One of the basic raw materials of tires is natural rubber. The tire industry consumes around 70 percent of natural rubber in the world and the demand is growing,
As an agricultural product, natural rubber is the livelihood of many families living in countries where the local legislation and working conditions have not been fully developed. We only purchase natural rubber from processors approved by Nokian Tyres. We expect them to adhere to our Supplier Code of Conduct and we supervise their activities through audits, among other things.
In order to improve supply chain sustainability, we started a partnership with an external auditor in 2016. Our separate sustainability auditing process has been developed together with a consulting company and it is based on Nokian Tyres’ Supplier Code of Conduct and principles that comply with the UN Global Compact goals. Our goal is to audit all of our major rubber processor partners by 2020, comprising at least 80% of our natural rubber purchasing volume. The audits enable the processor companies to improve their occupational safety and develop their operations further.
In 2018, we audited 4 more locations and initiated corrective programs to address the shortcomings identified in the process. Four re-audited producers have made significant improvements on weaknesses highlighted during our first sustainability audits.
Here are some highlights of successful improvements:
• 3 out of 4 companies have a Health & Safety system implemented, 4th company in progress (one in 2017)
• 3 out of 4 have legal working hours, 4th company in progress (one in 2017)
• All 4 companies have created an ethical policy and 1 has trained employees accordingly (none in 2017)
• Metal scrap management implemented in all locations (one in 2017)
• In 2 companies, employment contracts translated to indigenous languages (one in 2017)
• Enhanced first-aid training
• Amended employee dormitory cleanliness
FOCUS ON OCCUPATIONAL SAFETY, QUALITY, AND HUMAN RIGHTS
In addition to the audits by external parties, we track the sustainability of our raw material suppliers in connection with quality audits by our in-house personnel and raw material suppliers’ self-assessments. The supplier self-assessments discuss sustainability topics important to Nokian Tyres, including human rights and occupational safety. The assessments also seek to determine whether the supplier has set targets for developing their operations, the progress of the goals is tracked, and they are supervising their own suppliers’ activities.
During the quality audits, we review the supplier’s production and evaluate the company’s quality management system. The audits specifically focus on the quality of the activities as well as raw materials.
The need to perform quality audits is based on our supplier evaluation. Our purchasing personnel conduct smaller-scale supplier visits that also include an assessment of the working conditions.
The work of Nokian Tyres’ own procurement unit is guided by the internal purchasing policy, which establishes the general principles of sustainable procurement. We are a participant in the UN Global Compact initiative and follow the UNGC’s ethical principles as well as our own, which also address the issues of responsibility in the supply chain.
We require all of our raw material suppliers to adhere to our Supplier Code of Conduct. All raw material suppliers must, at a minimum, have an ISO 9001-certified quality management system in place. We also prefer suppliers with an ISO 14001-certified environmental management system. In 2018, 72% of our raw material suppliers had the ISO 14001 certification.
In March 2019, Nokian Tyres joined the Global Platform for Sustainable Natural Rubber. The GPSNR will work to improve respect for human rights, prevent land-grabbing, protect biodiversity and water resources, improve yields, and increase supply chain transparency and traceability. Members of the GPSNR will undertake binding commitments, and failures to honor those commitments are addressed actively.