Secretariat Update – December 2019

We can draw parallels to the coffee industry, which similarly comprises small plantation owners and more profitable downstream actors. In his recent sustainability report on the coffee industry, economist Jeffrey Sachs’ proposal for a global fund to fill the financial gaps for sustainability investments in coffee producing regions garnered vivid discussion.  

Currently, low and unpredictable rubber prices are a constraint to smallholders who produce the bulk of global rubber output. Transparency is critical in the purchasing process, and this kind of disruption typically comes hand in hand with embracing new strategies. 

Under the purview of the Strategy & Objectives Working Group, capacity building and extension services have been identified as potential measures to mitigate the root causes of the social and environmental impact from the natural rubber supply market. Implementing these at scale for the whole industry will require considerable financial investment.   

With the above considerations in mind, GPSNR is exploring new approaches to funding that would not be borne by a single segment of the industry, but in a manner incorporating the spirit of our shared responsibility. 

Enterprise Singapore organized an industry meeting on 14 January 2020, and invited GPSNR and Singapore Exchange to better understand the available options of an e-trading platform that could contribute to our funds. The meeting also discussed what could be the options, through GPSNR, to increase the uptake of the e-trading platform.

Tapping the vast potential of digitalization could present an exciting avenue of possibilities for GPSNR to better advance our vision of a fair, equitable and environmentally sound rubber value chain.      

The meeting was initiated by representatives from Enterprise Singapore, and panel speakers comprised representatives from GPSNR, Singapore Exchange and HeveaConnect. Participants included GPSNR members as well as other Natural Rubber buyers, producers, processors and traders .

Following several rounds of further consultation amongst its members, the Capacity Building Working Group has finalized proposals for capacity building strategies for the four previously identified focus countries: Côte d’Ivoire, Indonesia, Myanmar and Thailand. Within each of these proposals, the Working Group has defined key strategic approaches to best allow for immediate engagement and implementation. 

Each proposal sets out the issues that have been identified as threatening the sustainable production of natural rubber, underlying causes for these issues, as well as a main objective. Within each proposal, the Working Group has suggested various strategic approaches, providing a rationale for chosen actions, and proposing impacts and resources required. While the Working Group recognizes that the issues do not represent the full list of challenges that stand in the way of national rubber production becoming sustainable, it highlights that the focus is on strategic approaches that allow for immediate engagement and implementation.

These proposals have been submitted to the Executive Committee for review and approval, while the Working Group concurrently addresses final concerns around the proposed strategy around a CO2 compensation scheme.   

Looking ahead, detailed implementation plans and timelines will have to be developed upon approval of the proposed strategies. These are issues that the Working Group will be exploring in the weeks to come.