Trade (Comprehensive and Progressive Agreement for Trans-Pacific Partnership) Bill [HL]

Lord Goldsmith of Richmond Park Excerpts

Report stage
Tuesday 16th January 2024 Lords Chamber

It is in the context of those questions that I urge my noble friend to look very favourably on the purport and content of Amendment 10.

[Lord Goldsmith of Richmond Park (Con)]

I rise to speak to the proposed new clause “Review: forest risk commodities”, which is in my name and the names of the noble Baroness, Lady Boycott, and the noble Lords, Lord Davies and Lord McNicol. The noble Lord, Lord Davies, has spoken and I thank him for his support. I also appreciated the words of the noble Baroness, Lady Bakewell, when she spoke earlier, and I strongly agree with the case she made for prioritising indigenous people. There is no cheaper or more effective solution, if we are interested in protecting nature, than backing those who have been doing that for generations. The maths and facts speak for themselves—80% of terrestrial biodiversity is in land looked after, and in some cases owned by, indigenous people, so the noble Baroness makes the point very well.

Deforestation is a major environmental crisis for so many reasons. We heard earlier from the noble Baroness that the displacement of people all over the world is causing runaway biodiversity collapse and the loss of a terrifying variety of lifeforms. Once gone, they are never going to come back. Nearly 90% of deforestation is caused by agricultural expansion. The resulting loss of habitat has caused a horrifying decline in everything from tigers and elephants to rhinos, hornbills and orangutans. Orangutans, incidentally, are relevant to this amendment because they tend to live in areas where palm oil is so prevalent; they have lost 80% of their habitat in the last 20 years.

Forest loss goes far beyond even that. The Congo basin, whose forest is disappearing at a rate of around 1 million hectares every single year, produces most of the rainfall for the entire continent of Africa. If those trends are allowed to continue, we are going to see humanitarian crisis on biblical scales. In the Amazon too—we do not fully understand the role of the Amazon in generating rainfall, but we know it generates rainfall and that that rainfall falls in the southern states of the United States, and that without the Amazon there would be huge repercussions across that entire region—it is in everyone’s interest that stopping deforestation remains a top priority.

I have not even mentioned climate change at this point. Deforestation is now the second leading cause of climate change after burning fossil fuels. There is no credible solution to climate change and no credible net-zero plan that does not include nature at its very heart. A plan that does not include nature is not, in real terms, a plan at all.

It is for these reasons I am bringing this amendment to the House today. Noble Lords have previously expressed concern that, once ratified, the CPTPP agreement will remove all tariffs on palm oil irrespective of its environmental credentials. They are right to flag this issue, which has been flagged a number of times, because in pursuing that policy we risk, at the very least, undermining the core of our COP 26 messaging on the importance of forest.

It also contradicts commitments made by the Government under Schedule 17 to the Environment Act to tackle illegal deforestation in our supply chains. Indeed, without the safeguards of the due diligence secondary legislation in place—that safeguard is not there yet and I hope the Minister will be able to provide some reassurance about when that is going to happen—it is simply irresponsible to pursue a policy of this sort.

Around 90% of the world’s palm oil is grown in Malaysia and Indonesia. It is estimated that around 1% of Malaysian palm oil smallholdings are certified by the Roundtable on Sustainable Palm Oil. That 1% makes up around 40% of all the palm oil plantations in Malaysia. The RSPO is probably the most widely recognised certification scheme. It is voluntary, and among other things it requires that palm oil is deforestation- free.

We know what is possible when a Government are serious about this issue. We have actually seen amazing efforts and results in Indonesia. It gets very little credit for the work we have seen over the last few years, but under the leadership of a number of very impressive people, not least Minister Siti Nurbaya, that country has come pretty close—it has not done it yet, but has come pretty close—to breaking the link between palm oil production and environmental destruction. I think it should get more credit for the work it is doing, because it is a model that other commodity-producing countries could learn from.

I acknowledge and welcome, very briefly, the side agreement that the UK and Malaysian Governments have signed. It commits to strengthening efforts to conserve forests and promote sustainable supply chains, in particular around palm oils. In many respects, the statement goes further than the due diligence secondary legislation that I mentioned earlier. But the agreement still relies on the Malaysian sustainable palm oil certification scheme, as opposed to the RSPO, which I mentioned earlier. The details around the Malaysian scheme are unclear and in truth it is significantly less robust than the RSPO—I do not think anyone would argue against that.

That is why it is so vital that work is done to review the impact of that agreement once it is in place. This proposed new clause is very simple, and that is what it seeks to do. It would require a review every two years that would assess the effectiveness of that agreement, alongside the impact of the CPTPP trade deal, on the sustainable production of forest risk commodities more broadly, including palm oil of course, right the way through our supply chains. The review would also look at the impact of the deal on deforestation within CPTPP nations, and the compatibility of the deal with our own due diligence regulations.

I hope that noble Lords agree that it is a reasonable amendment. It offers a practical way of reaffirming the Government’s commitment to making sure that our own supply chains are part of the solution and not the problem, as well as empowering Parliament to hold the Government to account on this issue. The new clause is supported by a number of significant environmental organisations—WWF, Chester Zoo and others—and has support from Peers for the Planet, for which I am very grateful.

Very briefly, as I finish, I will say that in my previous capacity as Minister of State, I went to Chester Zoo and saw its pioneering work on sustainable palm oil—clearing up its own supply chains but then helping businesses in the area do exactly the same. I thank it on the record for its leadership on this issue and for its work more broadly. Its Kinabatangan Orangutan Conservation Project, which has been running for a quarter of a century, involves creating magnificent nature corridors linking up those little habitats, and making it possible for distinct and previously quite cut- off orangutan populations to meet, breed and strengthen their population.

We need to ensure that the environmental safeguards we put in place, such as this UK/Malaysia agreement, are effective. That is the purpose behind this amendment. Of course, a stronger, better and easier policy would be to remove tariffs entirely on commodities from countries that have broken the link between agricultural commodities and deforestation, or conversion of important ecosystems. We know that is possible: Gabon has broken the link between logging and deforestation; Costa Rica has broken the link between agricultural commodities and deforestation, and I mentioned Indonesia earlier.

I was thrilled to see that, in the free trade agreement between the EFTA and Indonesia, there is a commitment that palm and other vegetable oils that have been produced protecting primary forests, peatlands, and related ecosystems will get preferential market access. So it is possible to build these safeguards into the primary agreement but, in their absence, we have to act now by passing something similar, at least, to this amendment. I hope that, when he responds, the Minister will be able to provide some real, meaningful reassurances that the impact of these agreements on deforestation, on our supply chain and on our role as consumers in deforestation, is properly understood and monitored, and that we are indeed part of the solution and not the problem.

[Baroness Boycott (CB)]

My Lords, I first declare my interests. I will come to some notes about Amendment 11, so ably spoken to just now by the noble Lord, Lord Goldsmith. Right now, I rise to speak to Amendment 12 in the name of the noble Baroness, Lady Willis of Summertown. As the noble Baroness, Lady Bakewell, just said, she is unable to be here. I would also like to say that I support Amendment 6 from the noble Baroness, Lady Bakewell.

Amendment 12 is really very straightforward, and I cannot see any reason why the Government should not let this through. It just says that our border testing regimes must be robust enough so that we are aware of the new types of products that are going to enter the UK as a result of this trade agreement. We know that many countries in the CPTPP have products that contain levels of pesticides that exceed our safety limits, or indeed are actually banned because of their risks to human health, food safety and consumer protection, and are not covered at all by any import tolerances.

As the noble Baroness, Lady Willis, described in Committee, and as the noble Baroness, Lady Bakewell, has just reaffirmed, there are 119 pesticides that we ban that are permitted for agricultural use in one or more of the countries we are aiming to enter into a trade negotiation with. UK pesticide standards are stronger than those of the other countries and there is no expectation, I hope, that we are going to change our high standards. So, a successful trade agreement—which is presumably what the Government are after—will inevitably lead to some increase in agricultural imports to the UK. Indeed, the strength and effectiveness of our border control systems is an issue of relevance to all existing FTAs, not only to new ones.

The Trade and Agriculture Commission flags the

“likely pressure that will be placed on the UK’s border control regime”

as a result of the increase in trade, in combination with the new EU border control model. Reports on the ground, including from the NFU, flag the lack of inspection of products coming into the UK, and the risk of this to our biosecurity. This amendment is simple and pragmatic. It provides an opportunity for the Government to scrutinise the existing system to ensure that it operates with maximum effectiveness.

I turn now to Amendment 11, in the name of the noble Lord, Lord Goldsmith, which is a further iteration of the one we tabled in Committee. Following on from his remarks, the purpose of the amendment is to both highlight our susceptibility to commodities linked to deforestation and to get assurances that the Government’s statutory review will consider this issue.

Since we last discussed it, the arguments have only been strengthened by the Environmental Audit Committee’s report on deforestation. It flagged that, in their first revision to the Environmental Improvement Plan, the Government committed to use their trade agreements and trading relationships

“to support the United Kingdom’s strong environmental and climate commitments”.

Despite this, in the course of the negotiations, we eliminated import tariffs on palm oil, which had been set at rates of up to 12%, from all CPTPP members, including Malaysia. So what is that going to do in terms of keeping sustainable palm oil production alive?

While it is true that we have existing agreements with many of the countries already, we do not with Malaysia and so it is of significance that this agreement will allow Malaysian palm oil—not necessarily sustainable —to enter the market with no tariff. As raised by Chester Zoo in its letter to Peers, around 90% of the world’s oil palm trees are grown on a few islands in Malaysia and Indonesia. Estimates suggest that as little as 1% of Malaysian palm oil is actually certified.

The EAC also noted that:

“While the UK is only the 15th largest contributor”


to tropical deforestation, we actually have a very intensive use. This is to do with our diet, which is so largely made up of ultra-processed food—66%, in fact—that depends on palm oil, when food products are smashed back into their original chemical state and then reconstituted to make the kinds of products that so carelessly litter our shelves. It seems to me that we therefore have a responsibility in this area.

I also want to challenge the idea that we are starting from a high point. We are not. Even if the Schedule 17 regulations were in place, they would apply only to illegal deforestation. That means that if a country decides to legalise deforestation, we have absolutely no recourse to stop those products entering our market. Legal or illegal, the damage is the same, and it should be treated as such. The EU regulations that are coming into force cover both, and I note that the EAC has recommended that legal deforestation be included within ours.

I would appreciate it if, in his winding-up speech, the Minister were able to confirm that the review that the Government will carry out in two years’ time, which he referred to in Committee, will take into account these concerns; and specifically if he can confirm that the joint statement with Malaysia to tackle deforestation and the MSPO—the Malaysian Sustainable Palm Oil Certification Scheme—have been effective. I also want to note my support for other amendments in this group.

--- Later in debate ---

[Lord Johnson of Lainston (Con)]

My Lords, I thank all noble Lords who have participated in this debate, particularly the noble Lord, Lord McNicol, for his engagement, his very good summary of the various amendments and the points that he raised. If the House will indulge me, I will go through the different points quite carefully because there are so many elements. I beg forgiveness if I do not cover every point. My noble friend Lady McIntosh laid down a very great number of requests, which I am happy to answer outside this debate, with the broad provisions to be raised where I can.

Let me stress again how seriously this Government take parliamentary scrutiny of our FTA agenda. With this in mind, a full impact assessment for the UK’s accession to the CPTPP was indeed published at signature in July 2023, which is important to note, alongside the accession protocol text and a draft Explanatory Memorandum. This included assessments of potential economic impact on UK GDP and environmental impacts. This is important. I will refer back to the Section 42 report where relevant to reinforce and, hopefully, reassure Members of this House of the benign impact of CPTPP membership on our environment and border controls.

I want to pick up on a point made by my noble friend Lady McIntosh of Pickering about supporting our farmers and agricultural producers in this country. It is absolutely at the core of this Government’s policy to do that. The reason I am excited about the CPTPP is because of what we will be able to achieve when it comes to promoting our dairy industry: the additional quota access that we will have, for example, for cheese into Canada; the opportunities we will have to sell chocolate into Malaysia, reducing tariffs significantly; the opportunity to sell Scotch whisky into many of the CPTPP countries with lower tariffs.

We can combine these trade agreements with the extraordinarily strong work done by my noble friend Lord Offord of Garvel, who is in his usual place today, with regard to supporting exporters, and with the muscle of the Department for Business and Trade, the work of the agricultural attachés, and all that we are doing to promote exports around the world. This is why we are here. This is a positive and powerful expression of the extraordinary economic reach of the United Kingdom, particularly in its agricultural sector. I understand that there are concerns, and I will cover them, but let us understand why we are here in the first place: to promote our agriculture—an extraordinarily powerful sector in this country—to expand its interests abroad and create more wealth for farmers in the United Kingdom.

I want to touch on the monitoring report, which we will publish after two years, as well as a comprehensive evaluation of the agreement after five years. This will include an assessment as to the environmental impacts. An inclusive and participatory process will be at the heart of the evaluation, providing structured opportunities for a wide range of stakeholders to share their views and provide evidence; that is, basically, a proper assessment and review.

I do not think it would be helpful to be specific on every single checkbox. I am keen to make any review useful. But I would be surprised—that is the language I wish to use—if the evaluation and monitoring reports did not cover information on: trade flows under CPTPP; utilisation of the agreement; ISDS cases, which will be important to many speakers today; an overview of the work of the committees under the agreement to facilitate co-operation and implementation—that is particularly relevant when it comes to labour standards, environmental standards, reduction of the risk of deforestation and many other areas. There will be information on the environment covering many of the issues discussed today and on the impact of the agreement on all parts of the United Kingdom.

This is important. I have been asked to make commitments at the Dispatch Box, and I am very comfortable doing so. It is vital to me as a proponent of free trade that we promote the benefits of this extraordinarily powerful multilateral agreement; I hope that will be shown in the impact assessments and in the reviews after two years and five years. My principal point about the amendments that have been put forward on this Bill is that they are unnecessary because we are doing this anyway.

I turn to deforestation and the issue of palm oil. I am very grateful to my noble friend Lord Goldsmith for his amendment and for the passion that he brings to this vital subject. I believe that he is to be celebrated as someone who has truly brought to bear some significant changes to the legislation of this country following on from the Environment Act and the secondary legislation around the obligations on businesses relating to deforestation, which we will be bringing in; I am reassured by my officials that we are aiming for spring of this year. I want to applaud the work of my noble friend and say how important it is, and how vital for the future of this country and the world, that trade does not lead to a degradation of our environment and natural habitats.

My son came to watch some of this debate. He has now left; I think the third hour was the final straw for an 11 year-old. We are doing this in order that our children will have a world to inherit, as well as a strong economy in the United Kingdom. At no point have we ever suggested that we should separate our obligations to the future of this planet in relation to the importance of free trade. Those who do that are mistaken. In my view, they are inextricably linked. The positives of free trade are so significant and the opportunity for dialogue allows us to solve these problems.

I want to touch on the point about palm oil, which is very powerful. The Trade and Agriculture Commission, for whose feedback I am extremely grateful, has noted that the Malaysian sustainable palm oil certification had become a mandatory condition since January 2020 for the palm oil industry, as has been raised. The new 2022 version prohibits palm oil cultivation on land cleared after December 2019. This is very important. Provided that this new standard is fully implemented by January 2025 and compliance with it is effectively enforced, there is a

“low risk that Malaysian palm oil exported to the UK would come from land that was deforested after December 2019”.

It goes on to say:

“Moreover, the UK may be able to enforce Malaysia’s implementation of the 2022 MPSO standard if failure to do so has an effect on bilateral trade”.


That is extremely relevant.

My noble friend Lord Goldsmith was right to point out that we are signatories to the Glasgow Leaders’ Declaration on Forests and Land Use, which commits both parties—clearly, we are looking at Malaysia in this instance—to halt and, indeed, reverse forest losses by 2030. This is the whole point about the CPTPP. It allows us to align our values with our partner countries, to raise their standards, to enable and facilitate, through the power of free trade and the wealth that it creates, the opportunity to improve their environment. I am grateful to my noble friend for pressing us on these points and I hope that I have answered his questions to his satisfaction.

[Lord Goldsmith of Richmond Park (Con)]

I rise to intervene, but I have been caught by the House with a nut in my mouth, which is terrible timing—if I could have thought of some medical excuse, I would have done so. I thank the Minister very much for his passionate call for harmonisation of trade and nature. He is right; there should be no separation between the two. I was pleased by his commitment that the diligence legislation will come in the spring. I know that it is not entirely in his hands, but I am pleased if that is the assurance that he has had from officials. It is important that it should come through. Without that legislation, the risk remains. It will be like closing the last hole in the bucket. I am grateful for his reassurances. I encourage him to continue to push the other departments responsible, but I thank him very much for his words.

[Lord Johnson of Lainston (Con)]

I thank my noble friend for his comments.

I turn to Amendment 12 on pesticides, which have been raised by the noble Lord, Lord McNicol, and the noble Baroness, Lady Boycott—and I had conversations with the noble Baroness, Lady Willis, as well earlier this week. It is very important for noble Lords on all sides of the House to know about the work that I have personally been putting in to ensure that we have the right and appropriate border checks and security, and that the agreements allow us to ensure that we have control over our borders. I refer to my opening comments a few hours back that this free trade agreement—on implementation day plus one, or accession day, or on becoming a party to the CPTPP—makes no difference at all with regard to our import controls and our ability to control our own destiny. This is very relevant. It is essential, again, to return to the Trade and Agriculture Commission’s report, which says that the

“CPTPP has no effect on the UK’s existing WTO rights to regulate the import of products produced using pesticides that are harmful to UK animals, plants, or the environment”.

It is crucial to remember that. We would never derogate our responsibilities to our consumers. I am very grateful for the points raised by noble Lords today to ensure that they can feel a high degree of comfort that this is simply not the case, and that we have not done so by signing up to this agreement.

I want to touch on some of the comments made about the practicalities of administering our border controls. I took the liberty ahead of this debate of visiting our Thames Gateway port system and was shown the operations there in relation to risk-based assessments. I think that is the right way to manage our borders. It would be impossible to check every single thing coming through. It is very important to reinforce the point that the CPTPP does not grant equivalence on exporting parties. We are able—indeed, it is considered that we have increased our ability—to audit exporting parties’ mechanisms for their own domestic testing to ensure that there is robustness around the testing processes before food is exported to the United Kingdom. We believe that, fundamentally, compliance is high. Our ongoing monitoring programme provides assurance that food on the UK market complies with our rules and is safe to eat.