Baroness Pitkeathley Portrait The Deputy Chairman of Committees (Baroness Pitkeathley) (Lab)
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The noble Baroness, Lady Neville-Rolfe, has withdrawn, so I call the noble Baroness, Lady Parminter.

Baroness Parminter Portrait Baroness Parminter (LD)
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My Lords, the discussion on this grouping has been quite lengthy. I echo the comments of the noble Baroness, Lady Bennett of Manor Castle, and the noble Duke, the Duke of Montrose, in thanking my noble friend Lord Chidgey for his excellent championing of chalk streams in this and earlier groupings. I very much hope that the Government will respond positively to the suggestion of this new designation for chalk streams. I will not speak for long because most points have already been covered.

I added my name to Amendment 235 of the noble Lord, Lord Krebs, on species conservation strategies, and I very much support his comments. We need to ensure that they support nature recovery and not faster development. It is right that, as the comments that have been made by noble Lords around the Committee showed, there is unanimous support for this amendment. That is indicative of the level of concern that we have about what the Government might be proposing in terms of future planning reforms coming down the track. If we can get this clear in the Environment Bill, that could give us some level of assurance. For those reasons, we on this Bench also support the 10 amendments of the noble Earl, Lord Caithness, who is looking to make these species conservation strategies work better. They are a good tool, but they need to work better, so we support all those amendments.

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Baroness McIntosh of Pickering Portrait Baroness McIntosh of Pickering (Con)
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My Lords, I am delighted to follow my noble friend, and I pay tribute to his work as a trustee of the Bat Conservation Trust. I press my noble friend the Minister to respond to the concerns I raised in the debate on the Amendment 234 group and ask for his confirmation that a greater balance will be achieved between the interests of bats and humans in the context of the closure of St Hilda’s Church at Ellerburn. It is extremely important that the parishioners of that and other churches know that their interests will not be subordinated to those of bats.

I associate myself with the amendments in the name of my noble friend the Duke of Montrose and the amendment tabled by the noble Lord, Lord Krebs, and his co-signees, which proposes that Clause 106 do not stand part. I associate myself with all the comments made by my noble friend the Duke of Montrose on his amendment. I need say nothing more than that I support and applaud the idea, set out in his amendments, of achieving sustainable development and a balance between different uses. In particular, I support the words of the noble Earl, Lord Devon, in support of farming and the rural economy, and I hope that this group of amendments will place on record our desire that a balance be achieved.

In addition to my question about bats in the belfry in the context of St Hilda’s Church at Ellerburn, I press my noble friend the Minister to confirm the reason for the urgency for Clause 106. I understand from the noble Lord, Lord Krebs, that it was added at quite short notice and without any consultation, which is always slightly worrying. Can the Minister confirm—my noble friend Lady Neville-Rolfe hit the nail on the head—that this is, to a certain extent, a consequence of the EU directive on habitats being retained in UK law? Paragraph 955 on page 118 of the Explanatory Notes, which my noble friend the Minister is always keen that we read—I am one step ahead of him in this regard—says:

“The national site network of European sites provides protection for habitats designated for a particular purpose and supports delivery of international and domestic biodiversity objectives.”


I imagine that one of the main thrusts of Clause 106 is to ensure that that list is kept under review—by granting the Government the power to keep it under review—now that we have left the European Union. I urge my noble friend the Minister to continue to obtain a balance between the uses and the different interests that will be exercised in this regard.

How will the habitats regulations be applied when it comes to the planning Bill, which is coming before the House in short order?

Baroness Parminter Portrait Baroness Parminter (LD)
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My Lords, we on these Benches support the amendments in the name of the noble Lord, Lord Krebs, to which I added my name. He is right to raise the concerns that a number of us have about the intentions of the Government in removing the protections on our most valuable ecological sites and habitats. He mentioned some species that are very important to him; for me it is about the bitterns and nightingales. The Government are proposing, as the noble Lord rightly said, to change the present situation, where there has to be overriding public interest to remove protections for particular sites, to one in which, basically, local authorities have to satisfy the needs of the Bill and meet overall targets for improving nature.

They are asking them to do all that on trust, and as the noble Lord, Lord Krebs, rightly said, the Government’s amendment says that the Secretary of State will decide whether there has been a reduction of those protections. There is no guarantee of consultation with independent experts. I hope the Minister will answer the direct question asked by the noble Lord, Lord Krebs, on that point: will the Government guarantee to consult the independent experts? Without that, we must query their intentions.

There is a slightly broader point about consultation, one which the noble Earl, Lord Devon, raised. The current system works very well when there is proper consultation among all interested stakeholders in a given area, including the businesses, environmentalists and local action groups. It might work well in the Exe estuary; it certainly works well with us in the Thames basin, with the heath development framework. My local authority is working on that with 11 other local authorities, and we have managed to operate within the existing framework of the habitats directive. Meanwhile in Surrey—a heavily developed area—we are building the homes that are needed while protecting our most special ecological sites. The current consultation system is working, so there is no way we should give that up for a system in which there is no guarantee of consultation in future.

Secondly, on the point that the Government are asking us to take all this on trust, the noble Baroness, Lady Neville-Rolfe, said that there is no impact assessment. Surprise, surprise: that is because there was no consultation and it was introduced at Report in the Commons. There is no impact assessment, but there have been multiple reviews of the legislation on the habitats directive and all of them said it should be improved, not revoked. That consultation has involved businesses as well as environmental NGOs and other stakeholders. It is a shame that the Government have not introduced the improvements asked for by those interested parties over the years, rather than going for the nuclear option of suddenly throwing the baby out with the bathwater.

Thirdly, I come to what worries me most about the Government asking us to take this on trust. We have had debates about why they will not include in the Bill the state of nature targets for species abundance, and they said it was because at the moment, they cannot work out the metrics: they do not have the metrics in place and must work out what those targets are. If they must work them out, why do they think it is okay to get rid of the existing system, when we do not have those robust metrics in place? We should not be removing something that is delivering protection for our most valuable ecological sites and allowing developments in hotspots such as Surrey, if we do not have the metrics to prove that we can move from a system that is working to another which may be what the Government want, but for which we do not have the metrics.

The Government are asking us to take too much on trust at this stage. It makes me think that this is really more cover for future changes in the proposed planning Bill, through which they will sweep away protections for particular sites to allow more development in these new zoned areas. I accept that we have left Europe and we need to move ahead. The noble Baroness, Lady Neville-Rolfe, said that we need to move ahead independently. I do not care whether it is independently or not; I want us to move ahead so that we better protect our environment and, at the same time, build the affordable houses we need. The existing system is working and the Government need to provide some very good answers if they are to persuade the House that it should be swept away and replaced by something unproven and not clearly argued.

Baroness Hayman of Ullock Portrait Baroness Hayman of Ullock (Lab)
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My Lords, we support Amendments 255, 256 and 257AA in the names of the noble Lord, Lord Krebs, and others, which allow the Conservation of Habitats and Species Regulations 2017 to be amended to further new objectives in addition to, rather than in place of, existing ones. Government amendments to the Bill were, disappointingly, as the noble Lord, Lord Krebs, said in his introduction, brought in without consultation. They introduced new Clauses 105 and 106, providing powers for the Secretary of State to amend the habitats regulations. We agree with the noble Baroness, Lady Parminter, that taking things on trust is simply not good enough in legislation. This Government may say, “Yes, you can trust us”, but who knows what the future holds?

We have heard that Clause 105 allows Ministers, as, as the noble, Lord Krebs, said, to swap the duty on public authorities to satisfy the requirements of the nature directives with a duty to satisfy the requirements of the Bill’s targets and environmental improvement plans. However, the new objectives are simply not a substitute for those of the nature directives. They serve an entirely different purpose. as noble Lords have said. The Bill’s targets aim to ensure overall national improvement across the natural environment.

To satisfy the expected Environment Bill requirements, habitats and species in general need to be increasing. By contrast, the nature directive is all about protecting particular habitats and species and specific sites and populations. They form the first line of defence for some of our most precious habitats and species, and any powers to amend them must be designed and considered very carefully to avoid unintended consequences. Any protections must be maintained and built on, not undermined.

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Baroness Sheehan Portrait Baroness Sheehan (LD)
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My Lords, I will speak to the five amendments in the group which either appear in my name or to which I have added my name. I will confine my remarks to them in the interests of time, but I register my strong support for all the amendments in the group, with perhaps a question mark over Amendment 265 in the name of the noble Lord, Lord Lucas. It has not been explained in the amendment how relative product advantage would be measured.

I am fortunate to have been preceded by the noble Lords, Lord Randall and Lord Lucas, and by the noble Baroness, Lady Meacher, who spoke about why these amendments needed to have been tabled, so I can say a lot less. I am sorry to have to speak before my noble friend Lady Parminter, in whose name Amendment 265A appears. This is an important amendment, which—given the UK’s position as a leader in financial services—in many ways goes to the heart of our leadership on both climate change and human rights issues. It has my strong support.

I will address Amendment 264ZA in the names of the noble Baroness, Lady Jones of Whitchurch, and my noble friend Lord Oates, and to which I have added my name also. The amendment has been tabled to draw attention to the current situation in which human rights abuses of indigenous peoples abound, sometimes leading to death, and to offer a remedy of sorts. In order to make local laws fit for purpose, it is critical to ensure that the UK requires businesses to have evidence that the free, prior and informed consent—FPIC—of indigenous peoples in forest communities has been obtained in the production of forest risk commodities on their land and local area.

There is a strong body of evidence which shows that FPIC reduces deforestation, reduces attacks on forest custodians and develops strong, commercially productive relationships. This is particularly important for the 80% of indigenous and community lands that do not yet have secure legal rights. FPIC is defined under international law, and commitments to full or partial FPIC are included in a diverse array of industry standards, OECD guidance and company commitments. It should be specifically included in Schedule 16 to underscore our global leadership on both climate change and human rights. I also point out that the Global Resource Initiative task force—commissioned by BEIS, Defra, and the FCDO, so this is the Government’s own body—in its report of March 2020 specifically recommended that the UK Government urgently introduce a mandatory combined human rights and environmental due diligence approach to forest risk commodities.

Schedule 16 is the UK’s first due diligence process with respect to forest risk commodities, yet it makes no mention whatever of mitigating human rights abuses through free, prior and informed consent. This is a moral and practical oversight and I look forward to the Minister’s response about how this omission can be justified.

Amendment 264A, in the name of the noble Baroness, Lady Meacher, and the noble Earl, Lord Sandwich, which I support, seeks to address the potential gaping loophole that would be set up by differentiating between legal and illegal deforestation. Does the Minister accept that the British public do not want these tainted goods? I cite the remarkable outcome of the Government’s public consultation on due diligence on forest risk commodities: over 99% of respondents supported the introduction of legislation to reduce all deforestation. When can we expect a response to the consultation?

I tabled Amendment 264B to paragraph 3 of Schedule 16 on the due diligence system as a probing amendment to see what estimation the Government have made of the acceptable level of mitigation of risk by businesses operating forest risk commodities. If the objective of Schedule 16 to avoid products consumed in the UK contributing to deforestation abroad is to be met, UK businesses must be confident that there is no more than a negligible risk that their products are linked to deforestation. Does the Minister agree that a requirement to mitigate risk without specifying the extent to which risks must be mitigated is rather vague and subjective? What consideration have the Government given to the question, as an unqualified requirement to mitigate risks leaves businesses open to legitimately take the least action required to achieve the most minimal reduction in their assessment of risk rather than the action required to genuinely minimise the level of risk? What would stop this happening? In the way that Schedule 16 is currently drafted, it is not clear to me; maybe the Minister can enlighten me. I would appreciate a thorough response from him on this amendment, maybe in writing.

Amendment 265ZA in my name would require the Secretary of State to consult stakeholders when making regulations on the content and form of annual reports on the due diligence system, and on how such reports are to be made publicly available. The amendment is, I suppose, inspired by lessons learned in the implementation of Section 54 of the Modern Slavery Act 2015, which introduced a requirement on businesses above a certain size to publish a slavery and human trafficking statement every year. It has become apparent that changes are needed. The Commons Foreign Affairs Committee recently published a report which concludes that the MSA is too weak and the criteria for producing the statements are in need of reform. The implication for this part of the Environment Bill is that it is important to ensure that the form and arrangements for publishing reports by a regulated person should be informed by public consultation so that lessons such as those from the Modern Slavery Act can be properly factored in. I look forward to the Minister’s reply.

The final amendment in my name, Amendment 265AA, aims to strengthen the enforcement of Part 1 requirements and Part 2 regulations through a civil sanctions regime. As drafted, Schedule 16 states the potential for civil sanctions to be issued for failures to comply with the Schedule’s requirements, except where a regulated person

“took all reasonable steps to implement a due diligence system”.

However, “reasonable steps” is not defined; it could mean any number of things. The exception to liability is too broad and potentially undermines the effectiveness of the due diligence obligations. Would it not be far clearer to instead mandate a regulated person to take the steps necessary to implement an effective due diligence system, as my amendments suggest? My final question to the Minister is: why do the Government not do that? It would be far more effective to state what they actually want rather than a woolly form of words that is an open invitation to those with, shall we say, creative minds.

I will end with this reflection: deforestation is the second largest contributor to global warming, second only to fossil fuels. What happens to rainforests matters to us all. The Government should seize with both hands the opportunity presented by this Bill to play their part in stopping the wanton destruction of all rainforests, especially in this seminal year, when they hold the presidency of COP 26.

Baroness Parminter Portrait Baroness Parminter (LD)
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My Lords, I rise to introduce Amendment 265A in my name, for the support of which I am grateful to the noble Lord, Lord Randall of Uxbridge, the noble Earl, Lord Sandwich, and the noble Baroness, Lady Jones of Whitchurch.

Like other Peers, I welcome the inclusion of Schedule 16 and its introduction into law of an essential means of combating the deforestation associated with the consumption of forest risk commodities in the UK. Yet the trade in these commodities is only the final stage of the supply chain; their production must also be financed and, because the UK is such an important global source of capital, British banks and financial institutions currently supply a considerable proportion of this investment.

As Global Witness reported, in 2020, UK banks channelled over £900 million into over 300 major companies involved in forest risk commodities such as palm oil, soya and beef. Between 2013 and 2019, UK-based financial institutions were the single biggest source of international finance for six major agribusiness companies involved in deforestation in the climate-critical forests of Brazil, the Congo basin and Papua New Guinea, providing £5 billion over this period. I am not claiming that all this investment financed illegal activities, but, almost certainly, some of it did. As Forest Trends reported earlier this year, over the period of 2000-2012, 49% of tropical deforestation for agricultural commodities was thought to be illegal; between 2013 and 2019, the proportion rose to at least 69%. Illegal conversion of forests for agriculture is destroying an area of forest the size of Norway each year.

The point is that these banks do not have adequate systems in place to ensure they are not funding illegal deforestation. Extending the same requirements for the exercise of due diligence to banks as this Bill would impose on importers is a sensible move. This is not merely my view. That was the conclusion of the Global Resource Initiative Taskforce of sustainability leaders from finance, business and civil society, which was established by this Government in 2019. It was chaired by Sir Ian Cheshire, who was at that time chairman of Barclays UK. In its report last year, it concluded:

“Financial institutions provide enabling financial services across the commodity supply chain and so should be obligated to exercise due diligence with regard to their lending and investments.”


No other mechanism currently requires banks to carry out due diligence for illegal deforestation. The Government have argued, in their response to the Global Resource Initiative report, that the requirements for reporting on climate-related financial information that they intend to introduce will tackle the problem—but in reality they cannot. These reports will focus only on annual carbon emissions and are not suited to identifying the links between the provision of finance for agricultural crops growing on land cleared of forest several years before; they will also not require any assessment of the legality of the forest clearance.

The reports the importers of these commodities will be required to issue on the actions they have taken to establish their due diligence systems will provide helpful information but, again, they will relate to the final stages in the supply chain—the trade of the commodities. Far better, surely, to require banks to conduct due diligence on their lending and interventions at the start of the process when the initial finance is provided.

The financial sector is one of the British economy’s greatest strengths, but it will fail to remain so if it continues to fund activities which contribute to the climate and nature emergencies. I recognise and applaud the many steps that individual banks and financial institutions are already taking to green their activities. Requiring all of them to conduct due diligence to avoid their lending contributing to illegal deforestation is hardly a radical move. Indeed, it is the minimum we should expect.