Stefano Savi is the founder and director of the Global Platform for Sustainable Natural Rubber. He spoke at Satelligence’s webinar about the EU’s freshly agreed Regulation on Deforestation-free Products about rubber’s inclusion on the regulation.
There’s a need to ensure the burden of responsibility is spread evenly across the supply chain. We caught up with him for an in-depth discussion about the challenges and opportunities the rubber industry is facing in the fight to end deforestation and nurture sustainable, equitable and fair supply chains.
Fern’s briefing on Rubber consumption in the EU said that, as late as 2018, there were no estimates available for levels of deforestation in the rubber industry. Is this true and, if so, why do you think rubber might have flown under the radar for so long?
We don’t have the exact data for this period, which may also be why there hasn’t been so much attention being paid to rubber as a driver of deforestation. Events in other sectors may also have led them to take most of the attention.
The production lead-in time means that rubber is prone to boom and bust cycles. The last time there was media attention on deforestation related to the rubber industry was in the early 2010s as that was the last time rubber prices were high. Those high prices drove expansion by large-scale actors in the Mekong Delta and the Congo Basin. Data from the International Rubber Study Group has shown that there are very few new rubber plantations as prices are currently very low. Right now the big issue is not so much deforestation, but poverty.
When prices spike again, deforestation will be more of an issue, so now is the perfect time for the rubber industry to prepare, ahead of the next boom cycle, especially with the EU and GPSNR cut-off dates in mind.
The GPSNR was founded in 2018, were you responding to a dearth of information on sustainability in the rubber industry?
It was not so much about a dearth of information, but more due to the fact that there was attention being paid to deforestation in the early 2010s. There was also a desire between civil society and industry to collaborate and understand what the standards ought to be for the sector. Since then, GPSNR has consistently filled that industry–stakeholder vacuum.
What are the broader ambitions of GPSNR?
The goal is to set up a fair, sustainable, and equitable rubber value chain by establishing responsibility, and accountability, and providing finance and support for improved company and smallholder practices. GPSNR also takes responsibility for monitoring and evaluating progress against its commitment.
Rubber was a last-minute addition to the EU’s anti-deforestation regulations. Why do you think it was missing in the first place?
There are different views on this. Generally speaking, the topic of agricultural deforestation is not straightforward. Markets, not commodities, drive deforestation. Forests are or aren’t converted based on the price of a commodity. In the last few years, rubber hasn’t been at the top of that list as there hasn’t been much new clearing, but these things change continuously based on market conditions.
The best way to actually stop deforestation is to work on its root causes: egregious behaviour, criminal activity, but most of all: poverty.
GPSNR and the open letter to the European Commission are a sign of the rubber industry’s commitment to trust, transparency, and shared responsibility. Why do you think private actors are so invested in transparency and traceability?
While there is a long way to go, values are starting to align. Businesses realise that without a social licence to operate in a given area, they won’t be operating there for very long.
It’s becoming clearer and clearer that sustainability in business depends on the sustainability of one’s operations. At the upper levels of management, there appears to be a commitment to work these issues out. The problem is that sustainability brings higher costs, and unless we find a way to ensure all companies are willing to take on this cost, it becomes a competitive disadvantage to stick your head out alone. That’s why collaboration is key. Legislation and stakeholder platforms like the GPSNR have an important role to play here.
Would you say rubber companies are more open to sustainable progress than other commodities? Are there any challenges that are unique to the rubber industry?
Companies working on rubber have maintained sustainability projects for a number of years, particularly larger companies with the capability to do so. In terms of commodity platforms, rubber arrived late to the party compared to timber and palm oil. Rubber is not ahead, but it does have an opportunity to look at what’s worked in other systems, reflect on what applies to rubber, and move a little faster. In terms of the potential roadblocks, it remains difficult to reach out and promote sustainable best practices across the rubber supply chain when it is composed of so many smallholders across so many jurisdictions. However, the fact that GPSNR represents 60% of market volume is a positive sign, and an opportunity to effect change at the smallholder level.
How big a role do you think tech like satellite monitoring will have to play in helping rubber companies comply with anti-deforestation legislation?
It’s going to be very important. For any commodity that consists of mostly smallholders, it will be impossible to send people to check every farm and verify deforestation-free claims. When it comes to these types of checks, the more automated the system, the better. Satellite technology is playing, and will play, a larger role in this, especially as imaging and data analysis becomes less expensive and more accessible. This is particularly crucial for rubber, as rubber plantations tend to look quite similar to forests. It will also help with measuring carbon, measuring pollution, and having a collection of data that can also provide indicators of other problems.
What effects do you think the EU regulation will have on the rubber industry?
The Regulation has driven a lot of attention toward the topic of deforestation and has given the industry a wake-up call. We’re aware that we need to start working on this ahead of future deforestation risks.
I am worried about the potential for the exclusion of smallholders, particularly marginalized ones. If a commodity needs to be produced differently to enter into the EU, we could end up with a premium and sub-premium stratification of products. If marginalized smallholders cannot meet the Regulation’s demands, they will have a less valuable, sub-premium product and may be driven to carry out more deforestation in order to maintain their income levels. It’s not just the responsibility of the regulators, it’s the responsibility of the companies to make sure that the Regulation is not interpreted in a way that will damage marginalized smallholders.
Another point to make is that, while it’s good to work on verification and due diligence systems, budgets are limited no matter how large a company is. A lot of money and resources need to be spent on fighting poverty and protecting farmer livelihoods, which are the real drivers of deforestation. We need to spend money on making bigger carrots, rather than bigger sticks.
The intent of the Regulation is to avoid any deforestation-related products entering the EU, but there is a difference between that and fighting deforestation. One can do the first, without doing the second.
We have to level the global playing field, and not create a European-only safe haven without global impact. The UK and the US are also working on similar regulations, and China’s position has started to change, so change is going to happen, which could help level the playing field. The issue is that we don’t have time to dither. We need disruption, not incremental change, in order to make a dent in the problem and find a solution to the climate crisis. Seven years is not a long time.