European Union’s impact on forest peoples’ rights: what is to be expected of the due diligence legislations?

As the European Union moves forward on mandatory company due diligence legislation to place different sets of legal obligations on companies, several EU member states are obstructing the inclusion of protection for the rights of indigenous peoples and local communities. 

In the past year, the European Commission drafted two legislative proposals meant to address the environmental and human rights impacts of companies in EU value chains. On 6 December 2022 a deal was finally struck on the EU regulation on deforestation-free products, after intense negotiations between the European Commission, the European Parliament and the Council of the EU. The other law, the EU directive on corporate sustainability due diligence, is currently being examined by the parliament and the council, and a final adoption is expected by the end of 2023. While many forest peoples had great hopes for both pieces of legislation, some EU governments have blocked any attempt to put legal obligations on companies to respect the rights of indigenous peoples and local communities. 

The EU regulation on deforestation-free products: 

Designed as a product ban to reduce the impact of EU consumption on deforestation and forest degradation, the regulation puts obligations on companies to practice due diligence to ensure certain commodities (soy, cocoa, coffee, oil palm, wood, cattle and rubber) are not linked to deforestation, forest degradation or violations of the laws of the country of production before being placed on the EU market.  

The original proposal drafted by the Commission did not require companies to ensure respect of the rights of indigenous peoples and local communities protected by international law. In its review of the proposed text, the European Parliament sought to improve the text, including explicit obligations for companies to respect internationally recognised human rights, including customary tenure rights and the right to free, prior and informed consent (FPIC). Unfortunately, in the final negotiation, some EU member states as well as the Commission insisted on removing most of the proposed requirements for companies to ensure the respect of the rights of forest peoples in the production of deforestation-risk commodities.  

Sweden, Finland and France were particularly active in blocking the inclusion of these rights. The Swedish ministry of enterprises and innovation sent written comments to the council of the EU, trying to weaken references to FPIC in the regulation by making incorrect claims as to the legal interpretation of FPIC in international law. They sought to avoid any enforceable obligation to respect the right to FPIC. France on the other hand, pushed back against the mention of indigenous peoples as “peoples”, and recognition of collective rights. This is presumably because France does not recognise any collective rights for its own indigenous peoples, claiming it would be incompatible with France’s constitution and its principle of the “indivisibility of the French people”.  

The European Commission refused the inclusion of requirements on the rights of indigenous peoples and local communities because they claimed, wrongfully (see below), that the (not yet finalised) EU directive on corporate sustainability due diligence would efficiently protect these rights in global supply chains. 

On Tuesday 6 December, during the final round of negotiations between EU institutions, most of the provisions put forward by the European Parliament which sought to provide further protection to the rights of indigenous peoples and local communities were scrapped from the text. The obligation on companies to ensure respect for internationally-recognised human rights norms and standards was removed. Now, companies must only ensure respect for certain rights that form part of legislation applicable in the country of production (i.e. under national law). Although free, prior and informed consent is explicitly part of the definition, this will only come into play to the extent it is already protected by national laws (although possibly including through direct application of international law where national constitutions permit this).   

Other provisions added by the European Parliament, notably requiring companies to collect and disclose information about the existence of land claims and disputes and the views of indigenous peoples and local communities affected by commodity production, were removed.  

Nonetheless, there are still some useful requirements in the final text. Where national laws on indigenous peoples’ rights and local communities’ rights exist, but are poorly implemented, the regulation may support respect for these laws. Companies will also be required to undertake risk assessments as part of their due diligence, and in assessing the risk of non-compliance, will need to take into account various criteria including the presence of indigenous peoples, the existence of registered use or land ownership claims by indigenous peoples to areas of production, the consultation of indigenous peoples prior to production, as well as the general concerns regarding lack of law enforcement, international human rights violations and the presence of conflicts. However, these requirements apply only to indigenous peoples and do not extend to other types of communities with customary collective rights who may not be indigenous peoples. 

The final adoption of this regulation is expected for this spring, and 18 months later, around the end of 2024, implementation of the regulation will begin, and companies will be required to comply with their new obligations.  

 The EU directive on corporate sustainability due diligence: 

Unlike the deforestation regulation which focuses on specific commodities (soy, cocoa, coffee, oil palm, wood, cattle and rubber), the corporate sustainability due diligence directive is intended to cover on human rights and environmental due diligence in relation to any corporate activity, regardless of the sector. It proposes to place obligations on companies to identify and address adverse human rights and environmental impacts in their value chains.  

The original proposal from the European Commission includes, in an annex, a list of particularly important or relevant human rights that companies should consider (while leaving open the possibility that companies must also consider some other rights). The list in the original proposal included the right of indigenous peoples to the lands, territories and resources which they have traditionally owned, occupied or otherwise used or acquired. It also specifically lists the UN Declaration on the Rights of Indigenous Peoples (UNDRIP) as an international instrument containing additional rights be taken into consideration by companies.  

However, before adoption both the EU Parliament and the Council of the EU must also agree on the text. The Council of the EU adopted its general approach – effectively its negotiating position – on the directive in November 2022. In its approach, the Council dropped the specific inclusion of indigenous peoples’ right to land as well as the general reference to UNDRIP. It is clear therefore the Council in negotiations will be seeking to scrap any protection of indigenous rights in this instrument. Germany is said to be the main actor behind this removal, but it is very likely that France, Sweden and Finland continue to obstruct the protection of these rights.  

In contrast, both the European Commission and the European Parliament are in favour of the protection of indigenous rights in the Directive. The Parliament is currently working on amendments that would further strengthen the protection of indigenous peoples’ rights, to include specific rights to FPIC and self-determination as protected rights, adding ILO Convention No. 169 as a relevant international instrument, and adding requirements to respect indigenous rights and in particular FPIC as part of companies’ consultations with affected stakeholders. In view of these divergent positions, the coming months will be crucial to ensure that forest peoples are not once again left behind. 

Aside from this, however, the proposal still has other weaknesses for forest peoples. For example, companies are only required to address impacts caused by their own operations, those of their subsidiaries and those of their “established business partners”. The definition of “established business relationship” however may be highly problematic for forest peoples. This is because human rights violations affecting indigenous peoples and local communities in agricultural and extractive supply chains often occur far upstream the supply chain. Also, in many of these supply chains companies operate through short term contracts, regularly switching suppliers on the ground, or buy on the spot market. There is a strong risk that these scenarios – where the direct harm to indigenous and forest peoples is caused by suppliers multiple tiers away from EU companies and not necessarily through stable supply relationships – may frequently fall outside of the definition of established business relationship, meaning companies will not be required to assess or address these impacts. In light of the limitations of the deforestation regulation for indigenous peoples, if these and other issues are not addressed in the Directive, there is a real possibility that both major pieces of due diligence legislation adopted by the EU may substantially omit the protection of indigenous and forest peoples’ rights.  

For more details of the European Commission’s CSDD proposal and FPP’s analysis of its strengths and weaknesses for indigenous peoples’ rights and local communities’ rights, see our 2022 briefing here.