Continental taking steps toward sustainable natural rubber sourcing

HANOVER, Germany—Continental A.G. and an international aid agency are forming a partnership designed to improve the sustainability of the natural rubber supply chain in Indonesia.

The partnership with the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) G.m.b.H. will strive to develop a criteria catalog for sustainable production of NR, to train farmers in sustainable production in accordance with these criteria and to track the rubber from smallholders to production at Continental.

Among the initiative's aims are improved rubber quality, higher yields and supply chain optimization that will generate higher incomes for rubber tree cultivators, Conti said. Indonesia is considered the No. 2 producer of NR worldwide.

To safeguard and monitor sustainable rubber production, Continental and the GIZ will implement a traceability system and increase the traceable production of rubber in Indonesia's West Kalimantan region over the next three years, Continental said, noting that the initiative also will seek to ensure that rubber cultivation doesn't lead to rainforest deforestation.

"Our objective is to establish a traceable and sustainable supply chain and set a best practice example for the production of natural rubber," said Nikolai Setzer, who is in charge of corporate purchasing and the tire division in Conti's executive board.

"The partnership with GIZ gives us access to local players whom we need to achieve traceability and sustainability."

The GIZ describes itself as a "provider of international cooperation services for sustainable development and international education work," dedicated to building a future worth living around the world.

The partnership is part of develoPPP.de, a program initiated by Germany's Federal Ministry for Economic Cooperation and Development (BMZ), Conti said. To ensure that supply-chain partners are on board, Conti has signed memoranda of understanding with two unnamed suppliers.

In total, 400 farmers will be trained to grow high-quality rubber in accordance with clearly defined sustainability criteria, Conti said. An electronic system will be developed to ensure full traceability of the raw material along the entire supply chain.

This initiative reflects Conti's increasing emphasis on sustainability in purchasing, the tire maker said. It also precedes the release later this year of a specific corporate NR sustainability policy that's being developed by a sustainability management team in the firm's corporate purchasing department.

This policy is designed to further reinforce the unquestionable commitment of the corporation to securing a healthy and compliant supply chain and the zero tolerance attitude toward deforestation, land grabbing and other practices that harm local populations and the entire ecosystem, Conti said.

The company added that more than 80 percent of its Rubber Group raw material suppliers have been evaluated and further development activities have been started.

At the same time, Conti said it is one of 11 leading tire makers on the World Business Council for Sustainable Development that is working to establish an industry standard for the sustainability of natural rubber.

The other members of the WBCSD's Tire Industry Project are: Bridgestone Corp.; Cooper Tire & Rubber Co.; Goodyear; Hankook Tire Co. Ltd.; Kumho Tire Co. Inc.; Group Michelin; Pirelli & C. S.p.A.; Sumitomo Rubber Industries Ltd.; Toyo Tire & Rubber Co. Ltd.; and Yokohama Rubber Co. Ltd.