GPSNR Working Groups Update: January-February 2023

Strategy and Objectives Working Group:
The Traceability Pilot Field Trials consortiums Agridence and Koltiva have presented the final reports, which have been distributed within the Risk Subgroup. 

The Risk Subgroup has extended an invitation to ASI to share the formula behind the Risk Assessment Framework. This ensures that the framework is malleable to fit the dynamics of the Natural Rubber Industry. 

Furthermore, the Risk Subgroup has solidified plans for an initial pilot trial in collaboration with ASI, focusing on the establishment of Indonesia’s national risk assessment.

The resolution for the Assurance Model has been finalised and is currently in circulation among the wider membership for voting. The Member’s Journey Model and Assurance Model Timeline are slated for voting at GA 2023. The following items have been included in the Resolution as a strong basis for future consultations and discussions following GA 2023: Shared Investment Mechanism, Assurance Model Framework, and KPIs.

The Risk Subgroup is awaiting proposals from the Basel Institute in addressing corruption within Rubber Supply Chains from the ASI Risk Tool, Reporting Requirements and doing a qualitative corruption data analysis. 

Furthermore, the Risk Subgroup anticipates developments in the Assurance Model in December 2023, before proceeding with the expansion of the Risk Tool and the pre-setting of national risk levels. This ensures that the Risk Tool is not developed in silo and is in alignment with the other components of the Assurance Model.

Lastly, the Risk Subgroup intends to conduct an analysis of the Risk Tool with the Policy Framework to further understand how granular should Risk Assessment reach. For example, is Risk Assessment sufficient on a theme level or would it be necessary to deep dive into the Policy Component level.  

Smallholders Representation and Capacity Building (SCB) Working Group:
The Thailand Agroforestry subgroup conducted a KPI workshop before the Agroforestry training in October 2023. The subgroup is gearing up to conduct the inaugural set of Agroforestry training sessions, benefiting 100 farmers in Songkhla in October 2023.

Additionally, a productive knowledge exchange session took place involving the Agroforestry-Income Diversification task force, Pak Febrius, and the Thailand Agroforestry Subgroups.

Meanwhile, the Thailand GAP subgroup successfully finalised a contractual agreement with Koltiva and will hold its kick-off meeting, marking the first meeting since the start of the project.

The HCSA-HCVN Field Trials task force presented its final report to the SCB WG for endorsement.

The Digital Knowledge Sharing Platform (KSP) task force has conducted two pre-pilot development meetings and the Rubber Wiki app was officially launched on the Google Play Store. The task force is planning a training session tailored for task force and secretariat members, focusing on the effective management of Rubber Wiki. Following the app’s official launch, the KSP contractor will organise group socialising events in Indonesia and Thailand, aimed at introducing the app and gathering valuable user feedback.

Lastly, the SCB WG is gearing up for both national and international calls with smallholder members, an essential part of the preparations leading up to GA2023.

Policy Toolbox Working Group:
During the Year 1 Reporting Review process, input on the reporting process was gathered from members through a survey and stakeholder-specific meetings. This feedback will be used to inform revisions to the Reporting Matrix and disclosure requirements for reporting Years 2 and 3, aligning with the Transparent Reporting Roadmap (TRR).

The WG selected consultant Petra Westerlaan to propose a quantitative orientation for the reporting matrix and conducting a crosswalk with other established reporting frameworks such as CDP Forest, GRI, and ZSL-SPOTT. This quantification approach is expected to facilitate data aggregation and will make evaluating annual progress easier.

The Resolution for the Disclosure Requirements for Reporting Requirements has been finalised and is will be presented to the membership for voting. 

Lastly, quantification from Petra Westerlaan has been completed and the Working Group will embark on further consultations with the Working Group to prepare the updated Reporting Requirements to be approved at an extraordinary GA.

Shared Responsibility Working Group: The Shared Investment Mechanism (SIM) Resolution has been subsumed under the Assurance Model Resolution for approval in the 2023 GA, as a strong basis for further consultation and discussion after the GA. This is due to the integral role of the KPIs, which has not been finalised, in the implementation of the SIM. 

Value and benefits per category to be defined.

The Secretariat is looking into the development of guidance for the operation of the SIM.

Additionally, there is a co-chair seat open, and we are calling for interested volunteers.

On Wednesday, 19 April 2023, the European Union approved the upcoming Deforestation-Free Regulation (EUDR) to prevent companies from placing products linked to deforestation onto the EU market. As part of the wider vision of the EU Green Deal, it will demand companies who import rubber or rubber-based products (e.g., tires) to verify that their supply chain is deforestation-free. It’s a push towards an era of environmental accountability, yet it also sparks debates about the path forward for the rubber industry.

The EUDR requires companies to have traceability to the farm level, including geo-location data and proof of land legality. According to the regulation, every plot below 4 hectares requires at least a GPS point coordinate, while plots above 4 hectares must have a polygon.

Fulfilling these traceability requirements is no small feat. There is concern from the industry that smallholder farmers may be unintentionally excluded from global sustainable supply chains. Ensuring smallholder farmer inclusion requires a holistic sustainability approach.  There is no doubt that the rubber industry has begun moving towards sustainable rubber sourcing through combined industry efforts like the Global Platform for Sustainable Natural Rubber (GPSNR). However, the reality is that most imported rubber to the EU currently does not meet the regulatory requirements as the industry lacks traceability to the farm level. As 85% of the global natural rubber supply is supplied by approximately 6 million smallholder farmers, the implications of this regulation could be far-reaching and severe, particularly for these smallholder farmers.

However, there is a lot of hope.

Firstly, even though it might seem challenging, traceability to the farm level is doable – even for the rubber industry. This has been demonstrated in a GPSNR-funded farmer training and coaching project primarily focused on supporting smallholders to apply Good Agriculture Practices (GAP). Koltiva, the company I am working for and who was selected to be the implementing partner for this project, has mapped more than 4,000 farmers and their farms to help them to prepare for the EUDR in less than a year.

Secondly, we believe that traceability to the farm is scalable. In our work with clients in 51 countries, we were able to map almost 1 million smallholder farmers through our KoltiTrace platform. Platforms such as KoltiTrace allow companies to map and verify their supply chain, including transaction traceability from Seed to Tire and deforestation-free analysis.

Finally, EUDR could have a long-term positive impact on smallholder farmers. Currently, many rubber farmers do not have proper land titles. Due to the EUDR geolocation requirements, many smallholders will, for the first time, have access to a map of their own plantation, allowing them to legalize their land.

And it doesn’t stop there. Smallholders have largely been invisible in global supply chains. Traditional development programs have tried to engage them, but they have not reached the expected results. Many smallholders still have no access to knowledge, no access to capital,  and soon will also be excluded from the carbon economy.

I believe that it’s possible to bridge these gaps. Traceability to farm level and digitalizing the first mile of agricultural value chains can lay the foundation for holistic sustainability interventions. Enabled by technology and data, the sector can equip farmers with critical knowledge, improve their access to finance, actively support farmers to apply low-carbon practices and enable them to reap the benefits of the growing carbon economy.

While traceability cannot be achieved overnight, the rubber industry is in a unique position. At GPSNR, the major industry players are sitting at one table. Through combined efforts and data-sharing agreements of shared supplier data, the rubber industry can become a leading example of how to meet the EUDR.

About the Author:
Luca Fischer is Koltiva’s Program Manager, leading Koltiva’s boots-on-the-ground implementation projects in the rubber sector globally. He bridges the gap between the client, product, and field teams.

Luca has over five years of work experience in sustainable sourcing, smallholder livelihood, and climate-smart agriculture development. He graduated with an M.Sc. in Sustainable Resource Management from the Technical University of Munich, Germany.

About Koltiva (click here for more information)
Established in 2013, Koltiva is a leading agritech company for enterprises to make their global supply chains traceable, inclusive, and climate-smart. Backed by Koltiva’s human-centered technology with boots-on-the-ground professional service, Koltiva supports some of the largest multinational companies by digitizing and verifying global supply chains, focusing on enhancing traceability, inclusiveness, and sustainability. Koltiva combines triple-tech (AgriTech, FinTech, and ClimaTech) to improve producers’ outcomes and profitability while building more sustainable supply chains.