Recent discoveries and studies indicate that the environmental consequences of the worldwide rubber trade, driven by deforestation, have been considerably underestimated. The production of rubber in Southeast Asia may be responsible for up to three times more deforestation than previously thought. With more than 4 million hectares of forest loss for rubber since 1993 (an area as large as Switzerland) the effects of rubber on biodiversity and ecosystem services in Southeast Asia could be extensive (Nature Journal, 2023). Consequently, it is crucial for rubber to receive heightened consideration in domestic policy, trade agreements, and forthcoming due diligence legislation.
In terms of individual countries, both historically and since 2001, deforestation was highest in Indonesia, followed by Thailand and Malaysia (Nature Journal, 2023). Although these three countries accounted for more than two-thirds of total rubber-related deforestation in Southeast Asia during 2001–2016, substantial deforestation also occurred in Cambodia since 2001, where more than 40% of rubber plantations were associated with deforestation.
The European Union has recently embraced the Deforestation Regulation (EUDR), taking a significant step toward supply chains free from deforestation for EU manufacturers and traders. The regulation prohibits the entry of rubber and rubber derivatives associated with deforestation into the EU market. Businesses engaged in such imports must provide conclusively and verified information that outlines their supply chain mapping, encompassing geolocation data specifying the origin of products and ensuring the products are compliant. Larger companies must adhere to mandatory compliance by December 2024, while smaller ones must do so by June 2025.
Compliance with the European Union Deforestation Regulation (EUDR) poses several key challenges for rubber businesses. Some of these challenges include:
Traceability Complexity: Ensuring a fully traceable supply chain is a significant challenge. Rubber businesses need to trace the origin of their products, collecting data on production practices, geolocation, and supply chain intermediaries.
Data Management and Privacy: Gathering and managing comprehensive data, as the EUDR requires, can be a complex task. Companies must balance compliance with data privacy regulations while still providing the necessary information to meet traceability standards.
Deforestation-Free Verification: Providing evidence of deforestation-free production requires rigorous verification processes. Ensuring that rubber products are not associated with deforestation or land degradation may involve complex assessments and audits throughout the supply chain.
Implementation Costs: Complying with EUDR standards often requires significant investments in technology, systems, and processes. Small and medium-sized enterprises (SMEs) in the rubber industry may face financial challenges in meeting these requirements.
Supply Chain Collaboration: Achieving traceability and compliance often requires collaboration across the entire supply chain. Coordination with various stakeholders, including suppliers, manufacturers, and distributors, can be challenging, especially when diverse and decentralized networks are involved.
Training and Capacity Building: Ensuring that staff members are trained and have the necessary expertise to implement and maintain compliance measures is crucial. This may involve investing in training programs and building internal capacities within the organization.
Adapting to Regulatory Changes: The regulatory landscape may evolve, requiring rubber businesses to adapt quickly to new requirements and standards introduced by the EUDR. Staying informed and agile in response to regulatory changes is an ongoing challenge.
As a trusted global service provider to support businesses in complying with EUDR requirements, our robust traceability platform automates the creation of due diligence statements, risk assessments, and farmer lists generated from collected data, supporting evidence submission for EUDR Compliance.
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References: FAO. (2020). Global Forest Resources Assessment 2020. Retrieved from FAO: https://www.fao.org/3/ca9825en/ca9825en.pdf
Nature Journal. (2023). High-resolution maps show that rubber causes substantial deforestation. Retrieved from Nature Journal: https://www.nature.com/articles/s41586-023-06642-z
Writer: Rihlah Nahdhiyah Bilkis, Social Media at Koltiva
Editor: Boby Hermawan Arifin, Head of Digital Marketing at Koltiva
Rihlah Nahdhiyah Bilkis, a skilled writer with a social media and copywriting background, excelled as a social media specialist at Koltiva, crafting captivating articles on products and producers stories for the company's blog, showcasing her unique ability to blend technical details with human narratives. Her strategic approach to social media has been instrumental in connecting with the audience, making her a promising talent in content creation.