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PETALING JAYA: The natural rubber business in Malaysia still lacks sustainability and traceability, according to two World Wide Fund for Nature-Malaysia (WWF-Malaysia) assessments issued Tuesday.The studies “Mapping the Natural Rubber Value Chain in Malaysia” and “Addendum Report on Rubberwood” discovered that the problem with the natural rubber supply chain is due to the industrial system’s systemic architecture.

 The WWF-Malaysia in statement, here, Tuesday, said Malaysia is the world’s seventh largest producer of natural rubber and the eighth largest consumer. Tyres, industrial customized rubber products, and consumables such as gloves and shoes are all examples of rubber products utilised in Malaysia.

Because most Malaysian-grown natural rubber is used in tyres, Malaysia is a significant importer of natural rubber from Thailand. The rubber industry is Malaysia’s second largest agricultural sector, behind oil palm, and has a substantial environmental impact.

In Malaysia, over 90 to 95 percent of rubberwood is used in the furniture industry. In recent years, this segment has accounted for 70 to 75 percent of the rubberwood sector’s RM8 to RM9 billion in annual export value.

Rubber production is mainly by smallholders (96 per cent), and it is an important source of job stability. WWF performed a study to better understand the natural rubber value chain in the country because it is such an essential commodity for the country and the rural community. The study discovered two major problems with the natural rubber industry: lack of sustainability and lack of traceability. The sustainability challenges stem from the fact that the industry is dominated by smallholders. According to Dr. Adrian Choo, Lead for WWF-Malaysia’s Sustainable Markets Programme, “The lack of proper transparency and traceability in the natural rubber industry is rooted in the production system, as it is dominated by smallholders. The incentives, or lack thereof, is a major influence on their attitudes towards the environment. This challenge is not unique to rubber, but to many other commodities in general.”

“There is also minimal disclosure in public corporate and sustainability reports for natural rubber. While the processing stages are relatively straightforward, there are complex sustainability challenges at the subsequent value chain stages,” Choo added.

Key factors such as sustainability platforms, smallholder equity, commitment and corresponding practices by major natural rubber buyers, and sustainable financing need to be present. Some Malaysian furniture companies indicate the usage of Forest Stewardship Council (FSC) Controlled Wood and Programme for the Endorsement of Forest Certification (PEFC) certified wood.

The lack of transparency and traceability impedes the sustainability of the natural rubber sector in Malaysia. Financial support, incentives and group organisation are required to encourage rubber plantations to be certified. Fundamental restructuring of the marketing system that will enhance greater financial returns to smallholders is also badly needed.