Sustainable Natural Rubber Policy
Hankook Tire makes constant efforts for the economic, social and environmental sustainability of the natural rubber value chain.
0. Mission
Hankook Tire makes constant efforts for economic, social and environmental sustainability of the natural rubber value chain.
1. Background
About 85 percent of rubber trees are grown by smallholders. As industrial rubber demand increases due to world population growth and improvements in the quality of life, it is expected that economic, social and environmental issues will arise.
Hankook Tire is a tire manufacturer that does not own any natural rubber farms or processing facilities. As such, we aim to propose and execute joint activities with other members of the natural rubber value chain and join global efforts such as GPSNR to establish a sustainable natural rubber value chain.
2. Natural Rubber Value Chain
- 1) Producers: Farmers, organizations and entities who are producing natural rubber, excluding Smallholder Producers.
- 2) Smallholder producers: Natural rubber farmers, with all following characteristics.
- A. The primary source of income for the smallholder is the farm (not only Natural Rubber);
- B. The Natural Rubber production unit size is less than 50ha (although the farm may be larger); and
- C. Profits from the farm accrue primarily to the owner of the farm and their family.
- 3) Dealers: Entities that purchase and collect natural rubber from growers and sell it to processors.
- 4) Processors: Entities that process primary sources of natural rubber raw materials into natural rubber products.
- 5) Traders: Entities that buy and sell natural rubber involving physically handling or storing physical material.
- 6) Manufacturers: Companies who buy and process natural rubber in order to produce finished products that contain natural rubber.
3. Sustainable Natural Rubber Policy (referred to as Policy hereafter)
- 1) Support for raising growers’ living standards through improving productivity and quality of natural rubber
- (1) We, Hankook Tire, will increase its material efficiency trying to identify the most suitable cultivation practices (such as effective improvement of plant breeding and development of agricultural techniques, etc.) and encourage growers to receive training (such as using productive fertilizers, or appropriate tapping techniques, etc.).
- 2) Demand for compliance with laws and regulations, and code of ethics
- (1) Suppliers will comply with all laws and regulations regarding human rights, labor, land use and the environment of the country in which they operate their business.
- (2) Suppliers will be responsible for obeying the Sustainability Guidance for Suppliers(https://www.hankooktire.com/global/sustainability/policy/supplier-sustainability.html) as well as Hankook Tire’s Code of Ethics(https://www.hankooktire.com/global/about-hankook-tire/company/corporate-governance/code-of-ethics.html).
- (3) We run a Grievance Mechanism that is in line with the effectiveness criteria of the UN Guiding Principles on Business and Human Rights.
- 3) Demand for respecting and protecting human rights
- (1) We demand compliance with Hankook Tire’s Declaration of Human Rights(https://www.hankooktire.com/global/sustainability/policy/human-rights-policy.html), which observes the principles of the UN Guiding Principles on Business and Human Rights and the Fundamental Conventions of the International Labour Organization.
- (2) We demand the recognition of the rights of indigenous people and local communities in compliance with the UN Declaration on the Rights of Indigenous Peoples
- A. We demand the recognition of traditional rights of access to hunt and harvest animals and plants for the sake of survival, and indigenous, cultural and religious traditions, customs and rituals.
- B. We demand the recognition and protection of the customary, traditional, and communal land tenure rights of indigenous people and local communities
- C. For activities that can influence indigenous peoples and local communities (IP/LC), FPIC (Free, Prior, and Informed Consent) is obtained in accordance with the methodology prescribed in the UN-REDD (2012) Guidelines on FPIC. If we cause or have caused harm to the lands, territories, rights, or resources of IP/LC without securing FPIC, we take measures to remedy such issue through a mutually agreeable process. Implementation will be jointly monitored by the community and the GPSNR member and/or by mutually agreed third party(ies).
- D. We demand the operation of sustainable, effective, and culturally appropriate dialogue channels with indigenous people and local communities.
- (3) We demand support for proper living environments and food security, and respect and support for the economic, social, and cultural rights regarding community livelihoods.
- 4) Demand for activities to support environmental protection and the least negative impact on the environment of supply chain partners
- (1) We demand the prevention of deforestation and the degradation of high conservation values (HCV) in the production and procurement process for natural rubber, and if deforestation or degradation of HCV is confirmed to have taken place after April 1, 2019, sourcing will be prohibited. Identification and management of areas for development and conservation will comply with methodologies and guidelines that observe the High Carbon Stock Approach (HCSA) and HCV Approach.
- (2) We demand the prohibition of burning/fire for the purpose of land preparation, land management, waste disposal, etc.
- (3) We demand a prohibition on development or procurement of peatland farming of natural rubber.
- (4) We demand the protection and restoration of natural forests and ecosystems, along with rare, threatened, endangered and critically endangered species, and wildlife.
- (5) We demand that water resources be conserved including through the prevention of water pollution caused by the use of pesticides and industrial chemicals, erosion, and sedimentation during the production and procurement of natural rubber.
- (6) We demand that soil be conserved through the prevention of soil erosion, nutrient deficiency, ground subsidence, and pollution during the production and procurement of natural rubber.
- (7) We are committed to minimizing and mitigating GHG emissions and energy usage.
- 5) Efforts to prevent resource depletion and maintain sustainability
- (1) We aim to reduce the use of natural resources by improving manufacturing processes, tire quality, raw materials, etc.
- 6) We track the complex and diverse natural rubber supply chain from growers to manufacturers, at a minimum to an appropriate jurisdictional level, to identify and purchase materials that comply with GPSNR policies, in order to know the conformance of purchased materials with GPSNR Policy Components.
4. Implementation of the policy and compliance with it
- 1) We formulate plans for the implementation of the Policy.
- (1) Goals and policies to achieve those targets are approved by the ESG Strategy Committee, with the participation of the CEO, and are embedded into the company’s decision-making processes. The targets must reflect timebound and geographic-specific features and all policy provisions and approved targets should be disclosed.
- (2) Monitor implementation progress and performance to the Supplier Committee, which is chaired by the Purchasing Director, once every quarter.
- 2) We actively support the Policy compliance of supply chain partners through incentives, training, purchasing monitoring, etc.
- (1) We propose guidelines for fulfilling the Policy requirements to suppliers and reflect them in contracts and when participating in activities, etc.
- (2) Natural rubber suppliers that deal with material produced and processed in accordance and conformance with the GPSNR Policy Components will be preferred.
- 3) We conduct a supply chain assessment at least once every two years.
- (1) Based on the supply chain assessment, we will prioritize risk mitigation actions for social and environmental risks that are identified.
- (2) We formulate time-bound implementation plans for the compliance of suppliers who do not adhere to the elements of the Policy.
- (3) We construct processes to integrate information from stakeholders on our suppliers’ compliance with the Policy.
- (4) If there are significant negative social and environmental impacts resulting from non-compliance, transactions may be discontinued.
- (5) We, Hankook Tire, promise to develop our ESG assessment tools constantly.
- 4) We disclose the plans and achievements of our sustainable natural rubber policy in a transparent and faithful manner at least once every year.
- 5) To offer opportunities for feedback and suggestions related to our policy fulfillment, we actively communicate with stakeholders regularly.
- 6) We support multi-stakeholder planning and policy efforts that uphold the GPSNR principles at a landscape, jurisdictional or other spatial level.
