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EUREDD 
Briefing Facility 
Working with the 
private sector on REDD+ 
1 Introduction 
A key feature of implementing the EU FLEGT Action 
Plan has been the engagement of the private sector in 
addressing the production of and trade in illegal timber. 
Photo: Agus Andrianto, CIFOR In the early days of the Action Plan, the private sector was often seen only as part 
of the problem, responsible for illegal logging, forest clearance and trade in illegally 
harvested timber and forest products. However, it soon became clear that, although 
this was true in some cases, many companies were keen to find solutions and some 
had even started to make changes. Engaging the private sector in REDD+ will also 
be essential if it is to succeed. 
1.1 What is ‘the private sector’ with respect 
to forests? 
A wide range of companies undertake activities that can lead to forest degradation 
and loss. At the production end of the supply chain are forestry companies that 
harvest timber, agricultural companies clearing forest for palm oil, soy, rubber, 
coffee, cocoa, sugarcane, cattle ranching or other products, and mining companies 
clearing forests as part of their extraction activities. Further along the supply chain 
are the traders, processors, manufacturers and retailers that buy the products and 
the investors that provide the finance to keep the companies operating. At every 
stage, these actors can range from huge multinational organisations to small local 
companies, sole traders or individual farmers. 
EU REDD Facility Working with the private sector on REDD+ 
1
1.2 Experiences from FLEGT 
Addressing production 
The main mechanism used by FLEGT to address illegality in production is the 
negotiation of bilateral trade agreements called Voluntary Partnership Agreements 
(VPAs) between the EU and timber-exporting countries. In order to implement these 
agreements, producer country governments need to verify the legality of timber 
production through a timber legality assurance system (TLAS) (see Introduction 
to FLEGT). The private sector has played an important role in the development 
of VPAs and legality assurance systems. For example, they have helped define the 
scope of relevant laws, worked with government to develop practical solutions for 
verification and supply chain control, and identified and communicated unresolved 
issues. The private sector has also functioned as a service provider to government 
in developing the technical solutions needed to put a legality assurance system 
in practice. 
Influencing consumption 
Experience from the FLEGT process in Europe, and from similar processes in other 
parts of the world, shows that while companies did not actively support illegal 
production, few had ever sought information on the legality of the timber that they 
used. Rather, buying decisions were made based on availability, quality and price – 
and illegal timber is generally cheaper. As awareness of the issue of illegal logging 
increased companies began to see the need to act responsibly and exclude illegal 
timber from their supply chains. However, they were hampered by two key problems: 
• They faced competition from companies that did not try to exclude illegal timber 
and so could potentially supply cheaper products. 
• They had insufficient understanding, experience, practical tools or support they 
needed to exclude illegal timber from their supply chains. 
Therefore, a critical early step in FLEGT was to develop the market for legal timber. 
This was done at first by encouraging the voluntary adoption of public and private 
sector procurement policies and later by making legal requirements, with the EU 
Timber Regulation. Another important step was to support the private sector in 
developing the knowledge, policies and tools needed to comply. 
1.3 The private sector and REDD+ 
The experiences from FLEGT provide useful lessons for those working to reduce forest 
degradation and loss. The private sector can support their efforts in several ways: 
• Reducing the negative impacts of production: Companies involved in production 
(forestry, agriculture, mining, etc.) can build forest protection into their routine 
activities either through voluntary commitments or in response to legislation, 
external policies or incentives. See Section 2.1. 
• Influencing consumption: As with the trade in illegal timber, companies sourcing 
or investing in commodities whose production may involve forest degradation 
and loss can work to exclude deforestation from their supply chain. 
See Section 2.2. 
• Developing REDD+ projects: The main purpose of REDD+ is to reduce carbon 
emissions from forests (see Introduction to REDD+). A specific way in which 
the private sector can be involved in REDD+ is as project developers with 
the aim of creating carbon credits which contribute to emission reductions. 
See Section 2.3. 
EU REDD Facility Working with the private sector on REDD+ 
Photo: Neil Palmer, CIAT 
2
2 Mechanisms for reducing deforestation 
EU REDD Facility Working with the private sector on REDD+ 
Photo: Neil Palmer, CIAT 
In many countries, reducing or halting deforestation 
and forest degradation resulting from private sector 
activities is a major hurdle for REDD+. 
There are different ways in which this can be addressed including company-led 
initiatives, national or international legislative or policy-based approaches or the 
introduction of incentives to encourage change. 
The most effective approach depends on the local situation. It is necessary to 
understand the local context because the private sector’s contribution to forest loss, 
and hence to potential solutions, varies considerably from one situation to another. 
• Forest conversion and degradation may be the result of illegal or poorly 
controlled activities by companies, often associated with poor governance. 
In such cases, companies can significantly reduce forest loss by improving 
their practices, particularly if the government also strengthens governance 
and law enforcement. 
• Forest loss may be the result of national policies that support agricultural 
expansion combined with poor land-use planning that fails to take into 
consideration the carbon density and biodiversity value of land allocated 
to agriculture. In countries where high historical rates of forest loss have 
led to large areas of degraded land, but forested areas continue to be cleared 
for agriculture, the private sector can play a role in moving expansion activities 
to previously cleared areas, but needs support from government in improving 
the policy and legal context. 
• Forest loss may result from legal forest conversion conducted as part of a 
country’s national development strategy. Countries or provinces with very low 
historical levels of forest loss may have little alternative to clearing forests if they 
wish to expand agriculture. In such cases, policy change or incentives will be 
needed to minimise forest loss and ensure that the most valuable forest areas 
are conserved. 
• Forest loss may be driven by smallholders expanding into new areas so they can 
supply companies with raw materials. Many national governments emphasise 
the development of smallholder production in the agriculture sector and often 
require large companies to support smallholder development programmes. 
However, land may be allocated with little or no understanding of forest 
conservation or incentives to encourage forest conservation. Companies 
can play a significant role in improving the planning process and promoting 
responsible land use that minimises the pressure on forests. 
In all cases, it is necessary to see the private sector as part of the solution rather than 
as part of the problem. 
3
2.1 Reducing the negative impacts of production 
Photo: Golden Agri Resources 
Photo: CIFOR 
Photo: Neil Palmer, CIAT 
EU REDD Facility Working with the private sector on REDD+ 
Example1: Golden Agri Resources 
(GAR) is one of the largest palm oil 
producers in the world. Following 
pressure from business customers, 
GAR committed to not converting 
high-carbon land (defined as land 
with more than 35 t/ha of carbon) 
in its Indonesian concessions 
to new plantations. GAR is 
now working to implement this 
commitment in practice. 
Example 2: The Roundtable on 
Sustainable Palm Oil (RSPO) 
standard includes a New Plantings 
Procedure, which is mandatory for 
all producer company members. 
This procedure prohibits the 
conversion of primary forest, peat 
lands and high conservation value 
areas (HCVAs). Olam International 
committed to complying with the 
RSPO New Plantings Procedure 
in its new plantations in Gabon 
and has already avoided 
converting large areas of forest 
in its concessions. 
Example 3: Brazilian soy 
producers worked with 
environmental and social NGOs 
and supply chain actors to agree 
on a zero forest clearance policy 
for the Amazon biome in Brazil. 
This policy is known as the Brazil 
‘soy moratorium’. The moratorium 
has been extended several times, 
most recently until the end of 2013. 
It has been extremely successful 
in stopping both legal and illegal 
clearance of forest for cultivating 
soybean in this biome. 
Company policies on responsible agricultural expansion 
Many agricultural companies are beginning to develop and apply responsible 
expansion policies, which include commitments to minimise deforestation. (See Box 
1 for some reasons for this shift in policy). Where large-scale agricultural expansion 
is the main pressure on forests, such changes to company policies can have a major 
impact, especially in a context of weak governance or poor spatial planning. 
Certification and roundtables 
The introduction of voluntary certification and roundtables in many sectors has 
brought stakeholders together to discuss responsible agricultural production. 
Managing land-use change and minimising deforestation have become important 
requirements of many of the standards making these initiatives important in helping 
to encourage change. 
Sector initiatives 
Several agricultural sectors have introduced initiatives to reduce their impacts 
on forests. Such initiatives often serve to create a critical mass that then encourages 
the whole sector to act. They also provide the sector with a forum for interacting 
with government. 
4
Improved governance and enforcement 
In some countries, the laws provide reasonable protection for forests but those laws 
are poorly enforced. Therefore, strengthening governance and law enforcement can 
contribute to the reduction of forest degradation and loss. Addressing governance 
and law enforcement is a central component of FLEGT. 
Deforestation in the Brazilian Amazon, 1988–2013 
35000 
30000 
25000 
20000 
15000 
10000 
5000 
0 
sq km deforested, per year. 
1988 
1989 
1990 
1991 
1992 
1996 
1994 
1995 
1993 
1999 
2000 
1997 
1998 
2001 
2002 
EU REDD Facility Working with the private sector on REDD+ 
Example 4: During the 1980s 
and 1990s, Brazil had one of the 
highest rates of deforestation 
of any tropical country. However, 
during the past few years, its 
deforestation rate has decreased 
considerably, largely because 
the Brazilian government has 
strengthened its enforcement 
of the legislation regulating 
forest clearance. For example, 
the government provided real-time 
information to the public 
on deforestation from satellite 
images. The government also 
encouraged greater transparency 
in providing information on the 
response to illegal clearance 
by relevant authorities. 
Source: Mongabay.com 
2004 
2005 
2003 
2007 
2008 
2006 
2009 
2011 
2012 
2010 
Improving the policy and regulatory framework 
Policy and regulatory frameworks in some countries hinder efforts to better protect 
the forests. Poor legislation, unclear tenure and resource rights, and inadequate 
land-use planning are often the biggest issues. Companies that try to overcome such 
barriers in isolation often find it difficult to make any progress. Experience with FLEGT 
has shown that a multi-stakeholder process that engages the private sector along 
with government, civil society and communities can help resolve these issues very 
effectively. Conversely, if companies are excluded from the process, they may not 
support it and may even undermine the outcomes. 
2013 
Website highlighting Golden Agri Resources public request to government to facilitate land swaps 
Example 5: In Indonesia, many 
palm oil companies have very 
large concessions (‘land banks’) 
which they have not yet used; 
these often contain large areas 
of tropical forest and peatland. 
A lot of work has been done to 
find ways for these companies to 
carry out ‘land swaps’, where they 
give up their forested concessions 
in return for new concessions 
in ‘degraded’ areas. However, 
many factors have hampered 
these efforts, including complex 
legal frameworks, decentralised 
decision-making, presence of 
vested interests and lack of strong 
political will from government. 
Nevertheless, some companies 
have publicly expressed a desire 
to change, putting pressure on 
governments to act. 
5
Providing incentives 
Where deforestation is legal and profitable, those engaged in clearing the forest 
need incentives to conserve it instead. This is the idea behind REDD+ as a global 
mechanism, but it is also possible to create incentives locally. Examples of local-level 
incentives include access to low-interest finance from government or banks and 
preferential contracts with buyers. In some cases, governments and the private sector 
have worked together to develop innovative incentives. 
Example 6: In Brazil, private landowners are legally required to maintain 
natural vegetation on a proportion of their land: 20–80% depending on the 
region. Many landowners have cleared their entire holding but now, with 
stronger law enforcement, they are being required to comply. One way 
to comply is simply to replant the required area with natural vegetation. 
Alternatively, the government allows landowners to offset their shortfall by 
buying ‘forest credits’ from a holding that has more than the proportion 
legally required. This provides an incentive to landowners whose land is 
still forested to forego their legal right to clear part of it. To facilitate this, 
BVRio (Bolsa Verde do Rio de Janeiro) – an environmental exchange 
established in Brazil in 2012 – provides a platform where landowners 
with excess forest can register and sell their ‘forest credits’. 
EU REDD Facility Working with the private sector on REDD+ 
Photo: Kate Evans, CIFOR 
6
2.2 Influencing consumption 
Early discussions on REDD+, like early discussions on illegal logging, tended to 
focus on the direct drivers of forest degradation and loss, particularly the expansion 
of agricultural commodity production. This trend persists in Europe, with a lot of 
attention given to the expansion of large-scale palm oil and soy production and cattle 
ranching. However, consumption patterns are equally relevant. 
If consumers are interested only in quality, price and delivery dates and pay no 
attention to deforestation or degradation involved in creation of a product, then 
producers will have no incentive to stop destroying forests. The main buyers of 
commodities whose production entails forest loss, whether as traders, processors, 
manufacturers or retailers, are European and North American companies. 
A central lesson from FLEGT is that one of the most effective ways of influencing 
what happens during production is for buyers to send a strong and consistent 
message that illegal timber is unacceptable. This creates a strong market for legal 
products. The same concept applies with REDD+. With growing awareness of the 
role of consumption in deforestation (see Box 1), several initiatives that seek 
to build support for reducing forest loss are in development. 
Responsible sourcing policies 
Many companies have developed responsible sourcing policies in which they commit 
to minimum standards for sourcing of raw materials. Such policies often began 
by dealing with issues such as child labour, but some companies have expanded 
them to environmental issues such as deforestation. In implementing their policies, 
these companies put pressure on and create incentives for producers to change 
their practices. 
Sector initiatives 
Sector initiatives also serve to influence buyers as well as producers. They tend to be 
particularly effective where there is a need to build a critical mass to create a market 
or influence policy. 
Legislation 
The EU Timber Regulation provides a legal basis for preventing illegally harvested 
timber from entering the EU (see briefing Introduction to FLEGT for further 
information). In response, countries that export timber to the EU are making major 
changes to their timber supply chains. The EU has no equivalent legislation that 
targets commodities whose production entails deforestation or forest degradation in 
general. Indeed, any attempt to do so would probably be challenged under World Trade 
Organization rules because deforestation is legal in many countries. For biofuels, 
however, the EU Renewable Energy Directive states that feedstocks such as palm oil, 
soy and sugarcane) cannot be grown on recently deforested areas; this legislation is 
permissible under World Trade Organization rules because it applies only to biofuels 
imported to meet EU biofuel targets and hence that are eligible for certain subsidies. 
Although only a small proportion of most crops is used for biofuel production 
(for example, only about 10–12% of all palm oil produced), the legislation has 
had some impact in locations where biofuel feedstocks are grown. 
EU REDD Facility Working with the private sector on REDD+ 
Example 7: The four biggest global 
traders of agricultural commodities 
are ADM, Bunge, Cargill and Louis 
Dreyfus. The three biggest food 
manufacturers are Nestlé, Unilever 
and Mondelēz. These companies, 
which together have sales of more 
than USD 400 billion a year, are all 
owned and headquartered in the 
United States or Europe. 
Example 8: Nestlé’s Responsible 
Sourcing Guidelines include 
a commitment to strive for a 
deforestation-free supply base. 
The company is working towards 
fulfilling this commitment when 
sourcing commodities whose 
production has often entailed 
deforestation, such as palm oil, 
sugar and soy. 
Example 9: The Consumer 
Goods Forum brings together 
400 consumer goods companies 
from 70 countries with combined 
annual sales of EUR 2.5 trillion. 
In 2010, the Forum developed 
a deforestation policy, with a 
commitment to help achieve zero 
net deforestation by 2020. 
7
Tropical Forest Alliance 2020 
Box 1 How companies becamwwew a.uwsaiad.rgeov /osfit etsh/dee fnauelte/fidle st/od oacudmdernets/s1s8 6d5e/TfFoAr2e02s0tFaACtiToSHnE ET.pdf 
EU REDD Facility Working with the private sector on REDD+ 
Deforestation appeared on the corporate agenda for various 
reasons, many of which parallel those which raised the profile 
of illegal logging a decade ago. 
Government procurement policy 
A major driver of change in many countries, and part of 
the EU FLEGT Action Plan in Europe, was the introduction 
of government policies on buying legally and sustainably 
harvested timber. As government procurement accounts for 
up to 20% of all direct purchases and government standards 
often have a large indirect impact, this policy shift created 
a market for companies that could meet the new government 
requirements and a risk for those that could not. Similar 
policies for deforestation are now beginning to emerge, 
as seen in the Netherlands and the United Kingdom. 
2.3 Developing REDD+ projects 
The private sector is involved in many projects set up with 
the explicit purpose of reducing carbon emissions through 
better forest protection and management. Their aim is generally 
to create carbon credits, which can then be sold to finance 
the project. 
The Clean Development Mechanism (CDM), is the carbon 
offset market under the current global climate agreement. 
The CDM only recognises planting of new forests: reforestation 
or afforestation. This means that all credits related to forestry 
under the CDM are based on reforestation or afforestation. 
The private sector has led the development of CDM projects, 
but no forest projects are underway because of the complexity 
of the CDM bureaucracy and methodologies. 
as deforestation. Ten years ago, campaigns tended 
to focus on forest products, but the focus has since 
shifted to the production of the agricultural commodities 
driving deforestation. 
Customer requirements 
Many large companies do not have well-known brands 
because they are intermediaries that trade and process 
materials. However, if their main customers are 
consumer-facing companies with highly visible brands, 
they must change their practices to meet their customers’ 
requirements. Therefore, private sector purchasing policies 
are a key component in driving change and form another 
pillar of the EU FLEGT Action Plan. 
Corporate social responsibility 
Most large companies have corporate social responsibility 
programmes and participate in international initiatives 
concerning key social and environmental issues. Examples 
are the UN Global Compact and the World Business Council 
for Sustainable Development. Growing awareness of the link 
between deforestation and climate change has pushed forest 
loss, particularly related to agriculture, onto their agendas. 
Linked to corporate social responsibility are public reporting 
and transparency initiatives that encourage companies 
to report publicly on their impact on forests; examples 
of these are the Forest Footprint Disclosure Project 
and WWF Scorecards. 
Investors 
The EU FLEGT Action Plan recognises that investors can 
influence the production of and trade in illegal timber as well 
as the rate of deforestation more generally. Some multilateral 
and private sector investors are developing investment criteria 
that include a commitment to avoiding deforestation. Examples 
include the International Finance Corporation and HSBC. 
Brand management 
Large companies protect their brands because maintaining a 
strong and respected brand is a key to success. Environmental 
advocacy groups such as Greenpeace therefore attack brands 
as a way to force companies to consider issues such 
However, in the voluntary carbon market, where credits are 
sold outside of the compliance regime of the UN Framework 
Convention on Climate Change, a wide range of projects that 
aim to reduce emissions from forests have been established. 
Examples include conservation programmes that completely 
protect forest areas and projects that provide households with 
more efficient cooking stoves to reduce the use of wood and 
charcoal fuel. These can be very useful at a local level, but the 
scale is too small to transform sectors. 
In both the CDM and the voluntary market, most projects were 
developed by companies for commercial reasons. 
Protest against deforestation in Nestlé’s supply chain 
Photo: Greenpeace 
8
3 Engaging effectively with the private sector 
EU REDD Facility Working with the private sector on REDD+ 
Example 10: The Tropical Forest 
Alliance 2020 is a public–private 
partnership that was founded 
by the US government and the 
Consumer Goods Forum with 
the goal of reducing the tropical 
deforestation associated with key 
global commodities. The Alliance 
is open to new members, including 
producer and consumer countries, 
private sector companies and civil 
society organisations that agree 
to undertake specific actions 
to address commodity-driven 
tropical deforestation. 
International initiatives to reduce forest degradation 
and loss, such as FLEGT and REDD+, are more likely 
to succeed if they engage the private sector as full 
partners with government and other stakeholders in 
both developing and implementing solutions. 
There are a variety of ways in which this can be encouraged, several of which are 
discussed here. When considering any of these, it is important to remember that there 
are also risks associated with the private sector which must be managed. These are 
discussed in Box 2. 
Partnerships between government and the private sector 
Many tropical forest countries must revise their policy and legal frameworks, 
strengthen law enforcement and improve land-use planning if they are to make 
progress with REDD+ or low carbon development. The government must lead these 
initiatives, but failure to involve the private sector creates a high risk that individual 
companies or a whole sector will lobby against any changes that seek to curb their 
freedom to deforest. The multi-stakeholder approach used in the development 
of legality assurance systems in VPAs is a good example of how the private sector 
can be constructively involved. 
International support for change 
A lesson from FLEGT is the importance of having private sector support in the 
international debate. Governments are heavily influenced by the position of large 
companies, particularly companies that are already major employers or that the 
government hopes will invest in their country. Therefore, international initiatives 
such as FLEGT and REDD+ are more likely to gain and maintain political attention 
and support if major multinational companies support their goals. In practice, 
large companies are often reluctant to support specific initiatives, so the focus should 
be on the goals, such as ending the production of and trade in illegally harvested 
timber or eliminating deforestation from agricultural supply chains. 
Developing and using tools and systems 
A major challenge for both FLEGT and REDD+ is carrying out activities such as 
planning, enforcement, monitoring and development in remote forest areas in 
countries with very poor infrastructure and limited capacity among government 
staff. Private companies are often much more effective than government in these 
situations. For example, they often provide clinics, schools, roads and community 
support systems in areas where they run plantations, farms and mills and where 
government services are absent. Companies could support governments by 
developing and deploying effective tools and systems, whether for tracing timber, 
enforcing legislation or protecting forests. 
Supporting small-scale producers 
A pressing issue in achieving low-deforestation agricultural production is ensuring 
that small-scale producers are meaningfully included. This is a daunting task given 
that there are millions of small-scale producers around the world with little or no 
access to information or incentives to conserve forest. Companies have unique 
access to these small-scale producers where they buy their products or provide 
finance or technical assistance. They may be able to leverage this influence to raise 
awareness and provide incentives. 
Example 11: The SHARP Initiative, 
is a partnership of companies, 
NGOs, governments and other 
stakeholders that supports 
smallholder development by 
working with the private sector. 
SHARP harnesses company 
experience and resources and 
their existing relationships with 
smallholders as buyers, financers 
or providers of technical support 
to identify and resolve key 
issues, including how to reduce 
deforestation in smallholder 
production. 
9
Creating economic buy-in 
Even if a large number of individuals and organisations strongly support the protection 
of forests, experience shows that achieving and maintaining low rates of forest loss 
in the long term will be very difficult unless there is an economic as well as an ethical 
imperative to do so. The private sector can help create this economic imperative. 
For example, if a company wins a major contract partly because it guarantees 
deforestation-free products, it is likely to work hard to ensure that no further forest 
loss is incurred. Similarly, if a government employs many people in law enforcement, 
they are likely to oppose any suggestion that enforcement is unnecessary. 
EU REDD Facility Working with the private sector on REDD+ 
Example 12: When the UK 
government said it would ‘reduce 
environmental legislation to 
improve the environment for 
the private sector’, the 10,000+ 
UK companies whose business 
was based on supporting 
the implementation of good 
environmental practices lobbied 
against this reduction in 
standards. This strongly influenced 
subsequent government action. 
Service providers 
The private sector can provide many of the services needed to reduce 
deforestation, including monitoring, enforcement, training and systems 
development and deployment. 
Photo: Aidenvironment 
Photo: Neil Palmer, CIAT 
10
Box 2 Limitations and risks of working with the private sector 
EU REDD Facility Working with the private sector on REDD+ 
Scope 
Government must lead in many aspects such as legislation 
reform, land-use planning, allocation of tenure and use rights 
and law enforcement. Placing too much emphasis on private 
sector–led approaches or leaving the private sector to improve 
their practices in the absence of government support can 
undermine progress. Therefore, it is important to consider 
carefully the scope of private sector activities. 
Exclusion of SMEs 
Shifting to sustainable practices is challenging for small 
and medium enterprises, such as smallholder farmers, 
traders, manufacturers and suppliers along the supply chain. 
Economies of scale make it possible for large companies 
to make changes, while smaller players may be left behind. 
Programmes should therefore include adequate support 
and training for small and medium enterprises, and large 
companies should find ways to help smaller suppliers rather 
than exclude them. 
Corruption 
In some cases, the private sector may help provide greater 
transparency, but in others, it can be a source of corrupt 
practices. In some countries, companies have been routinely 
paying officials for many years and constitute a major barrier to 
better governance and greater transparency. In such situations, 
it may be necessary to concentrate on improving corporate 
governance and transparency, rather than seeking to engage 
companies as partners. 
There are many advantages to working with the private 
sector, but there are also limitations and risks to consider 
when planning any collaboration. 
Companies drive forest loss 
Although a growing number of companies are committed 
to minimising their forest footprint, many others remain 
unconcerned about their direct or indirect contribution to forest 
degradation and loss. Such companies have no interest in 
working with governments or anyone else to make changes. 
Therefore, while it is often possible to work in partnership 
with companies, it is also important to have adequate control 
mechanisms in place to deal with companies that are not 
committed to good practice. 
Company policy versus practice 
There is sometimes a disconnect between the policies of 
companies at the headquarters level and the reality of the 
activities carried out on the ground. For example, in sites where 
agricultural companies are expanding their operations, field 
personnel may be selected for their agronomic expertise or 
their ability to function in difficult remote areas, rather than 
for their awareness of environmental issues; supply chain 
companies may recruit traders for their ability to negotiate 
deals rather than for their familiarity with the impacts of 
purchasing on forests or people. Furthermore, targets and 
reward systems are often based on delivery of results, such 
as hectares planted or profits made on trades; employees 
may not be rewarded for minimising environmental impacts. 
Consequently, unless the company provides adequate training, 
support and oversight and sets appropriate key performance 
indicators (KPIs) and individual targets, personnel are 
unlikely to focus on complying with policies such as avoiding 
deforestation. Therefore, when engaging with the private sector, 
it is important to examine how their policies are being applied 
in practice. 
11
4 Further information 
on examples 
Golden Agri Resources high-carbon land commitment 
http://news.mongabay.com/2012/0605-gar-high-carbon-stock-report.html 
The Roundtable on Sustainable Palm Oil New Planting Procedure and Olam 
www.rspo.org/en/new_planting_procedure 
www.rspo.org/en/member/754 
Brazil soy moratorium 
www.abiove.org.br/site/index.php?page=soy-moratorium&area=MTEtMy0x 
Brazil Amazon deforestation rates 
www.mongabay.com/brazil.html 
Nestlé Responsible Sourcing Guidelines 
www.nestle.com/csv/responsible-sourcing/managing-responsible-sourcing 
Consumer Goods Forum 
http://sustainability.mycgforum.com/deforestation.html 
SHARP Partnership 
www.sharp-partnership.org 
Monthly information on deforestation in the Amazon 
www.imazon.org.br/mapas 
BVRio (Bolsa Verde do Rio de Janeiro) 
www.bvrio.org/site 
Proforest developed four briefings that introduce REDD+ and explain the links between FLEGT 
and REDD+ and with other forest initiatives. 
• Introduction to FLEGT 
• Introduction to REDD+ 
Funded by the European Union and the 
Governments of France, Germany, Ireland, 
Spain and the United Kingdom 
• Linking FLEGT and REDD+ 
• Working with the private sector on REDD+ 
This is the fourth of the four briefings, Working with the private sector on REDD+. REDD+ stands 
for reducing emissions from deforestation and forest degradation plus conserving forests, 
sustainably managing forests and enhancing forest carbon stocks. REDD+ is a proposed 
international mechanism to provide incentives for developing countries to protect and restore 
their forest carbon stocks. FLEGT stands for forest law enforcement, governance and trade. 
The FLEGT Action Plan is a European Union initiative to address the problem of illegal logging 
and related trade. 
This briefing was developed by Proforest, with input from EFI and officials of the European Union 
and EU member states, and produced with the assistance of the European Union. The contents 
are the sole responsibility of the authors and can in no way be taken to represent the views 
of the European Union. 
© European Forest Institute, Proforest 2014

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Pro forest - working with the private sector on redd

  • 1. EUREDD Briefing Facility Working with the private sector on REDD+ 1 Introduction A key feature of implementing the EU FLEGT Action Plan has been the engagement of the private sector in addressing the production of and trade in illegal timber. Photo: Agus Andrianto, CIFOR In the early days of the Action Plan, the private sector was often seen only as part of the problem, responsible for illegal logging, forest clearance and trade in illegally harvested timber and forest products. However, it soon became clear that, although this was true in some cases, many companies were keen to find solutions and some had even started to make changes. Engaging the private sector in REDD+ will also be essential if it is to succeed. 1.1 What is ‘the private sector’ with respect to forests? A wide range of companies undertake activities that can lead to forest degradation and loss. At the production end of the supply chain are forestry companies that harvest timber, agricultural companies clearing forest for palm oil, soy, rubber, coffee, cocoa, sugarcane, cattle ranching or other products, and mining companies clearing forests as part of their extraction activities. Further along the supply chain are the traders, processors, manufacturers and retailers that buy the products and the investors that provide the finance to keep the companies operating. At every stage, these actors can range from huge multinational organisations to small local companies, sole traders or individual farmers. EU REDD Facility Working with the private sector on REDD+ 1
  • 2. 1.2 Experiences from FLEGT Addressing production The main mechanism used by FLEGT to address illegality in production is the negotiation of bilateral trade agreements called Voluntary Partnership Agreements (VPAs) between the EU and timber-exporting countries. In order to implement these agreements, producer country governments need to verify the legality of timber production through a timber legality assurance system (TLAS) (see Introduction to FLEGT). The private sector has played an important role in the development of VPAs and legality assurance systems. For example, they have helped define the scope of relevant laws, worked with government to develop practical solutions for verification and supply chain control, and identified and communicated unresolved issues. The private sector has also functioned as a service provider to government in developing the technical solutions needed to put a legality assurance system in practice. Influencing consumption Experience from the FLEGT process in Europe, and from similar processes in other parts of the world, shows that while companies did not actively support illegal production, few had ever sought information on the legality of the timber that they used. Rather, buying decisions were made based on availability, quality and price – and illegal timber is generally cheaper. As awareness of the issue of illegal logging increased companies began to see the need to act responsibly and exclude illegal timber from their supply chains. However, they were hampered by two key problems: • They faced competition from companies that did not try to exclude illegal timber and so could potentially supply cheaper products. • They had insufficient understanding, experience, practical tools or support they needed to exclude illegal timber from their supply chains. Therefore, a critical early step in FLEGT was to develop the market for legal timber. This was done at first by encouraging the voluntary adoption of public and private sector procurement policies and later by making legal requirements, with the EU Timber Regulation. Another important step was to support the private sector in developing the knowledge, policies and tools needed to comply. 1.3 The private sector and REDD+ The experiences from FLEGT provide useful lessons for those working to reduce forest degradation and loss. The private sector can support their efforts in several ways: • Reducing the negative impacts of production: Companies involved in production (forestry, agriculture, mining, etc.) can build forest protection into their routine activities either through voluntary commitments or in response to legislation, external policies or incentives. See Section 2.1. • Influencing consumption: As with the trade in illegal timber, companies sourcing or investing in commodities whose production may involve forest degradation and loss can work to exclude deforestation from their supply chain. See Section 2.2. • Developing REDD+ projects: The main purpose of REDD+ is to reduce carbon emissions from forests (see Introduction to REDD+). A specific way in which the private sector can be involved in REDD+ is as project developers with the aim of creating carbon credits which contribute to emission reductions. See Section 2.3. EU REDD Facility Working with the private sector on REDD+ Photo: Neil Palmer, CIAT 2
  • 3. 2 Mechanisms for reducing deforestation EU REDD Facility Working with the private sector on REDD+ Photo: Neil Palmer, CIAT In many countries, reducing or halting deforestation and forest degradation resulting from private sector activities is a major hurdle for REDD+. There are different ways in which this can be addressed including company-led initiatives, national or international legislative or policy-based approaches or the introduction of incentives to encourage change. The most effective approach depends on the local situation. It is necessary to understand the local context because the private sector’s contribution to forest loss, and hence to potential solutions, varies considerably from one situation to another. • Forest conversion and degradation may be the result of illegal or poorly controlled activities by companies, often associated with poor governance. In such cases, companies can significantly reduce forest loss by improving their practices, particularly if the government also strengthens governance and law enforcement. • Forest loss may be the result of national policies that support agricultural expansion combined with poor land-use planning that fails to take into consideration the carbon density and biodiversity value of land allocated to agriculture. In countries where high historical rates of forest loss have led to large areas of degraded land, but forested areas continue to be cleared for agriculture, the private sector can play a role in moving expansion activities to previously cleared areas, but needs support from government in improving the policy and legal context. • Forest loss may result from legal forest conversion conducted as part of a country’s national development strategy. Countries or provinces with very low historical levels of forest loss may have little alternative to clearing forests if they wish to expand agriculture. In such cases, policy change or incentives will be needed to minimise forest loss and ensure that the most valuable forest areas are conserved. • Forest loss may be driven by smallholders expanding into new areas so they can supply companies with raw materials. Many national governments emphasise the development of smallholder production in the agriculture sector and often require large companies to support smallholder development programmes. However, land may be allocated with little or no understanding of forest conservation or incentives to encourage forest conservation. Companies can play a significant role in improving the planning process and promoting responsible land use that minimises the pressure on forests. In all cases, it is necessary to see the private sector as part of the solution rather than as part of the problem. 3
  • 4. 2.1 Reducing the negative impacts of production Photo: Golden Agri Resources Photo: CIFOR Photo: Neil Palmer, CIAT EU REDD Facility Working with the private sector on REDD+ Example1: Golden Agri Resources (GAR) is one of the largest palm oil producers in the world. Following pressure from business customers, GAR committed to not converting high-carbon land (defined as land with more than 35 t/ha of carbon) in its Indonesian concessions to new plantations. GAR is now working to implement this commitment in practice. Example 2: The Roundtable on Sustainable Palm Oil (RSPO) standard includes a New Plantings Procedure, which is mandatory for all producer company members. This procedure prohibits the conversion of primary forest, peat lands and high conservation value areas (HCVAs). Olam International committed to complying with the RSPO New Plantings Procedure in its new plantations in Gabon and has already avoided converting large areas of forest in its concessions. Example 3: Brazilian soy producers worked with environmental and social NGOs and supply chain actors to agree on a zero forest clearance policy for the Amazon biome in Brazil. This policy is known as the Brazil ‘soy moratorium’. The moratorium has been extended several times, most recently until the end of 2013. It has been extremely successful in stopping both legal and illegal clearance of forest for cultivating soybean in this biome. Company policies on responsible agricultural expansion Many agricultural companies are beginning to develop and apply responsible expansion policies, which include commitments to minimise deforestation. (See Box 1 for some reasons for this shift in policy). Where large-scale agricultural expansion is the main pressure on forests, such changes to company policies can have a major impact, especially in a context of weak governance or poor spatial planning. Certification and roundtables The introduction of voluntary certification and roundtables in many sectors has brought stakeholders together to discuss responsible agricultural production. Managing land-use change and minimising deforestation have become important requirements of many of the standards making these initiatives important in helping to encourage change. Sector initiatives Several agricultural sectors have introduced initiatives to reduce their impacts on forests. Such initiatives often serve to create a critical mass that then encourages the whole sector to act. They also provide the sector with a forum for interacting with government. 4
  • 5. Improved governance and enforcement In some countries, the laws provide reasonable protection for forests but those laws are poorly enforced. Therefore, strengthening governance and law enforcement can contribute to the reduction of forest degradation and loss. Addressing governance and law enforcement is a central component of FLEGT. Deforestation in the Brazilian Amazon, 1988–2013 35000 30000 25000 20000 15000 10000 5000 0 sq km deforested, per year. 1988 1989 1990 1991 1992 1996 1994 1995 1993 1999 2000 1997 1998 2001 2002 EU REDD Facility Working with the private sector on REDD+ Example 4: During the 1980s and 1990s, Brazil had one of the highest rates of deforestation of any tropical country. However, during the past few years, its deforestation rate has decreased considerably, largely because the Brazilian government has strengthened its enforcement of the legislation regulating forest clearance. For example, the government provided real-time information to the public on deforestation from satellite images. The government also encouraged greater transparency in providing information on the response to illegal clearance by relevant authorities. Source: Mongabay.com 2004 2005 2003 2007 2008 2006 2009 2011 2012 2010 Improving the policy and regulatory framework Policy and regulatory frameworks in some countries hinder efforts to better protect the forests. Poor legislation, unclear tenure and resource rights, and inadequate land-use planning are often the biggest issues. Companies that try to overcome such barriers in isolation often find it difficult to make any progress. Experience with FLEGT has shown that a multi-stakeholder process that engages the private sector along with government, civil society and communities can help resolve these issues very effectively. Conversely, if companies are excluded from the process, they may not support it and may even undermine the outcomes. 2013 Website highlighting Golden Agri Resources public request to government to facilitate land swaps Example 5: In Indonesia, many palm oil companies have very large concessions (‘land banks’) which they have not yet used; these often contain large areas of tropical forest and peatland. A lot of work has been done to find ways for these companies to carry out ‘land swaps’, where they give up their forested concessions in return for new concessions in ‘degraded’ areas. However, many factors have hampered these efforts, including complex legal frameworks, decentralised decision-making, presence of vested interests and lack of strong political will from government. Nevertheless, some companies have publicly expressed a desire to change, putting pressure on governments to act. 5
  • 6. Providing incentives Where deforestation is legal and profitable, those engaged in clearing the forest need incentives to conserve it instead. This is the idea behind REDD+ as a global mechanism, but it is also possible to create incentives locally. Examples of local-level incentives include access to low-interest finance from government or banks and preferential contracts with buyers. In some cases, governments and the private sector have worked together to develop innovative incentives. Example 6: In Brazil, private landowners are legally required to maintain natural vegetation on a proportion of their land: 20–80% depending on the region. Many landowners have cleared their entire holding but now, with stronger law enforcement, they are being required to comply. One way to comply is simply to replant the required area with natural vegetation. Alternatively, the government allows landowners to offset their shortfall by buying ‘forest credits’ from a holding that has more than the proportion legally required. This provides an incentive to landowners whose land is still forested to forego their legal right to clear part of it. To facilitate this, BVRio (Bolsa Verde do Rio de Janeiro) – an environmental exchange established in Brazil in 2012 – provides a platform where landowners with excess forest can register and sell their ‘forest credits’. EU REDD Facility Working with the private sector on REDD+ Photo: Kate Evans, CIFOR 6
  • 7. 2.2 Influencing consumption Early discussions on REDD+, like early discussions on illegal logging, tended to focus on the direct drivers of forest degradation and loss, particularly the expansion of agricultural commodity production. This trend persists in Europe, with a lot of attention given to the expansion of large-scale palm oil and soy production and cattle ranching. However, consumption patterns are equally relevant. If consumers are interested only in quality, price and delivery dates and pay no attention to deforestation or degradation involved in creation of a product, then producers will have no incentive to stop destroying forests. The main buyers of commodities whose production entails forest loss, whether as traders, processors, manufacturers or retailers, are European and North American companies. A central lesson from FLEGT is that one of the most effective ways of influencing what happens during production is for buyers to send a strong and consistent message that illegal timber is unacceptable. This creates a strong market for legal products. The same concept applies with REDD+. With growing awareness of the role of consumption in deforestation (see Box 1), several initiatives that seek to build support for reducing forest loss are in development. Responsible sourcing policies Many companies have developed responsible sourcing policies in which they commit to minimum standards for sourcing of raw materials. Such policies often began by dealing with issues such as child labour, but some companies have expanded them to environmental issues such as deforestation. In implementing their policies, these companies put pressure on and create incentives for producers to change their practices. Sector initiatives Sector initiatives also serve to influence buyers as well as producers. They tend to be particularly effective where there is a need to build a critical mass to create a market or influence policy. Legislation The EU Timber Regulation provides a legal basis for preventing illegally harvested timber from entering the EU (see briefing Introduction to FLEGT for further information). In response, countries that export timber to the EU are making major changes to their timber supply chains. The EU has no equivalent legislation that targets commodities whose production entails deforestation or forest degradation in general. Indeed, any attempt to do so would probably be challenged under World Trade Organization rules because deforestation is legal in many countries. For biofuels, however, the EU Renewable Energy Directive states that feedstocks such as palm oil, soy and sugarcane) cannot be grown on recently deforested areas; this legislation is permissible under World Trade Organization rules because it applies only to biofuels imported to meet EU biofuel targets and hence that are eligible for certain subsidies. Although only a small proportion of most crops is used for biofuel production (for example, only about 10–12% of all palm oil produced), the legislation has had some impact in locations where biofuel feedstocks are grown. EU REDD Facility Working with the private sector on REDD+ Example 7: The four biggest global traders of agricultural commodities are ADM, Bunge, Cargill and Louis Dreyfus. The three biggest food manufacturers are Nestlé, Unilever and Mondelēz. These companies, which together have sales of more than USD 400 billion a year, are all owned and headquartered in the United States or Europe. Example 8: Nestlé’s Responsible Sourcing Guidelines include a commitment to strive for a deforestation-free supply base. The company is working towards fulfilling this commitment when sourcing commodities whose production has often entailed deforestation, such as palm oil, sugar and soy. Example 9: The Consumer Goods Forum brings together 400 consumer goods companies from 70 countries with combined annual sales of EUR 2.5 trillion. In 2010, the Forum developed a deforestation policy, with a commitment to help achieve zero net deforestation by 2020. 7
  • 8. Tropical Forest Alliance 2020 Box 1 How companies becamwwew a.uwsaiad.rgeov /osfit etsh/dee fnauelte/fidle st/od oacudmdernets/s1s8 6d5e/TfFoAr2e02s0tFaACtiToSHnE ET.pdf EU REDD Facility Working with the private sector on REDD+ Deforestation appeared on the corporate agenda for various reasons, many of which parallel those which raised the profile of illegal logging a decade ago. Government procurement policy A major driver of change in many countries, and part of the EU FLEGT Action Plan in Europe, was the introduction of government policies on buying legally and sustainably harvested timber. As government procurement accounts for up to 20% of all direct purchases and government standards often have a large indirect impact, this policy shift created a market for companies that could meet the new government requirements and a risk for those that could not. Similar policies for deforestation are now beginning to emerge, as seen in the Netherlands and the United Kingdom. 2.3 Developing REDD+ projects The private sector is involved in many projects set up with the explicit purpose of reducing carbon emissions through better forest protection and management. Their aim is generally to create carbon credits, which can then be sold to finance the project. The Clean Development Mechanism (CDM), is the carbon offset market under the current global climate agreement. The CDM only recognises planting of new forests: reforestation or afforestation. This means that all credits related to forestry under the CDM are based on reforestation or afforestation. The private sector has led the development of CDM projects, but no forest projects are underway because of the complexity of the CDM bureaucracy and methodologies. as deforestation. Ten years ago, campaigns tended to focus on forest products, but the focus has since shifted to the production of the agricultural commodities driving deforestation. Customer requirements Many large companies do not have well-known brands because they are intermediaries that trade and process materials. However, if their main customers are consumer-facing companies with highly visible brands, they must change their practices to meet their customers’ requirements. Therefore, private sector purchasing policies are a key component in driving change and form another pillar of the EU FLEGT Action Plan. Corporate social responsibility Most large companies have corporate social responsibility programmes and participate in international initiatives concerning key social and environmental issues. Examples are the UN Global Compact and the World Business Council for Sustainable Development. Growing awareness of the link between deforestation and climate change has pushed forest loss, particularly related to agriculture, onto their agendas. Linked to corporate social responsibility are public reporting and transparency initiatives that encourage companies to report publicly on their impact on forests; examples of these are the Forest Footprint Disclosure Project and WWF Scorecards. Investors The EU FLEGT Action Plan recognises that investors can influence the production of and trade in illegal timber as well as the rate of deforestation more generally. Some multilateral and private sector investors are developing investment criteria that include a commitment to avoiding deforestation. Examples include the International Finance Corporation and HSBC. Brand management Large companies protect their brands because maintaining a strong and respected brand is a key to success. Environmental advocacy groups such as Greenpeace therefore attack brands as a way to force companies to consider issues such However, in the voluntary carbon market, where credits are sold outside of the compliance regime of the UN Framework Convention on Climate Change, a wide range of projects that aim to reduce emissions from forests have been established. Examples include conservation programmes that completely protect forest areas and projects that provide households with more efficient cooking stoves to reduce the use of wood and charcoal fuel. These can be very useful at a local level, but the scale is too small to transform sectors. In both the CDM and the voluntary market, most projects were developed by companies for commercial reasons. Protest against deforestation in Nestlé’s supply chain Photo: Greenpeace 8
  • 9. 3 Engaging effectively with the private sector EU REDD Facility Working with the private sector on REDD+ Example 10: The Tropical Forest Alliance 2020 is a public–private partnership that was founded by the US government and the Consumer Goods Forum with the goal of reducing the tropical deforestation associated with key global commodities. The Alliance is open to new members, including producer and consumer countries, private sector companies and civil society organisations that agree to undertake specific actions to address commodity-driven tropical deforestation. International initiatives to reduce forest degradation and loss, such as FLEGT and REDD+, are more likely to succeed if they engage the private sector as full partners with government and other stakeholders in both developing and implementing solutions. There are a variety of ways in which this can be encouraged, several of which are discussed here. When considering any of these, it is important to remember that there are also risks associated with the private sector which must be managed. These are discussed in Box 2. Partnerships between government and the private sector Many tropical forest countries must revise their policy and legal frameworks, strengthen law enforcement and improve land-use planning if they are to make progress with REDD+ or low carbon development. The government must lead these initiatives, but failure to involve the private sector creates a high risk that individual companies or a whole sector will lobby against any changes that seek to curb their freedom to deforest. The multi-stakeholder approach used in the development of legality assurance systems in VPAs is a good example of how the private sector can be constructively involved. International support for change A lesson from FLEGT is the importance of having private sector support in the international debate. Governments are heavily influenced by the position of large companies, particularly companies that are already major employers or that the government hopes will invest in their country. Therefore, international initiatives such as FLEGT and REDD+ are more likely to gain and maintain political attention and support if major multinational companies support their goals. In practice, large companies are often reluctant to support specific initiatives, so the focus should be on the goals, such as ending the production of and trade in illegally harvested timber or eliminating deforestation from agricultural supply chains. Developing and using tools and systems A major challenge for both FLEGT and REDD+ is carrying out activities such as planning, enforcement, monitoring and development in remote forest areas in countries with very poor infrastructure and limited capacity among government staff. Private companies are often much more effective than government in these situations. For example, they often provide clinics, schools, roads and community support systems in areas where they run plantations, farms and mills and where government services are absent. Companies could support governments by developing and deploying effective tools and systems, whether for tracing timber, enforcing legislation or protecting forests. Supporting small-scale producers A pressing issue in achieving low-deforestation agricultural production is ensuring that small-scale producers are meaningfully included. This is a daunting task given that there are millions of small-scale producers around the world with little or no access to information or incentives to conserve forest. Companies have unique access to these small-scale producers where they buy their products or provide finance or technical assistance. They may be able to leverage this influence to raise awareness and provide incentives. Example 11: The SHARP Initiative, is a partnership of companies, NGOs, governments and other stakeholders that supports smallholder development by working with the private sector. SHARP harnesses company experience and resources and their existing relationships with smallholders as buyers, financers or providers of technical support to identify and resolve key issues, including how to reduce deforestation in smallholder production. 9
  • 10. Creating economic buy-in Even if a large number of individuals and organisations strongly support the protection of forests, experience shows that achieving and maintaining low rates of forest loss in the long term will be very difficult unless there is an economic as well as an ethical imperative to do so. The private sector can help create this economic imperative. For example, if a company wins a major contract partly because it guarantees deforestation-free products, it is likely to work hard to ensure that no further forest loss is incurred. Similarly, if a government employs many people in law enforcement, they are likely to oppose any suggestion that enforcement is unnecessary. EU REDD Facility Working with the private sector on REDD+ Example 12: When the UK government said it would ‘reduce environmental legislation to improve the environment for the private sector’, the 10,000+ UK companies whose business was based on supporting the implementation of good environmental practices lobbied against this reduction in standards. This strongly influenced subsequent government action. Service providers The private sector can provide many of the services needed to reduce deforestation, including monitoring, enforcement, training and systems development and deployment. Photo: Aidenvironment Photo: Neil Palmer, CIAT 10
  • 11. Box 2 Limitations and risks of working with the private sector EU REDD Facility Working with the private sector on REDD+ Scope Government must lead in many aspects such as legislation reform, land-use planning, allocation of tenure and use rights and law enforcement. Placing too much emphasis on private sector–led approaches or leaving the private sector to improve their practices in the absence of government support can undermine progress. Therefore, it is important to consider carefully the scope of private sector activities. Exclusion of SMEs Shifting to sustainable practices is challenging for small and medium enterprises, such as smallholder farmers, traders, manufacturers and suppliers along the supply chain. Economies of scale make it possible for large companies to make changes, while smaller players may be left behind. Programmes should therefore include adequate support and training for small and medium enterprises, and large companies should find ways to help smaller suppliers rather than exclude them. Corruption In some cases, the private sector may help provide greater transparency, but in others, it can be a source of corrupt practices. In some countries, companies have been routinely paying officials for many years and constitute a major barrier to better governance and greater transparency. In such situations, it may be necessary to concentrate on improving corporate governance and transparency, rather than seeking to engage companies as partners. There are many advantages to working with the private sector, but there are also limitations and risks to consider when planning any collaboration. Companies drive forest loss Although a growing number of companies are committed to minimising their forest footprint, many others remain unconcerned about their direct or indirect contribution to forest degradation and loss. Such companies have no interest in working with governments or anyone else to make changes. Therefore, while it is often possible to work in partnership with companies, it is also important to have adequate control mechanisms in place to deal with companies that are not committed to good practice. Company policy versus practice There is sometimes a disconnect between the policies of companies at the headquarters level and the reality of the activities carried out on the ground. For example, in sites where agricultural companies are expanding their operations, field personnel may be selected for their agronomic expertise or their ability to function in difficult remote areas, rather than for their awareness of environmental issues; supply chain companies may recruit traders for their ability to negotiate deals rather than for their familiarity with the impacts of purchasing on forests or people. Furthermore, targets and reward systems are often based on delivery of results, such as hectares planted or profits made on trades; employees may not be rewarded for minimising environmental impacts. Consequently, unless the company provides adequate training, support and oversight and sets appropriate key performance indicators (KPIs) and individual targets, personnel are unlikely to focus on complying with policies such as avoiding deforestation. Therefore, when engaging with the private sector, it is important to examine how their policies are being applied in practice. 11
  • 12. 4 Further information on examples Golden Agri Resources high-carbon land commitment http://news.mongabay.com/2012/0605-gar-high-carbon-stock-report.html The Roundtable on Sustainable Palm Oil New Planting Procedure and Olam www.rspo.org/en/new_planting_procedure www.rspo.org/en/member/754 Brazil soy moratorium www.abiove.org.br/site/index.php?page=soy-moratorium&area=MTEtMy0x Brazil Amazon deforestation rates www.mongabay.com/brazil.html Nestlé Responsible Sourcing Guidelines www.nestle.com/csv/responsible-sourcing/managing-responsible-sourcing Consumer Goods Forum http://sustainability.mycgforum.com/deforestation.html SHARP Partnership www.sharp-partnership.org Monthly information on deforestation in the Amazon www.imazon.org.br/mapas BVRio (Bolsa Verde do Rio de Janeiro) www.bvrio.org/site Proforest developed four briefings that introduce REDD+ and explain the links between FLEGT and REDD+ and with other forest initiatives. • Introduction to FLEGT • Introduction to REDD+ Funded by the European Union and the Governments of France, Germany, Ireland, Spain and the United Kingdom • Linking FLEGT and REDD+ • Working with the private sector on REDD+ This is the fourth of the four briefings, Working with the private sector on REDD+. REDD+ stands for reducing emissions from deforestation and forest degradation plus conserving forests, sustainably managing forests and enhancing forest carbon stocks. REDD+ is a proposed international mechanism to provide incentives for developing countries to protect and restore their forest carbon stocks. FLEGT stands for forest law enforcement, governance and trade. The FLEGT Action Plan is a European Union initiative to address the problem of illegal logging and related trade. This briefing was developed by Proforest, with input from EFI and officials of the European Union and EU member states, and produced with the assistance of the European Union. The contents are the sole responsibility of the authors and can in no way be taken to represent the views of the European Union. © European Forest Institute, Proforest 2014