Can supply chain laws prevent deforestation in the Democratic Republic of the Congo and Indonesia?

Abstract

There is a new trend toward public supply chain-related laws which demand information from companies on imported products. The European Union's (EU) Renewable Energy Directive (RED) and Timber Regulation (EUTR) exemplify this new type of law. In both cases, companies have to prevent deforestation in their supply chains. The Democratic Republic of the Congo and Indonesia, both among those countries with the world's highest deforestation rates, support supply chain laws on paper, but there are serious implementation deficits in practice. Using a tripartite framework developed by Cashore and Stone, our study addresses this alleged contradiction and explains deficits inherent in the laws based on the analysis of policy documents, expert interviews and field research. We find that companies take advantage of opportunities to shift exports to less regulating countries. EU member states exercise their purchasing power too cautiously over intermediary (manufacturing) countries in the supply chain, especially China. Finally, despite possibilities of public action, sanctioning is largely left to the private sector.