Singapore-based Double Helix Tracking Technologies (DoubleHelix) – which operates in Australia and around the world – is working with UK-based start-up iov42 to create and test a new digital Due Diligence Management Platform (DDMP).
This unique project is co-funded by Innovate UK and Enterprise Singapore to specifically target Schedule 17 of the UK Environment Act, relating to the “Use of Forest Risk Commodities in Commercial Activity”.
Similar legislation to the UK’s will apply to organisations wanting to import into Europe under the EU Deforestation Regulation (EUDR) and the United States of America under the proposed US FOREST Act.
It could well apply to Australia importers and exporters as well.
The aim is to help tackle deforestation in the sourcing and supply chains of commodities, including timber, pulp, paper, beef, cocoa, palm oil, leather, rubber and soya.
We know that for some years DoubleHelix has offered a unique combination of on-the-ground expertise, global network, and extensive track-record of innovation in supply chain due diligence, primarily for timber.
But Darren Thomas, Co-founder and CEO of DoubleHelix, says his company’s engagement with iov42 takes it “to a new level, harnessing Distributed Ledger Technology (DLT) to deliver a solution that works across multiple forest-risk commodities”.
He’s also quick to invite those involved in sourcing for, trading in, and supplying these various commodities “to join our trials and ensure their industry requirements are met”.
Committed as he is to work to address deforestation in every way he can, Darren reminds us that it continues to occur at an alarming rate, with an estimated 7.6 million hectares of forest lost annually for the last 10 years; the equivalent to losing an area the size of Greece every year.
Some commodities are closely linked with deforestation in the most biodiverse tropical forest regions because these fertile, often remote areas are attractive for the establishment of plantations or rearing of cattle.
DoubleHelix draws our attention to the very commodities covered in the scope of the new due diligence platform:
- Palm oil: Large-scale deforestation has occurred in countries such as Indonesia and Malaysia to make way for oil palm plantations. This has led to the loss of rainforests and peatlands, as well as the displacement of indigenous communities.
- Soy: It has occurred in South America, particularly in Brazil and Argentina, to make way for soybean production. This has led to the loss of the Amazon rainforest and the Cerrado savannah.
- Beef: Deforestation has been widespread in countries such as Brazil, Colombia, and Paraguay to make way for beef production and grazing land. This has led to the loss of the Amazon rainforest, the Gran Chaco, and the Cerrado.
- Pulp, Paper: In countries such as Indonesia, Thailand, and China, large scale pulp and paper production has led to the loss of rainforests and wetlands.
- Timber: Brazil, Indonesia, and Russia are among those countries where logging and the production of wood products, has led to the loss of rainforests and other types of forests.
What are the main “unsustainable practices:” that lead to deforestation? For DoubleHelix they include:
- Illegal logging, which is logging in protected areas or without the proper permits.
- Clearing of forests for monoculture plantations, such as palm oil and soy, without proper rehabilitation.
- Lack of transparency and traceability in the supply chain, making it difficult to hold companies accountable for deforestation.
- Failure to implement sustainable land-use planning and management.
- Failure to comply with environmental and social regulations.
- Limited or non-existent community consultation, consent and benefit sharing.
Darren Thomas is clear that these practices are not unique to a specific region or country; they happen globally and often in areas where governance and enforcement are weak.
“This loss of forests not only has environmental impacts such as loss of biodiversity and carbon sequestration but also social and economic impacts on the livelihoods of millions of people, particularly indigenous communities”, he insists.
“If forest destruction continues at the same rate as the last decade, we may not survive the consequences.”
So an obvious question for DoubleHelix and its UK partner iov42 is how can the new and quite unique digital platform help mitigate or eliminate deforestation by tackling the supply chain?
It’s been clear to DoubleHelix for some time that lack of transparency and traceability contribute greatly to unchecked deforestation. So tackling this problem directly will also support better enforcement of environmental and social regulations, and encourage better sustainable land-use planning.
However, in order to establish such transparency and traceability, vast amounts of data must flow through the supply chain to buyers and consumers. This will be impossible to achieve without digitalisation, and the use of digital platforms to manage and facilitate the flow of information along the supply chain.
There are other factors to take into account too, such as government policies, land use changes, and poverty also contribute to deforestation, but for Darren it is ultimately access to trustworthy information about the product’s origin and impact that will enable buyers and consumers to make responsible decisions.
“Because of the globalised nature of supply chains, especially in the forest-risk space, it’s absolutely critical that any solutions – digital or otherwise – are designed ethically and with all end users in mind, not just those buying the end products”, he asserts.
“If systems don’t work for those at the first mile – those working in forests or on plantations – then there will be limited impact.”
The DDMP, therefore, is the combination of these two components, which allows for the secure and transparent tracking of products through the supply chain using blockchain technology, while also providing a scientific basis for verifying the authenticity and sustainability of the products.
Critically, Darren explains, it allows users to set transparency levels themselves, choosing which data is made public and which to permissioned users (i.e., other users within their own supply chain).
The new innovative digital platform, using DLT, aims to help organisations importing into the UK to comply with the due diligence requirements set by the UK Environment Act 2021. This ground-breaking environmental legislation aims to establish clear statutory targets for the recovery of the natural world in four priority areas: air quality, biodiversity, water and waste.
By combining iov42’s pioneering technology – an evolution of blockchain – along with DoubleHelix’s science-based supply chain verification processes, the companies will design, develop and test a new digital platform, creating a shared, secure, and decentralised system that serves all impacted commodities and makes due diligence frictionless.
The DDMP will also interact with other data sets and technologies such as geospatial imagery and additional science-based testing methodologies.
When announcing the platform partnership in January this year, Dominic von Trotha Taylor, CEO and Chairman at iov42 had this to says:
“Distributed Ledger Technology (DLT) is one of the most innovative technologies that gives organisations the tools needed to meet due diligence requirements and reach sustainability targets.
“This, combined with the need to decentralise and secure commercially sensitive data across multiple parties, really puts DLT in the spotlight and we can’t wait to show what we are able to achieve in collaboration with DoubleHelix and with the support of Innovate UK and Enterprise Singapore.”
His company is described as “the identity platform for building trust”.
Based on an evolution of blockchain, iov42 is enhanced with several other pioneering technologies that make it simple, fast and secure. This ensures organisations, governments and societies can coordinate confidently in the digital space, by enabling trusted, transparent and secure transactions. Founded in 2016, iov42 is made up of 26 employees based across the UK and Europe but with a global reach.
You might well ask, as the development of DDMP is projected to take two years, what do both companies plan to test or do over this time?
There are two hypotheses being put to the test over the project duration.
- Hypothesis 1: that the combination of DLT and verification is helpful (time / cost saving, useful for risk management) for small and medium sized enterprises who have to comply with the UK Environment Act. We think the combination is unique.
- Hypothesis 2: that one platform (combined DLT + verification) can meet the needs of all forest-risk materials that fall under the legislation, rather than requiring separate platforms for different materials.
To do this, Darren makes it clear, “we will conduct market analysis, engage with end users and potential partners, test integration with publically available data sets (such as satellite imagery), build a prototype and test it live in the market, with a view to deployment.
For DoubleHelix it’s a natural extension of what it has been doing since 2008: delivering practical solutions to help companies understand their product’s impact and journey from forest, farm, factory, mill, or plant to the consumer.
With in-country experts in Europe, Asia Pacific, Africa, North and South America, DoubleHelix engages with supply chains to collect, analyse, and verify data, assess risk, and implement mitigation measures on behalf of buyers, suppliers and investors.
One obvious Australian connection for all this work is the location of the laboratory at the University of Adelaide where Professor Andy Lowe is based. As Chief Scientific Officer for DoubleHelix, he has a global reputation for being the first to apply DNA fingerprinting techniques to timber tracking work, solving and preventing forest crime.
Together, DoubleHelix and the University of Adelaide in Australia have been instrumental in building a DNA library for timber trees that allows the species and region of origin of timber from forests in Southeast Asia – and all over the world – to be verified.
As Prof Lowe’s lab has pioneered DNA testing of timber, it has also been able to provide scientific assurance of product claims, at the same time demonstrating best-practice due diligence.
Another very good reason why DoubleHelix and iov42 have been chosen to develop what is believed to be the first digital due diligence platform in the world to help tackle illegal deforestation in the sourcing and supply chains of commodities, including timber.
Find out more about the technology and the difference between Certification and Verification here.