EUDR Series: EUDR Compliance- Exploring Risk Assessment

How does risk assessment fit into EUDR compliance? In this episode of our EUDR series, Jayne Stewart is joined by experts Luke Gwenter and Karen Ngo to break down the role of risk evaluation in meeting the EU Deforestation Regulation. Tune in for practical insights and key takeaways to strengthen your compliance strategy.

Speakers:

• Jayne Stewart- Scientific Consultant, Regulatory Affairs and Dietary Intakes, Food & Nutrition Group, Food & Nutrition Group, Intertek Assuris
• Karen Ngo- Manager, Toxicology & Dietary Intakes, Food & Nutrition Group, Intertek Assuris
• Luke Gwenter- Associate Dietary Intakes, Food & Nutrition Group, Intertek Assuris

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Transcript

00:16 --> 00:36
 Speaker 1 – Jayne Stewart, Scientific Consultant, Regulatory Affairs and Dietary Intakes, Food & Nutrition Group, Food & Nutrition Group, Intertek Assuris

Hello Everyone, Thank you for joining our latest podcast in our EUDR series. I’m Jayne Stewart a manager at Intertek Assuris and I am joined by Luke Gwenter and Karen Ngo. Today, we are going to discuss the risk assessment component of EUDR compliance.

To start us off, Karen, can you inform our listeners what the purpose of the risk assessment is? 

00:36 --> 00:57
 Speaker 2 – Karen Ngo, Manager, Toxicology & Dietary Intakes, Food & Nutrition Group, Intertek Assuris

Of course. The EUDR risk assessment component, as detailed in Article 10 of the regulation, is required to be conducted to confirm that there is no or only a negligible risk that a commodity or product would not be compliant. All information is to be verified and analyzed by the operator before placing the product on the EU market or exporting it.

00:57 --> 01:00
 Speaker 1 – Jayne Stewart, Scientific Consultant, Regulatory Affairs and Dietary Intakes, Food & Nutrition Group, Food & Nutrition Group, Intertek Assuris

What information exactly? Do mean the geolocations?

01:00 --> 01:28
 Speaker 3 – Luke Gwenter, Associate Dietary Intakes, Food & Nutrition Group, Intertek Assuris

Making sure geolocation data is accurate is just one part of the process. The risk assessment also looks at whether commodities are produced in line with the laws of the country of production.

The EUDR specifies 14 elements of risk to be considered by the operator. These criteria, which have been referred to as the “14 pillars of risk”, include country of production details such as presence of forests, indigenous interests, legal practices or lack thereof, and complexity of the supply chain.

01:28 --> 01:38
 Speaker 2 – Karen Ngo, Manager, Toxicology & Dietary Intakes, Food & Nutrition Group, Intertek Assuris

There is also documentation available from the European Commission expert groups, reports from other Non Govermental Organisations, and certification bodies.

01:38 --> 01:40
 Speaker 1 – Jayne Stewart, Scientific Consultant, Regulatory Affairs and Dietary Intakes, Food & Nutrition Group, Food & Nutrition Group, Intertek Assuris

Is there a way to break this down to help simplify?

01:40 --> 02:07
 Speaker 3 – Luke Gwenter, Associate Dietary Intakes, Food & Nutrition Group, Intertek Assuris

You could consider the pillars of information required within a number of key groups. As an example, you could consider information to be provided by the European Commission as 1 grouping. 

This would include the country risk benchmarking that is due to be released at the end of June, reports providing conclusions of commission group meetings, and any supported concerns, and a history of non-compliance over time. These could potentially relate to a specific operator or a country of concern.

02:07 --> 02:36
 Speaker 2 – Karen Ngo, Manager, Toxicology & Dietary Intakes, Food & Nutrition Group, Intertek Assuris

Another group of data collection for the risk assessment could be the ‘known’ data generally relating to country or regions, this information can be gathered from environmental, social, and governance data sources. These pillars include the presence of forests, deforestation or forest degradation, indigenous people, and concerns related to corruption, data falsification, weak law enforcement, human rights violations, conflict, or sanctions.

02:36 --> 02:41
 Speaker 1 – Jayne Stewart, Scientific Consultant, Regulatory Affairs and Dietary Intakes, Food & Nutrition Group, Food & Nutrition Group, Intertek Assuris

Is there any information relating specifically to the commodity or relevant product?

02:41 --> 03:11
 Speaker 3 – Luke Gwenter, Associate Dietary Intakes, Food & Nutrition Group, Intertek Assuris

Yes, a large portion of the data relates specifically to the supply chain. This data needs to be gathered directly from the supply chain and requires thorough engagement with suppliers. The relevant pillars include:

·       Consultation and involvement of Indigenous people,

·       The existence of verifiable claims regarding land use or ownership,

·       The complexity of the supply chain, and

·       Any risk indicators of non-compliance.

Additionally,  the source, reliability, validity, and links to related documents of the information must also be considered.

03:11 --> 03:20
 Speaker 1 – Jayne Stewart, Scientific Consultant, Regulatory Affairs and Dietary Intakes, Food & Nutrition Group, Food & Nutrition Group, Intertek Assuris

Thanks Luke. Ok, so if you had a sustainability certificate in place for the product in question. Would this suffice rather than collecting all this data?

03:20 --> 04:16
 Speaker 2 – Karen Ngo, Manager, Toxicology & Dietary Intakes, Food & Nutrition Group, Intertek Assuris

Great question Jayne, and this actually falls in perfectly to the final grouping of data collection for the risk assessment. Certainly, having a suitable certificate in place will be beneficial towards risk assessment and traceability, however, a certificate cannot be used to replace the requirement for risk assessment or due diligence. 

The regulation refers to this type of evidence as ‘complementary’ in the process but does not replace the need for a complete assessment of all potential risks.

The final grouping of pillars covers the risk of bypassing the regulation or mixing of products from unknown or deforested areas, and the use of certification or voluntary schemes as mentioned earlier. All voluntary schemes should be recognized by the EU Renewable Energy Directive, also referred to as RED. An example of a voluntary scheme recognized by the RED is the ISCC, that is the International Sustainability and Carbon Certification.

04:16 --> 04:38
 Speaker 3 – Luke Gwenter, Associate Dietary Intakes, Food & Nutrition Group, Intertek Assuris

Another helpful point to add is that businesses within the wood industry with a FLEGT License, which stands for Forest Law Enforcement, Governance and Trade - can help demonstrate compliance by proving that products are legally sourced, this covers one of the key prohibitions to the regulation that products must be produced in accordance with the relevant legislation of the country of production. 

04:38 --> 04:46
 Speaker 1 – Jayne Stewart, Scientific Consultant, Regulatory Affairs and Dietary Intakes, Food & Nutrition Group, Food & Nutrition Group, Intertek Assuris

Thanks Luke, now that we have covered all the pillars of the risk assessment. What happens if the risk assessment shows a risk?

04:46 --> 04:59
 Speaker 2 – Karen Ngo, Manager, Toxicology & Dietary Intakes, Food & Nutrition Group, Intertek Assuris

If the conclusion of the risk assessment shows a risk of non-compliance, the operator would need to carry out risk mitigation steps. Risk mitigation could be in the form of additional documentation request or an audit.  

04:59 --> 05:02
 Speaker 1 – Jayne Stewart, Scientific Consultant, Regulatory Affairs and Dietary Intakes, Food & Nutrition Group, Food & Nutrition Group, Intertek Assuris

Who needs to complete the Risk Assessment?

05:02 --> 05:19
 Speaker 3 – Luke Gwenter, Associate Dietary Intakes, Food & Nutrition Group, Intertek Assuris

Both Operators and Non-SME traders who place relevant commodities or products on the market need to complete the Risk Assessment. 

As a reminder, Operators are the businesses that first place the product on the market and Traders are the businesses that further distribute these products within the market.

05:19 --> 05:22
 Speaker 1 – Jayne Stewart, Scientific Consultant, Regulatory Affairs and Dietary Intakes, Food & Nutrition Group, Food & Nutrition Group, Intertek Assuris

Is the risk assessment always needed? 

05:22 --> 06:03
 Speaker 2 – Karen Ngo, Manager, Toxicology & Dietary Intakes, Food & Nutrition Group, Intertek Assuris

Well, there is a simplified Due Diligence process detailed in the regulation, that may be followed if the country or area from which the commodity is sourced, is classified as low risk. In this case, the Risk Assessment requirements may be waived. 

However, operators will still need to evaluate the information to rule out any mixing of product from low risk countries with product from unknown origins, or from standard or high risk regions. 

If the operator is made aware of any information that indicates a potential risk of non-compliance, even for a product sourced from a low-risk country, they would be obligated to carry out the risk assessment and risk mitigation steps.  

06:03 --> 06:07
 Speaker 1 – Jayne Stewart, Scientific Consultant, Regulatory Affairs and Dietary Intakes, Food & Nutrition Group, Food & Nutrition Group, Intertek Assuris

How frequently should risk assessments be completed?

06:07 --> 06:20
 Speaker 3 – Luke Gwenter, Associate Dietary Intakes, Food & Nutrition Group, Intertek Assuris

The risk assessment is to be completed at least on an annual basis. The risk assessment findings are not uploaded to the EU information system, but must be provided to the competent authorities upon request. 

06:20 --> 06:30
 Speaker 1 – Jayne Stewart, Scientific Consultant, Regulatory Affairs and Dietary Intakes, Food & Nutrition Group, Food & Nutrition Group, Intertek Assuris

Thank you Luke and Karen, that was super informative. And thanks Everyone for joining us, I look forward to sharing more insights on EUDR topics in the future

06:30 --> 06:34
 Speaker 3 – Luke Gwenter, Associate Dietary Intakes, Food & Nutrition Group, Intertek Assuris

Thank you for listening, I hope you found the information helpful. 

06:34 --> 06:41
 Speaker 2 – Karen Ngo, Manager, Toxicology & Dietary Intakes, Food & Nutrition Group, Intertek Assuris

Thank you for joining us today. I hope this short podcast has helped you gain a better understanding of the EUDR risk assessment.