Deforestation risk in bovine leather supply chain. Risk assessment through conceptualization, discourse and trade data analysis within the context of Italian-Brazilian leather trade

Large-scale industrial agricultural production and commodity trade are increasingly linked to deforestation and forest degradation in the tropics. This link is described via the concept of ‘deforestation risk’. Agricultural products whose production or extraction involves deforestation and native vegetation clearing are classified as forest-risk commodities. Beef, soybean, palm oil, and timber - the commodities with deforestation risk - are considered the “big four” of forest-risk commodities. Due to the complexity of global production and trade systems there are commodities that possess the risk of originating from deforested areas without being direct deforestation/forest degradation drivers. This dimension of the risk is either overlooked or held as secondary in the debates about commodity-driven deforestation. Differentiation between commodities with direct causal links and those with the exposure to deforestation in their supply chain has impact on how responsibility and accountability is constructed both through legal measures and self-regulatory voluntary standards. Better conceptualization is needed to approximate the usage of the terms both in grey and academic literature and to achieve science backed policy decisions. By referring to the case of bovine leather (hereinafter just leather) and the case of Brazilian leather production we aim to expand the conceptualization of deforestation risk. We focus on leather for multiple reasons. First, while the role of cattle in driving deforestation in Brazil is subject to increasing public scrutiny, the leather commodity chain largely remains in the shadow. Except for a few leading firms in leather goods, public discussion about transparency across the leather supply chain and associated deforestation risk is mostly absent. Second, leather supply chains are more complex compared to beef and involve many national and international players, including intermediary sellers, tanneries, fashion houses, etc. This creates traceability gaps and complicates identifying deforestation risk along the chain. Third, leather is a commodity with inherently uneven power relations among the actors in the supply chain and with costs and benefits unevenly distributed across the chain. Often considered a waste or by-product to beef meat, actors in the leather supply chain argue to lack important negotiation power to impose their standards and no deforestation conditions upon producers. At the same time, downstream actors of leather supply chain, such as fashion brands, are more susceptible to reputational risks compared to that of beef. While upstream farmers lack resources to adhere to sustainability standards and hardly get any financial compensation for the skin of their cattle, finished leather products are often regarded as luxury products presenting very high price margins for producing/trading brands. This research employs both primary and secondary data. Primary data is mostly qualitative and entails thirty-nine semi-structured, recorded, and transcribed interviews, in the form of both face-to-face and video call interviews conducted during extended field visit to Brazil in May-August 2018. This data is mainly used for the discourse analysis in the second chapter and for interpretative and contextual purposes to analyse the secondary quantitative data in the other chapters. Secondary information consists of extensive literature review, statistical data on annual slaughter, bovine hide/leather registry and annual deforestation, geospatial data on deforestation, slaughterhouse and tannery locations, as well as, trade statistics on Brazilian-Italian leather trade. No specific time frame was chosen to analyse the data and time series for each data set were selected according to availability and the specific requirements of each type of analysis. The results show that bovine leather supply chains possess significant risk of embedded deforestation despite leather not being a primary product of cattle ranching and driver of deforestation. The risk reveals itself in the link with cattle ranching, incomplete supply chain traceability, as well as in interstate and international leather trade. The Brazilian-Italian bovine leather has significant level of embedded deforestation due to intensive trade relations. Different discourses articulate deforestation risk of bovine leather differently and highlight how the storylines of each discourse bring attention both to what is made visible and invisible in relation to sustainability, legitimacy, and fairness. The results emphasise the importance of the role and voice of frontier settlers, by presenting how their storylines inform a political discourse on livelihoods. There is a need for increased public scrutiny of supply chains, including the leather one, and for special attention to unequal power relations and the importance of meaningful inclusion of vulnerable groups and populations. The leather industry and big brands need to be more proactive by sending clear market signals that deforestation and other illegalities are not tolerated. Full coverage and traceability of the supply chain and engagement with the producers is necessary if the industry wants to produce and trade deforestation-free products.