Recent policies on legal sourcing of raw materials, such as the EU's European Deforestation Regulation (EUDR), emphasize ecosystem conservation and market growth. Meanwhile, the development of advanced traceability technology will support the achievement of these goals effectively for the rubber industry.
Traceability application for rubber.
Origin traceability has not been paid attention to
Natural rubber production is linked to deforestation and the rubber industry is currently working to address this problem, which according to advocacy organization Mighty Earth, is especially prevalent in Southeast Asia and West Africa. Deforestation is accelerating climate change and destroying the habitats of endangered animals such as tigers, gibbons and elephants. The establishment of rubber plantations is also often associated with violations of the rights of forest communities and indigenous peoples, leading to forced displacement, land confiscation and human rights violations. Additionally, smallholder rubber farmers are currently receiving very low income for their efforts.
Despite efforts towards sustainability in the rubber industry, a significant challenge of transparent supply chains is hindering the industry's growth. Recently the free online platform that rates commodity manufacturers Spott, an initiative of the Zoological Society of London (ZSL), assessed the level of transparency of manufacturers, processors and traders disclose their environmental, social and governance practices.
The results of the review highlighted a lack of transparency and traceability. Accordingly, 79% of natural rubber manufacturers assessed have not yet publicly disclosed their ability to trace rubber supply to the processor level. At the time of research, only two companies, tire manufacturers Michelin and Bridgestone, claimed that they could trace back a portion of their rubber raw materials to where they were harvested. Sam Ginger, ZSL's Sustainable Business Expert, notes that the lack of traceability is alarmingly increasing the risks of deforestation, especially as plantations expand continues to take place in unidentified high-risk areas.
The role of digital technology
Despite the complex nature of the natural rubber supply chain involving millions of smallholder farmers, pilot projects have demonstrated the traceability of rubber from processing facilities back to farms. This is feasible. This allows buyers to support the sustainability of the farm. Recent new technologies are making it possible to securely track and trace assets and related data back to the source.
Anna Roberts, Market Development Director at UK-based software company IOV42, discussed how these technologies empower businesses to operate with confidence and improve efficiency in their operations. Pursue net zero emissions targets. Ms. Roberts highlighted that IOV42, a startup that is gaining traction in Europe, is helping importers and exporters meet due diligence requirements, including those set by the EUDR, prohibit the placement or export of non-compliant products in the EU market.
Under the EUDR, companies must ensure legality and sustainability in their sourced products, avoiding ties to deforested sources. Global concern about deforestation has significant implications, especially for the EU, which is seeking to reduce greenhouse gases and biodiversity loss due to deforestation. Roberts highlights that around 15-30% of emissions are directly due to deforestation, with some tropical forests emitting more carbon as a result of this activity.
According to Ms. Roberts, technologies such as Distributed Ledger Technology (DLT), is a consensus technique that allows copying, sharing, and synchronization of digital data between multiple sites, countries, and regions. participant or organization, has the potential to transform the industry, as DLT's decentralized and immutable system can create solutions that prioritize trust and accountability, while also meeting the need for asset tracking. Secure assets and data while protecting company trade secrets, a key element in complying with Net Zero policies.
When it comes to complex supply chains, using this technology can not only improve efficiency and help build stronger bonds of trust between participants and consumers, but it can also help manufacturers imports meet current and new regulations, such as EUDR, and help organizations work towards Net Zero goals.
She added that IOV42 provides traceability solutions to support organizations trading in goods that comply with regulations such as EUDR, including commodities such as rubber, wood, cocoa, coffee, soybeans and palm oil, among many other commodities. Additionally, DLT solutions also provide users with a number of benefits, including secure and reliable storage of essential due diligence information, complete with timestamps and anti-tamper measures.
This application maintains auditable digital records of all stakeholders in a particular supply chain and related products. The app also ensures easy and secure access to relevant information and features easy-to-navigate interconnected information, eliminating the need to sift through emails and paperwork. It also shares shipment information with buyers, allowing them to trace product origins and perform due diligence/risk assessment and compliance at the time of shipment receipt.
“The potential benefits to Indonesian organizations from increased traceability are significant,” said Dr. Rudy P. Tobing, of Fortex Strategic Advisory in Indonesia. Especially due to the increased market access and revenue generated by EU and UK importers. This is because these buyers want to cooperate with producing countries that can not only provide quality products but also provide the necessary information to help them meet regulations such as the EUDR.”
EU importers and exporters will need to have a much better understanding of every stage of the supply chain and its component products. This requires better traceability between steps in the supply chain and the need for more transparency. Additional considerations for sourcing and procurement teams will also be added, and will require suppliers to share additional information (e.g., on the geographic location of any harvest points ). Rubber suppliers who are willing and easy to share this information will likely be favored by EU importers. If buyers cannot perform the required level of due diligence on a supplier, they will not purchase from that supplier.
Finally, if technology can be used to automate processes such as certificate checking, mass balance calculations… or enhance security (giving users greater control over data themselves and with whom the data is shared) and improve visibility (traceability along the supply chain), this will build trust. And trust builds business relationships.
NGUYEN ANH NGHIA
(Rubber Journal Asia and IOV42.com)
http://tapchicaosu.vn/2023/12/20/nganh-cao-su-va-cong-nghe-truy-xuat-nguon-goc/
