This OECD-FAO Business Handbook on Deforestation 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 Agricultural Supply Chains (OECD-FAO Guidance) and the OECD Due Diligence Guidance for Responsible Business Conduct.
This Handbook forms part of the OECD and FAO’s work associated with the OECD-FAO Guidance for Responsible Agricultural Supply Chains (OECD-FAO Guidance) (OECD-FAO, 2016[1]) and Responsible Business Conduct (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 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 or 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, 2008[2]) aimed at ensuring the legal origin of timber. 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 companies 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‑operation 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 identify, 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 legality, 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, 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 stakeholders 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 public consultation was organised from June to July 2022.