The German federal government is lobbying in Brussels for a restriction of the liability rules in the EU Supply Chain Act. As internal documents suggest, this position is a result from pressure applied by the Free Democratic Party (FDP) and corporate lobbies. This has been revealed by investigations by CORRECTIV and Frontal. The example of natural rubber shows how demand in Europe drives deforestation and displacement in Africa.
The German federal government is lobbying in Brussels for a restriction of the liability rules in the EU Supply Chain Act – seemingly under pressure from the Free Democratic Party (FDP) and industry. This has been revealed by investigations by CORRECTIV and Frontal. The example of natural rubber shows how demand in Europe drives deforestation and displacement in Africa.
by Gabriela Keller, Leoni Bender, David Haas, Alexander Maxia, Justin Yarga, Roland Akon Wuwih, Haoxuan Xiong
March 7, 2023
Mud brick huts are scattered along a country road in Cameroon’s South Region. Children sit on the ground in between as a few men make their way through the settlement and into the tropical forest that lies beyond. “This is the land our ancestors left us,” one of them says. “But if natural rubber takes all that away from us, what can we do? What are we supposed to live on?”
The men belong to the indigenous Baka people, whose livelihood has been depending on the rainforest for generations. “We don’t know how we’re supposed to manage,” says the Baka man. “They told us: our land is for natural rubber now.”
For years, international agricultural companies have been clearing rainforest in Cameroon to grow rubber – mostly destined for the European market. The remote regions of Central Africa are where the supply chain begins. It ends with common everyday products, mattresses, shoe soles, hoses, surgical gloves, condoms and, above all, car tyres, everything that needs to be practical and tear-resistant. Produced by the millions.
In between, there are thousands of kilometres, dozens of borders, global company structures, Chinese conglomerates, Brazilian car parts manufacturers, cargo ships and, depending on your point of view, a critical raw material or an enormous environmental problem.
Rubber is considered a key factor for the economy – especially for the automotive industry. It allows cars to roll, machines to rattle, it seals, insulates and protects. But the practical material has a nasty downside: its cultivation involves brutal interventions in nature.
According to a recent scientific study, about five million hectares of rainforest worldwide were destroyed between 2003 and 2017 to grow natural rubber. According to the organisation Global Witness, natural rubber is the biggest export-driven threat to Central Africa’s rainforest.
Consumers are usually not aware of the circumstances behind everyday natural rubber products. Major importers like tyre manufacturer Continental refuse to disclose the origin of the raw material they process. And further investigations reveal that the entire rubber industry has a transparency problem.
The EU has long recognised the issue. New directives and regulations are in the works to ensure that European companies must respect human rights and environmental standards all over the world and will be held accountable for violations.
One of these regulations is the EU Supply Chain Act. But as the investigation by CORRECTIV and the ZDF magazine TV programme Frontal shows, a powerful and politically well-connected lobby of industry and business associations is trying to undermine effective regulations. Internal EU documents, correspondence and secret government papers suggest that the German government is reaching out to this lobby and advocating for a softening on some critical points in Brussels – especially regarding the key issue of liability.
One of the most controversial rubber companies in Africa is Sud-Cameroun Hévéa, known as Sudcam for short. In 2018, environmental organisations sounded the alarm: Sudcam was blamed for clearing 10,000 hectares of rainforest in Cameroon and for the displacement of Baka peoples. Satellite images analysed by CORRECTIV provide evidence of vast clear-cutting in the area.
Sudcam's land is located in southern Cameroon and was covered by dense virgin forests.
Satellite image from 2001 (Source: Google)
Large-scale deforestation on Sudcam land.
Satellite image from 2015 (Source: Google)
Cameroon’s rainforest is part of the Congo Basin – the largest tropical rainforest after the Amazon biome. The displacement of the Baka people puts an entire culture at risk of disappearance, says Ranèce Jovial Ndjeudja, who is Greenpeace Africa’s campaign manager for the Congo Basin: “The indigenous Baka groups are semi-nomads and consider the forest their home. Now they are being forced to live next to the roads – outside of the forest.”
Sudcam is part of the Corrie MacColl group, which controls rubber plantations in Southeast Asia and Africa through a network of subsidiaries. Corrie MacColl itself operates under the umbrella of Singapore-based industry giant Halcyon Agri, which is majority-owned by the Chinese group Hainan Rubber and another Chinese state-owned group, Sinochem.
In Cameroon, the areas owned by Sudcam and its sister company Hevecam form the largest commercial rubber plantation in the world. When asked, Corrie MacColl denied responsibility for the deforestation and speaks of “legacy issues”: until 2017, the plantations were owned by another company, GMG Global. However, this predecessor was also part of the Sinochem group and merged with Halcyon Agri in 2016 – so it was part of the same group of companies as Corrie MacColl is today.
Until November last year, the Sinochem Group held a 54.99% stake in Halycon Agri. As of November 17, 2022, it owns 29.2%.
Corrie MacColl is a subsidiary of Halycon Agri.
Hevecam was established in 1975 by the Cameroonian Government. Now it is a subsidiary of Corrie MacColl. There are two plantations in Niete: Hevecam I (40,992 ha) and Hevecam II (11,615 ha).
Sudcam was established in 2008. The plantation has 45,217 ha and is located near Meyomessala.
Until November last year, the Sinochem Group held a 54.99% stake in Halycon Agri. As of November 17, 2022, it owns 29.2%.
Corrie MacColl is a subsidiary of Halycon Agri.
Hevecam was established in 1975 by the Cameroonian Government. Now it is a subsidiary of Corrie MacColl. There are two plantations in Niete: Hevecam I (40,992 ha) and Hevecam II (11,615 ha).
Source: own research, annual reports & company information
Corrie MacColl says it reacted immediately when a Greenpeace report made the clear-cutting public five years ago. The company had begun immediate a “deep-dive investigation into the sustainability” of its plantations’ operations, resulting in “swift action” regarding the awkward “legacy”. Corrie MacColl promised improvements and help for the local communities. In response to CORRECTIV’s inquiry, the company said that, with the help of local NGOs, it had held “extensive consultations” with the people in the region, and that the company had developed a “social action plan” that included financial support, well drilling, support for school children and health campaigns.
Greenpeace’s Ranèce Jovial Ndjeudja does not have the impression that much has changed for the indigenous people. One of the Baka’s main demands – their return to the forest – appeared to be ignored. “The situation has remained exactly the same”, he says. “Although Sudcam has not yet cleared all of its land, they do not let the Baka groups return to the forest.” He says that their intentions regarding the remaining forests were still unknown: “The government is not giving us any clear answers.”
Corrie MacColl denies the allegations: “The Baka communities can freely access Sudcam’s forest land without any obstruction.” The company, however, did not know whether Baka groups are currently living in the forests, according to the spokesperson.
Officially, Corrie MacColl has committed itself to the goal of “Zero Deforestation” since 2018, in other words, to stopping all clearing of forests. Local experts and environmentalists speak of greenwashing: there are indications that deforestation in Cameroon’s South Region is continuing. This is also shown by satellite images that CORRECTIV has analysed. As the images show, it is particularly small areas that have been deforested recently in a zone of five kilometres around the plantations, totalling around 5,000 hectares between 2019 and 2021 alone – and these areas extend all the way to the edge of the Dja animal reserve, which is home to numerous species. Only that these clearings can no longer be linked to Sudcam. The situation has become unclear.
There is no evidence proving who is responsible for the recent clearings and why the areas are being deforested. The Corrie MacColl group says that clearing and tree felling was stopped at the end of 2018. As it states, this was monitored through satellite images and verified by external auditors.
Germany is the biggest importer of natural rubber within the EU and was the seventh biggest worldwide in 2020.
Germany is the main importer of rubber within the EU and ranked seventh worldwide in 2020.
Top 10 importing countries of rubber in Europe in 2020 (Source: OEC)
Where does the natural rubber from the deforested areas go? CORRECTIV spent weeks researching and tracing the supply chains from Cameroon and analysed delivery papers, market data and company reports. There is no public data on the sources of European manufacturers’ supplies.
However, one thing is certain: part of the rubber ends up in Germany directly. Trade databases show that in 2021 a total of more than 50 tonnes of natural rubber from the company Hevecam in Cameroon arrived in Hamburg on cargo ships. In its annual reports, the Halcyon Agri group names major international tyre manufacturers – Bridgestone, Michelin, Goodyear, Continental – as important customers.
Continental would not answer any questions regarding the sources of its supply: “Please understand that, as a matter of principle, we will not comment on our business partners.” However, they say that most of the natural rubber they used was grown by smallholders. Even Continental apparently does not know its exact origin: “Due to the high complexity of the supply chain, from a technical point of view, it is currently not possible to trace natural rubber fully back to its source,” the company says.
Corrie MacColl does not want to provide further details about its clients either: “We are sorry that we cannot disclose any further details.” A senior Corrie MacColl employee in Germany confirmed to CORRECTIV that most of the natural rubber goes into the automotive supplier and tyre industries. He gives the footwear and adhesive industries as other examples of customers, including well-known German brands such as Tesa.
When asked by CORRECTIV, Tesa stated that it only used natural rubber from Southeast Asia, not from Africa. Tesa “cannot and does not want to” provide information about its suppliers “due to the confidentiality of business relationships”. However, they say that they imposed high sustainability standards on suppliers and check corresponding certifications.
The data of hundreds of cargo ship deliveries reveal further links to the automotive supply industry – several shipments from Corrie MacColl appear to have been bought by a Mexican branch of the company ContiTech, which belongs to Continental and specialises in rubber and plastic products: V-belts, hoses, conveyor belts, etc.
The data suggest that the company Sampel Industria E Comercio De Pecas Automotivas in Brazil has also been busy ordering rubber – in this case directly from the controversial Corrie MacColl subsidiary Hevecam in Cameroon. Between November 2019 and April 2020, the company had more than 200 tonnes delivered from Hevecam. The material could therefore be found in cars of major brands: the company Sampel produces suspension parts for VW, Honda, Ford and the German car parts supplier ZF, among others.
Every year, between 40 and 50 percent of the natural rubber from Cameroon ends up on the European market. Till now, companies have been able to shrug off their responsibility for deforestation and displacement, but the EU wants that to change. The goal of the EU Supply Chain Act is to require importers to make sure that their suppliers commit to environmental protection and human rights. But for months, business associations have been working behind the scenes against the initiative: in February 2022, CORRECTIV and the broadcaster SWR reported together on the influence of the lobbyists.
“I’d say that this is one of the main topics for the lobby organisations at the moment,” says MEP Anna Cavazzini (Greens). “With this law, we could make huge strides forward in environmental protection and human rights. That is why the lobby attacks are worrying.”
In Germany, a national supply chain law already came into force on 1 January 2023. Critics describe it as weak and toothless. The Union parties (CDU/CSU), in particular, ensured that the lobbyists’ positions would shape the law: among other aspects, most due diligence obligations have been limited to the direct suppliers, and civil liability rules have been removed altogether.
MEP René Repasi (Social Democratic Party of Germany – SPD) describes the German law as “insufficient”. He says that “something better needs to emerge” at the EU level. Repasi has also noticed an extremely high level of lobbying. As an MEP, he says he was used to a lot. “But this is on a different level.” Considering the resistance, he says it was now important to create a law that is actually effective. This required options for controlling and punishment: “The crux of the matter is the way liability rules are designed.”
The EU directive clearly goes beyond the German law and sets out civil liability rules for the companies. This, in particular, is what German lobbyists are up in arms against. The Federation of German Industries (Bundesverband der deutschen Industrie – BDI), for example, lambasts these rules in a position paper and “emphatically calls for their removal”.
It is striking that the German government is also strongly advocating for weaker liability rules in Brussels. This is evidenced by documents from the EU Council, the council of European heads of state and government, which have been seen by CORRECTIV and Frontal. When the Council agreed on a compromise text in December, Germany agreed but demanded improvements.
According to internal minutes of the Council meeting, the German representatives expressed their displeasure: some points that were “very important to Germany have not been adopted”. In an attached declaration, the federal government makes a blunter statement and and demands that a so-called safe harbour clause must be included. Germany would only agree to a text “that meets these conditions”. In other words: either the EU gives in, or we’re out.
Safe harbour: Germany has repeatedly insisted on this clause in the EU Council. The intention would be to protect the economy from damages claims. Companies would then only be liable for intent or gross negligence – not for ordinary negligence. That would be a massive relief for the economy. The intended beneficiaries are companies that use recognised certificates and certification marks.
With regard to Cameroon’s South Region, this means the following: let’s assume that a local rubber company needs larger plantations in order to be able to meet the orders of a European customer. If the company displaces indigenous groups in order to achieve this, the European company might be jointly liable.
“In any case, companies are obliged to investigate such risks and take corresponding preventive measures,” says Armin Paasch, supply chain expert at the organisation Misereor. “If they do not comply with this duty, I would expect there to be fines, and maybe also civil liability if this omission causes damages.”
However, the crux of the matter is that a safe-harbour clause would allow victims to sue for damages only if they had evidence that the company acted intentionally or with gross negligence.
This will likely be impossible without access to the company’s internal records. For this reason, Misereor’s Armin Paasch says: “Such a clause would issue a blank cheque to these companies.” Certificates and industry dialogues have repeatedly proven to be flawed and unreliable, he says. He reacted to Germany’s demands in the EU Council with sharp criticism: “It is completely unacceptable that the German government continues to make its approval of the directive dependent on the inclusion of further civil liability loopholes for companies.”
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The safe harbour clause is one of the demands of the business lobby. For instance, a paper by the Association of German Chambers of Commerce and Industry (Deutscher Industrie- und Handelskammertag – DIHK) states that compliance with due diligence must be “ensured through participation in ‘appropriate’ industry initiatives and recognised as a safe-harbour solution”.
But why has the German government been so eager to advocate for this clause in Brussels? Observers in Brussels and Berlin say that the FDP in particular has lobbied for a softening of the directive in Germany. CORRECTIV and Frontal have obtained instructions from the federal government and secret papers that provide insights into the cabinet’s internal alignment and corroborate this impression.
After weeks of negotiations, the German government outlined its position on the EU Supply Chain Directive in an instruction paper in September 2022. The ARD magazine TV programme Monitor reported on this in October. CORRECTIV and Frontal also have access to this document and to a preliminary paper from July 2022 that reflects an earlier position and proves the influence exerted by the FDP.
The earlier paper shows that the SPD and the Greens had advocated for a much more ambitious EU Supply Chain Act; the ministries involved include the Ministry of Labour under Hubertus Heil (SPD) and the Ministry of Economic Affairs under Robert Habeck (Greens). However, stricter provisions apparently failed due to the resistance of the Ministry of Justice under Marco Buschmann (FDP).
In the previous version of the document, all passages where the Ministry of Justice had fundamental reservations are marked by brackets – these passages include, for instance, the entire section on liability. The wording of the July paper goes far beyond the final September document.
The term “safe harbour” does not appear in it. But two months later, the instruction paper states: “Germany is in favour of including a safe harbour clause.” This is how the federal government presented its position in Brussels as well.
Did the FDP push this point through? The FDP parliamentary group did not answer any questions, despite several inquiries by CORRECTIV and Frontal. The Federal Ministry of Justice, however, admits to having proposed the safe harbour clause within the cabinet: ensuring that the liability risk was in line “with the constitutional principles of proportionality and certainty” had been “a major concern” of the ministry.
The Ministry of Justice also stated that industry dialogues and certificates would only lead to liability limitations if they were subject to state control and would therefore offer the “advantage of reliable certifications and evidence”. Furthermore, as the Ministry writes, this system could provide an incentive for companies to “take effective, preventive measures.”
But why did the SPD and the Greens buckle under the opposition of the FDP? Habeck’s Federal Ministry of Economic Affairs did not reply to CORRECTIV’s and Frontal’s questions and referred us to the ministry in charge, the Federal Ministry of Labour.
The Ministry of Labour also rejects the criticism: a spokesperson stated that a safe harbour regulation did not mean “complete exemption” nor could it serve as “loophole”. In fact, the criteria for recognising industry initiatives could be very strict, the ministry wrote: “It is true that industry initiatives do not currently meet these requirements. Improving this would be one of the benefits of the safe harbour rule.”
The Federal Ministry of Labour did not want to comment on the FDP exerting influence on the government’s position: “We do not comment on internal government discussions.” They said: “The German government has actively participated in the negotiations at the EU level and has advocated for a legal act that, in some respects, will go beyond the German Supply Chain Act, for example regarding civil liability.”
Internal government documents, however, show that the German government has also softened its stance on other aspects of the EU directive: The cabinet pleaded for limiting climate protection regulations – which is a surprising move for a government including the Greens:
The government argues that the EU directive should contain climate targets for companies, but “non-implementation” of such plans should “not lead to official enforcement or other punishments”. This is what the September instruction paper states.
In other words, there are no consequences if companies do not meet their climate targets. It is striking how this passage changed between July and September. The July paper still stated that it should be “clarified” that the law contains an “obligation to implement” climate plans – the Ministry of Justice had also raised reservations regarding this section. In the final version of September, there is no longer any mention of an obligation.
The Federal Ministry for Economic Affairs and Climate Action led by the Greens did not want to comment on this. The Federal Ministry of Justice stated that, with the obligation to work out climate plans, the directive already makes an “important contribution” to sustainability: “More far-reaching regulations did not find a majority among the member states and were also not the goal of the federal government.”
The December agreement in the EU Council does not include a safe harbour clause – Germany was unable to get its way on this point. However, the controversial clause is not off the table: the German government is putting pressure on other member states and is demanding the addition of the rule as a condition – this is stated in the minutes circulated before the Council vote.
Green MEP Anna Cavazzini welcomed the fact that the EU Council had reached an agreement at all but expressed her disappointment: in areas such as liability or climate protection, “the Council further weakens the already incomplete Commission proposal”, she says. “It seems that governments have buckled under the huge lobby pressure.” She expects difficult times for the upcoming negotiations between the EU Council and the Parliament.
At least, however, binding standards for European human rights and environmental standards covering the supply chains of European companies are in the works for the first time. The rubber group Corrie MacColl seems to have prepared itself for change and is presenting itself as a green company. The company website says that Corrie MacColl is committed to providing a “traceable” product that is “certified by recognised organisations in environmental and social aspects at all stages of the supply chain”.
Since falling into disrepute due to the deforestation, Sudcam has been changing course: its parent company Halcyon Agri signed an agreement with the environmental organisation Mighty Earth and local NGOs, announced support for the Baka and committed itself to stopping deforestation.
This investigation, however, raises doubts on these claims. At Mighty Earth, disillusionment has set in: the projects announced ended up petering out into nothing, a system for recording indigenous people’s grievances did, according to Mighty Earth, not provide sufficient access and lacked transparency, and a planned local “sustainability council” was “dead in the water”, says Julian Oram, natural rubber expert at Mighty Earth: “At best, there is a lack of clarity and evidence that indigenous groups are benefiting from the measures taken so far.”
The Corrie MacColl group denies the accusations, saying that the company had established the “sustainability council” and handed over responsibility to local actors and NGOs. The digital recording of complaints was “transparent” and can be accessed online, and locals can also raise their concerns verbally, they say.
At the same time, however, reports of polluted water near the rubber plantations are spreading; Corrie MacColl leaves questions on this topic unanswered. At least, say environmentalists in Cameroon, there seemed to be no more large-scale clear-cutting on the land owned by its subsidiaries.
At the same time, Corrie MacColl appears to be energetically pushing its “Outgrower” program. As local sources confirm, the program appears be working, but it is also linked to economic self-interest: it aims to enable smallholders to set up their own rubber farms with microcredits. It also allows Corrie MacColl to presents itself as a responsible company and, at the same time, it gais access to more and more farmland, because the company intends to buy the rubber from these smallholders, according to the company’s website.
Therefore, critics fear that the project could lead to outsourced deforestation. “This looks like greenwashing: They could blame deforestation on other people participating in the program”, says Ranèce Jovial Ndjeudja of Greenpeace Africa. This was possible, he adds, because nobody verified whether recent clearings were connected to the activities of smallholders: “In our view, this involves even greater threats to the rainforest.”
Cameroonian forest expert Ghislain Fomou Nyamsi expresses similar views: “They claim they are sustainable and are not deforesting anymore, but they have already done the deforestation and planting,” he criticises. “Now they say that they support smallholders. But how do the smallholders produce natural rubber? Possibly through deforestation.”
Deforested areas and monocultures instead of rainforest: The plantations of Sudcam are part of the Congo Basin and are located near the particularly species-rich animal reserve Dja.
Satellite image from December 2018 (Source: Planet Labs Inc.)
A dataset from the Global Forest Watch initiative shows the decline in tree cover in the region on and near the Sudcam plantation from 2001 to 2018. The red spots show where trees have declined.
Tree loss 2001-2018 (Source: Hansen/UMD/Google/USGS/NASA)
Tree loss 2019-2021. Around the Sudcam areas, more and more small bare areas have been appearing in recent years - several 1,000 hectares in total. However, the reasons are unclear: the loss of tree cover may also have occurred as a result of fires or natural causes.
Tree loss 2019-2021 (Source: Hansen/UMD/Google/USGS/NASA)
Corrie MacColl denies this, saying that there was a “strict onboarding process” for smallholders, who had to prove that they had not deforested any land after December 2018. The information was compared to satellite images, they say.
At the same time, new actors are entering the scene. CORRECTIV spoke to residents in Cameroon’s South Region who say that an obscure company is currently preparing clearances in the region and denying people access to the forest.
This company has no website, and there is hardly any information available publicly. An employee told CORRECTIV that the company was still in the process of establishing its plantations, and that the trees had not yet been tapped. However, they planned on supplying Halcyon Agri and Hevecam with natural rubber in the future: “We have not yet started production and are still planting the rubber trees. But we intend to start selling to the two companies mentioned.”
Corrie MacColl claims to not know anything about it. They say, they had “no relationship with this company”.
Natural rubber is an example of how the consumption in Europe drives environmental damage in other parts of the world. The EU now wants to stop this, and a regulation to specifically protect forests is in the pipeline. The rules go considerably further than those of the EU Supply Chain Act but only apply to a narrow range of particularly risky products. Despite massive resistance from the tyre lobby, which CORRECTIV has previously reported on, after much toing and froing, the EU also put natural rubber on the list, as well as soy, palm oil and cocoa, among other things.
This regulation could be far more significant for Cameroon’s forests than the Supply Chain Act. It aims to ensure that companies can no longer import raw materials for which forests have been cleared into the EU. Buyers must prove the delivery routes of the goods with geodata from the cultivation area to the EU.
For MEP Delara Burkhardt (SPD), the law is a breakthrough: “We are sending a clear signal that, on the European market, we will no longer accept products that are linked to environmental and human rights violations,” she says. “If it is implemented well, we can cause a dramatic change in supply chains. What matters is that compliance is properly monitored in all EU member states and non-compliance is punished.”
However, this regulation also leaves considerable gaps: the rules for the protection of forests are indeed far-reaching, especially regarding transparency obligations. In contrast to nature protection, however, human rights have been greatly reduced – including those regarding indigenous groups: Although European companies are urged to respect the rights of indigenous peoples and ensure that their land is not used for agriculture without their consent, the EU regulation only legally obliges them to do so in countries where there are also national laws to protect indigenous peoples.
This is bad news for the Baka in Cameroon as the government does not recognise their rights to the land. The situation around Corrie MacColl’s plantations in particular shows the close connection between human rights and environmental protection.
“It is unfair that these communities have lived in the forests for generations and can be displaced overnight simply because they have no land rights,” says Cameroonian environmental lawyer Aristide Chacgom. Food shortages are becoming an increasing problem in the area around where Hevecam operates, especially for the indigenous groups. “Most of what they consume comes from the forest,” he says. “And if the forest disappears, these products no longer exist. In the area around Sudcam’s operations, things will go the same way if they continue as they are.”
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