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How are EUDR requirements implemented in companies' supply networks? The case of Ethiopian coffee sourcing

Sorokin, Sergei LU (2024) In IIIEE Master Thesis IMEM01 20241
The International Institute for Industrial Environmental Economics
Abstract
Deforestation, mainly driven by agricultural expansion, is a global problem, interlinked with many pressing sustainability issues of our time, first and foremost, climate change. Previous private corporate initiatives and public policies such as FLEGT and the EUTR have not succeeded in overturning the trend. As a response to that, EU deforestation regulation was developed as the new demand-side policy to prevent forest-risk agricultural commodities from entering the EU, and, by the means of market power, curbing the halting deforestation assoicated with affected commodities. This is expected to be achieved by imposing the due diligence requirements on the EU exporters. However, the implementation in the agricultural supply chains, or... (More)
Deforestation, mainly driven by agricultural expansion, is a global problem, interlinked with many pressing sustainability issues of our time, first and foremost, climate change. Previous private corporate initiatives and public policies such as FLEGT and the EUTR have not succeeded in overturning the trend. As a response to that, EU deforestation regulation was developed as the new demand-side policy to prevent forest-risk agricultural commodities from entering the EU, and, by the means of market power, curbing the halting deforestation assoicated with affected commodities. This is expected to be achieved by imposing the due diligence requirements on the EU exporters. However, the implementation in the agricultural supply chains, or networks, due to their length and complexity, poses difficulties for commodity traders who are affected by the regulation first-hand. Despite the history of supply chain due diligence laws like the EUDR, neither their implementation by the companies as part of their sustainability strategies, nor the responses to it in supply networks are sufficiently studied. This thesis investigates the patterns of the implementation of the EUDR both as a policy and a sustainability strategy, using the multi-tier approach through complex adaptive systems (CAS) perspective on the example of supply network of Ethiopian coffee. Building on the literature review of 50+ academic and grey literature sources and eight semi-structured expert interviews, it reveals the traders’ approaches to the EUDR implementation, the behaviour of supply network actors emerging as a response to that, and the main factors influencing such behaviour and implementation process in general. The results show traders’ reliance on third-party tools and services for commodities traceability which in the short tewrm was heavily prioritized over other due diligence requirements. In the upstream part of supply network reactions varied from compliance to evasion, with the latter especially in the from of producers switching to other cash crops. These processes were shaped by diverse reasons internally, primarily the non-alignment of rules and norms regarding coffee trade and sustainability within the supply network. Externally, the implementation processes was found to be subject to high dynamism coming from sudden policy change, mismatching the overall preparedness of the local industry. (Less)
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author
Sorokin, Sergei LU
supervisor
organization
course
IMEM01 20241
year
type
H2 - Master's Degree (Two Years)
subject
keywords
EUDR, deforestation, supply networks, Ethiopia, coffee
publication/series
IIIEE Master Thesis
report number
2024.24
ISSN
1401-9191
language
English
id
9171357
date added to LUP
2024-08-09 21:01:01
date last changed
2024-08-09 21:01:01
@misc{9171357,
  abstract     = {{Deforestation, mainly driven by agricultural expansion, is a global problem, interlinked with many pressing sustainability issues of our time, first and foremost, climate change. Previous private corporate initiatives and public policies such as FLEGT and the EUTR have not succeeded in overturning the trend. As a response to that, EU deforestation regulation was developed as the new demand-side policy to prevent forest-risk agricultural commodities from entering the EU, and, by the means of market power, curbing the halting deforestation assoicated with affected commodities. This is expected to be achieved by imposing the due diligence requirements on the EU exporters. However, the implementation in the agricultural supply chains, or networks, due to their length and complexity, poses difficulties for commodity traders who are affected by the regulation first-hand. Despite the history of supply chain due diligence laws like the EUDR, neither their implementation by the companies as part of their sustainability strategies, nor the responses to it in supply networks are sufficiently studied. This thesis investigates the patterns of the implementation of the EUDR both as a policy and a sustainability strategy, using the multi-tier approach through complex adaptive systems (CAS) perspective on the example of supply network of Ethiopian coffee. Building on the literature review of 50+ academic and grey literature sources and eight semi-structured expert interviews, it reveals the traders’ approaches to the EUDR implementation, the behaviour of supply network actors emerging as a response to that, and the main factors influencing such behaviour and implementation process in general. The results show traders’ reliance on third-party tools and services for commodities traceability which in the short tewrm was heavily prioritized over other due diligence requirements. In the upstream part of supply network reactions varied from compliance to evasion, with the latter especially in the from of producers switching to other cash crops. These processes were shaped by diverse reasons internally, primarily the non-alignment of rules and norms regarding coffee trade and sustainability within the supply network. Externally, the implementation processes was found to be subject to high dynamism coming from sudden policy change, mismatching the overall preparedness of the local industry.}},
  author       = {{Sorokin, Sergei}},
  issn         = {{1401-9191}},
  language     = {{eng}},
  note         = {{Student Paper}},
  series       = {{IIIEE Master Thesis}},
  title        = {{How are EUDR requirements implemented in companies' supply networks? The case of Ethiopian coffee sourcing}},
  year         = {{2024}},
}