Sustainable Natural Rubber Production in Latin America

Diogo Esperante Diogo Esperante is Executive Director of APABOR the NR Farmers and Processors Association of São Paulo/Brazil.

He is responsible for the Statistical Monitoring Program of the National Association of Natural Rubber Producers in Brazil (ABRABOR).

Post graduated in Project Management and have been active in the Brazilian NR industry for the past 10 years.


For the past 5 years the concept of Sustainable Natural rubber has gained some attention in Latin America.

Guatemala was the first country on the region to pioneer on that subject having developed several projects ranging from  FSC ® (Forest Stewardship Council) certifications up to Carbon Credit emissions.

Colombia for its turn, have created recently a Carbon Taxation system that was the genesis for a national carbon credit market with great potential as a tool to promote low-carbon opportunities in the agricultural sector, being Natural Rubber an excellent choice.

In Brazil, sustainable natural rubber production has gained momentum, specially since 2016, when Pirelli (one of the biggest consumers of Natural Rubber in Brazil) engaged all of its Brazilian suppliers on the International Rubber Study Group (IRSG) program called Sustainable Natural Rubber Initiative (SNR-i).

Brazil and Sustainable Natural Rubber

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Among Pirelli suppliers in Brazil are 80% of the processing plants market share in the country. With that, became gradually clear to the industry the need to continue the stakeholder engagement processes and thus bringing the producer sector on to the same page.

One project in particular that contributed to this momentum is the affiliation of the Hevea Forte Cooperative (with 5 thousand ha of Rubber planted area) this year with the SNR-i program.

This group, a member of the Association of the São Paulo Natural Rubber Producers and Processing Plants (APABOR), was the first major group in Brazilian productive sector to create a Sustainability Program and it’s first project was to fulfill IRSG SNR-i self-declaration.

The consistent local policies towards forest conservancy and labor rights are interesting to be highlighted for very little is left for voluntary commitment and just by following local legislation producers are already able to attain good social and environmental scores.

Colombia and the Sustainable Natural Rubber

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The history of Natural Rubber in Colombia explains why the country’s government is so compromised with the development of rubber expansion.

The Illicit Crop Substitution program that by 2017 verified 23,770 hectares of coca plants were uprooted by peasants.

In total there are 49,031 hectares that the UN must certify based on the agreements reached with the communities. The Government the goal set at 50,000 hectares of substitution from May 2017 to May 2018.

Since Natural Rubber is a crop that has good economical attractiveness even on small areas it was one important crop among others on this program.

Understanding that Natural Rubber can help communities in Colombia to overcome a difficult chapter in their history as a tool for Social emancipation the government has shown great commitment to the expansion of Natural Rubber.

Mavalle S.A.S. is the country’s biggest producing group with 10 thousand hectares planted and it is a good example of commitment of using Natural Rubber as a tool for generating employment and income in areas in deep need of alternatives to illegal activities thus collaborating with the country’s peace process.

For that, in 2016 Mavalle implemented the management system needed to comply to the international standards named BASC (Business Alliance for Secure Commerce).

BASC -Business Alliance for Secure Commerce-, is an international business alliance that promotes safe trade in voluntary cooperation with Governments, border agencies, control authorities, and international organizations

WBO is the world´s largest business led organization whose mission is to generate a security culture throughout the supply chain, by implementing Management Systems and control measures in international trade processes and other related sectors.

The Control and Security Management System implemented seeks to continuously improve the safety standards applied in Mavalle in order to ensure that the product is not contaminated by any foreign substance, in order to keep the company out from any illegal activity, and at the same time smooth customs’ processes. ISO 9001 Quality Management System is currently implemented.

On 2017, Mavalle started homologation processes with Brazilian companies and thus became aware of IRSG SNR-i program.  One year later Mavalle became the first Colombian company self-declared to the Initiative.

Materials and Methods

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The example of both Hevea Forte and Mavalle are not only important for the expansion potential of such groups as Sustainable Natural Rubber Producers but also for the ripple effect that it may cause on the region. The possibility of reproducing these models is what local industry agents and Sustainable Natural Rubber enthusiasts have been debating over.

Regarding that debate the first problem we encounter was: what should be the most suitable theoretical framework to assess the effectiveness of such initiatives. For if we are thinking on multiplying it we ought to be sure they are any good, some would consider.

Next issue that popped up as a criticism towards such initiatives was: How can such small and individualized programs collaborate with such huge and collective problems such as World Deforestation and Fair Trade?

To tackle such questions we have found on the Polycentric Framework some clues as in “do´s and Don’ts” that might help us designing, evaluating, interacting and powering such initiatives.

Polycentric Framework

On her later writings, the American political economist and 1999 Nobel Prize in Economics, Elinor Claire “Lin” Ostrom (August 7, 1933 – June 12, 2012) theorized on structures of governance for common resources management, in these cases Ostrom often used the Climate Change and greenhouse gas emissions as an example of a Common Poll Resource to be managed. Her analysis consisted on assessing the limitations of traditional nation-state-centered approaches to  governance design and proposing the use of a “polycentricity” as “a useful analytical approach for understanding and improving efforts to reduce the threat of climate change” (Ostrom 2010b, 552).

The concept was that the management of a certain complex task should be more efficiently solved within a plurality of interrelated units starting from the individual centers self-organization of it’s actions and relationships with the other units involved in a common task.

Principles Designing over Blueprint

In respect to creating sustainable, cooperative and integrated systems Ostrom argues that the idea of “Blueprinting the solutions” often leads to the distancing of actors. Thus only by fitting local collective-action problems will the system be able to become sustainable on the long run. (Moran and Ostrom 2005; Hayes and Ostrom 2005)

For that, Ostrom creates 5 design principles to be considered:

1) Well defined boundaries: Membership agreed upon rules and excluding those who do not agree to these rules, thus knowing with whom to cooperate and helping the group to sustain and build their cooperation over long periods.

2) Proportional equivalence between benefits and costs: In the case of a user getting all the benefits and pay few of the costs, others will not be willing to follow rules over time (Ensminger 2000). Is important to allocate benefits proportional to inputs that are required.

3) Collective choice arrangements: The third design principle is that most of the individuals affected by a resource regime may participate in enacting their rules. This enables regimes to tailor rules to local circumstances and to devise rules considered fair by participants.

4) Monitoring: Rule enforcement is necessary to achieve sustainable systems. Long surviving resource management systems either select their own monitors or all participants contribute resources to jointly hire monitors. Regular monitoring and sanctioning are strongly and statistically associated with better system efficiency and conditions.

5) Graduated sanctions: Graduated sanctions by robust governance arrangements. The capability to escalate sanctions enables a regime to warn members that if they do not conform they will have to pay higher sanctions.

Perverse Outcomes and Limitations of Polycentric Approach

On one of her most famous articles about the Greenhouse Gas (GHG) Emissions theme, Ostrom debates that often  too many projects and activities operating at multiple scales (without no support of a global treaty) may generate negative implications. These perverse outcomes have to be closely monitored and avoided.

A detailed identification proposing the recognition of problems as an essential to start serious efforts toward finding methods to reduce them.

(1) Leakage

An issue often highlighted on subnational projects to reduce carbon emissions is leakage, either leakage between locations or market leakage (Ebeling, 2008, pp. 49–51).  The notion of Leakage between locations is when an activity that took place on a certain location shifts to another due to a certain project taking place on the first. As an example, farmers forced to leave a location due to a tree planting project may simply move to a new location causing deforestations of new areas.

Market leakage, on the other hand, occurs when changes in the price of a product occur as a result of restrictions. These restrictions reduce offer of such product stimulating an increase in the prices. On a positive scenario, the higher prices work as a stimulus so that more production is made in a conscious manner ‘‘In a less favorable scenario, particularly when landuse regulations are poorly enforced, higher prices provide an additional incentive to clear forests for timber or agriculture elsewhere, thereby reducing the net benefits of the climate mitigation project’’ (Ebeling, 2008, p. 50).

(2) Inconsistent policies

The inconsistent policies issue relates somehow to the leakage problem for companies that operate in a Global level might find themselves trapped in between different varying policies from one region to another. Such variations often produce different costs and availability of technologies that not always generate enough value and income on the end product, demotivating such investments in certain markets.

(3) Inadequate certification

There is obviously the demand for skilled personnel to certify that one project is in fact generating a good sustainability impact. As Ostrom argues: “A very active new industry of ‘‘global consultants’’ has emerged. While many consultants do have good scientific training, the greatly increased need for certification has generated opportunities for some unqualified contractors to earn money in the new ‘‘certification game.”

(4) Gaming the system

In this context for each new sustainable product or mean of production is created often incentives such as “green bond credits” are developed. Gaming the system happens when the generation of credits become more profitable than the end activity itself and actors start to concentrate more on finding ways to generate (questionable) credits than to reduce the deforestation activity or GHG emission.

(5) Free riding

The benefit of reducing deforestation and GHG emission might be used by others that will use this reduction to actually increase their environmental impact substantially.

Table

Partial Conclusions and Further Research

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In our perspective, SNR-i Self Declaration Program served on both Colombia’s and Brazilian Natural Rubber Projects so far as an important tool specially for helping in: Creating Well Defined Boundaries, functioning as a platform for Collective choice arrangement, serving as a tool for Monitoring and Graduated Sanctions. On another hand, the Program created for us a path for avoiding Inadequate Certifications, Inconsistent Policies and Leakage.

Mavalle is already a member of IRSG and in Brazil, we are very proud to announce that from 22 of November on it will be required from all APABOR Processing Plants associates to fulfill the SNR-i self declaration. Additionally in 2019, APABOR will return as an IRSG member. We thank for all the IRSG support so far and hope together we might find ways to continue to promote Sustainable Natural Rubber Initiatives in Latin America!

To monitor these interactions might be beneficial for further research done on the theme.

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