Rubber Journal Asia Country Focus
Indonesia’s rubber sustainability at a crossroads Deforestation in Indonesia, the world’s
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of these areas, located in Jambi and North-East Kalimantan-Timur, rubber trees will be planted to produce an estimated 80,000 tonnes/year; while the remaining land will be allotted for re-creating a natural environment and community crops, Michelin said in a press statement. The company’s four-year partnership with WWF is to ensure that best practices are observed throughout the RLU project, with WWF having presence on concessions bordering those of Michelin/Barito in Jambi. The local coordination also aims to protect the Bukit Tigapuluh National Park and Limau Protected Forest, which are at risk of deforestation.
Michelin/WWF: making responsible rubber sourcing a priority Rubber is Indonesia’s golden goose, with most of the rubber production coming from South and North Sumatra, Jambi, Riau, and West Kalimantan. The Indonesian market, according to TechSci Research, was valued at US$3.35 billion in 2019, and is poised to grow at a CAGR of nearly 6% through 2025. Indonesia-domiciled tyre maker Gajah Tunggal, despite a sales decline in the pandemic period, remains the largest producer in Southeast Asia, followed by Bridgestone. Meanwhile, French tyre maker Michelin is a prominent figure in the Indonesian tyre market space, having acquired Indonesian tyre manufacturer Multistrada Arah Sarana in 2019. The company was the first tyre maker to commit to responsible rubber sourcing, according to the World Wide Fund (WWF), which in 2016 cooperated with Michelin on the sustainable rubber sourcing policy, since rubber plantations are a major cause of deforestation in Southeast Asia. To enable success of this objective is to develop responsibly-managed plantations on degraded land with full consent by tenure-holding local communities, instead of grabbing land and clearing high quality natural forests, WWF commented. In 2015, Michelin entered into a joint-venture with PT Chandra Asri Petrochemical subsidiary, Barito Pacific Group (BPG), to produce rubber. Known as Royal Lestari Utama (RLU), the joint venture, 53% for BPG and 47% for Michelin, involves the reforestation of three concessions, representing a total area of 88,000 ha. On half
Mighty Earth puts RLU’s sustainability under the spotlight The RLU project, however, has come under scrutiny from environmental expert Mighty Earth. The US-based firm has said that Michelin has “coveredup” industry-scale deforestation of over 2,500 ha of rainforest. In a new report, “Complicit: An Investigation into Deforestation at Michelin’s Royal Lestari Utama Project in Sumatra, Indonesia”, Mighty Earth said that the “industrial deforestation” has been carried out over a 33-month period to January 2015 to make way for natural Mighty Earth’s Campaign Director, rubber plantations in Alex Wijeratna, challenges Michelin to flex its industry leadership Jambi. Of this, Mighty position “for greater transparency Earth also found 1,298 across the whole rubber supply ha of rainforest was chain” industrially deforested in a Wildlife Conservation Area (WCA), and which is now planted with thousands of rubber trees. Mighty Earth also found that the Michelin RLU project has since attracted financing from Asia’s first US$95 million corporate sustainability ‘Green bond’, as well as public funds from Norway, the UK and the US, and is slated to receive further financing from a second US$120 million green bond. Alex Wijeratna, Campaign Director at Mighty Earth, said that Michelin was aware of the “terrible forest destruction”, but “didn’t do enough to stop it, and instead chose to provide green cover to the project in order to attract green bond investors that have since sunk millions of dollars into the scheme.”
second largest natural rubber producer,
is an issue to reckon with. According to Greenpeace, the country has one of the
highest rates of deforestation globally, with over 74 million ha cleared for agriculture, as well as mining concessions. Thus,
rubber sector stakeholders are shuffling to says Angelica Buan in this article.
3 NOVEMBER / DECEMBER 2020
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