Rubber hits the road: Private sector dialogue on sustainable rubber in Vietnam
HO CHI MINH CITY, December 4, 2018 – Planes, trains, automobiles, the soles of your running shoes, motorbikes. From tires to tubing and rainwear to radio sets, rubber – quite literally – underlies most facets of modern living. Most of the world’s natural rubber is traced to Asia: southern China, India, Indonesia and Vietnam. Together, these countries produce 90 percent of the world’s natural rubber, with Vietnam as the world’s third largest producer and exporter of natural rubber.
U.S. Agency for International Development (USAID) Green Invest Asia co-convened a private sector dialogue on sustainable – ethically-produced and environmentally-safe — rubber with Vietnam Rubber Association on December 4 in Ho Chi Minh. Panelists from IKEA and Halcyon Agri Corporation, the world’s largest rubber processor, shared their sourcing requirements in an increasingly environmentally conscious marketplace.
IKEA’s business developer in Vietnam, Nguyen Huu Tuan, said IKEA looked forward to source local rubber from providers meeting IKEA’s 14 ways of working.
Rubber is a $30 billion marketplace where customer calls for more sustainable production have led to six of the world’s leading tire makers committing to responsible rubber sourcing since 2016. Driving demand for sustainably sourced rubber is Michelin, the first tire manufacturer to set a sustainable sourcing policy in 2016, General Motors the first automotive company to make a similar commitment in 2017 and Halcyon becoming the first rubber processor to release its own version in November 2018.
Challenges on the ground
The natural rubber value chain is complex, and risks of deforestation, human rights violations and challenges of transparency and traceability remain despite growing efforts to counter illicit and destructive rubber production, Halcyon’s vice president of environment, health and safety, Kavickumar Muruganathan, told the room of more than 50 business people.
“This is a work in progress and it will be a long journey,” he said. “It’s worrying. We don’t know where all the risks are. We need everyone to come along because we cannot do it ourselves.” And this is despite Halcyon’s in-house standards, rigorous vetting (900-question checklist for producers) and risk-mitigation mobile apps like Project Rubberway that trace the rubber supply chain to identify human rights and environmental hazards; the tool showed how 76 percent of 159 surveyed smallholder suppliers employed family, posing a child-labor risk.
Participants voiced concerns about the cost to certify their products as sustainable, on top of complying with the Vietnamese government’s sustainability strategy adopted in 2012.
Unsustainable and illegal production of rubber is one of the world’s leading causes of tropical deforestation. Asia’s acreage of rubber plantations has nearly doubled between 1983 and 2012, leading to a significant loss of natural forests and growing greenhouse gas emissions, according to the International Rubber Study Group.
When done responsibly, rubber production can help achieve net-zero deforestation while upholding human and labor rights.
USAID’s environmental team lead for its office in Vietnam, Scott Bartos, reinforced the need for the public and private sectors to collaborate to overcome challenges to sustainable development. “It’s the only way forward.”
Tran Ngoc Thuan, chairman of the state-owned Vietnam Rubber Group, which manages 400,000 hectares of land in Vietnam and another 100,000 in Laos PDR and Cambodia, agreed: “We need more of these [encounters] . We need to collaborate. And we need to turn this dialogue into reality.”
