Benton's Clause

Deforestation and Land Use Change Clause and Questionnaire

This clause and the associated self-assessment questionnaire enable businesses and law firms to gain a better understanding of deforestation and land use change across their supply chains.

Jurisdiction: USA
Updated:

What this clause does

Deforestation and land use change are major drivers of climate change. The clause and the associated self-assessment questionnaire enable businesses and law firms to gain a better understanding of deforestation and land use change across their supply chains, while protecting their businesses from potential reputational, economic, and legal risks arising from suppliers’ behavior and non-compliance.

Clauses

[Drafting note: Capitalized terms relate to either a defined term in this clause or a defined term in the main agreement that this clause is designed to be inserted into.]

 

1. Supplier Responsibilities in Managing Deforestation and Land Use Change 

1.1 The Parties shall comply in all material respects with all applicable land and forest use laws, rules and regulations;

1.2 Supplier shall continuously engage in [commercially reasonable] [best] practices to minimize Deforestation and/or Land Use Change from any land use relating to the contract, including but not limited to [procuring the following actions]: 

1.2.1 Publicly committing to reduce or eliminate Deforestation and/or Land Use Change from direct operations and supply chain;

1.2.2 Tracing the source, origin, and/or production conditions of sourced products;

1.2.3 Assessing the incidence and risk of Deforestation and/or Land Use Change in land relating to the contract;

1.2.4 Conducting HCV-HCS assessments in accordance with [the HCV Resource Network’s (HCVRN) HCV-HCSA Assessment Manual as refined in 2021] to support the identification of High Conservation Value (HCV) and High Carbon Stock (HCS) Forests relating to the contract;

1.2.5 Setting a time-bound and quantifiable Zero Deforestation and/or Land Use Change commitment/ target for direct operations and supply chain; 

1.2.6 Disclosing and reporting progress toward eliminating Deforestation and/or Land Use Change from direct operations and supply chain to the Buyer;

1.2.7 Measuring and disclosing the GHG emissions from Deforestation and/or Land Use Change in land relating to the contract to the Buyer, in accordance with [the Intergovernmental Panel on Climate Change’s 2006 IPCC Guidelines for National Greenhouse Gas Inventories, Volume 4: Agriculture, Forestry and Other Land Use (IPCC 2006) as refined in 2019 and] [the GHG Protocol’s Land Sector and Removals Guidance] as amended periodically; and

1.2.8 Engaging in external sustainability initiatives (e.g., landscape, jurisdictional, or sectoral collaborations) to avoid Deforestation and Land Use Change.

2. Self-Assessment Questionnaire

2.1 To support the Buyer’s endeavors to minimize Deforestation and Land Use Change from its supply chain, the Supplier will complete and provide a copy of the self-assessment questionnaire in Annex [A] to the Buyer on an annual basis commencing from the date of this Agreement and continuing through the Term of the Agreement. 

[Drafting note: Sanctions for suppliers who fail to comply with the contract (including failing to provide the questionnaire) may already be dealt with in the underlying agreement in which this clause is intended to sit. That being so, the reporting requirement in this clause might need to be amended to align with the reporting requirements in the underlying agreement.]

2.2 The Supplier represents, warrants, and covenants that the information provided within each self-assessment questionnaire will be true, accurate, full and complete to the best of its knowledge at the date of the self-assessment questionnaire.

[Drafting note: Sanctions for suppliers who fail to comply with the contract (including failing to provide the questionnaire) may already be dealt with in the underlying agreement in which this clause is intended to sit. If not, refer to TCLP’s Jessica’s Clause for sample drafting on remedies for breach of warranty.]

3. Remedies for Non-Performance and Termination of Agreement 

3.1 If the Buyer identifies a material risk of Deforestation and/or Land Use Change in land use relating to the contract based on the above-referenced self-assessment questionnaire, the Buyer shall notify the Supplier, and each Party shall cooperate in good faith with the other to mitigate the risk of Deforestation and/or Land Use Change [as far as reasonably practicable][to the extent commercially reasonable]. 

3.2 Within [60 days] [● days] of the Buyer providing notice of a material risk of Deforestation and/or Land Use Change in land use relating to the contract, Supplier shall provide a detailed proposed plan to mitigate the risk of Deforestation and/or Land Use Change, including a timeframe for implementing the plan.

3.3 The Parties shall identify a point of contact within their respective organizations to Review the Supplier’s proposed plan, seek to agree on a course of action, and, if a plan is agreed, to oversee its implementation.

3.4 The Buyer shall be entitled to terminate this Agreement with [28 days] [● days] written notice if:  

3.4.1 The Supplier does not provide a proposed plan in accordance with [clause 3.2], or  

3.4.2 The Parties cannot come to an agreement on a course of action in accordance with [clause 3.3] after good faith negotiations by their points of contact, or 

3.4.3 The Supplier does not take such actions particularized in, and in accordance with, any plan agreed in accordance with [clause 3.3] within the timeframe specified in that plan.

 

ANNEX [A]

Supplier Self-Assessment Questionnaire – Deforestation and Land Use Change

1. Information about the Supplier

1.1 Supplier company name:

1.2 Registered address:

1.3 Telephone number:

1.4 Supplier contact (name, job title, e-mail):

1.5 Countries/ areas in which Supplier operates:

1.6 Date of completing this questionnaire:

2. Management of Deforestation and Land Use Change

Please answer the following questions and provide further additional information where possible (including, if you respond ‘N/A’ to any of the questions, an explanation why you think the question does not apply to you).

2.1 Direct operations

2.1.1 Indicate the forest-risk commodities that you use in production or trade.

2.1.2 Do you comply with all applicable land and forest use laws, rules and regulations?

[Drafting note: Tailor this question to the land and forest use laws, rules and regulations relevant to the industry/ sector the contract relates to.]

Yes ☐ No ☐ N/A ☐ Please provide additional information:

2.1.3 Have you incorporated forest and land use change-related issues into your corporate governance system?

Yes ☐ No ☐ N/A ☐ Please provide additional information:

2.1.4 Have you incorporated forest and land use change-related issues into your business strategy?

Yes ☐ No ☐ N/A ☐ Please provide additional information:

2.1.5 Does your company have a designated management person responsible for all sustainability initiatives and queries?

If so, please provide their contact details.

Yes ☐ No ☐ N/A ☐ Please provide additional information:

2.1.6 Do you have a public commitment to minimize or eliminate Deforestation and/or Land Use Change in your direct operations?

Yes ☐ No ☐ N/A ☐ Please provide additional information:

2.1.7 If you answered 'Yes' to question 2.1.6, does your company regularly monitor progress toward its commitment to minimize or eliminate Deforestation and/or Land Use Change?

Yes ☐ No ☐ N/A ☐ Please provide additional information:

2.1.8 If you answered 'Yes' to question 2.1.7, are the monitoring results verified and validated by an external third party?

Yes ☐ No ☐ N/A ☐ Please provide additional information:

2.1.9 If you answered 'Yes' to question 2.1.7, does your company publicly report progress and outcomes related to the implementation of its commitment to minimize or eliminate Deforestation and/or Land Use Change?

If so, please provide a link to the report.

Yes ☐ No ☐ N/A ☐ Please provide additional information:

2.1.10. Do you have a code of conduct or code of ethics related to Deforestation and/or Land Use Change?

If available, please attach your code of conduct/ ethics.

Yes ☐ No ☐ N/A ☐ Please provide additional information:

2.1.11. Does your company deliver training for staff to improve the understanding of Deforestation and Land Use Change in your direct operations and supply chain?

Yes ☐ No ☐ N/A ☐ Please provide additional information:

2.1.12. Do you carry out due diligence on your suppliers?

Yes ☐ No ☐ N/A ☐ Please provide additional information:

2.1.13. If you answered 'Yes' to question 2.1.12, does the due diligence cover Deforestation and Land Use Change?

Yes ☐ No ☐ N/A ☐ Please provide additional information:

2.1.14 Indicate the percentage of your supply certified to internationally recognized standards that trace the path of ingredients/ products through the supply by product and list the standards.

2.2 Supply Chain

[Drafting note: Tailor the questions in this section to those relevant to the supplier counterparty and its supply chain. Some questions in this template might not apply. There might also be Deforestation and Land Use Change risks that are not listed here. The parties and their legal advisors will need to amend these template questions accordingly.]

2.2.1 Do you require your suppliers to comply with all applicable land and forest use laws, rules and regulations within your supply chain?

[Drafting note: Tailor this question to the land and forest use laws, rules and regulations relevant to the industry/ sector the contract relates to.]

Yes ☐ No ☐ N/A ☐ Please provide additional information:

2.2.2 Are forest-risk commodities in your supply chain traceable to the country, region, or farm of origin level? 

Yes ☐ No ☐ N/A ☐ Please provide additional information:

2.2.3 Do you have a public commitment to minimize or eliminate Deforestation and/or Land Use Change in your supply chain?

Yes ☐ No ☐ N/A ☐ Please provide additional information:

2.2.4 Do you engage with your [Tier 1] [Tier 2] suppliers to support and improve their capacity to comply with your Deforestation and/or Land Use Change policies, commitments, and other requirements?

Yes ☐ No ☐ N/A ☐ Please provide additional information:

3. Procedures – Direct Operations and Supply Chain

3.1 Do you [annually] assess the Deforestation and/or Land Use Change footprint of your direct operations and supply chain?

Yes ☐ No ☐ N/A ☐ Please provide additional information:

3.2 Do you conduct HCV-HCS assessments to support the identification of High Carbon Stock (HCS) and High Conservation Value (HCV) sites in your direct operations and supply chain? 

Yes ☐ No ☐ N/A ☐ Please provide additional information:

3.3 Have you identified any potential or actual practices within your direct operations or supply chain that represent a material risk for Deforestation and/or Land Use Change?

Yes ☐ No ☐ N/A ☐ Please provide additional information:

3.4 Have you established appropriate actions to remediate or prevent the material risks identified in 3.3?

Yes ☐ No ☐ N/A ☐ Please provide additional information:

3.5 Have you implemented adequate controls considering the size and nature of your business to mitigate the incidence and/or risk of Deforestation and Land Use Change in your direct operations and supply chain?

Yes ☐ No ☐ N/A ☐ Please provide additional information:

3.6 Have you participated in remediation processes where Deforestation or Land Use Change has been identified within your direct operations and supply chain? If 'Yes', indicate the status of such remediation processes.

Yes ☐ No ☐ N/A ☐ Please provide additional information:

4. Implementation

4.1 Is your company engaged in external sustainability initiatives (e.g., landscape, jurisdictional, or sectoral collaborations) to avoid Deforestation and/or Land Use Change?

Yes ☐ No ☐ N/A ☐ Please provide additional information:

4.2 If you have made a commitment to minimize or eliminate Deforestation and/or Land Use Change, does your company participate in external activities and/or initiatives to promote the implementation of your commitments?

Yes ☐ No ☐ N/A ☐ Please provide additional information:

5. Compliance Statement

5.1 I, [Contact Name], represent [Supplier]. 

5.2 I confirm that the information in this self-assessment questionnaire is true, accurate, full and complete to the best of my knowledge and belief at the date of this self-assessment questionnaire.

Definitions

Deforestation means the conversion of forest land to non-forest land. (IPCC, 2000)

Greenhouse Gasses (GHGs) means the gasses [or particulates] that trap thermal radiation in the Earth’s atmosphere. They are specified by the United Nations Framework Convention on Climate Change (UNFCCC) in Annex A to the Kyoto Protocol and may be updated periodically.

High Carbon Stock (HCS) Forests means forests that possess high concentration of carbon contained in the vegetation and soils. (High Carbon Stock Approach, The HCS Approach Toolkit, May 2017)

High Conservation Value (HCV) Forests means forests that possess one or more of the following attributes: 

  • (HCV 1) Forest areas containing globally, regionally or nationally significant concentrations of biodiversity values. 
  • (HCV 2) Forest areas containing globally, regionally or nationally significant landscape-level ecosystems and mosaics containing viable populations of the great majority of the naturally occurring species in natural patterns of distribution and abundance. 
  • (HCV 3) Forest areas that are in or contain rare, threatened or endangered ecosystems, habitats, or refugia. 
  • (HCV 4) Forest areas that provide critical ecosystem services or basic ecosystem services in critical situations. 
  • (HCV 5) Forest areas fundamental to meeting basic necessities of local communities or Indigenous Peoples. 
  • (HCV 6) Forest areas containing sites, resources, habitats and landscapes of global or national cultural, archaeological or historical significance, and/or of critical cultural, ecological, economic or religious/ sacred importance for the traditional cultures of local communities or Indigenous Peoples.

(Forest Stewardship Council - FSC Principles and Criteria for Forest Stewardship, March 2023)

Land Use Change means a change in the use or management of land by humans, which may lead to a change in land cover. Land cover and land use change may have an impact on the surface albedo, evapotranspiration, sources and sinks of greenhouse gasses, or other properties of the climate system and may thus give rise to radiative forcing and/or other impacts on climate, locally or globally. (IPCC, 2000)

Zero Deforestation means no forest loss through deforestation and no decline in forest quality through degradation. (World Wide Fund for Nature, 2008)


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