THE European Commission has proposed to delay its incoming deforestation import rules to give more clarity to regulating authorities and exporters from other countries.
The proposal still has to go through the European Parliament and Council for approval. If it is successful, it will give small enterprises an additional 18 months and large companies an additional 12 months.
With Australia’s cattle industry caught up in the legislation, the Federal Government has previously written to the EU asking it to delay the import rules and give more clarity about compliance.
Concerns have been raised about definitions of deforestation as well, with Cattle Australia recently releasing a definition after months of consultation and calling on the EU and other companies to recognise the extensive regulations in Australia and the importance of agriculture.
Within Europe, the pressure has been on the commission to make changes to the deforestation legislation – with companies reliant on other products like soy concerned about it driving up their cost of production at a time of high inflation.
In a statement this week, the European Commission recognised the concerns being raised.
“The guidance presented today will provide additional clarity to companies and enforcing authorities to facilitate the application of the rules, coming on top of the Commission’s continuous support for stakeholders since the law’s adoption,” the statement said.
“At the same time, the Commission recognises that three months ahead of the intended implementation date, several global partners have repeatedly expressed concerns about their state of preparedness, most recently during the United Nations General Assembly week in New York.
“Moreover, the state of preparations amongst stakeholders in Europe is also uneven. While many expect to be ready in time, thanks to intensive preparations, others have expressed concerns.”
Different implementation timeframes for importers, depending on business size
One of the important points in the amendments made today is different timeframe allowances, depending on importing entities’ business size.
The European Commission’s definitions for ‘large’ versus ‘small/medium sized’ enterprises (SMEs) suggest that in the case of importers of Australian beef, supply chains will fall into both categories, but are likely to be heavily skewed towards the ‘large’ group .
In order to qualify as an SME, importing businesses will have to fill two or more of the criteria below:
- 250 FTE employees or less
- Net turnover of less than 50 million Euros ($80m Aussie dollars)
- Balance sheet of less than A$40 million.
In addition to getting 12 months’ grace in terms of implementation, the SME importers will follow certain simplified procedures to comply with the requirements of the law in order to prove that no deforestation activities have taken place.
While the EU claims that 90pc of operators that are importing products (all products, not just red meat) in scope of the EUDR are SMEs, as gauged by the points above, that does not necessarily apply for red meat.
Some very large European food importing and distributing companies account for the majority of Australian beef and sheepmeat imports each year.
One of the largest, Inalca Food & Beverage, has annual turnover of some seven billion Euros, while specialist meat importers like George Abrahams turn over hundreds of millions of Euros each year.
Cattle Australia welcomes proposal
Cattle Australia has welcomed the move from the European Commission.
Cattle Australia CEO Dr Chris Parker
“This is a victory for common sense with the EC recognising that the EUDR needs more work and stronger international cooperation if it is to play a role in protecting both the environment and global food security,” chief executive officer Dr Chris Parker said.
“While the delay is needed at a practical level to provide beef supply chains time to prepare their businesses, the EU must also use this time to clarify compliance regulations and accept the equivalency of Australian definitions of agricultural land and vegetation laws, including 136 pieces of legislation across the State, Territory and Federal Governments, as well as mapping and agricultural land management practices as detailed in the LMC.”
Dr Parker thanked the Federal Government and senate for their work in pressuring the EU.
“CA thanks Minister Farrell, Minister Collins, their departments, Senator Raff Siccone and the Opposition, in particular the efforts of Coalition Senator Matt Canavan, for their support in making the case to the EC and the international community,” he said.
“CA will continue working with the Australian Government to strengthen the advocacy for the Australian LMC to be accepted on the international stage in order to ensure the sustainability and prosperity of our environment.”
NFF calls for renewed engagement from the EU
National Farmers’ Federation president David Jochinke said it was important for the European Parliament to follow the commission swiftly.
“Off the back of increasing international pressure and concern, including from the United States, it is pleasing to see the EU has listened to governments and made a sensible decision to delay implementation,” Mr Jochinke said.
“We understand this will be subject to the EU Parliament and we urge that decision to be made swiftly,” Mr Jochinke said.
The NFF says that although the announcement is a step in the right direction, the EU has shown no inclination to repeal the EUDR or to redefine the troubling definitions of what it considers to be a forest.
NFF also understand that a process to establish the next European Commission is currently underway and seeks renewed Government engagement with cabinet leaders once that process is finalised early next month.
“If this proposal is nothing more than a stay of execution then we should be contemplating other avenues of resolution such as the World Trade Organisation processes, in concert with other jurisdictions,” Mr Jochinke said.