Operational Guidance on:
Environmental Restoration and Compensation
Purpose & Summary
This Operational Guidance elaborates on the Accountability Framework’s Core Principles 1.1, 1.2, and9 to describe how companies should address environmental restoration and compensation related to their no-deforestation and no-conversion commitments.
As specified in Core Principle 1, companies must avoid conversion or degradation in the first place. The primacy of ecosystem protection over restoration or compensation (i.e., the mitigation hierarchy) is a well-accepted principle of environmental management. This guidance addresses scenarios where remedy is required to address past deforestation or conversion. This remedy may come in the form of environmental restoration and/or conservation activities that provide incremental (additional) conservation benefit to protect and enhance ecosystems and their conservation values.
Portions of this guidance are also relevant for companies that choose to conduct or support restoration to help deliver positive benefits, unrelated to any obligations arising from past deforestation or conversion.
This document addresses the following topics:
- Specification of company responsibility for environmental restoration and/or conservation to remedy past deforestation or conversion
- Parameters for carrying out effective environmental restoration or conservation activities
Given the scope of the Accountability Framework, this Operational Guidance focuses on remedy for deforestation, conversion, and associated environmental impacts. The guidance does not directly address remedy for other environmental harms, such as those related to pollution, except insofar as they are consequences of deforestation or conversion. In the case of environmental harms that also result in adverse impacts to human rights, requirements for remedy of human rights impacts must also be followed, as described in the Operational Guidance on Remediation and Access to Remedy. This Operational Guidance also relates closely to the Operational Guidance on Supply Chain Management, which outlines how companies should identify and manage instances of non-compliance, some of which may require restoration.
Important note: restoration or compensation may not be used to justify or offset new deforestation or conversion
As stated above, a central tenet of the Accountability Framework is that commodity production, sourcing, and financing must not cause or contribute to new deforestation or conversion. Accordingly, restoration or compensation – or plans or commitments to restore or compensate – may not be used to justify or offset new deforestation or conversion associated with agriculture or forestry. This requirement is elaborated in several sections of the Framework, including the following:
- Core Principles 1.1 and 1.2 call for companies to commit to eliminating deforestation and conversion of other natural ecosystems, respectively, from their production, sourcing, and financial investments. Corresponding definitions clarify that this means no gross deforestation and no gross conversion.
- This means that company activities that entail offsetting new deforestation or conversion with restoration or conservation – or other forms of “net” accounting for deforestation or conversion – do not adhere to the Accountability Framework.
- Core Principles 1.1 and 1.2 also call for the specification of cutoff dates after which land units associated with deforestation or conversion, respectively, are deemed non-compliant. Parameters for appropriate cutoff dates are specified in the Operational Guidance on Cutoff Dates.
- These stipulations mean that any new deforestation or conversion that is undertaken may render the corresponding production units and products non-compliant with many existing and future supply chain commitments of downstream buyers, potentially on a permanent basis. This is true regardless of whether the company undertaking, financing, or supporting the deforestation or conversion has a no-deforestation or no-conversion commitment.
- Section 4 of the Operational Guidance on Supply Chain Management outlines parameters for assessing the severity of non-compliance and appropriate courses of action. This material clarifies that significant new deforestation or conversion would typically constitute a severe form of non-compliance (Section 4.2.1, Factors A, B, and C). If carried out knowingly (Factor D), such action would weigh heavily towards suspending or excluding the supplier responsible for such deforestation or conversion from supply chains.
- This guidance means that new deforestation or conversion may result in market barriers or exclusions, even if it is associated with plans for restoration or conservation. As indicated in Section 4.2.2 of this Operational Guidance, such market barriers or exclusions may extend beyond the production units and product volumes associated with new deforestation or conversion to include other portions of the supplier’s business.
Consistent with these requirements, this Operational Guidance is not intended to be used to select or design restoration or compensation activities that are carried out to justify or offset new deforestation or conversation. Rather, it addresses scenarios where restoration or compensation is required to remedy past deforestation or conversion. Portions of this guidance are also relevant for companies that choose to conduct or support restoration to help deliver positive benefits, separate from any obligations arising from past deforestation or conversion.
Topics in this Guidance
As stated in Core Principle 9.1, companies are expected to provide for or cooperate in providing fair and just remedy in the case of adverse impacts to human rights or the environment. In the case of deforestation, conversion, and loss of associated conservation values stemming from commodity production, fair and just remedy requires taking effective action to restore the given ecosystems and values to their prior condition and/or providing suitable compensation for the lost ecosystems and values (see Definitions).
Companies are expected to conduct or support restoration or compensation where they caused, contributed to, or assumed responsibility for deforestation or conversion that occurred in violation of the company’s supply chain commitment. This includes circumstances where:
- the company owns or manages land on which there has been deforestation or conversion in violation of the company’s commitment;
- the company has assumed responsibility to restore or compensate for such deforestation or conversion from a previous owner or manager in accordance with Core Principle 9.4; or
- the company contributed to deforestation or conversion in violation of its commitments, for instance by financing, supporting, mandating, facilitating, or encouraging deforestation or conversion (see Section 4.2.1 of the Operational Guidance on Supply Chain Management).
Companies are also expected to conduct or support restoration or other forms of compensation where required by applicable law. As with all aspects of the Accountability Framework, voluntary commitments are in addition to legal requirements, and the more stringent requirements and practices related to restoration and compensation should be followed.
Downstream companies are also encouraged to actively support or participate in restoration and/or conservation efforts to remedy deforestation or conversion that their direct or indirect suppliers caused or contributed to, even when the downstream company itself did not directly cause or contribute to the environmental harm.
Parameters for effective restoration or conservation are outlined in the following section and describe how the requirements of Core Principle 9.1 should be implemented.
 Deforestation or conversion are generally in violation of a company commitment if they took place after the applicable cutoff date specified in the commitment (see Operational Guidance on Cutoff Dates for information on appropriate cutoff dates). If a cutoff date is not specified in the commitment, then as a default it should be presumed that deforestation or conversion that took place after the date of the commitment is in violation of the commitment.