This article first appeared in The Edge Malaysia Weekly on July 17, 2023 - July 23, 2023

With the European Union Deforestation Regulation (EUDR) coming into force on Dec 30, 2024, it is high time to prepare your country — and smallholders — for Europe’s new import terms.

Some lawmakers, traders and producers in Southeast Asia have reacted strongly to the new EU regulation, which aims to reduce deforestation related to the production of palm oil, coffee and rubber, among other commodities, saying that the EU hasn’t listened to local stakeholders or that it is nothing but a trade barrier. Some harsher critics have even shouted “neo-colonialism!”

Having lived a major part of my life in Malaysia, I consider myself someone who would be at the receiving end of this perceived neo-colonialism. And yes, some of the criticism may be true. The EUDR is certainly a radical piece of legislation, reaching further than many would have expected. However, let’s face it: The window for negotiation has passed. The EUDR in its current form and shape will happen.

In our engagements with the EU, we must look forward and seek to chart a course that can best support our industries and producers affected by the EUDR. In our region, this will be wood, rubber, palm oil, coffee and cocoa. Nearly all these commodities are driven by smallholders: In Vietnam, by 650,000 coffee farmers; in Malaysia, by 300,000 palm oil producers; in Indonesia, by about 700,000 cocoa farmers; and in Thailand, by 1.6 million rubber farmers. Many will certainly be impacted by the EUDR.

How do we ensure that some of the most vulnerable producers in our European supply chains will become beneficiaries rather than victims of the EUDR? If you are a government in Southeast Asia, this is a three-step plan that will make the best of the situation:

Ask the EU how it plans to assess whether a country is low-, medium-, or high-risk. These classifications will be crucial for businesses importing commodities into the EU and decisive for the level of enforcement. Then take a critical look at the potential risks for each of the commodity sectors in your country. Finally, make a national risk assessment for each of the commodities involving key stakeholders including the EU, technical ministries, non-governmental organisations (NGO), certification scheme owners and associations.

When you have assessed your risks, you can begin mitigating them and improving your potential risk category. It is not enough to simply say that we are low-risk. Prove it, and then make a national plan for improving whatever needs to be improved.

Depending on the commodity, there can be different ways to move forward. Support credible certification schemes or provide capacity-building programmes, primarily to those involved in a supply chain aiming to land in the EU. Help your smallholders prepare by making sure that there is a secure structure for land ownership (legality) and a legal workforce. I would find ways to provide support for geolocation (another EU requirement), which would of course benefit all, as we need to know where production takes place.

The EU is, of course, considering how to support countries preparing for the EUDR. And I am pretty sure there will be funds available for countries to support their smallholders. I would also ask all commodity sector agencies to prepare concept notes, budgets and action plans for how to lower the overall risks identified and how to more directly support smallholders to become aligned with the requirements.

The time frame is worrying, to say the least. However, this convinces me that we must work harder and smarter, and mobilise all resources needed to support our smallholders and make sure they are ready by the end of 2024.

Chris Schriver is regional director and lead for palm oil at Preferred by Nature, an international non-profit organisation that aims to support better land management and business practices that benefit people, nature and the climate. The organisation has been working with governments and businesses to prepare for the EUDR. Schriver lives in Malaysia and has been working in the areas of sustainability and assurance for at least 40 years.

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