Rainforest Alliance and Fairtrade call on EU for major changes to its Omnibus sustainability plans

The Rainforest Alliance has joined with Fairtrade International in calling on the EU Commission to re-evaluate sweeping changes it has put forward with its Omnibus proposals on simplifying a raft of landmark sustainability legislation, which they claim risks the livelihoods of millions of smallholder farmers worldwide, reports Neill Barston.

Significantly, the collaborative organisations have been joined by other partners including civil organisation Solidaridad, and a wide range of industry observers expressing major concerns at what has been widely perceived as a significant watering down of established plans surrounding several flagship environmental and social rights policies for the EU linked to the Green Deal.

According to the collective group of industry bodies, the omnibus package has been devised in “a deeply flawed and undemocratic manner” that has lacked public scrutiny – though the Commission has claimed that it has consulted with industry partners, and that its move will save €6 billion in administrative costs.

As previously reported, the Corporate Sustainability Due Diligence and Reporting directives (CSDDD and CSRD), were designed to bring greater transparency and accountability to companies across Europe, including the food and drink sector – including many operating across confectionery, snacks and bakery markets, as well as cocoa supply chains. These were originally intended to be engaging with businesses with 500 employees or more, but it will now only be applicable to companies with 1000 staff or more – leaving many uncovered by the legislation.

For its part, the Rainforest Alliance noted in response to this week’s release of the Omnibus, the combined legislations had originally been anticipated to delivers ‘meaningful improvements to the living and working conditions for millions of smallholders and workers across the globe,’ but, as they assert, the proposed radical reduction in the scope of the legislation places those gains directly at risk.

Under the EU’s latest proposals, the major CSRD has been markedly reduced in scale, cutting reporting obligations for 80% of companies, with the start date for such monitoring also being pushed back by two years. This has drawn notable criticism from industry observers who have stated that unless the legislation applies broadly and has tangible enforcement penalties, it is effectively toothless.

This is even more the case they argued, given that the annual reporting on corporate due diligence has been proposed to be downgraded to just once every five years.

As Confectionery Production reported on the issue yesterday, Antonie Fountain, of the Voice Network, believed the EU Commission’s proposals amounted to a ‘dismantling of due diligence requirements,’ that did not serve their intended purpose. He also noted that there had been specific clauses inserted into the plans that prevented countries from raising the standards in future on an individual national basis.

Fairtrade response
Bindu Sukumarapillai, CEO Fairtrade Network of Asia Pacific Producers, added to the chorus of concern over the proposals.

She commented: “A CSDDD without civil liability and reduced fines for wrongdoings leaves farmers and their families with little. Companies often disengage and switch suppliers rather than co-invest in solutions that build resilience within supply chains. Meanwhile, meaningful stakeholder engagement is further limited, reinforcing power imbalance. What does this leave for farmers?”

Significantly, Rainforest Alliance highlighted that that the proposals are not considered to be aligned with long-standing due diligence standards like the United Nations Guiding Principles on Business and Human Rights(UNGPs) and the OECD guidelines. Furthermore, in its view, the proposals as they stand also risks abandoning the opportunity provided by the CSDDD to enhance long-term economic security.

As Rainforest Alliance explained, it has been among many groups advocating for years for the inclusion of key elements in the CSDDD to benefit rightsholders in non-EU countries, in particular smallholders, and expressed “deep concerns” about the proposed changes outlined this week in the EU Commission documents.

In addition, the environmental NGO noted that in its view, as with many other sector observers, limiting corporate responsibility to direct partners will eliminate the original objective to foster responsible corporate behaviour across global value chains and replaces it with an exercise where potential positive impacts are annihilated.

Rainforest Alliance concluded: “The CSDDD as agreed before, explicitly recognises the specific challenges faced by the 600 million smallholder farmers around the world, who produce the majority of the world’s coffee, cocoa, cotton, bananas, rice, tea and other vital commodities.

“Moreover, living wage and living income were also recognised as human rights that companies need to consider in their due diligence. The Commission now proposes changes that will undermine these essential parts of the CSDDD. Smallholders are the first to suffer from the triple planetary crisis, and their exposure to these risks will only exacerbate without levelling the playing field through landmark legislation.

“Further, the removal of civil liability and allowing only recourse to national law tort mechanisms, would not only weaken the implementation of the CSDDD, but also deprive rightsholders – especially from the Global South – of accessing justice. These provisions had been agreed by all co-legislators, as forming essential parts of effective and impactful due diligence.”

Critically, it added that the proposals as they now stand would not help meaningfully address human rights and environmental risks in supply chains, ultimately leaving the Directive ineffective.

Furthermore, it highlighted the fact that representative organisations of smallholder farmers have recently warned that the EU would fail them if it walked back on the CSDDD in a joint letter, leading to considerable concern that this in fact appears to have transpired with the latest proposals from the Commission.

Ursula von der Leyen, President of the European Commission, asserted that the proposals would benefit business, as well as help meet its environmental targets.

“This will make life easier for our businesses while ensuring we stay firmly on course toward our decarbonisation goals. And more simplification is on the way,” she stated of its proposals, which will now be voted on by the European Parliament.