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1、OECDFAO Business Handbook onDeforestation andDue Diligence inAgricultural Supply ChainsOECDFAO Business Handbook on Deforestation and Due Diligence in Agricultural Supply ChainsThis work is published under the responsibility of the Secretary-General of the OECD and the Director-General of FAO.The op
2、inions expressed and arguments employed herein do not necessarily reflect the official views of the Membercountries of the OECD,or of the Food and Agriculture Organization of the United Nations or its Members.The names and representation of countries,maps and territories used in this joint publicati
3、on follow the practice of FAOand the United Nations.Specific territorial disclaimers applicable to the OECDThis document,as well as any data and map included herein,are without prejudice to the status of or sovereignty overany territory,to the delimitation of international frontiers and boundaries a
4、nd to the name of any territory,city or area.Specific territorial disclaimers applicable to FAOThe designations employed and the presentation of material in the maps do not imply the expression of any opinionwhatsoever on the part of FAO concerning the legal or constitutional status of any country,t
5、erritory or sea area,orconcerning the delimitation of frontiers.Dashed lines on maps represent approximate border lines for which there maynot yet be full agreement.The position of the United Nations on the question of Jerusalem is contained in GeneralAssembly Resolution 181(II)of 29 November 1947,a
6、nd subsequent resolutions of the General Assembly and theSecurity Council concerning this question.Please cite this publication as:OECD/FAO(2023),OECD-FAO Business Handbook on Deforestation and Due Diligence in Agricultural Supply Chains,OECD Publishing,Paris,https:/doi.org/10.1787/c0d4bca7-en.ISBN
7、978-92-64-72532-4(print)ISBN 978-92-64-51308-2(pdf)ISBN 978-92-64-99794-3(HTML)ISBN 978-92-64-79712-3(epub)FAO:ISBN 978-92-5-137953-0(print and pdf)Photo credits:cover STILLFX/Getty Images.Corrigenda to OECD publications may be found on line at:www.oecd.org/about/publishing/corrigenda.htm.OECD/FAO 2
8、023The use of this work,whether digital or print,is governed by the Terms and Conditions to be found at https:/www.oecd.org/termsandconditions.3 OECD-FAO BUSINESS HANDBOOK ON DEFORESTATION AND DUE DILIGENCE IN AGRICULTURAL SUPPLY CHAINS OECD/FAO 2023 Foreword This OECD-FAO Business Handbook on Defor
9、estation and Due Diligence in Agricultural Supply Chains(Handbook)aims to help companies embed considerations on deforestation and forest degradation in corporate due diligence procedures.It is based on the risk-based due diligence framework set out in the OECD-FAO Guidance for Responsible Agricultu
10、ral Supply Chains(OECD-FAO Guidance)and the OECD Due Diligence Guidance for Responsible Business Conduct.This Handbook forms part of the OECD and FAOs work associated with the OECD-FAO Guidance for Responsible Agricultural Supply Chains(OECD-FAO Guidance)(OECD-FAO,20161)and Responsible Business Cond
11、uct(RBC)in Agriculture.The sourcing and trade of many agricultural commodities involves a complex network of business relationships,including producers,farmers,traders,suppliers and other actors that are part of global agrifood supply chains.As global demand for food grows,challenges can arise which
12、 may result in adverse impacts related to agricultural expansion,including into forests and other natural ecosystems.As a result,business decisions made by companies sourcing,processing and selling agricultural commodities and products can cause,contribute to or be directly linked to deforestation o
13、r forest degradation.For almost 15 years,companies and stakeholders in the timber sector have widely applied due diligence approaches in response to regulations(e.g.the European Union Timber Regulation and the United States of America Lacey Act(Lacey,20082)aimed at ensuring the legal origin of timbe
14、r.To facilitate due diligence and reduce risks,timber exporting countries have developed verification or assurance systems to prove and document the legality,sustainability and traceability of wood products.In parallel,the UN and the OECD have developed recommendations and guidelines on how companie
15、s can integrate risk-based due diligence in their business decisions and business relationships to identify and address supply chain risks which have an impact on people and the planet.These efforts have resulted in work on reducing environmental and social risks among agrifood enterprises,in co-ope
16、ration with stakeholders from farmer organisations,civil society and enterprises themselves.However,many enterprises still struggle to understand how the risks of deforestation and forest degradation can manifest in their supply chains and how they as enterprises can take practical measures to ident
17、ify,prevent and address these risks through risk-based due diligence.This Handbook aims to help business address deforestation and forest degradation risks in global agricultural supply chains through risk-based due diligence,including by integrating existing business efforts to trace timber legalit
18、y,where relevant.The Handbook is designed for agrifood enterprises that source or use commodities and products that may be associated with deforestation or forest degradation.While impacts on forests occur upstream in the supply chain,companies downstream often drive the demand for these commodities
19、,which in turn increases deforestation risks.This Handbook has thus been designed for use by enterprises along the entire supply chain,from production to retail.As part of the development of this Handbook,the OECD and FAO convened a Multi-Stakeholder Expert Working Group(MSWG)comprised of stakeholde
20、rs from business,government,civil society,academia and others to support the drafting of this Handbook,including elements and types of information that would be useful to help companies operationalise risk-based due diligence to address deforestation.In addition to feedback from the MSWG,an informal
21、 public consultation was organised from June to July 2022.4 OECD-FAO BUSINESS HANDBOOK ON DEFORESTATION AND DUE DILIGENCE IN AGRICULTURAL SUPPLY CHAINS OECD/FAO 2023 Acknowledgements The OECD and FAO would like to thank all stakeholders who contributed to the development of this Handbook,ranging fro
22、m enterprises,academia,civil society organisations and certification bodies to numerous governments from around the world.Particular thanks go to independent expert Duncan Brack who led the drafting process of this Handbook in co-operation with the OECD and FAO and the Multi-Stakeholder Working Grou
23、p(MSWG).At the OECD Centre for Responsible Business Conduct(OECD RBC Centre),the Handbook was drafted and supervised by Shivani Kannabhiran,Sophia Gnych and Sebastian Weber.The OECD would like to further thank the Working Parties on Responsible Business Conduct(WPRBC)and Agricultural Policies and Ma
24、rkets(APM)for contributing inputs and comments to this Handbook.At the Food and Agriculture Organization of the United Nations(FAO),the Handbook was drafted by Tomislav Ivani,Caroline Merle and Kristin DeValue,under the supervision of Pascal Liu,Tiina Vhnen and Serena Fortuna.Special acknowledgment
25、goes to Astrid Agostini,as well as to colleagues in FAOs Forestry and Markets and Trade Divisions,and offices around the world who provided technical support to this Handbook.This handbook is funded by the German Federal Ministry for Economic Cooperation and Development(BMZ)and supported by the Deut
26、sche Gesellschaft fr Internationale Zusammenarbeit(GIZ)GmbH.Franziska Rau,Advisor at the Initiative for Sustainable Agricultural Supply Chains(INA),GIZ,provided valuable input to the Handbook on behalf of the INA deforestation team.5 OECD-FAO BUSINESS HANDBOOK ON DEFORESTATION AND DUE DILIGENCE IN A
27、GRICULTURAL SUPPLY CHAINS OECD/FAO 2023 Table of contents Foreword 3 Acknowledgements 4 Executive summary 8 Introduction 9 Who is this Handbook for?10 Forests and deforestation 12 Impacts of agricultural production on forests 14 Agricultural commodities and deforestation 15 Global initiatives on def
28、orestation 15 Legislation on deforestation and risk-based due diligence 17 Due diligence in agricultural supply chains 18 The OECD-FAO Guidance due diligence framework 19 Step 1:Establish a policy on deforestation and strong management systems 22 Establish or update sustainability policies on defore
29、station and integrate into enterprise processes 23 Embed policy on deforestation in oversight bodies and management systems and different company functions 24 Incorporate expectations and policies into engagement with suppliers and other business relationships 24 Establish control systems along the
30、supply chain 25 Establish an operational-level grievance mechanism,in consultation and collaboration with relevant stakeholders 25 Step 2:Identify,assess and prioritise deforestation risks in the supply chain 27 Map the supply chain by identifying the various actors involved,including immediate supp
31、liers and business partners,and the sites of operation 30 Assess risks of deforestation associated with the products,goods,services,suppliers and sourcing areas 34 Risk assessments:what types are there and who does what?35 Step 3:Design and implement a strategy to respond to deforestation 38 Define
32、and adopt a risk management plan 40 6 OECD-FAO BUSINESS HANDBOOK ON DEFORESTATION AND DUE DILIGENCE IN AGRICULTURAL SUPPLY CHAINS OECD/FAO 2023 Respond to adverse impacts implement the risk management plan,monitor and track performance 42 Responding to deforestation impacts and promoting forest-posi
33、tive outcomes 43 Step 4:Verify due diligence of deforestation 46 Track the implementation and effectiveness of due diligence activities 47 Step 5:Report on due diligence to address deforestation 49 Public Reporting 50 Remediation for adverse impacts 52 Glossary 54 Annex A.Resources 56 References 64
34、Notes 66 FIGURES Figure 1.Deforestation,2000-2018 13 Figure 2.Main deforestation drivers across the worlds regions 14 Figure 3.The OECD-FAO Guidance due diligence framework 19 Figure 4.Addressing adverse impacts based on examples of relationships to the impact 20 Figure 5.Identify,assess and priorit
35、ise deforestation risks in the supply chain 28 Figure 6.Design and implement a strategy to respond to deforestation 39 TABLES Table 1.Examples of international initiatives on deforestation 15 Table A A.1.Primary datasets 57 Table A A.2.Processed datasets 57 Table A A.3.Data access platforms/tools 58
36、 Table A A.4.Data processing platforms/tools 59 Table A A.5.Supply chain mapping tools 59 Table A A.6.Voluntary sustainability standards and certification schemes 61 Table A A.7.National sustainability standards and certification schemes 62 Table A A.8.Other relevant resources 62 7 OECD-FAO BUSINESS
37、 HANDBOOK ON DEFORESTATION AND DUE DILIGENCE IN AGRICULTURAL SUPPLY CHAINS OECD/FAO 2023 https:/ FAO on:https:/ OECD Publications on:https:/ OECD-FAO BUSINESS HANDBOOK ON DEFORESTATION AND DUE DILIGENCE IN AGRICULTURAL SUPPLY CHAINS OECD/FAO 2023 Executive summary The OECD-FAO Guidance for Responsib
38、le Agricultural Supply Chains(OECD-FAO Guidance)helps enterprises in the agricultural sector observe existing international standards for responsible business conduct in agricultural supply chains.The OECD-FAO Guidance is an example of the growing recognition of how risk-based due diligence can help
39、 enterprises identify and respond to risks in their operations and global supply chains.In addition to due diligence actions taken by enterprises,several governments have adopted or plan to introduce,mandatory obligations of due diligence in global supply chains,including to address deforestation co
40、ncerns.Business decisions made by companies sourcing,processing and selling agricultural commodities or food products may have an impact on forests,which can include deforestation.As a salient risk related to sourcing,deforestation can also have larger impacts on ecosystems and the people depending
41、on them.However,many enterprises struggle to understand how risks of deforestation and forest degradation can manifest in their supply chains,including on practical measures they can take to identify,prevent and address these risks through risk-based due diligence.This Handbook was developed by OECD
42、 and FAO to help companies embed considerations on deforestation and forest degradation into their responsible sourcing and corporate due diligence efforts.It is informed by FAOs extensive work and experience on halting deforestation and forest degradation and promoting responsible governance of ten
43、ure.The handbook builds on the leading international,government-backed standards on supply chain due diligence and responsible business conduct:the OECD Guidelines for Multinational Enterprises on Responsible Business Conduct and the associated due diligence framework introduced in the OECD-FAO Guid
44、ance for Responsible Agricultural Supply Chains and the OECD Due Diligence Guidance for Responsible Business Conduct.This Handbook demonstrates how the OECD-FAO Guidance can be applied to address deforestation by contextualising existing recommendations and helping users understand how to proactivel
45、y introduce due diligence and reduce the potential risk of deforestation taking place in their supply chains.9 OECD-FAO BUSINESS HANDBOOK ON DEFORESTATION AND DUE DILIGENCE IN AGRICULTURAL SUPPLY CHAINS OECD/FAO 2023 This chapter introduces the Handbook,outlines who it has been developed for and pro
46、vides key definitions.Introduction 10 OECD-FAO BUSINESS HANDBOOK ON DEFORESTATION AND DUE DILIGENCE IN AGRICULTURAL SUPPLY CHAINS OECD/FAO 2023 This OECD-FAO Business Handbook on Deforestation and Due Diligence in Agricultural Supply Chains(Handbook)aims to help companies embed considerations on def
47、orestation and forest degradation in corporate due diligence procedures.It builds on the risk-based due diligence framework set out in the OECD-FAO Guidance and the OECD Due Diligence Guidance for Responsible Business Conduct.The Handbook provides background information,resources and practical actio
48、ns that enterprises can take when implementing each of the steps of risk-based due diligence in line with the OECD-FAO Guidance.It draws on current corporate practice,including existing tools and resources,data and metrics that are available to support enterprises when they consider how best to iden
49、tify and avoid deforestation and forest degradation.Key definitions Deforestation:The FAO defines deforestation as the conversion of forest to other land use independently whether human-induced or not(FAO,20203).Forest degradation:There is no FAO or other standard definition for forest degradation;t
50、he FAO encourages countries to define it themselves.The definition included in the Accountability Framework proposed by a group of international NGOs,which applies to other natural ecosystems as well as forests,is:“Changes within a natural ecosystem that significantly and negatively affect its speci
51、es composition,structure,and/or function and reduce the ecosystems capacity to supply products,support biodiversity,and/or deliver ecosystem services”(Accountability Framework,20204).For a full list of definitions,see the Glossary.Who is this Handbook for?The Handbook is designed for enterprises in
52、agrifood supply chains which source or use commodities and products that may be associated with deforestation or forest degradation.While the Handbook is primarily concerned with the impacts of land use,planting and harvesting on forests,it can be used by enterprises along the entire supply chain,fr
53、om production to retail.Increasingly,companies are introducing risk-based due diligence approaches in their policies and procedures to help guide their responsible sourcing efforts and promote responsible business conduct.Many small-and medium-sized enterprises(SMEs)struggle to address trade and mar
54、ket requirements linked to responsible business conduct,including deforestation.To help smaller enterprises address deforestation,each chapter of this Handbook features a box with suggestions on how SMEs can introduce risk-based due diligence in line with the OECD-FAO Guidance.The Handbook can also
55、be a resource for financial institutions as they assess and evaluate potential business partners policies and activities relevant to due diligence expectations and potential deforestation.Annex A of the Handbook lists resources related to deforestation.11 OECD-FAO BUSINESS HANDBOOK ON DEFORESTATION
56、AND DUE DILIGENCE IN AGRICULTURAL SUPPLY CHAINS OECD/FAO 2023 Forests,natural ecosystems and conversion The due diligence framework described in this Handbook applies both to deforestation and forest degradation.For ease of reading,the term deforestation is here used to apply to both.Forests are not
57、 the only natural ecosystem that may be adversely affected by conversion to agricultural production.Savannah,grasslands,peatlands and wetlands,among others,can also be at risk when considering land use.Many due diligence policies adopted by enterprises now cover the conversion of these ecosystems al
58、ongside forests,and incorporate references to,for example,the protection of high conservation value and high carbon stock areas.While this Handbook focuses only on forests,the due diligence steps it describes are generally also applicable to the conversion of other natural ecosystems.A full list of
59、definitions used in this Handbook is included in the Glossary.12 OECD-FAO BUSINESS HANDBOOK ON DEFORESTATION AND DUE DILIGENCE IN AGRICULTURAL SUPPLY CHAINS OECD/FAO 2023 This chapter introduces deforestation and forest degradation in the context of global supply chains.It presents the magnitude of
60、the problem and its origins in commodity production and sourcing,along with the development challenges that can contribute to deforestation in different contexts.Forests and deforestation 13 OECD-FAO BUSINESS HANDBOOK ON DEFORESTATION AND DUE DILIGENCE IN AGRICULTURAL SUPPLY CHAINS OECD/FAO 2023 Hea
61、lthy forests are vital to the three pillars of sustainable development:economic,social and environmental.Continued business growth and jobs in the agricultural sector,and global food security,depend on forests.Forest ecosystems are the largest terrestrial carbon sink,critical to meeting climate goal
62、s;they also regulate rainfall and water cycles and help to maintain stable local environments,which are essential to supporting livelihoods and sustainable agricultural production.Approximately 1.6 billion people depend on forests for their livelihood,including about 70 million Indigenous Peoples.Fo
63、rests contain more than 60 000 different tree species and provide habitats for a large majority of animal species.(FAO,20203;FAO and UNEP,20205).In 2020,31%of the worlds land area 4 billion hectares was covered by forest.Since 1990 an estimated 420 million hectares of forests have been lost through
64、deforestation(FAO,20203).From 2015 to 2020,the rate of deforestation was estimated at 10 million hectares per year,though afforestation and reforestation has supported forest recovery in some parts of the world(FAO,20203).Loss of forests,particularly natural forest,was especially high in the tropics
65、 over this period(see Figure 1).Forest degradation is a result of unsustainable logging operations,wood fuel extraction,shifting agriculture,grazing or fires and affects forest ecosystems in tropical,temperate and boreal biomes alike.In all these cases the forest retains the capacity to regrow,but t
66、hese activities typically reduce forest cover faster than it naturally recovers and affect the diversity of species hosted in those forests(FAO and UNEP,20205).While forest degradation is difficult to measure,studies suggest that it accounts for about one-third of the overall impact of tree cover lo
67、ss,measured in terms of carbon emissions(Federici,20156).Figure 1.Deforestation,2000-2018 Source:FAO(20227),FRA 2020 Remote Sensing Survey,https:/www.fao.org/forest-resources-assessment/remote-sensing/fra-2020-remote-sensing-survey/en/14 OECD-FAO BUSINESS HANDBOOK ON DEFORESTATION AND DUE DILIGENCE
68、IN AGRICULTURAL SUPPLY CHAINS OECD/FAO 2023 Impacts of agricultural production on forests Agricultural production can both drive deforestation and be negatively impacted by deforestation.FAOs global Remote Sensing Survey of forest resources estimates that from 2000-18 nearly 90%of global deforestati
69、on was a result of agricultural expansion,including 52%from cropland expansion and 38%from livestock grazing(FAO,20218).Figure 2 illustrates the main drivers of deforestation by region.Similarly,deforestation,coupled with climate change,can also greatly impact agricultural production,which can in tu
70、rn have significant impacts on food availability and demand.1 Figure 2.Main deforestation drivers across the worlds regions Drivers of deforestation by region,2000-18(in Mha)Source:FAO(20227),FRA 2020 Remote Sensing Survey,https:/www.fao.org/forest-resources-assessment/remote-sensing/fra-2020-remote
71、-sensing-survey/en/A range of factors underpin the link between deforestation and agricultural production(Geist,20029).While growth and development have raised millions out of poverty,they have also increased demand for food and led to changes in lifestyles and diets as people consume lower volumes
72、of staple foods and more meat,dairy products,fruit and vegetables,and processed foods.These trends are projected to continue(OECD-FAO,202110)as the global population is anticipated to reach 9.7 billion people by 2050(UN,201911).Taking dietary changes and other factors into account,this implies a gro
73、wth in food demand of 35-56%(Van Dijk,202112),potentially increasing demand for land and pressure on forests.The liberalisation of trade and business has encouraged the growth of global supply chains;an estimated onethird of agri-food exports are now traded within global value chains(FAO,202213).Whi
74、le the act of deforestation takes place at specific locations upstream in the supply chain,downstream firms and suppliers play a critical role in ensuring that the risk of deforestation is addressed within the commodity supply chains from which they source.It should be noted that a significant propo
75、rtion of the clearance of forests for agriculture has been illegal.A comprehensive survey published in 2021 estimated that 69%of the conversion of tropical forests for agriculture that had taken place between 2013 and 2019 had been conducted in violation of national laws and regulations(Forest Trend
76、s,202114).Illegal logging(for timber)remains a serious concern in many countries,with an estimated value in international trade at between USD 50-150 billion a year(World Bank,201915).4.2 14.9 0.5 37.7 28.3 0.3 7.4 47.7 0.7 7.9 2.4 0.5 3.6 1.4 1.0 1.5 3.1 0.1 0.4 2.9 0.8 1.3 1.3 0.0 1.2 0.9 0.3 0.1
77、0.7-055404550North and Central AmericaSouth AmericaEuropeAfricaAsiaOceaniaCropland expansion Livestock grazingUrban and infrastructure developmentOther driversDam construction and change in water courses 15 OECD-FAO BUSINESS HANDBOOK ON DEFORESTATION AND DUE DILIGENCE IN AGRICULTURAL SUPP
78、LY CHAINS OECD/FAO 2023 Agricultural commodities and deforestation Based on studies of the drivers discussed above,deforestation linked to agriculture has often been associated with a select group of commodities(Pendrill,201916).However,business,demand and trade can oscillate over time.Neither suppl
79、y nor demand is fixed,and growth in demand for new agricultural products can drive deforestation in other contexts,including in temperate climates.International attention is commonly given to the impacts on forests of certain commodities which have seen increased production and export over recent de
80、cades,often dependent on expanding land for agricultural use by reducing forest cover.Commodities cultivated or grown in an area after it is deforested are considered as“direct drivers”of deforestation.It is the manner in which these commodities are produced,not the commodities themselves,however,th
81、at links them to deforestation.A small group of commodities have received wider attention because recently deforested lands are often used for their production.These include beef,dairy products and leather from cattle,soybeans,palm oil,cocoa,coffee,wood and rubber.Consequently,public and private res
82、ponses and multi-stakeholder initiatives have tended to adopt commodity-specific approaches in their efforts towards more sustainable production models,respecting forests.Examples include the Amazon Soy Moratorium signed in 2006 where 90%of companies in the Brazilian soy market committed to avoiding
83、 the purchase of soy grown on recently deforested areas in the Brazilian Amazon.Likewise,the governments of Cte dIvoire and Ghana and 35 leading cocoa and chocolate companies have joined together in the Forest and Cocoa Initiative to eliminate cocoa related deforestation and restore forest areas.Glo
84、bal initiatives on deforestation Many efforts are being made to decouple commodity production from deforestation.While meeting international targets associated with deforestation,particularly those adopted before 2020(see Table 1)have proved challenging,they have stimulated action by a wide range of
85、 companies producing,trading and using commodities associated with deforestation.Commitments to eliminate or reduce deforestation in corporate supply chains have become common in companies trading in and using timber,palm oil and cocoa;they are less common for other commodities.An analysis of 675 co
86、mpanies in 2021 disclosing forest risk in their supply chains to CDP found that 66%possessed a policy related to deforestation,while 38%had a general or commodity-specific company-wide no-deforestation/conversion policy(CDP/AFI,202217).Table 1 provides examples of the wide range of international ini
87、tiatives on deforestation associated with agricultural and timber supply chains since 2010;2 these include initiatives such as soft law,SDGs,private sector initiatives,as well as multi-stakeholder initiatives.Table 1.Examples of international initiatives on deforestation Date Organisation/Initiative
88、 Commitments 2008 through 2015 UN Framework Convention on Climate Change REDD,then REDD+,Framework Guide activities in the forest sector that reduce emissions from deforestation and forest degradation,as well as the sustainable management of forests and the conservation and enhancement of forest car
89、bon stocks in developing countries.2010 Consumer Goods Forum(global industry network of retailers,manufacturers and service providers)Zero net deforestation in memberships supply chains by 2020 in key commodities:soy,palm oil,timber/paper and pulp,beef.2012 Tropical Forest Alliance(global partnershi
90、p of governments,companies,civil society,Indigenous Peoples,local communities,UN agencies)Reduction in tropical deforestation associated with the sourcing of commodities such as palm oil,soy,cattle products and paper and pulp.Promotes and supports 16 OECD-FAO BUSINESS HANDBOOK ON DEFORESTATION AND D
91、UE DILIGENCE IN AGRICULTURAL SUPPLY CHAINS OECD/FAO 2023 Date Organisation/Initiative Commitments regional multi-stakeholder initiatives.2014 New York Declaration on Forests(signatories now include over 200 national and local governments,companies,and civil society,community and Indigenous Peoples o
92、rganisations)At least halve the rate of loss of natural forests globally by 2020,strive to end natural forest loss by 2030;support private-sector goal of eliminating deforestation from production of agricultural commodities by no later than 2020;significantly reduce deforestation derived from other
93、economic sectors by 2020.2015 UN Sustainable Development Goals SDG 15.2:“By 2020,promote the implementation of sustainable management of all types of forests,halt deforestation,restore degraded forests and substantially increase afforestation and reforestation globally.”(Also SDG 12.6:“Encourage com
94、panies,especially large and transnational companies,to adopt sustainable practices and to integrate sustainability information into their reporting cycle.”)2020 Consumer Goods Forum Forest-Positive Coalition of Action Coalition of major companies aiming to support deforestation-and conversion-free e
95、nterprises through multi-stakeholder,integrated land use initiatives in key production landscapes.Commodity-specific roadmaps for action for soy,palm oil,cattle and pulp and paper.2021 Glasgow Leaders Declaration on Forests and Land Use(signed by 141 countries at the 26th UN Climate Change Conferenc
96、e COP26)“Work collectively to halt and reverse forest loss and land degradation by 2030 while delivering sustainable development and promoting an inclusive rural transformation”.Specific commitments include to:“facilitate trade and development policies,internationally and domestically,that promote s
97、ustainable development,and sustainable commodity production and consumption,that work to countries mutual benefit,and that do not drive deforestation and land degradation”.2021 Forest,Agriculture and Commodity Trade(FACT)Dialogue Roadmap for Action(statement by 27 governments and EU(representing lar
98、gest producers and consumers of internationally traded agricultural commodities)at COP26)Aims to promote sustainable development and trade of agricultural commodities while protecting and sustainably managing forests and other critical ecosystems;Includes indicative actions on trade and market devel
99、opment;smallholder support;traceability and transparency;and research,development and innovation.A number of consumer countries have seen the emergence of initiatives aimed at ensuring that the entire national market is supplied with certified sustainable commodities particularly for palm oil and co
100、coa by a target date;sometimes these voluntary initiatives include governments too.Similar alliances have developed in several producer countries,such as the Zero-Deforestation Agreement on Palm Oil in Colombia.A number of producer countries have also developed their own national standards and certi
101、fication schemes for specific commodities;examples include the Indonesian and Malaysian Sustainable Palm Oil standards and the African Standard for Sustainable Cocoa.Recent years have also seen the emergence and uptake of commodity-focused multi-stakeholder roundtables and engagement platforms for c
102、ollective action such as the Africa Sustainable Commodities Initiative and voluntary sustainability standards and associated certification schemes(see Annex A).Several financial institutions have adopted commitments not to provide finance for activities associated with deforestation.3 17 OECD-FAO BU
103、SINESS HANDBOOK ON DEFORESTATION AND DUE DILIGENCE IN AGRICULTURAL SUPPLY CHAINS OECD/FAO 2023 Legislation on deforestation and risk-based due diligence In response to rising concerns over climate change and deforestation,some governments are introducing obligations for enterprises to conduct due di
104、ligence to address a range of risks in their operations and supply chains,including deforestation.These obligations complement the initiatives mentioned above and include:General corporate obligations of due diligence,applying to an enterprises entire operations and supply chains,not specific to any
105、 sector or product,and not linked to placing products on the market.Requirement for due diligence to be undertaken with regard to particular criteria(e.g.legal production,or zero-deforestation)before specified products can be placed on the market,imported or exported.The implementation of risk-based
106、 due diligence as described in this Handbook,according to the OECD-FAO Guidance may support enterprises to meet such obligations.4 18 OECD-FAO BUSINESS HANDBOOK ON DEFORESTATION AND DUE DILIGENCE IN AGRICULTURAL SUPPLY CHAINS OECD/FAO 2023 This chapter introduces the overall concept of risk-based du
107、e diligence as set out by the OECD-FAO Guidance for Responsible Agricultural Supply Chains.Due diligence in agricultural supply chains 19 OECD-FAO BUSINESS HANDBOOK ON DEFORESTATION AND DUE DILIGENCE IN AGRICULTURAL SUPPLY CHAINS OECD/FAO 2023 “Due diligence”is understood as the process through whic
108、h enterprises identify,prevent,mitigate and account for how they address the actual and potential adverse impacts of their own operations,their supply chain and other business relationships.This is the approach to due diligence recommended by the OECD-FAO Guidance for Responsible Agricultural Supply
109、 Chains(OECD-FAO Guidance)and the cross-sectoral Due Diligence Guidance for Responsible Business Conduct(OECD,2018,p.1518).Due diligence in this context is thus an integral part of business decision-making and risk management.The due diligence framework of the OECD-FAO Guidance can be used by all en
110、terprises operating along agricultural supply chains,from upstream production to downstream retail.The OECD-FAO Guidance due diligence framework The risk-based due diligence framework in the OECD-FAO Guidance describes the steps an enterprise can take to identify,prevent and address risks in their o
111、perations,supply chains and business relationships.Figure 3 illustrates the five-step process,as well as integrating the Remediation of Adverse Impacts,which forms a sixth step within the cross-sectoral Due Diligence Guidance for Responsible Business Conduct.The protection of forests and the avoidan
112、ce of deforestation are mentioned on several occasions in the OECD-FAO Guidance but are not discussed in detail.As such,this Handbook supplements the OECD-FAO Guidance by using risk-based due diligence to identify and address deforestation risks in global agricultural supply chains.Figure 3.The OECD
113、-FAO Guidance due diligence framework Source:Adapted from(OECD-FAO,20161)and the(OECD,201818).20 OECD-FAO BUSINESS HANDBOOK ON DEFORESTATION AND DUE DILIGENCE IN AGRICULTURAL SUPPLY CHAINS OECD/FAO 2023 What is meant by“risk”for due diligence For many enterprises,the term“risk”means primarily risks
114、to the enterprise financial risk,market risk,operational risk,reputational risk,etc.In the field of responsible business conduct,risk refers to the severity and likelihood of adverse impacts on people,the environment and society that enterprises cause,contribute to,or to which they are directly link
115、ed through business operations and sourcing practices.In other words,it is an outward-facing approach to risk.It is important to note that there are many potential underlying drivers of deforestation.Factors such as poverty,human rights abuses,the rights,resources and capacities of local communities
116、 and Indigenous Peoples,the uncertain status of land and forest tenure rights,corruption and weaknesses in governance and law enforcement may all act as root causes for deforestation risks.Defining the involvement of an enterprise with regard to adverse impacts An enterprise can either cause adverse
117、 impacts,contribute to them,or be directly linked to them through its operations,products and services by a business relationship(see Figure 4).This understanding of the relationship of the enterprise to deforestation,or the risk of deforestation,is important,as it guides an enterprise on what it is
118、 expected to do in response to the impact.Depending on its relationship to the impact,taking action to respond to deforestation or deforestation risks could mean taking steps to directly remedy the impact,cease activities causing the impact or prevent the potential impact,or use leverage to influenc
119、e the entity causing the impact.Figure 4.Addressing adverse impacts based on examples of relationships to the impact Source:Adapted from OECD(201818),OECD Due Diligence Guidance for Responsible Business Conduct and OECD-FAO(20161),OECD-FAO Guidance on Responsible Agricultural Supply Chains,Box 1.2.2
120、1 OECD-FAO BUSINESS HANDBOOK ON DEFORESTATION AND DUE DILIGENCE IN AGRICULTURAL SUPPLY CHAINS OECD/FAO 2023 An enterprise causes an adverse impact if the enterprises actions by themselves result in the impact.For example,if an agricultural enterprise produces crops on land that it has cleared of for
121、est,it is understood to cause that impact.Impacts can also result from inaction(omission).An enterprise contributes to an adverse impact if its activities,in combination with the activities of other entities,result in the impact,or if the enterprise causes,facilitates or incentivises another entity
122、to cause an adverse impact.Contribution must be substantial,meaning that this does not include minor or trivial contributions.For example,an agricultural company may be contributing if it acquires a land concession for development of a plantation,knowing that the land will need to be cleared of fore
123、sts in order to grant the concession.An enterprise is directly linked to an adverse impact when the impact is linked to its operations,products or services by a business relationship.An enterprises business relationships include entities in the supply chain that are directly linked with its operatio
124、ns,products and services.Business relationships include relationships beyond contractual,first tier or immediate relationships.This could include for example a producer,processor or trader in the supply chain from which the enterprises receives its products or raw materials.22 OECD-FAO BUSINESS HAND
125、BOOK ON DEFORESTATION AND DUE DILIGENCE IN AGRICULTURAL SUPPLY CHAINS OECD/FAO 2023 Step 1 of the OECD-FAO Guidance is about establishing strong corporate management systems and policies,which in turn support all the subsequent steps of the OECD-FAO due diligence framework.This chapter outlines how
126、Step 1 can help support companies deforestation commitments.Step 1:Establish a policy on deforestation and strong management systems 23 OECD-FAO BUSINESS HANDBOOK ON DEFORESTATION AND DUE DILIGENCE IN AGRICULTURAL SUPPLY CHAINS OECD/FAO 2023 Strategic questions for enterprises What level of ambition
127、 do we as a company have on deforestation?What is our definition of forests?Have we considered a deforestation cut-off date in our sourcing practices(see Glossary for definitions)?Does our policy meet or exceed legislation regarding forest protection in our home country,country of production and key
128、 export markets?Does our policy meet expectations from investors,legal advisors,local communities and civil society?Do senior executives in the company(including the Board)understand:(1)the commitments on deforestation the company has;(2)the ramifications of choosing a particular policy;(3)the syste
129、ms required to implement such a policy(e.g.revising existing contracts and relationships,budget and personnel implications);and(4)the costs of not addressing deforestation for the company(direct or indirect impacts on production and revenues),and globally(in terms of climate change and biodiversity
130、loss and the associated medium-and long-term insecurity of supply of agricultural commodities)?Has a lead focal point in the company been appointed to co-ordinate and manage the implementation of the due diligence approach to responsible sourcing(including on deforestation commitments),together with
131、 other company departments(e.g.legal,public/corporate affairs,procurement,marketing)?Is there adequate communication between them?Which suppliers and other stakeholders should we engage with in developing our commitments against deforestation?Do we have vulnerable producers,such as smallholders,in o
132、ur supply chains that require specific support with compliance with the companys policy and regulatory requirements?Are company key performance indicators(KPIs)linked to achieving deforestation-related due diligence objectives part of our management systems?Which external due diligence systems or pr
133、ocesses are we using to support our internal due diligence management(e.g.OECD-FAO Guidance,industry codes,commodity certification systems/schemes,audit protocols,etc.)?Establish or update sustainability policies on deforestation and integrate into enterprise processes The following key elements hav
134、e been identified as important when developing a policy on deforestation:The policy applies across the entire company(including its subsidiaries)and its supply chains and ensures that all relevant departments work together to deliver a common commitment towards eliminating deforestation through resp
135、onsible production and sourcing practices.It sets measurable targets for reducing deforestation and the risk of deforestation acceptable in the enterprises operations,supply chains and business relationships.For example,the objective can be to achieve zero deforestation,or zero illegal deforestation
136、,or a reduction in deforestation levels to be achieved by a specified date.The definition of the objective includes clear time-bound targets and cut-off dates and definitions of terms such as“forest”,“deforestation”and“forest degradation”(see Glossary for definitions).24 OECD-FAO BUSINESS HANDBOOK O
137、N DEFORESTATION AND DUE DILIGENCE IN AGRICULTURAL SUPPLY CHAINS OECD/FAO 2023 Targets and definitions can often be derived from collective commitments the enterprise has entered into,international and national agreements and commitments,national legislation,industry association guidelines,the expect
138、ations of investors,or voluntary sustainability standards in certification systems(See Annex A for further resources).The policy is risk-based,meaning it addresses the most significant risks and impacts first,taking into consideration likelihood of an impact as well as the scale,scope and irremediab
139、le aspects of the impact.The policy is reviewed and adapted on a regular basis in light of new sourcing areas,shifting patterns of deforestation and increasing knowledge about deforestation risks in the supply chain and international standards and national legislation.Embed policy on deforestation i
140、n oversight bodies and management systems and different company functions Practices should be consistent throughout the operations of the enterprise,including in all the departments or units which may take decisions affecting commodities and products potentially associated with deforestation,includi
141、ng in particular the purchasing and procurement functions.The deforestation-related procedures should be consistent with,and integrated within,any other due diligence policies the enterprise may have.Incorporate expectations and policies into engagement with suppliers and other business relationship
142、s Since due diligence applies throughout an enterprises supply chains and business relationships as well as to its own operations,regular communication with suppliers and other business partners is critical.For products and supply chains with associated high risk of deforestation,the enterprise shou
143、ld:Communicate key aspects of its policy on deforestation to suppliers and other relevant business relationships.Long-term relationships with business partners can increase leverage to encourage the adoption of such a policy and improve transparency.Include conditions and expectations on deforestati
144、on due diligence in supplier or business relationship contracts,supplier codes of conduct or other forms of written agreements,tailored to suppliers capacities.Develop and implement pre-qualification processes on deforestation due diligence for suppliers and other business relationships,where feasib
145、le,adapting such processes to the specific risks and circumstances they face.Provide adequate resources,capacity-building and training to suppliers and other business relationships to help them understand and apply the policy and implement due diligence in relation to deforestation.This could includ
146、e,for example,a standardised reporting framework for suppliers.Some suppliers,such as smallholder farmers,will need greater levels of support than others.Seek to understand and address barriers arising from the enterprises way of doing business that may impede the ability of suppliers and other busi
147、ness relationships to implement the due diligence policy in relation to deforestation,such as the enterprises purchasing practices and commercial incentives.Enterprises may face practical and legal limitations to how they can influence or affect business relationships to prevent,cease,or mitigate ad
148、verse impacts on forests,or to remedy them.Enterprises can seek to overcome these challenges to influence business relationships through contractual 25 OECD-FAO BUSINESS HANDBOOK ON DEFORESTATION AND DUE DILIGENCE IN AGRICULTURAL SUPPLY CHAINS OECD/FAO 2023 arrangements,pre-qualification requirement
149、s,voting trusts,license or franchise agreements,and also through collaborative efforts to pool leverage in industry associations or cross-sectoral initiatives.Implementation plans developed in co-ordination with business partners and involving,where appropriate,local and central governments,internat
150、ional organisations,local communities and civil society,can also improve compliance,in particular by offering capacity-building and training.Industry associations and multi-stakeholder initiatives may often be able to provide support for many of the steps described above.Establish control systems al
151、ong the supply chain Establishing systems to enable the enterprise to monitor the implementation and impacts of its policy on deforestation is critical to the credibility and effectiveness of the policy and to good relationships with stakeholders,including investors and governments.This entails:Crea
152、ting verification procedures to undertake regular independent and transparent reviews of compliance with the policy;this may include ongoing supplier engagement and monitoring,as well as internal and independent third-party audits(the latter is preferred where the risk of association with deforestat
153、ion is higher),and covers both the enterprise and its suppliers.Establishing monitoring and control systems for the chains of custody of the commodities and products the enterprises identify as potentially associated with deforestation.This is described in more detail in Step 4 of the OECD-FAO Guida
154、nce(verifying due diligence).Typically,these steps will take place at the same time,or soon after the enterprise has started to conduct supply chain mapping as per Step 2 of the OECD-FAO Guidance(identifying risks).Establish an operational-level grievance mechanism,in consultation and collaboration
155、with relevant stakeholders Grievance mechanisms,which should include both early warning risk-awareness and complaints systems,can help alert enterprises to deviations from their policy on deforestation in their activities or those of their suppliers or other business relationships,help them to ident
156、ify and mitigate risks,including by improved communication with stakeholders,and provide a mechanism to prevent and remediate conflicts.Grievance mechanisms can also incorporate a channel for feedback and suggestions.They can be established at the level of a project,an enterprise or an industry.Ente
157、rprises can both establish their own grievance mechanisms and participate in other grievance mechanisms.It is important that grievance mechanisms be accessible,especially,where relevant,to local stakeholders including women and other vulnerable and marginalised groups.Grievances should be handled wi
158、thin a reasonable timeframe and anonymity respected when requested.26 OECD-FAO BUSINESS HANDBOOK ON DEFORESTATION AND DUE DILIGENCE IN AGRICULTURAL SUPPLY CHAINS OECD/FAO 2023 Suggestions for SMEs Decide what level of policy commitment you are prepared to adopt given national laws and international
159、commitments,and company commitments to customers.Choose the definitions of“forest”and“deforestation”you want to use and the cut-off date(s).(Sectoral initiatives or other SMEs policies and commitments may provide useful models).Decide on how the policy commitment will be operationalised according to
160、 your financial and human resources.Make your commitments known;this can be through a written commitment or a stand-alone statement or as part of your business vision,value statement,or responsible sourcing policy.Engage in multi-stakeholder platforms on sustainable commodities that aim to minimise
161、deforestation through collective action.Mention your limitations and risk prioritisation approach,including actions you will take if you discover that any business partner is sourcing from deforested areas.Reference national or regional commitments on deforestation and forest degradation in company
162、policy.27 OECD-FAO BUSINESS HANDBOOK ON DEFORESTATION AND DUE DILIGENCE IN AGRICULTURAL SUPPLY CHAINS OECD/FAO 2023 Step 2 of the OECD-FAO Guidance is about examining the supply chain and mapping the risks of deforestation within it,to enable enterprises to determine their priorities for action.Unde
163、r the OECD-FAO Guidance,enterprises are expected to identify general areas where the risk of adverse impacts is most significant and to prioritise due diligence accordingly.High-risk suppliers or suppliers operating in high-risk areas will warrant more scrutiny.Step 2:Identify,assess and prioritise
164、deforestation risks in the supply chain 28 OECD-FAO BUSINESS HANDBOOK ON DEFORESTATION AND DUE DILIGENCE IN AGRICULTURAL SUPPLY CHAINS OECD/FAO 2023 Figure 5.Identify,assess and prioritise deforestation risks in the supply chain 29 OECD-FAO BUSINESS HANDBOOK ON DEFORESTATION AND DUE DILIGENCE IN AGR
165、ICULTURAL SUPPLY CHAINS OECD/FAO 2023 Strategic questions for enterprises Mapping the supply chain:Which departments within our company are responsible for supply chain mapping and prioritisation?Do they have the capacity and budget to meet company commitments on deforestation?What systems or proces
166、ses do we currently have in place to map our operations and supply chains to identify deforestation risks(e.g.desk-based research,heat maps,supplier questionnaires,satellite data,field visits)?o How far upstream from our enterprise have we mapped the supply chain?o Do we have a plan to map the key c
167、ontrol or“choke”points within those supply chains that are associated with high risks of deforestation?(See the Glossary)o Do we use a risk-based approach to prioritise which entities in the supply chain and which parts of the supply chain should be mapped in detail?o Are we ensuring that our identi
168、fication efforts extend upstream to agricultural production?o Are there parts of the supply chain where mapping is impeded by a lack of transparency(e.g.purchases from the spot market)?o What can we do to increase transparency(e.g.engage with suppliers,stop buying from the spot market,etc.)?What lev
169、el of traceability or chain of custody can we have in place for our products?Where does our information come from(e.g.internal systems/tracking,supplier feedback,external data;collaboration with industry groups,open-source deforestation satellite data)?o Do we have up-to-date maps on forest cover an
170、d deforestation frontiers in the areas from which we source our products and raw materials?o Which departments/individuals have responsibility for mapping deforestation risks and maintaining quality information?Do we rely on external public information for this or on a contract with a specific provi
171、der?o How reliable is this information,and how can we verify it?o How traceable are our commodities and products?What are our partners doing to identify deforestation risks?How can that information be strengthened,co-ordinated and streamlined in our approach?Assess and prioritise the supply chain:Wh
172、at do we consider and define as the most salient or priority deforestation risks?Which are our highest risk suppliers or other business partners?What steps do we take to verify our supply chain data and ensure that it is current?Do we triangulate data,conduct supplier or site visits,conduct audits,u
173、se real-time data/tech,collaborate or exchange information with industry groups,etc.?Against which benchmarks and standards do we assess risks?How do we assess and prioritise the risks of deforestation?Do we use a system of“red flags”(see below)?Do we provide support to local farmers and enterprises
174、,and what form does this take(i.e.training,resources,equipment)?30 OECD-FAO BUSINESS HANDBOOK ON DEFORESTATION AND DUE DILIGENCE IN AGRICULTURAL SUPPLY CHAINS OECD/FAO 2023 Map the supply chain by identifying the various actors involved,including immediate suppliers and business partners,and the sit
175、es of operation Mapping and prioritizing should start with a high-level overview of company products,services and suppliers.This stage in the process involves establishing the sources of all the commodities and products covered by the enterprises policy on deforestation,in order to understand at a h
176、igh level the risks associated with their production and sourcing.The extent of information collected on suppliers and business partners depends on the severity of the deforestation risk and how closely they are linked to the identified risk.Mapping the supply chain includes identifying:The source o
177、f the commodities or products derived from these commodities,including the country of production,source area and,where appropriate,the plot of land of production.This can help to identify the countries or areas most at risk of deforestation and enable the enterprise to focus on high-risk areas or su
178、ppliers in more detail.The legal and political context of the source area can be as important as trends in deforestation or agricultural production.Enterprises should carry out due diligence in locations which feature one or a combination of the following“red flags”:o Areas defined or known as prote
179、cted areas,collectively managed areas(under tenure rights of local communities or Indigenous Peoples),high conservation value areas,or high carbon stock areas(e.g.peat forests).o Areas with high levels of rural poverty and a reliance on agriculture as a main form of income.o Areas where local commun
180、ities and Indigenous Peoples are present o Areas which are considered as at high risk of conflict o Weak protection of human rights,Indigenous Peoples rights or poorly defined or contested land tenure rights(see Box 1)o Weak governance and implementation of the rule of law,and corruption o Weak leve
181、ls of forest protection by national or local governments.Box 1.Land tenure issues Issues of land tenure(including the implied bundle of rights from access to ownership)are central to the debates around halting deforestation.A significant portion of the worlds remaining tropical forests are customari
182、ly owned by Indigenous Peoples and traditional communities and other customary rights-holders.Enterprises seeking to access land for commodity production must respect the rights of those who already own,occupy or otherwise use it.They may only acquire access to such land through a process that first
183、 recognises these rights.Sometimes this may also include national or local public authorities.The rights of those without formal property rights to the lands should also be recognised;this includes those of tenants,sharecroppers,farm-workers,or those with informal rights to access and use land and n
184、atural resources.These informal rights can include womens tenure rights,which are commonly subsumed under those of the male head of household.31 OECD-FAO BUSINESS HANDBOOK ON DEFORESTATION AND DUE DILIGENCE IN AGRICULTURAL SUPPLY CHAINS OECD/FAO 2023 The tenure rights recognition process frequently
185、poses challenges.It may not always be clear who has legal title to the land,customary rights may sometimes conflict with statutory rights,and statutory rights may sometimes not align with international human rights obligations.Many certification schemes and other tools(for example,the High Carbon St
186、ock Approach),set out standards for respecting land tenure and processes for determining it,including,for example,participatory mapping carried out jointly by the enterprise and communities,although certification by itself does not always guarantee compliance with these standards.Free,prior and info
187、rmed consent(FPIC)can be an important element in this process.As set out in Annex B of the OECD-FAO Guidance,FPIC involves agreeing a consultation process with affected Indigenous Peoples;consulting and agreeing on what constitutes appropriate consent(taking into account representation of women and
188、other marginalised groups);and engaging in the process of seeking consent before activities commence(if consent is given).This is an iterative and ongoing process rather than a one-off discussion;continuous dialogue will generate trust and a balanced agreement,or non-agreement,that will benefit the
189、investment across all phases of the project,or provide a clear indication that it should not go ahead(FAO,201419;FAO,201620)More detail on responsible tenure governance is available in the Voluntary Guidelines on the Responsible Governance of Tenure of Land,Fisheries and Forests in the Context of Na
190、tional Food Security officially endorsed by the Committee on World Food Security in 2012.In addition to red flag locations,companies can use a system of“red flags”for:Sectors or products commodities known often to be linked to deforestation or forest degradation);Business partners suppliers known to
191、 trade in commodities or source from forests;suppliers o Known to have a poor track record vis-a-vis deforestation o Known to have sourced commodities from red flag locations(see above)o Known to operate in red flag locations(see above)o Known not to have observed internationally agreed standards su
192、ch as those contained in the OECD-FAO Guidance.Companies can also prioritise certain products,geographies and suppliers to conduct further,more in-depth assessments.This approach helps companies to build transparency over the supply chain in those prioritised areas,products and suppliers.Identifying
193、 the various actors involved in the supply chain,including suppliers and business partners and prioritizing using a risk-based approach.Such activities may be challenging if products are supplied through local traders or on spot markets.Mapping the supply chain will require dialogue with traders and
194、 suppliers,in particular those operating at the control or choke points of the supply chain.Enterprises can identify control points such as processing points where there are relatively few enterprises that handle a majority of inputs.Examples include commodity processors,commodity traders,wholesaler
195、s,exporters and/or commodity exchanges.Repeating this process before making any new investments or pursuing business activities that result in changes in the supply chain.Establishing a system of controls and transparency throughout the supply chain includes:Assessing the type and quality of supply-
196、chain traceability or chain of custody offered by suppliers,and any complaints or grievances lodged against any of the actors in the supply chain,including suppliers and business partners.32 OECD-FAO BUSINESS HANDBOOK ON DEFORESTATION AND DUE DILIGENCE IN AGRICULTURAL SUPPLY CHAINS OECD/FAO 2023 App
197、roaches to traceability include tracing to origin;tracing to a supplier that has a robust traceability and due diligence system of its own(with the downstream company responsible for assessing the robustness of this system);tracing to a jurisdiction that can demonstrate a negligible risk of commodit
198、y-linked deforestation across the entire jurisdiction;and using a credible certification or chain of custody system.The extent of information collected on suppliers and business partners depends on the severity of the deforestation risk and how closely linked to the identified risk they are.For area
199、s at high risk of deforestation,a higher degree of traceability or chain of custody to the farm level will be needed;in some areas this will be challenging.The potential gap between the level of deforestation risk and the granularity of the information on the production area will need to be taken in
200、to account when defining the risk mitigation strategy.Different traceability systems exist,including those used in many certification schemes(see Annex A for further information on Certification Schemes).Depending on the granularity of the information they monitor,they offer diverse levels of confid
201、ence regarding the link between the commodities and the place of production and hence the risk of deforestation:Under the identity preserved model,products from a single identifiable certified source are kept separate from uncertified products,and from certified products from other sources,throughou
202、t the supply chain.The plot of land of production is known.Under the segregated model,certified products from different certified sources are mixed together but kept separate from uncertified products.Under the mass balance model,certified products are mixed with uncertified products but the proport
203、ions are monitored administratively;users can advertise their product as partially certified(or mixed),usually with a specific percentage figure.Under the book-and-claim model,certified products are not kept apart,but suppliers of certified products sell credits to users;while the user may not actua
204、lly be using any certified products,they do contribute to the costs of responsible production.Box 2 lists the types and some potential sources of information needed by enterprises for these purposes.33 OECD-FAO BUSINESS HANDBOOK ON DEFORESTATION AND DUE DILIGENCE IN AGRICULTURAL SUPPLY CHAINS OECD/F
205、AO 2023 Box 2.Types and potential sources of information to map the supply chain and assess deforestation risks Types of information:Names and locations of farmers,local traders,processors and any other enterprises in the supply chain that a company further downstream wants to trace to Average produ
206、ction volumes of farms or jurisdictional area supplying the commodities,to detect possible leakages between production areas with different deforestation risks National production and trade data for the commodity in question;this may help in detecting possible leakages such as hidden imports from a
207、third country in supply areas close to the borders Processing facility information(e.g.palm oil mill,soybean crusher sourcing areas)Where appropriate,geolocation data(geographic co-ordinates)of the plot of land on which the commodities are grown,by point co-ordinates or polygon mapping of the plot o
208、f production,farm boundaries or larger area,such as village or landscape or jurisdiction Farm mapping and registration databases Legal frameworks for the production of commodities and products purchased by the company and for forest conversion in the countries of production,levels of governance and
209、law enforcement,legality compliance,respect for human rights and land rights,and corruption Certification scheme data,including,for example,volumes of products fully certified,and of products certified to more limited criteria Visual,isotopic or DNA analyses of samples(these can help distinguish bet
210、ween species,e.g.for timber,and,for some commodities,between different geographic origins)Potential sources:Purchase orders and invoices,batch numbers of commodities and products Supplier questionnaires,including their sub-suppliers On-site visits to production,transformation and storage areas Compa
211、ny and industry association programmes,public summaries of audit reports and product claims or labels,including voluntary certification and legality verification schemes Information generated through jurisdictional or landscape approaches Private or public remote sensing providers Supply chain mappi
212、ng and transparency tools,e.g.TRASE,SPOTT,FLEGT IMM,Open Timber Portal,commercial providers,sectoral initiatives,co-operation projects Traceability systems,mercial or national traceability systems,Independent Forest Monitoring,Timber Legality Assurance Systems Specific tools monitoring and assessing
213、 deforestation risk,e.g.Global Forest Watch Agriculture and trade statistics from national or international databases,e.g.FAOSTAT,UN Comtrade;land registries,and other sources of land data such as Land Matrix or Open Land Contracts.FAOLEX(a comprehensive legislative and policy database)Note:All of t
214、he initiatives listed above approach deforestation according to different models or approaches;efforts should always be made to verify their reliability.34 OECD-FAO BUSINESS HANDBOOK ON DEFORESTATION AND DUE DILIGENCE IN AGRICULTURAL SUPPLY CHAINS OECD/FAO 2023 Assess risks of deforestation associat
215、ed with the products,goods,services,suppliers and sourcing areas Once the sources of the commodities and products covered by the enterprises deforestation policy are identified,and the sourcing area is known,it becomes possible to assess the risk that their production has been associated with defore
216、station.Likelihood and severity.The significance of an adverse impact is a function of its likelihood and its severity.The severity of impacts can be analysed according to their scale,scope and irremediable character:The scale of the adverse impact characterises the gravity of the impact on forests
217、as a whole,or on particular types of forests(e.g.protected areas,high conservation value areas,high carbon stock areas)or the extent of changes in tree species composition.Scope concerns the reach of the impact,for example the extent of damage to the forest by total area or by impacts on specific ar
218、eas or species.Irremediable character means any limits on the ability to restore the forest,or forest-dependent species,or the people living,working or depending on it,to a situation equivalent to their situation before the adverse impact.Special attention should be paid to the substantial challenge
219、s of restoring the social and environmental values and functions of a forest.The process of prioritisation is ongoing,and in some instances new or emerging adverse impacts may arise and be prioritised before moving on to less significant impacts.The risk assessment should combine information on:Exte
220、nt and type of forest cover in the sourcing area Trends of deforestation in this area(in general,not just for specific products)Information on direct drivers of deforestation Information on indirect drivers of deforestation Levels of traceability Complexity of the supply chain The higher the extent
221、and risk of deforestation,the greater the level of detail that will be needed.Where the risk is very low,an assessment at the country or regional level may be adequate;where it is higher,the assessment will need to focus on smaller areas,and may require detailed geolocation information to the farm l
222、evel.Addressing any information gaps for high-risk source areas should be a high priority.Forest cover.This should include assessments of the proximity of suppliers to remaining forest land within the supply area(including within the farms themselves)and adjacent to it,which should help the enterpri
223、se to assess the risk of future deforestation.For example,a region with low rates of deforestation but with a significant amount of standing forest is a higher risk compared to a region with previously high rates of deforestation but no forest left.Deforestation trends.An increasing range of sources
224、 of information on deforestation rates and incidences are now available(see Box 3 and the Glossary).Deforestation fronts move over time and their dynamics are not linear.The risk of deforestation in supply areas(which may themselves often change)should therefore be updated on a regular basis,and the
225、 use of deforestation alert services should be considered.Direct drivers.A direct driver of deforestation is the direct cause of the forest loss and associated land use change.Estimating the likelihood of the conversion of forests to cropland or grassland being caused by the extension of production
226、of the commodity used by the enterprise is a key element of the risk assessment.35 OECD-FAO BUSINESS HANDBOOK ON DEFORESTATION AND DUE DILIGENCE IN AGRICULTURAL SUPPLY CHAINS OECD/FAO 2023 Underlying/Indirect drivers.Indirect drivers,sometimes called underlying drivers,include the policy,legal,econo
227、mic,social or contextual causes that induced the land use change.For instance,if the evidence shows that an increased demand and/or increased prices for a specific commodity have driven deforestation,and commercial forecasts indicate that this trend will remain,then the risk of deforestation will re
228、main high.For another example,where standards of forest and land use governance and law enforcement are weak,the risk of deforestation will be higher than where they are stronger.The complexity of the supply chain,including the number of intermediate steps within it,and the risk of mixing of product
229、s from unknown or potentially high-risk sources.This includes identifying the various actors involved in the supply chain,including suppliers and business partners.This is important:the greater the number of links in the chain,the higher is the risk,since every link potentially increases the chance
230、of products associated with deforestation entering supplies.The type of links e.g.intermediary traders sourcing directly from farms and selling the commodities on to the next link in the supply chain are also important,particularly where the commodity is obtained from a large number of sources such
231、as smallholder farmers,who may need support in complying with the enterprises policy.Where it is not feasible to address all identified impacts,an enterprise should prioritise action based on the severity and likelihood of the adverse impact.Once the most significant impacts are identified and dealt
232、 with,the enterprise should move on to address less significant impacts.Box 3.Potential sources of information on deforestation and deforestation drivers Remote sensing through satellite or radar data,e.g.Global Forest Watch,Terra-i,Earth Resources Observation and Science(EROS)Center;national system
233、s(e.g.PRODES,Brazil;Mapbiomas;IDEAM,Colombia;Geobosques,Peru)Assessments of the status of governance and law enforcement in the source country,e.g.World Bank Worldwide Governance Indicators,Transparency International Corruption Perceptions Index or Freedom House Index Deforestation alerts,e.g.Global
234、 Forest Watch GLAD alerts,RADD Forest Disturbance Alert FAO Forest Resources Assessment series Local communities,Indigenous Peoples and civil society organisations;Independent or community forest monitors(empowering community members to act as forest monitors can be an effective way to collect data
235、and raise the alarm on deforestation)Country or landscape risk assessments,e.g.those conducted by LandScale Information collected through early warning and grievance mechanisms Studies of deforestation drivers,Measuring Reporting and Verification(MRV)reports,e.g.in national REDD+strategies Tools pro
236、vided by civil society,e.g.the Cocoa Accountability Map by Mighty Earth For further resources please see Annex A.Risk assessments:what types are there and who does what?Several types and levels of risk assessments are possible.Context risk assessments:At country or regional level,by assessing the re
237、gulatory framework,political context,civil liberties and socio-economic environments.Site-level risk assessments aim to understand the factual circumstances of the operations of business partners in order to assess the scope,severity and likelihood of risks at the site level.36 OECD-FAO BUSINESS HAN
238、DBOOK ON DEFORESTATION AND DUE DILIGENCE IN AGRICULTURAL SUPPLY CHAINS OECD/FAO 2023 Assessments can include checking volumes of commodities produced in particular areas against allowable volumes,undertaking stakeholder consultations,monitoring by third parties such as civil society organisations,an
239、d organising visits to the farms and/or processing facilities.Upstream enterprises(such as farms and plantations)may establish on-the-ground assessment teams for generating and sharing verifiable,reliable and up-to-date information on the extent of deforestation.These enterprises also need to ensure
240、 that they respect legitimate land tenure right holders(see Box 1).They should provide the results of their risk assessments to downstream enterprises.Downstream enterprises should not only identify risks in their own operations but also,to the best of their efforts,assess the risks faced by their s
241、uppliers and sub-suppliers.They can evaluate the latter by assessing the due diligence carried out by their suppliers or by directly assessing the operations of their suppliers,for instance by conducting visits to farms and local communities.Tools such as deforestation alerts can help to spot-check
242、suppliers operations for potential association with deforestation.Information should be sought both on the suppliers systems and the volumes of products they are supplying.Participating in industry-wide schemes that assess the compliance of business partners with deforestation policies and provide r
243、elevant information can support these assessments.Financial enterprises should carry out due diligence with regard to their clients and investments.The nature and extent of the due diligence will depend on the size and nature of the enterprises investment portfolio and its relationship to specific c
244、lients and investments(e.g.the ownership share in the company,tenure of investment,access to relevant information and the likelihood that meaningful influence may be exercised).Where financial enterprises have large numbers of clients and investee companies,they are encouraged to prioritise efforts
245、based on risk assessments.Financial enterprises should seek to prioritise the most severe deforestation-related impacts for due diligence while continuing to monitor risks,evaluate prioritisation decisions and build on their actions to the extent possible and necessary over time,to cover a broader r
246、ange of clients and investee companies and actions.37 OECD-FAO BUSINESS HANDBOOK ON DEFORESTATION AND DUE DILIGENCE IN AGRICULTURAL SUPPLY CHAINS OECD/FAO 2023 Suggestions for SMEs All SMEs:Identify your commodity focus and prioritise your mapping efforts accordingly.Create a list of your direct and
247、 indirect(outsourced)suppliers and identify which ones may require greater scrutiny/due diligence actions in terms of deforestation(by geography/location,type of commodity,parts of supply chain,company size).Information on direct and indirect suppliers can be collected in a variety of different ways
248、 to minimise costs,including desk-based research using existing publicly disclosed information online,working with third-party initiatives or certification schemes,working collectively as part of industry associations.Some industry collaborations allow SMEs to share risk assessment,traceability and
249、sometimes monitoring information.Ask your direct suppliers to send you information on their due diligence practices,sourcing practices and deforestation policies;assess those approaches to better understand which suppliers may not have effective measures to consider deforestation risks.Consider havi
250、ng regular calls,or check-ins with upstream suppliers operating at control points of the supply chain to better understand how they are identifying,preventing and mitigating deforestation impacts in the commodities that you have prioritised.In addition,upstream SMEs can:Know where your product comes
251、 from,and how it is grown and sourced;it may be more feasible to focus on particular source landscapes rather than wider areas.Hold meetings with cooperatives,farmers or other producers,and Indigenous Peoples and local communities,who are at the front lines of production and deforestation risks.Buil
252、d your leverage:collaborate with other SMEs that source from the same producers to identify and prioritise deforestation risks in the sector.Seek advice and information from business associations,certification schemes(private or national),international organisations(e.g.OECD,FAO,UNEP),government ent
253、ities,NGOs,trade unions and relevant multi-stakeholder initiatives.38 OECD-FAO BUSINESS HANDBOOK ON DEFORESTATION AND DUE DILIGENCE IN AGRICULTURAL SUPPLY CHAINS OECD/FAO 2023 Step 3 of the OECD-FAO Guidance is about responding to the findings of risks of deforestation through reporting to designate
254、d senior management and designing and adopting a risk management plan.The plan should cover appropriate risk mitigation and prevention measures.Enterprises should ensure that risks are addressed,and that they are taking steps to tackle adverse impacts that have occurred.Step 3:Design and implement a
255、 strategy to respond to deforestation 39 OECD-FAO BUSINESS HANDBOOK ON DEFORESTATION AND DUE DILIGENCE IN AGRICULTURAL SUPPLY CHAINS OECD/FAO 2023 Figure 6.Design and implement a strategy to respond to deforestation 40 OECD-FAO BUSINESS HANDBOOK ON DEFORESTATION AND DUE DILIGENCE IN AGRICULTURAL SUP
256、PLY CHAINS OECD/FAO 2023 Strategic questions for enterprises Designing the strategy Do we have a strategy with clear actions to respond to the identified deforestation risks?How often do we need to update it?What activities do we have the capacity to undertake in response to deforestation risks and
257、impacts,and any forthcoming legislation?How have we engaged with external stakeholders in developing our strategy?How do we ensure that our strategy is up to date and working e.g.through an annual review process,or collaboration with industry players?To what extent can we work directly with producer
258、s?What assistance and support do they need(with special attention being paid to independent and contracted smallholders)?Do we understand when we need to offer remedy(e.g.“cause”cases)?Have we considered the types of remedy that we could offer?What steps can we take to innovate in our risk mitigatio
259、n plans?Issues include the role of technology,cross-sector collaboration,engagement with governments at different stages of the supply chain,engagement with Indigenous Peoples and local communities.Implementing the strategy Who within our company is responsible and accountable for the implementation
260、 of this strategy?Have we identified people in each department who are responsible for doing their part to reduce the identified risk?How is the Board kept apprised of our actions?Do we have an in-country or regional presence,or will we have to bring in a third party to implement activities on our b
261、ehalf?How often do they report back on progress?What steps can we take to increase overall leverage in the supply chain to change the business behaviour of suppliers and address root causes of deforestation(e.g.are we engaging with governments and organisations in producing countries,including OECD
262、National Contact Points for RBC and FAO country focal points)?To what extent do we need external partners to create impact on the ground?How is the progress and impact of our risk mitigation strategy measured and rewarded?Define and adopt a risk management plan Having assessed the risk of associatio
263、n of the enterprises operations and supply chains with deforestation,the next stage is to cease causing harm or mitigate the risk and prevent future risks.All the related measures and processes should be defined in a risk management plan;separate plans may be necessary for different commodities or d
264、ifferent sourcing areas.Box 4 includes potential risk prevention measures which can help manage the risk of deforestation in the enterprises operations and supply chains,and companies should refer to the OECD-FAO Guidance for more detail.41 OECD-FAO BUSINESS HANDBOOK ON DEFORESTATION AND DUE DILIGEN
265、CE IN AGRICULTURAL SUPPLY CHAINS OECD/FAO 2023 Box 4.Risk prevention measures Risk prevention measures available to enterprises will depend on their position in the supply chain and their capacity;some of the measures below are applicable mainly to producers and some to enterprises sourcing directly
266、 from producers.Measures to improve transparency and the level of information available include:Requiring more than one source of information on products(see Box 2 and Box 3)Undertaking independent surveys or audits of source areas and/or business partners Commissioning an independent audit of the e
267、nterprises due diligence system Conducting audits of suppliers due diligence systems,focusing on their systems to identify and address deforestation risks Reinforcing traceability or chain of custody systems and engaging with control points in key commodity chains Empowering local community members
268、to act as forest monitors Using certification schemes(with careful evaluation of actual consideration of forest protection in the selected scheme)Potentially sharing information on risks and risk mitigation strategies with other companies through industry associations or public-private platforms;thi
269、s is likely to be of particular value to SMEs Communicating regularly with OECD National Contact Points for RBC.Measures to engage with suppliers include improving awareness,and offering assistance and incentives,especially for smallholder farmers,particularly those affected by any deforestation cut
270、-off date the company is implementing or that is required by regulation.Providing financial support,longer-term contracts Responsible purchasing practices Better payment terms Access to forestry experts or due diligence experts Capacity-building and training.Sometimes such support may be better deli
271、vered by local NGOs or other organisations.The risk management plan should specify:Timelines for developing each of the measures and processes to be adopted.Resources to be mobilised,including budgetary(for travels,data procurement,traceability system,etc.)and human(forestry experts and legal expert
272、s,for example).Roles and responsibilities within the enterprise for implementing the management measures(e.g.who on the Board could be a resource for responding to deforestation issues,participation of teams on procurement,regional heads of areas that include red flag locations,etc.?).Procedures for
273、 consulting with affected stakeholders,including business partners,governments and affected communities and civil society in the countries of origin,to clarify concerns and agree on the strategy for mitigating risks and opportunities to feed into the deforestation policies and strategy of the compan
274、y.42 OECD-FAO BUSINESS HANDBOOK ON DEFORESTATION AND DUE DILIGENCE IN AGRICULTURAL SUPPLY CHAINS OECD/FAO 2023 Monitoring systems for assessing the implementation of the plan and its impacts(including,for example,access to publicly available data/satellite monitoring of forests,indicators/data point
275、s to collect from suppliers),and reporting processes to designated senior management.Procedures to follow in cases of non-compliance by suppliers and follow-up plans such as awareness-raising,training on detection and reporting on deforestation.Procedures to support producers,notably smallholders,wi
276、th attention to gender and social inclusion.Respond to adverse impacts implement the risk management plan,monitor and track performance How an enterprise responds to adverse impacts will depend on the extent to which it causes,contributes to or is directly linked to them.In the specific case of defo
277、restation,it means the following:If the enterprise has caused deforestation,it should cease the activities that cause deforestation,prevent further potential adverse impacts and provide remedy for actual adverse impacts it caused.This may entail suspending operations temporarily while undertaking me
278、asurable efforts to prevent any future adverse impacts,or suspending operations permanently if these impacts cannot be mitigated.Where assessment and mapping exercises find that the enterprise has contributed to deforestation,it should cease and provide remedy with respect to its contribution and us
279、e its leverage over its business partners to mitigate any remaining adverse impacts.This may entail suspending operations temporarily.The enterprise should also take preventive measures to ensure that these adverse impacts do not recur.If the enterprise has not contributed to deforestation,but an ob
280、served impact has nevertheless been directly linked to its operations,products or services through a business relationship,it should use its leverage to mitigate or prevent the adverse impact,for instance requesting changes in the investment plan to ensure that forests are preserved and sustainable
281、production practices are encouraged.This may lead to disengaging from a business partner after failed attempts at mitigating risks or when risk mitigation is deemed to be not feasible or unacceptable.Where it is possible,continue the relationship and demonstrate a realistic prospect of,or actual imp
282、rovement over time,such an approach will often be preferable to disengagement.The enterprise should also take into account potential social,environmental and economic adverse impacts related to the decision to disengage.When deciding to disengage,enterprises should do so responsibly including by see
283、king meaningful consultation with relevant stakeholders in a timely manner and where possible,by taking reasonable and appropriate measures to prevent or mitigate adverse impacts related to their disengagement.Factors that are relevant to determining the appropriate response include:the severity of
284、the adverse impact,the enterprises ability to influence and/or build leverage over the business partner or other relevant actors(e.g.government),and how critical the business partner is to the enterprise(if it is critical,the enterprise should increase its efforts to change the partners behaviour;wh
285、ere is it less crucial,disengagement may be a better option).A wide range of measures are available to enterprises to mitigate the adverse impacts of deforestation,depending on the enterprises position in the supply chain.Where feasible they should encompass measures that achieve positive impacts on
286、 forests and the workers and communities who depend on them what are sometimes termed“forest-positive”actions.43 OECD-FAO BUSINESS HANDBOOK ON DEFORESTATION AND DUE DILIGENCE IN AGRICULTURAL SUPPLY CHAINS OECD/FAO 2023 Responding to deforestation impacts and promoting forest-positive outcomes Action
287、s to protect and restore forests include:Identifying areas of future risk to forests in or near the enterprises supply chains and engaging suppliers to take preventive action.This could include,for example,engaging with farmers to understand why deforestation may occur and what measures could be ado
288、pted to ensure it does not.Investing in programmes that promote forest conservation and sustainable agricultural production practices,such as agroforestry and intercropping.Supporting forest ecosystem restoration in areas of degraded forest,and the restoration and sustainable use of fallow or degrad
289、ed land.Choosing to buy from suppliers who are implementing forest-positive practices themselves,including conserving and restoring forests while promoting sustainable livelihoods.Rewarding such suppliers by purchasing their goods at a premium,buying larger quantities or agreeing longer-term contrac
290、ts.Working with farmers,farmer cooperatives and local communities,who are central to managing forest conservation and restoration,could include:Making and communicating explicit commitments to respecting the rights of Indigenous Peoples and local communities(See Annex B of the OECD-FAO Guidance:Enga
291、gement with Indigenous Peoples.(OECD-FAO,20161)Gathering information on land tenure(both statutory and customary rights)within the enterprises operations and supply chains and those of its suppliers,and adopting measures to ensure they are not adversely affected by the enterprises operations.Support
292、ing innovation and capacity-building to improve agricultural productivity and diversified production systems including agroforestry and farm management systems in order to help reduce poverty and meet community food security needs without expansion into forests.Providing support to farmers,particula
293、rly smallholders,in adopting agricultural innovation and sustainable,forest-positive techniques and technologies,so that incomes are strengthened,farms are more productive and resilient and forests are kept standing.Paying farmers and farm organisations(such as co-operatives and womens producer orga
294、nisations)fair prices for their products,with the aim of contributing to achieving living incomes potentially linked to performance in reducing deforestation and forest degradation,adopting sustainable production techniques,and engaging in forest ecosystem restoration.Supporting smallholder liveliho
295、od initiatives that deliver forest conservation and farmer resilience and inclusion,including through long-term contracts,responsible purchasing practices,strengthening organisational structures such as cooperatives,implementing traceability systems and financial support.Encouraging and supporting l
296、ocal initiatives,involving farmers,local communities,Indigenous Peoples,women and other marginalised groups,local industry and government,to develop and implement local solutions.Collaborating with local government to jointly foster enabling framework conditions for deforestation-free production,suc
297、h as clarifying and recognising land rights and providing targeted support by agricultural extension officers.Participating in or developing systems of payments for ecosystem services.44 OECD-FAO BUSINESS HANDBOOK ON DEFORESTATION AND DUE DILIGENCE IN AGRICULTURAL SUPPLY CHAINS OECD/FAO 2023 Support
298、ing landscape and jurisdictional initiatives to help address the root causes of deforestation in particular regions could include:Contributing to the development of forest-positive strategies across an entire landscape or jurisdiction measures include improving land use planning,identifying no-go ar
299、eas,strengthening forest monitoring by public authorities and/or local communities,helping companies avoid deforestation and manage conservation areas.Helping to promote collaboration amongst the private sector within the landscape or jurisdiction,and with governments,communities,Indigenous Peoples
300、and sources of financial support and investment.Supporting local forest monitors and environmental defenders.Supporting initiatives and stakeholders engaged in improving law enforcement.Supporting and lobbying for improvements in the wider enabling environment,including,for example,greater supply ch
301、ain transparency,traceability and monitoring systems;improvements in governance and law enforcement,particularly in human rights and land rights;and the wider provision of agricultural support,infrastructure and public services,with appropriate support from donors and national and local public entit
302、ies.Participating in the development of sustainable finance mechanisms for conservation and restoration initiatives that include social and environmental co-benefits,including improved biodiversity and more resilient livelihoods and respect for human rights.Promoting and supporting international ini
303、tiatives to reduce deforestation and scale up forest-positive action could include:Encouraging and participating in the development of commodity roundtables,certification schemes and other multi-stakeholder initiatives.Participating in appropriate industry initiatives,business associations and coali
304、tions.Supporting the development of reliable and accessible sources of data on deforestation rates and drivers,and examples of best forest-positive practice.Contributing to the dissemination of information and knowledge on international initiatives,regulations and schemes,notably on processes linked
305、 to the REDD+framework.45 OECD-FAO BUSINESS HANDBOOK ON DEFORESTATION AND DUE DILIGENCE IN AGRICULTURAL SUPPLY CHAINS OECD/FAO 2023 Suggestions for SMEs All SMEs:Designate someone in your company to lead and decide who should be involved in designing and implementing your strategy;ensure they have t
306、he sufficient resources,knowledge and support.Tap into industry initiatives and association networks to learn how peers and other companies are addressing problems and if they have similar approaches that can guide your efforts.Include deforestation targets and objectives as part of performance revi
307、ews and incentives for staff,to drive change.Ensure that your identified risks feature in sales terms,procurement and contracting practices and in clauses in your agreements.Identify the resources needed to implement the activities under your risk management plan.Share your action plan with all your
308、 suppliers and ask your suppliers also to share it with partners in the supply chain with whom you may not have direct contact.Explain to suppliers that may be identified in your prioritisation efforts that you will need to enhance co-operation in reducing deforestation risk.In addition,upstream SME
309、s can:Consider including in your strategy actions to develop co-operation with producers,smallholder farmers,Indigenous Peoples,local communities or other stakeholders in the supply chain,and communicate that strategy downstream.Include requests on due diligence that customers ask for,to help shape
310、your strategy.46 OECD-FAO BUSINESS HANDBOOK ON DEFORESTATION AND DUE DILIGENCE IN AGRICULTURAL SUPPLY CHAINS OECD/FAO 2023 Step 4 of the OECD-FAO Guidance is about establishing systems to track and monitor due diligence actions to make sure they are effective.Step 4:Verify due diligence of deforesta
311、tion 47 OECD-FAO BUSINESS HANDBOOK ON DEFORESTATION AND DUE DILIGENCE IN AGRICULTURAL SUPPLY CHAINS OECD/FAO 2023 Strategic questions for enterprises Do we conduct due diligence assessments at key points in the supply chain(i.e.at control or choke points)?Are our due diligence assessments internally
312、 led or carried out by external third-party assessors,or both?Have we used external audits for any gaps to ensure that the assessment is comprehensive and considers different ways that deforestation occurs(e.g.through outsourcing to different suppliers,etc.)?If so,have we checked the independence an
313、d quality of those audits and the information flowing from them,and layered on our own risk-based monitoring and verification activities?What role can technology play in assessments of our due diligence actions on deforestation?Are there opportunities to partner with others in sharing data and reduc
314、ing costs?How have we responded to third parties complaints on deforestation risks?If we use third party commodity or product certification schemes,do we know if these schemes are aligned to the OECD-FAO Guidance and the risk-based due diligence framework?If not,what steps can we take to make sure t
315、hey are more aligned?How do we monitor suppliers with whom we do not have a contract,in order to effect change?Track the implementation and effectiveness of due diligence activities Enterprises should take steps to verify that their due diligence practices are effective,i.e.that risks have been adeq
316、uately identified and prevented and adverse impacts have been mitigated.This involves both monitoring of impacts to assess and document the extent to which actions,progress,performance and compliance are being carried out or achieved;and verification of compliance,performance,and/or actions relative
317、 to a stated commitment,standard or target.This process should be proportionate to the risk;take into account the capacities of various enterprises,as such processes can be costly;and where necessary,generate recommendations to improve due diligence practices.Monitoring of the effectiveness of the e
318、nterprises due diligence process can draw on the types of information listed in Chapter 5 on types and potential sources of information on commodities and products;and on sources of information on deforestation.This monitoring should consider the following:Levels of deforestation,and levels of the r
319、isk of deforestation,in the areas from which the enterprise is sourcing commodities and products change over time and need to be continually monitored.The elements listed in Box 2(on types and potential sources of information on commodities and products)will help to deliver information on the produc
320、ts and commodities in the enterprises operations and supply chains.The sources listed in Box 3 can help to identify deforestation in the supply area during the monitored period:any change in tree cover in this area constitutes an alert for which the level of the enterprises responsibility must be as
321、sessed.Verification of the effects of the enterprises due diligence procedure include reviews of documents and internal control mechanisms,verification via satellite data,third-party audits,5 on-site investigations,and consultations with local communities,civil society and government authorities.The
322、 frequency and intensity of verification efforts should themselves be risk-based,in line with Step 2 of the OECD-FAO Guidance(identifying risks).48 OECD-FAO BUSINESS HANDBOOK ON DEFORESTATION AND DUE DILIGENCE IN AGRICULTURAL SUPPLY CHAINS OECD/FAO 2023 The results of monitoring and verification eff
323、orts should be fed back into the design and functioning of the due diligence system,as due diligence is a dynamic process.Where the risk has been mitigated or prevented,the enterprise should conduct ongoing due diligence to ensure that the risk does not recur,or that new risks do not appear.The ente
324、rprise should also monitor its own internal control mechanisms and ensure they are robust and working as intended.Consultation and engagement with external stakeholders such as Indigenous Peoples,local communities,civil society and international organisations can help to identify problems and is cru
325、cial to the impartial and efficient verification of due diligence processes.Suggestions for SMEs All SMEs:Identify local NGOs and communities or international organisations with knowledge of the agricultural sourcing communities in your focus commodity sectors;speak to them regularly to triangulate
326、information you receive from suppliers.Understand from your customers or existing regulations the type and frequency of data needed.Seek ways in which data can be pooled across customers,or how technology can be used to increase efficiency and reduce costs.Consult existing platforms that can help yo
327、u to identify deforestation alerts in your supply areas.Consider working with partners and suppliers to introduce joint complaints or whistleblowing systems.The OECD National Contact Points for RBC can also be a resource in this regard.Consider using tools and indicators from industry initiatives,ce
328、rtification schemes,or deforestation platforms that you may be part of,to support your verification of due diligence.Work together with peer companies and industry groups to increase your leverage when deforestation risks persist within your supply chains.Team up with other suppliers,business associ
329、ations and NGOs,if your leverage over a business partner is insufficient to encourage change.In addition,upstream SMEs can:Ensure that your customers know how you verify and collect information,including the type of data collected,frequency of collection and who you work with in obtaining that data.
330、Be transparent in communicating what information you do not have,and why.Discuss with upstream buyers how they may support your data collection activities and use their leverage and capacity,which may be greater than your own.Identify and support existing forest monitoring systems for your areas of
331、supply whether based on community monitoring or remote sensing surveys.49 OECD-FAO BUSINESS HANDBOOK ON DEFORESTATION AND DUE DILIGENCE IN AGRICULTURAL SUPPLY CHAINS OECD/FAO 2023 Step 5 of the OECD-FAO Guidance is about reporting publicly on company efforts to implement due diligence.Step 5:Report
332、on due diligence to address deforestation 50 OECD-FAO BUSINESS HANDBOOK ON DEFORESTATION AND DUE DILIGENCE IN AGRICULTURAL SUPPLY CHAINS OECD/FAO 2023 Strategic questions for enterprises Do we report on deforestation risks identified in our supply chain and specific mitigation we have undertaken?Do
333、we provide an annual update on our deforestation commitments and how we are progressing(or not)against them?Should our reporting be carried out through one document or through several discrete issue reports linked to our company deforestation commitments,or the commodities we handle,or through a chapter in our company report on sustainability?Have we incorporated the reporting recommendations acco