ecolabel, report the company to the relevant regulatory authority or labelling system.
A company that falsely obtains an ecolabel may be removed from the labelling scheme, liable to breaches of advertising codes or regulations, fines or consumer compensation.
Generally, in order to bring a claim, you must have “standing” (the legal right to bring a claim). See Sub-Page 4 of this Guide for more information on standing.
The person or group who can bring the chain claim depends on the type of action you are pursuing, what laws have been broken and the specific jurisdiction in which you are bringing a claim.
Remember to check the laws in your country (and any producer/consumer countries) to see what type of action can be taken and how to make complaints to relevant bodies.
Generally, government or regulatory bodies will bring the case. You can report to them if you suspect that illegally harvested timber is being imported or that companies are trading forest risk commodities from illegally deforested land.
You will either report or bring the litigation against the company or organisational group who has imported the timber or forest risk commodity.
These actions will be brought by:
You may be able to bring the case as an individual or group. The general rules of standing will apply.
Consumers that rely on certification or ecolabels labels may be able to lodge a complaint if these labels are used in bad faith or falsely obtained.
Depending on the type of action you are taking, the case or complaint could be brought against:
This is a complex subject, and it is recommended that you obtain specialist advice. If you are reporting or pursuing a complaint or litigation against a company in the timber supply chain, you will need to obtain detailed information on the supply chain, including the origin of the timber. In any case, it will help if you can obtain the following information:
It may also help to obtain DNA samples on the timber product.
Key Resource: Traceability Guide for Forest Products
Sustainable Forest Products have released a short guide on traceability, i.e. tracing the origin of the timber materials. It lists a number of methods and documents that will be useful for tracing the origins of raw materials, including tracing purchasers through supply chain purchase contracts.
See their website for further information on traceability and origin.
You may be able to access evidence documents via Freedom of Information Requests or requesting directly from suppliers or purchasers.
For other claims regarding forest risk commodity supply chains, you will likely need the following information:
An Earthsight investigation revealed that beef suppliers to the UK Ministry of Defence in Bahrain received beef from Frigosul. However, the Ministry of Defence’s subcontractor bought cattle from farmers who were facing fines for malpractice, land clearance, falsifying documents and pollution.
Earthsight’s evidence allegedly points to a ‘cattle laundering’ scheme between embargoed and non-embargoed farms within Frigosul’s supply chain. It analysed freedom of information requests, data on sanctioned cattle ranchers, slaughterhouse transactions, and shipping data across the supply chain.
For further information on evidence, including the scope of evidence you will need to provide, see the section on “Evidence and Information” in Sub-Page 11 of this Guide.
For general information on evidence, see the section on “How Can I Prove My Case” in the A4J Going to Court Guide.
The procedural steps will depend on the type of action you will be taking and the jurisdiction in which the claim is being brought. It is important to note that many of these cases may not be classic litigation cases and you may be reporting to a regulatory authority or a quasi-judicial mechanism.
If you are reporting to a regulatory authority or another body, you will need to follow their reporting requirements. It is important to look at these requirements prior to bringing a complaint. Remember to check if there are any time limitations that will be relevant to your complaint.
For an overview of Non-Judicial remedies, see Sub-Page 10 of this guide.
If you are bringing litigation against a company, you will need to check the relevant civil or criminal procedures in your country.
Depending on the type of supply chain action you take, you may be entitled to one or more of the below “remedies”. The outcome of a successful case will depend on your cause of action or complaint:
It is important to remember that the affected individuals and communities should lead on deciding which remedies are appropriate, as opposed to NGOs or lawyers. Consider the community impacts of each possible remedy.
If you want more information:
In addition to all the factors above, there are further practical issues you need to consider.
One set of issues relates to the resources you will need by way of general support for you, and the case, legal and expert advisers, finance, logistics (such as transport), translation and printing.
Another set of issues is on the safety and security of you, witnesses and your information.
For general guidance on these points, see the relevant headings in Sub-Page 11 “Going to Court” of this Guide.