New Market Expectations for Sustainable Natural Rubber Production

Implications for Smallholder Producers The environmental and social impacts of natural rubber production have received much less media attention than palm oil in recent years. However, since campaigning NGO Global Witness accused the rubber industry of dragging its heels on sustainability a couple of years ago, the big tyre companies and the wider automotive industry have become increasingly sensitive on issues of sustainability.

In 2015 the International Rubber Study Group (IRSG), an inter-governmental organisation composed of rubber producing and consuming stakeholders, launched a Sustainable Natural Rubber Initiative. Through this initiative Voluntary Guidelines and Criteria for self- certification of sustainable natural rubber production have been produced.

Last year Michelin, an important actor in IRSG, adopted its own sustainable natural rubber policy, which runs beyond its general purchasing principles to cover commitments that mirror those of CGF companies in areas like zero deforestation, peatland protection, traceability, FPIC and labour practice.

Bridgestone, Michelin’s biggest rival, is understood to be working towards adoption of its own comprehensive responsible sourcing policy and Pirelli may be moving in a similar direction.

General Motors recently committed itself to sourcing original equipment tyres produced from sustainable natural rubber. The vehicle manufacturer claimed this as industry first and says its aim is to help “drive the industry toward net-zero deforestation and uphold human and labour rights.” GM is encouraging other car makers and suppliers to join in the effort to accelerate progress. GM is also working with tyre manufacturers such as Bridgestone, Continental, Goodyear and Michelin to develop appropriate transparency into natural rubber supply and ensure its traceability throughout the supply chain. 

Meanwhile publication of a ‘Guide for Sustainable Development of Natural Rubber’ by the China-UK Collaboration on International Forest Investment and Trade (InFIT) programme is understood to be imminent.

Why is this important for smallholders?

Smallholders dominate natural rubber production in the world’s two biggest exporting countries, Thailand and Indonesia. Here, rubber and palm oil largely share the same landscapes and may be treated as alternates by small farmers, many of whom produce both crops. Most rubber smallholders operate on land converted to agricultural production many decades ago. Over the past 20 years the trend has been towards replacement of rubber by palm oil, which can be a more attractive option where constraints on labour are more critical than those on access to land. It is difficult to predict the dynamic between palm oil and rubber in the future, but in any event many farmers may see a business case for spreading risk by maintaining both crops within their farming systems.

The current wave of natural rubber expansion in SE Asia has been mainly driven by large plantation companies and/or state-owned agencies. It is in these industrial operations that concerns around sustainability are now focussed, around forest conversion, land grabbing and labour practice. Levels of risk in smallholder production are generally much lower. So, demand for sustainable natural rubber could benefit smallholders, if they can distinguish their product in the market place as deforestation free and socially responsible.

However, in the palm oil sector the challenges for smallholders to demonstrate compliance with supply chain expectations on responsible sourcing are well recognised. The SHARP partnership has been actively engaged in steps to lower barriers to access to certification for palm oil smallholders. Now that similar expectations are arising in natural rubber supply chains, careful thought is required to shape the development of systems for assurance on sustainability that match the needs and capabilities of smallholder producers.