The Leather Working Group (LWG) has come up with a summary guide for operators and traders of cattle leather in all its forms to help them navigate business under the ambit of the European Green Deal and the 2030 EU Biodiversity Strategy which the European Commission adopted on 16 May to curb EU-driven deforestation and forest degradation.
- The new rules seek to guarantee that products sold into the EU do not contribute to global deforestation and forest degradation covering both legal and illegal deforestation.
- The key driver for this move has been the identification of agricultural expansion and associated deforestation and its links to climate change and biodiversity loss.
- Though the regulation requirements will apply to operators and traders, the obligations and timelines for each of these groups will differ.
THE SCOPE: Operators are companies who first place the product on the EU market; traders are companies further along the supply chain. The regulation applies to operators and traders of any size; however, the period set for companies to comply will vary.
- All larger companies will have 18 months to comply (by 29 December 2024);
- SMEs: medium companies (defined as those <250 employees and turnover of <€50 million); small companies (defined as those with <50 employees and a turnover of <€10million);
- and micro-enterprises (defined as those with <10 employees and a turnover of <€2million) will have 24 months to comply by 29 June 2025.
Traders will have a reduced scope of obligations.
REGULATION CRITERIA: The Regulation sets mandatory due diligence rules for operators that place relevant products on the EU market associated with deforestation and forest degradation. To ensure that:
- products must be deforestation-free and have not been produced on land deforested or degraded after 31 December 2020;
- they have been produced in accordance with the laws of the country of production
- they are covered by a due diligence statement.
Not meeting any of these three requirements will result in a prohibition to place those products on the EU market.
DUE DILIGENCE : ‘Operators’ (companies first placing products on the EU market) will be required to sign a due diligence statement and keep all related documentation for at least 5 years. The statement will require the following steps to have been taken:
- Step 1: Provide access to data on relevant commodity, quantity, supplier, and country of production. Including geolocation for plots of land where commodities they place on the market were produced
- Step 2: Conduct at least annually a risk assessment to determine the level of non-compliance associated with the product in accordance with the benchmarking process.
- Step 3: Take adequate and proportionate mitigation measures.
‘Traders’ must keep records of who they buy relevant products from and who they sell them to, along with details of their accompanying due diligence statements.
GEOLOCATION: For relevant commodities other than cattle, for plots of land of more than 4 hectares, the geographical location shall be provided using polygons, meaning sufficient latitude and longitude points to describe the perimeter of each plot of land.
- For cattle products, the geolocation information covers all establishments where the cattle were kept.
BENCHMARKING: A country benchmarking system will categorise countries according to deforestation patterns linked to the relevant commodities.
- There will be three categories of countries: • Low • Standard • High risk.
- Obligations for operators and member states authorities will vary according to the level of risk of the country of production, with simplified due diligence duties for low-risk and enhanced scrutiny for high-risk countries.
- It will be critical for leather industry stakeholders to work in close collaboration with slaughterhouses and the meat industry to align on requirements and standardise traceability systems and mechanisms to provide access to data.
