French retailers failing to comply with due diligence law for soy imports, NGOs say

Thursday, April 11th, 2019

Some of France’s leading soy buying firms – including big brands like Burger King, E.Leclerc and Lidl – are failing to adequately monitor their supply chains in Latin America despite a due diligence law requiring them to do so, a new report from environmental groups has claimed.  

Mighty Earth and French NGOs Nature Environnement and Sherpa have published the report, which comes two years after the country’s Devoir de Vigilance (duty of vigilance) law was introduced, rating due diligence practices of 20 of the largest soy-consuming companies in France.

Carrefour, Danone and Casino were also among those included in the study, which found that several firms had “major gaps in the identification and prevention of risks” in their Latin America supply chains for soy production.

Most of the soy imported by European countries is used as livestock feed for meat and dairy production while. Large supermarket chains that sell these products to consumers also bear responsibility for the environmental and social risks present in soy supply chains under the new law.

The Devoir de Vigilance, passed in February 2017 and seen as a significant step in strengthening corporate action against deforestation, requires large companies in France to identify and mitigate risks to human rights and the environment in their global supply chains.

None of the firms surveyed are conducting satisfactory levels of due diligence when it comes to sourcing soy from countries plagued by high levels of forest loss linked to the commodity, especially Brazil and Paraguay, according the to the report.

French soy imports from Brazil and Paraguay  increased by 48 percent between 2014 and 2018 and were valued at more than €580 million ($650 million)  according to Eurostat data. Only seven of the twenty firms analysed have showed early signs of compliance with the law, and only three – Carrefour, Danone and Bel – displayed somewhat better levels of supply chain monitoring and transparency.

The list includes eight firms that have signed up to the Cerrado Manifesto, an agreement launched in 2017 committing signatories to curb deforestation at the Brazilian Cerrado, a biodiverse savannah that has lost more than half its native vegetation to agricultural expansion, especially soy cultivation.

The study’s results show that such voluntary pledges are often not enough on their own to curtail forest loss, a point repeatedly made by Earthsight and other environmental organisations.

According to the report’s authors, the only companies that showed some level of transparency in their methodology to identify risks were Carrefour, Bel and Casino. Several fail to even mention deforestation risks in their publications, while those that do often omit more systematic analyses of its links to the company’s activities.

The report also found that action plans dedicated to soy are scarce. Some companies include soy in more general anti-deforestation plans, but with few details on the objectives, timetable and concrete actions to be taken. Few companies appear to be drastically changing procurement practices or reducing soybean dependence, for example by blacklisting non-compliant suppliers or developing alternative sources of livestock feed.

In March 2018 Mighty Earth published The Avoidable Crisis showing how soy production for European animal feed, traded by giants Cargill, Bunge and ADM, is driving large-scale deforestation across the Gran Chaco – South America’s largest expanse of forest – in Paraguay and Argentina.

Given the companies’ poor performances, Mighty Earth, Nature Environnement and Sherpa are considering lawsuits as an option to force the firms’ compliance with the law.

Sherpa director Sandra Cossart said: “Since the adoption of the law of due diligence, companies can no longer ignore the risks of human rights and environmental damage in their supply chain. […] In the coming weeks, the companies concerned will have to justify that they have implemented appropriate measures, […] failing of which can expose them to legal action.”

The three organisations argue that replicating the Amazon soy moratorium for other biomes in South America could help prevent further deforestation of the continent’s forests and savannas. The Amazon moratorium is an agreement signed in 2006 by major soy traders that has helped drastically reduce deforestation linked to soy production in the region. The world’s largest soy companies have been reluctant to sign up to similar agreements covering the Cerrado and the Gran Chaco.

Nonetheless, the report’s authors  argue voluntary agreements will only go so far. They have called on French authorities to monitor compliance with the law and push for ambitious EU-level legislation on monitoring and curbing deforestation linked to European imports of soy, palm oil, beef, cocoa and other commodities.

The call lends support to the recent criticism by NGOs of the EU’s focus on voluntary private sector action in its upcoming action plan on deforestation. NGOs – including Earthsight – have argued that this approach is misguided and would fail, and are calling for legally binding regulations to be placed at the heart of the EU’s plan instead.

Image on homepage shows deforestation in Gran Chaco, Paraguay. Courtesy of Jim Wickens / Ecostorm via Mighty Earth.