Compliance with law and regulation
There are numerous laws and regulations that are in place to govern companies operating in soft commodity supply chains. Financial institutions can help to ensure compliance by requiring companies to provide proof that their own company operations, as well as those of their supply chain are in compliance. Examples of laws and regulations affecting companies in soft commodity supply chains includes:
- Brazilian Forest Code: This set of laws requires landowners to maintain a set proportion of native vegetation, which varies by biome, and ensure the protection of particularly sensitive habitats (including riparian areas, mountain slopes, and mangroves) (http://assets.wwf.org.uk/downloads/wwf_brazils_new_forest_code_guide_1.pdf).
- EUTR (EU Timber Regulation): Requires first importers on timber into the EU market to ensure that that was not illegally harvested in the country of origin (http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A32010R0995).
- Indonesian Peat Moratorium: Postpones further land clearing in peatland areas, and makes it illegal to burn peatlands.