Vietnam’s rubber industry is struggling to meet the criteria set by the Forest Stewardship Council (FSC), especially those related to the requirement of having at least 10 per cent of a conservation area.
|Plantations dreaming of FSC status for rubber products, Photo: Duc Thanh |
Nguyen Vinh Phuong, the owner of a 150-hectare rubber plantation area in the south-eastern province of Tay Ninh has recently spent more time studying the process of obtaining the FSC certification. Although he is interested in cultivating sustainable rubber, he remains hesitant to implement this process.
Phuong pointed out that the rule of a 10-per-cent conservation area seems to be an infeasible requirement for small operators of plantation areas. The rule would mean that Phuong would lose $1,500 over 10 days of rubber tapping if he saved 10 per cent of his 150-ha plantation area for conservation.
Besides state-owned companies like Tan Bien Rubber and Tay Ninh Rubber, there are 12 private firms competing to source rubber. Phuong was certain that he would not lose VND105 million ($4,520) per month during the tough market caused by rising production expenses, the shortage of rubber tappers and the intensifying competition in prices.
Lien Anh Rubber Co., Ltd. in Tay Ninh missed the chance to obtain FSC certification given the 10 per cent conservation area requirement. Phan Do Trong Nhan, the company’s purchasing manager, said, “We have so far completed eight out of 10 principles set by FSC. However, we face challenges in conserving 10 per cent of rubber space for conservation.”
“Many smallholders do not agree to fulfil this requirement,” Nhan said. “It is difficult to talk to smallholders to meet this requirement although Lien Anh has offered supporting policies as well as rubber care and exploitation techniques.”
Foreign buyers from the United States and Europe are willing to pay a higher price for FSC-certified rubber but this is a long-term matter, added Nhan. “Currently, the purchasing price of rubber between companies with FSC-PM and without FSC-PM is almost equal because people know too little about FSC.”
Lien Anh is exporting 60 per cent of rubber to the Chinese market, 20 per cent to the EU and US markets and the rest for domestic consumption. “Many Chinese buyers offer a new price as soon as our rubber is certified with FSC,” Nhan said. “At this time, many Chinese buyers still buy uncertified rubber, because its government has not tightened its grip on sustainability regulations.”
According to Nhan, Lien Anh has considered sustainable development but the initial investment for FSC certification is very large, accounting for about 35 per cent of the expenses. In the near future, Lien Anh will try to comply with the conservation area regulation on an area of 123ha. He calls it the flexibility of the company to achieve FSC certification in August this year. However, the company still finds it difficult to implement this regulation in its plan to develop 7,000ha in 2027.
Due to increasing pressure, some Vietnamese firms have invested in sustainable development to improve environmental and social conditions in rubber plantation areas. Bui Quang Ninh, CEO of Daklak Rubber JSC (Dakruco), expected that the company would soon acquire FSC certification to sell rubber at a higher price.
Dakruco faces three difficulties to meet FSC criteria including initial investment capital, the conservation area requirement and the possibility of changing the living habits of rubber growers. Dakruco is managing 11,300ha of rubber land, including 1,670ha in Cambodia.
There is a small number of FSC-certified rubber plantation areas in Vietnam, but obtaining the certification is not an easy feat. Vietnam Rubber Group (VRG) perfectly exemplifies this challenge. In 2017, after 18 months of trials, VRG has achieved FSC for two rubber plantations in Vietnam with a total area of 11,700ha. This was quite small compared to its total rubber space of 550,000ha at that time.
Besides FSC, there are many independent non-governmental organisations overseeing the activities of its members. As a rule, FSC certification is valid for five years. During this time, FSC will make four visits to certified holders to assess their compliance with the requirements set forth by this organisation. Issued certificates will be suspended or revoked for unsatisfactory cases.
Phan Tran Hong Van-Deputy secretary general Vietnam Rubber Association
There is mounting pressure to promote the sustainable development of Vietnam’s rubber industry by improving the environment and social conditions in rubber plantation areas. There are 256,000 rubber smallholders owning 479,600ha or just over half of the total plantation area in Vietnam.
Among them, 426,000ha are in the process of rubber tapping. It is expected to supply 732,000 tonnes of dried latex per year, accounting for 62 per cent of total latex exploited in the entire rubber area of the country.
Vu Thi Que Anh - Project coordinator, FSC Vietnam
Vietnamese businesses have paid more attention to applying FSC forest management standards. However, they have been struggling to meet the criteria. FSC Vietnam is actively working with rubber companies to handle issues.
Developing FSC-certified rubber plantation areas will open up new opportunities for businesses to improve competitiveness, increase yield and penetrate deeper into the global supply chain. According to statistics by FSC, FSC-certified products have higher economic value than the same types of products by some 20-30 per cent. This helps protect natural resources from improper use.
Nguyen Vinh Quang - Specialist, Forest Trends
Vietnam is the world’s third-largest supplier of natural rubber. As the majority of rubber is not accredited with sustainable certification, the selling prices of Vietnamese rubber remain low. The fragmented and small-scale production affects the quality of rubber input, making it hard to obtain sustainable certifications. It is vital to connect foreign buyers with smallholder communities and rubber firms to build a sustainable supply chain. As a result, Vietnam can gradually produce FSC-certified rubber.
There are two forest certification schemes worldwide: the Programme for the Endorsement of Forest Certification (PEFC) and the Forest Stewardship Council (FSC). The criteria of the latter are stricter than the former’s.
FSC is a non-governmental organisation established in 1993, operating independently without benefit. It is a voluntary standard to support globally responsible forest management. FSC has over 850 members in 50 countries.
FSC developed a set of 10 principles and 56 criteria for forest management, which are classified into three standards. Firstly, the certification confirms that the forest is being managed in a way that preserves biological diversity and benefits the lives of local people and workers while ensuring it sustains economic viability.
Secondly, the FSC chain of custody certification provides a credible assurance that products which are sold with a claim originate from well-managed forests, controlled sources, or reclaimed materials.
Thirdly, FSC-controlled wood certification requires certificate holders who use controlled wood to mitigate the risk of using wood products from undesirable sources in FSC-labelled products.
By Hai Van