August 27, 2020. For the first time ever, the German Federal Ministry of Economic Cooperation and Development (BMZ) and technology company Continental are making a rubber supply chain seamlessly electronically traceable – from cultivation in Indonesia and further processing through to tyre production.
Federal Development Minister Gerd Müller: ‘We need a rethink in the global economy to better protect people and nature. I am delighted that pioneers like Continental are demonstrating that in the digital age, at a minimum the social and ecological sustainability criteria can be monitored along the supply chain. Through sustainable cultivation methods and a digital traceability system, we are helping to stop the destruction of nature and improve the incomes of small local farmers.’
Christian Kötz, Head of the Tires business area and member of the Executive Board of Continental AG, emphasises the following: ‘The creation of sustainable and traceable supply chains is an integral part of our comprehensive sustainability strategy at Continental. As part of the pilot project in Indonesia, which has been successfully established with the BMZ, we are able for the first time to seamlessly trace a rubber supply chain from cultivation and further processing to our tyre plant in Germany. In doing so, we are working together to ensure greater transparency and make a significant contribution to securing the livelihood of the small farmers involved in the project. Our goal is to gradually expand electronic traceability within our natural rubber supply chains, thereby contributing to the global improvement of sustainability in the natural rubber sector.’
Continental is collaborating with the German development co-operation specifically in the Indonesian province of West Kalimantan in Borneo. The Kapuas Hulu district has two national parks with extensive natural forests, designated a UNESCO biosphere reserve. The project partners document all steps in the supply chain with a digital traceability system. The 450 small farmers involved so far, achieve significantly higher sales prices than usual for the high-quality natural rubber they produce. This is due to the fact that they are trained in sustainable cultivation and have better knowledge, such as how the trees need to be cut in order to obtain as much rubber as possible. The small farmers thus significantly increase their surface yields and can use the trees for longer.
The digital traceability system allows the production and supply chain of the rubber to be evaluated in detail. The production areas mapped by GPS, the raw rubber deliveries and sales prices achieved are documented in the system directly on delivery to the warehouse. In addition, the system checks the raw rubber quantity delivered with regard to the production area. If the delivered quantity exceeds the expected production volume, the system indicates this. This ensures employees can prevent rubber from entering the supply chain from non-registered areas, e.g. illegally deforested areas.
Both the BMZ and Continental are members of the Global Platform for Sustainable Natural Rubber (GPSNR), which was founded in March 2019, a merger of the most important players in the natural rubber sector from the economy and civil society. Together with other members, they are working on the global improvement of sustainability in the natural rubber sector.