How you can use the ‘Guide for Assessing Compliance with the Forest Code in commodity supply chains’, by Roberta del Giudice

Brazil has rules for the use of rural properties that have the potential to make Brazilian agricultural production sustainable, both regarding the conservation of natural vegetation and inputs for the production itself, such as water and soil quality.

Although, these rules for the use of rural properties have been established since the 19th Century, and in the last Century Brazil had two Forest Code, they still need to be implemented. Therefore, we plan with the Pratical Guide to Forest Code Compliance Analysis to help buyers of Brazilian agricultural commodities to work with suppliers who can work in compliance with the Law.

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After years of discussion, in 2012 the main Brazilian Forestry Law, the Forest Code of 1965, was changed, resulting in the new Law # 12,651. To seek the implementation of this Law, it is extremely important to disseminate knowledge about it.

Briefly, the main obligations of the rural producer by the new Forestry Law are:

  1. the registration of all rural property in the Rural Environmental Registration – called CAR in Portuguese, which is an electronic register that has all relevant information from the environmental characteristics;
  2. the maintenance of natural vegetation in areas of permanent preservation, which are sensitive areas that must be preserved due to their location, such as surrounding rivers, hilltops and very steep areas; and
  3. the maintenance of a percentage of natural vegetation of the property – denominated Legal Reserve – which varies according to the region in which a property is located, from 20 to 80 percent of the land.

The new law has given several amnesties for those who have not complied with the previous law. But even with all those amnesties, 21 million hectares still need adequacy (according to Raoni Rajão).

And then, how to bring these properties to legality?

The new Law of 2012 established transition rules for bringing the no complied owners, of 2008, to obey the law.

These transition rules allow the adaptation of rural properties to the terms of the Law, by means of:

(1) First, registration in CAR,

(2) Second, adhesion to the Environmental Regularization Program (PRA).

That is the program to be implemented for the regularization of environmental liabilities of Legal Reserve or Permanent Preservation Area, considering the specific environmental conditions of each State of the country.

(3) Then, each producer presents a project[1] in which he specifies how he will adapt to the rules

For permanent preservation areas, the options are:

– re-planting native species and, if it´s a small property[2], the owner should mix that with exotic commercial species that can reach up to 50% of the total amount planted

– natural regeneration – by the isolation of the area, provided that this viability is technically identified

For the Legal Reserve, the Law provides three forms of adjustment, such as:

  • Natural regeneration
  • Re-planting, and also
  • Legal Reserve Compensation

The Compensation has some limitations:

  • Clear cut (deforestation) had to be done prior to 2008 – the compensation cannot be used for deforested new areas;
  • It should be done in areas which are in the same biome; and located in the same State or in prioritized areas in other States.

The main mechanisms for compensation of Legal Reserve in other properties are Legal Reserve Credits (CRAs) and the donation of properties in Protected Areas.

Forest Reserve Credits (CRAs, Cotas de Reserva Ambiental, in Portuguese) are instruments to allow Legal Reserve offsetting among rural properties. Each CRA represents one hectare (1 ha) of forest legal reserve that is surplus to the amount required by law to be maintained in any given rural property.

  1. Donation of lands to the Public Agency in Protected Areas

In Brazil, protected areas can be public or private, depending on the category they belong to.

When the category requires the area to be public, the public agency must pay the former owner and transfer the property to the State. However, bureaucratic and financial issues prevent that process to get to an end. Nowadays, at the federal level, there are 5.5 million hectares to be regulated, at the cost of approximately 1,5 billion dollars.

The Forest Code allows the liability of Legal Reserve to be offset by the acquisition of properties in PA, with the payment to the former owner, and the donation to the State.

Once the regularization options are presented by the rural producers in one plan, they sign (4) a commitment term in which they agree to comply.

The last phases are (5) the implementing and monitoring of compliance and (6) the environmental suitability of the rural property to the Law.

The deadlines defined by the Law are:

  • 1st Deadline – Until December 31, 2017, all rural properties must be registered in the CAR. Properties with unresolved compliance issues must adhere to the Environmental Regularization Program (PRA).
  • 2nd Deadline – the period defined by each State for owners to sign the Term of Commitment – after registering in CAR and getting the public analysis
  • Until May 28, 2032

Every rural producer has to be in conformity with the Forest Code all over Brazil

And so? how to check if a supplier is in compliance or if he is in the suitability process?

[1]

[2] Properties of maximum sizes defined by region – ranging from 20 to 440 hectares