Originica
Due Diligence System with EUDR reporting functionality
The EU Deforestation-free Regulation is established to guarantee that certain products and commodities don't exacerbate the degradation of forest ecosystems. Additionally, it aims to cut down on greenhouse gas emissions and bolster biodiversity preservation.
The Purpose
of EU Deforestation-free Regulation (EUDR)
Implications of the EU Deforestation-free Regulation
All operators and non-SME traders involved in introducing or exporting the subsequent commodities to or from the EU market will be affected:
Primary Commodities
Derived Products
soy
leather
cocoa
beef
chocolate
coffee
palm oil
tires
rubber
wood
furniture
reinforcing the EU's commitment to environmental sustainability and forest preservation.
This regulation seeks comprehensive oversight over a vast array of products
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29 June 2023
EUDR entered into force.
30 December 2024
Deadline for operators and traders to comply. The Commission will also present a risk classification for countries.
29 June 2024
30 June 2025
Impact assessment for potential scope expansion is due.
SMEs become subject to the obligations.
Non-compliance may incur
monetary sanctions up to 4% of total revenue
coupled with substantial harm to brand reputation.
Timeline
To ensure products align with the deforestation-free and legality standards set by the Regulation, operators need a holistic approach.
This require a Due Diligence System in place, ensuring that the products or commodities they deal in do not contribute to deforestation, and reporting to the EUDR IS.
What does it mean for EU company:
Setting Up Suppliers data
& Risk Assessment:
& Risk Assessment:
―
Gathering plots-of-land / polygons geodata form the suppliers
―
Gathering detailed information on product sources and suppliers
―
Evaluating risks associated with deforestation, local legistations and business sustainability
―
Taking steps to minimize those risks
Gathering plots-of-land / polygons geodata form the suppliers
―
Gathering detailed information on product sources and suppliers
―
Evaluating risks associated with deforestation, local legistations and business sustainability
―
Taking steps to minimize those risks
Setting Up Project Traceability:
―
Each product delivery whereabouts (country of production, supply logistics, contractors)
―
Plots-of-land related to the delivery of production sites with batch data (production time and date)
―
Storage of the history data and activity logging (integrations, user's activity, reporting events)
Each product delivery whereabouts (country of production, supply logistics, contractors)
―
Plots-of-land related to the delivery of production sites with batch data (production time and date)
―
Storage of the history data and activity logging (integrations, user's activity, reporting events)
Setting Up Suppliers data
& Risk Assessment:
& Risk Assessment:
―
Geolocations check against GIS
―
Due Diligence Statement
preparation and report
―
Downstream partners notification
―
Authorities reports
(regular and on-request)
Geolocations check against GIS
―
Due Diligence Statement
preparation and report
―
Downstream partners notification
―
Authorities reports
(regular and on-request)
EUDR Challenges
#1 Challenge
Geolocation
and strict traceability
Geolocation
and strict traceability
Sourcing raw material will likely be more challenging due to the current and potential supplier’s ability to comply with the regulation. Due diligence system should ensure geotags management and source transparency from each plot-of-land.
Evidence of geolocation by geotags and timestamps
―
Plot of land/polygon/stamp approach
―
Production at this plot-of-land is legitime
―
Supply chain transparency
should be proved
#2 Challenge
Risk assessment
and mitigations
Along with the geotags, for each order came to EU market, the risk assessment should be performed by the company. All supply chain routes where there is a risk of non-conformance should be elaborated, assessed and mitigated. Only no and negligible risks are allowed.
Conformance and trust to the information about the geolocations.
―
Risks of mixing the product on different routes, so each route to be assessed.
―
Country risk level is important
―
Yearly reassessments
#3 Challenge
Geolocation
and strict traceability
Geolocation
and strict traceability
Company suppliers should provide full information about the plots of land and routes how the product is delivered to EU. Information should be verifiable and provided along with the Annex forms.
The company is legally responsible for verification and reporting of this information.
Plots of land, and any proof
of evidence (i.e. photos
with geotags and timestamps)
―
Production time & date
―
Delivery routes in the supply chain
―
Proofing documents:
invoices, certificates, etc.
Risk assessment and mitigations
Each plot-of-land has risk-assessment data that proves the risk-assessment requirements according to Article 10.
Each plot of land has connection to all orders that had this supply location. Data is kept in logs.
Location data and historical data can be downloaded or forwarded to the regulation authorities upon their request.
Each plot of land has connection to all orders that had this supply location. Data is kept in logs.
Location data and historical data can be downloaded or forwarded to the regulation authorities upon their request.
#2 Challenge
Risk assessment and mitigations
Each route in Supply chain has risk-assessment data that proves the risk-assessment requirements according to Article 10.
#2 Challenge
Risk assessment and mitigations
Route data + Location data makes unique set of assessment document for each Due Diligence.
Due Diligence statement can not be reported if the assessment has unverified locations or routes.
Due Diligence statement can not be reported if the assessment has unverified locations or routes.
#2 Challenge
Risk assessment and mitigations
Risk assessment module may include check-lists related to each location / route risks, documents and mitigation steps.
#2 Challenge
Data collection from suppliers
Company should work closely with its coffee bean suppliers to ensure that they understand and comply with deforestation-free sourcing practices. Collaboration and transparency with suppliers are critical aspects of compliance.
#3 Challenge
Scenario 1.
Partner uses DD system
For farmers
Mobile App for farmers
For upstream partners
Additional fields to annex form
Partner uses DD system
For farmers
Mobile App for farmers
For upstream partners
Additional fields to annex form
Scenario 2.
Partner uses own system
API integration
Partner uses own system
API integration
Updated
Annex forms
Annex forms
Mobile Apps for Farmers
Geolocation and Strict traceability
Each delivery can be traced up to the plots-of-land involved in the delivery.
Along with existing data in Annex Form, the company supplier will have to choose the plots of land (locations under the Area), add production dates and other information, according to Article 9, when filling out the order.
Due Diligence system will keep all records, prepare and send the Due Diligence Statement
Along with existing data in Annex Form, the company supplier will have to choose the plots of land (locations under the Area), add production dates and other information, according to Article 9, when filling out the order.
Due Diligence system will keep all records, prepare and send the Due Diligence Statement
#1 Challenge
Originica
a state-of-art Due Diligence System
with EUDR reporting functionality
a state-of-art Due Diligence System
with EUDR reporting functionality
Master Data base includes suppliers, locations, routes, users.
Vendor-managed data regarding order information, locations, routes and warehouses update per each order.
Special tool to assess
each component of the supply chain:
Location (plot-of-land), warehouse, route, supplier.
each component of the supply chain:
Location (plot-of-land), warehouse, route, supplier.
All orders coming from ERP (or manually) will be added here.Each order consists of several components of the supply chain used fot the specific delivery.
Convenient way to visually check locations information, orders information, route information in the specific order, or separately.
All data and events that were received or sent between the API with counterparties, suppliers, GIS, etc.
All operational data is kept for 5 years, incluiding DDS, risk assessment changes, user activity, etc., building full backward traceability.
DDS reporting (regular reporting functionality)
Master Data
Master Data base includes suppliers, locations, routes, users.
Can be integrated with ERP or MDM systems.
Can be integrated with ERP or MDM systems.
Suppliers form
Vendor-managed data regarding order information, locations, routes and warehouses update per each order.
Can be integrated through API or filled-in trough suppliers form.
Can be integrated through API or filled-in trough suppliers form.
Risk assessment
Special tool to assess each component of the supply chain: Location (plot-of-land), warehouse, route, supplier.
Detailed reports for risk assessment and mitigation can be attached in PDF format
Integration to Eco Vadis (or relevant audit system) is possible.
Location data includes verification with European Union Space Program (EGNOS/Galileo, Copernicus)
Detailed reports for risk assessment and mitigation can be attached in PDF format
Integration to Eco Vadis (or relevant audit system) is possible.
Location data includes verification with European Union Space Program (EGNOS/Galileo, Copernicus)
Orders manager
All orders coming from ERP (or manually) will be added here.
Each order consists of several components of the supply chain used fot the specific delivery.
Due diligence system automatically checks against the risk assessment. If everithing is OK, DDS report is prepared.
Each order consists of several components of the supply chain used fot the specific delivery.
Due diligence system automatically checks against the risk assessment. If everithing is OK, DDS report is prepared.
Data viewer
Convenient way to visually check locations information, orders information, route information in the specific order, or separately.
Risk assessent information and component status (blocked / released) is highlighted.
Risk assessent information and component status (blocked / released) is highlighted.
Integration journal
All data and events that were received or sent between the API with counterparties, suppliers, GIS, etc.
Logging and storage
All operational data is kept for 5 years, incluiding DDS, risk assessment changes, user activity, etc., building full backward traceability.
Reporting model
DDS reporting (regular reporting functionality).
All data can be set-up in PDF report required in your yearly Sustainability Report, or by request of authorities (for the specific order, batch, period of time) in few clicks, to proof the deforestation status and risks.
All data can be set-up in PDF report required in your yearly Sustainability Report, or by request of authorities (for the specific order, batch, period of time) in few clicks, to proof the deforestation status and risks.
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© 2023 Originica
London, UK