Blog 16.12.19

Can the Rubber Industry Erase its Supply Chain Issues for Good?

By 2050 there will be at least twice as many cars on the road, and more cars mean more tyres, and more rubber.

Natural rubber is a crucial ingredient in modern tyres (see box). The world’s tyre industry consumes around 70% of the planet’s natural rubber supply – making it vital to the conversation on sustainable transport.

Although it may not have attracted the same level of attention as palm oil, rubber has similar sustainability issues.  

It starts with a tree

Rubber is made by extracting and processing the liquid sap of the rubber tree, known as latex. An incision is made in the bark of the rubber tree and the latex that seeps out is collected in cups and later refined to produce sheets of rubber. Ninety percent of the world’s natural rubber comes from Malaysia, Indonesia and Thailand, where the tropical growing conditions are perfect.

The latex itself a sustainable resource – the trees that produce it can live for 100 years if grown in the right environment.

But high demand, poor regulation and unsustainable farming practices have led to a host of social and environmental problems in the rubber supply chain.

Large scale expansion in areas with weak governance and high levels of corruption has resulted in land-grabbing and illegal deforestation of protected areas, displacing indigenous communities. What’s more, rubber supply chains are extremely complicated, with 85 percent of natural rubber produced by smallholder farmers. This makes it incredibly difficult to regulate and monitor, leading to human rights abuses such as forced labour.

Rubber reform

In October 2018, the Global Platform for Sustainable Natural Rubber (GPSNR) was launched to address the environmental and human rights abuses within the rubber supply chain.

Initiated by members of the World Business Council for Sustainable Development (WBCSD) Tire Industry Project (TIP), the GPSNR is a multi-stakeholder initiative comprising top tyre companies, car manufacturers, rubber producers and processors, and NGOs. Members of the initiative have aligned to work towards a set of principles to improve the rubber sourcing industry by respecting human rights, preventing land-grabbing, protecting biodiversity and water resources, improving yields, and increasing supply chain transparency and traceability.

Time to assess

The GPSNR is good news for the rubber industry, tropical farming communities and the many people who depend on rubber for a living. It’s now been a year since the GPSNR was launched and its members pledged their commitment to improving the socio-economic and environmental performance of the rubber industry. As part of our continuing work in agriculture commodities, we are assessing how well the top tyre and rubber companies are living up to their commitments and what operational changes they are making. We will share our findings shortly.

Cover image: Ryan Woo/CIFOR, rubber tree plantation in Indonesia (source)

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Author:
Charlotte Smith

Analyst

Client:
H&M


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