On Wednesday, the European Commission proposed legislation to restrict the import of deforestation-linked commodities by forcing corporations to verify that their worldwide supply chains are not contributing to forest destruction.
Fines of up to 4 percent of a company’s turnover could be imposed if the companies fail to comply.
The proposed bill establishes mandatory due diligence regulations for importers of soy, cattle, palm oil, wood, cocoa and coffee, as well as some derivative items such as leather, chocolate and furniture, into the European Union nations.
Many European firms do business in countries where environmental abuses are rampant, but there is presently no mandate across the European Union that identify and address environmental hazards in their worldwide supply chains.
They must also show that the commodities were not cultivated on any area that has been deforested or degraded after December 31, 2020, even if it is permissible to produce there under the laws of the producing country.
The Commission intends to pass the law by 2023, giving large enterprises a 12-month grace time and smaller businesses a 24-month grace period to comply.
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