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The Environment Act 2021, Highly Anticipated Legislation Critical to UK Supply Chain Operations

The Environment Act 2021, Highly Anticipated Legislation Critical to UK Supply Chain Operations

In November 2021 the UK Government’s Environment Bill, an eagerly awaited piece of legislation, finally became law. This legislation, which is highly anticipated, will have many impacts on the food and retail sectors.

The Environment Act 2021 is now known as the Act. It aims to accelerate and improve our environmental protection. It focuses on setting clear targets and policies to improve the natural environment. There are four main priority areas: air, biodiversity, water, waste, and a strong commitment for reversing the decline of species by 2030 through improved habitats for nature.

As 80% of the world’s deforestation is linked to agricultural production, the Act has sought to combat further habitat destruction through targeted measures on UK businesses and supply chains. Illegal deforestation in the UK is connected to a range of commodities, including soya, palm oils, timber, pulp paper, meat, leather, rubber, cocoa, and beef. UK businesses cannot use key commodities if they are not produced in accordance with local laws that protect natural ecosystems.

Businesses should identify and obtain information on the commodities used. A risk review should be done to ensure that all local laws have been complied with. To substantiate this requirement, an annual reporting obligation on deforestation in a UK business’s supply chain will follow six months from the end of the UK financial year.

The aim of such measures is to build greater resilience, traceability and sustainability in the UK’s supply chain whilst contributing to the end of the climate crisis.

Comment

One commented flaw with the Act is that it currently only restricts forest risk commodities produced ‘illegally’ under that producer’s country laws. The Brazilian Government is currently drafting a package that will eventually weaken and abolish forest protections. Two related Bills have been approved in Brazil’s lower House of Parliament and are awaiting a vote in the Senate.

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Jaoquim, Brazil’s Environmental Minister, stated at COP26 the country would update its climate targets to include zero illegal forest destruction by 2028. His comments were starkly different from the subsequent statistic. The Amazon rainforest saw its highest levels of deforestation in 15 years. It is speculated that this was due to illegal activities. This demonstrates the importance of international cooperation to eradicate deforestation.

What’s next

To implement the Act’s provisions, secondary legislation is required. Defra published the secondary legislation consultation on 3 December 2021. Additional details about the legislation, including how the requirements will enforced and which commodities will be covered, as well as the business subject to the regulations, will be made available after the consultation closes on 11 March 2022.

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