EUDR: An Environmental Milestone with Social Implications
For companies operating in the EU, the EU Regulation on Deforestation Free Products (EUDR) is now a reality. While the EUDR is overtly an environmental legislation, one that’s been tailored to protect global forests from deforestation, its social implications are inevitable. The regulation covers applicable companies’ entire supply chain, all the way to the grower and manufacturer level, which means that best practice will have to be applied along the length of the supply chain.
The EUDR’s social implications lie in its requirement for companies to apply local and international human rights and labor laws in the production of affected commodities. This means if they’re to maintain access to EU markets, they’ll need to implement robust due diligence to ensure they’re upholding local human rights laws in the supply chain.
According to the Institute for Human and Business Rights, over 884 million people globally work primarily in agriculture, and around 3.83 billion live in households linked to agricultural food systems. The majority of farms in the world are family-owned, and smallholders account for at least a third of global food production. To implement the social aspects of the EUDR, companies need to establish reliable ways to engage with the smallholders who produce their commodities.
The Unique Role of Smallholders and the EUDR in the Supply Chain
For smallholders, the EUDR represents both a threat and an opportunity. They produce a significant portion of the commodities covered by the EUDR. There is a symbiotic relationship between the EU and smallholders. EU consumers are dependent on commodities that are largely produced by smallholders, and smallholders need continued access to the EU market to maintain their livelihoods. The agriculture sector accounts for 25% of GDP in low income countries, but there are already signs that industries are turning away from smallholders as it’s difficult to verify their compliance levels. If companies can’t implement the EUDR in a way that is smallholder inclusive, they risk falling foul of its social requirements.
Smallholders are the most vulnerable members of many commodity supply chains. They can slip through the cracks as they’re hard to reach. Job security on smallholder concessions isn’t always guaranteed. These are family run businesses with limited time and limited resources to invest in certification programmes or other means of proving compliance. Participation in certification programmes is low as they’re unable to shoulder the administrative or economic burden. Poor access to grievance systems means smallholders and their employees don’t always have a voice to raise concerns.
Smallholder ubiquity and vulnerability among EUDR-related commodities means that their voices must be heard, but they’re in danger of being left out because of the prohibitive cost and logistical difficulties that come with verifying compliance and meeting social welfare criteria. 35-40% of the world’s palm oil production is managed by smallholders, for example and 80% of coffee is produced by 25 million smallholders globally. However, smallholders face unique challenges when it comes to getting the money they need to participate in the sustainability compliance system.
EUDR Solution Case Study: Wild Asia
Companies can’t map social risk in the supply chain alone; there just isn’t enough existing data on social risks and social issues related to land rights. Social data will need to be aggregated and presented visually so it’s actionable, and cross-referenced with concession maps. Downstream companies are best equipped to do this, so it’s their responsibility to uphold the EUDR’s social aspect, and to help smallholders to comply.
Wild Asia is a member based organization that partnered with Ulula so they could better listen to their network of farmers and producers. Use of Ulula’s platform had the added bonus of allowing them to monitor yield, sales, pesticide use and so on.
Wild Asia and Ulula took worker and smallholder wellbeing surveys, and recorded the results digitally. The surveys gathered data on income, the impact of weather and climate change on crops and more. Ulula’s digital deployment allowed them to implement a grievance mechanism so Wild Asia could respond to smallholder issues as they happened.
Implementation yielded interesting results. It turns out monkeys can be a real nuisance for the smallholders involved! This goes to show just what insights you can glean with a worker-first, granular approach that amplifies smallholder voices.
Wild Asia groups small producers who are willing to work together into “Wild Asia Units”. In this way they can aggregate local information about smallholders more easily, so the data is more actionable. Around 75 smallholders tried the system and the feedback was overwhelmingly positive.
Ulula’s tech allowed Wild Asia to get closer than ever before to otherwise uncharted parts of the supply chain. The methodology could be easily scaled to the needs of companies looking to implement the social aspect of the EUDR at the mill level. The feedback shows how Ulula’s worker voice tech isn’t just good for EUDR compliance, it can be used to improve the lives of workers and smallholders for the benefit of everyone in the supply chain.
EUDR Compliance with Ulula
Ulula’s stakeholder engagement surveys are multilingual, accessible on any device, anywhere at any time. They’re designed to facilitate inclusive dialogue and feedback for affected stakeholders and communities with low visibility. These surveys allow companies to receive rapid, stakeholder-led insights across key indicators of well-being, working conditions, environmental impacts, health and safety, and more.
Of course, worker-voicer tech on its own isn’t going to transform supply chains and the lives of workers within. Tech is an enabler, companies will still need to implement better practices, gather actionable data, and use that data for EUDR compliance and more. Ulula gives them the tools to do so.
The latest Human Rights Due Diligence (HRDD) laws and the social aspect of the EUDR mandate engagement with all stakeholders. The Corporate Sustainability Reporting Directive specifically requires that companies report on how they engage with hard to reach stakeholders, like smallholders. This means that accessibility is a crucial consideration when implementing worker-voice tech. Smallholders aren’t a unified group; their ranks include migrants, farmers, family-run businesses and many other circumstances across the globe, so companies will have to adapt their solutions to fit as they scale them globally.
Data gaps remain on social issues that will need to be filled for companies to comply with the social aspects of the EUDR. Ulula can help companies fill data gaps and build impactful stakeholder engagement policies with their curated actionable data that comes directly from workers themselves, by allowing them to engage on their own devices, in their own language and in their own time. Worker voice tech allows companies to start their journey towards social impact and social compliance with the EUDR in the right way.