Nokian Tyres Sustainable Natural Rubber Policy

Nokian Tyres Sustainable Natural Rubber Policy

As a member of the Global Platform for Sustainable Natural Rubber (GPSNR), we are committed to legal compliance, community livelihoods, healthy, functioning ecosystems (including no deforestation), and respecting all human rights in natural rubber procurement and production. This is reflected in our sustainable natural rubber policy that falls in alignment with GPSNR’s policy framework.

1. INTRODUCTION

1.1 Nokian Tyres & Sustainability

Nokian Tyres is committed to conducting its business in a sustainable way and to contribute to a sustainable development. Sustainability has for a long time been an integral part of Nokian Tyres way of conducting business. For Nokian Tyres, sustainability means, for example, sustainable product development, safe and eco-friendly products and ensuring that our activities do not harm the environment or people. We firmly believe that by operating in a sustainable way, we can achieve financial success and offer security, work and well-being for our personnel and contribute to the well-being of local communities, while also considering investors, customers, and other stakeholders. Sustainability at Nokian Tyres is guided by the Group strategy and values.

As part of Nokian Tyres commitment towards a more sustainable business, we have been a supporting member of the United Nations Global Compact (UNGC) initiative since 2015, and we follow the initiative’s ten principles that covers the areas of human rights, labour, the environment and anti-corruption. Nokian Tyres is further committed to acting in a manner required by the UN Guiding Principles on Business and Human Rights.

When it comes to sustainability – our ambition is high: Nokian Tyres wants to be seen as a sustainability benchmark in the industry – creating added value for people, the economy, and the environment.

1.2 Nokian Tyres & Natural Rubber

As one of the leading tyre manufacturers in the world, Nokian Tyres is a large consumer of natural rubber. Natural rubber is one of the key raw materials of the tyres produced by Nokian Tyres. It is therefore natural that we have a role to play in the journey towards a more sustainable natural rubber supply chain.

Natural rubber is a sustainable and renewable natural resource in itself. If natural rubber is cultivated, produced and processed in a sustainable way, it has the potential to bring positive social, environmental and economic impacts. Yet, at the same time, the sourcing/procurement of natural rubber in a sustainable way is considered to be the most critical stage in a tyre company’s supply chain. Natural rubber is typically cultivated in tropical forests, often on small family-owned farms. Most of the natural rubber used by Nokian Tyres comes from Malaysia and Indonesia. With more than 85% of the world’s natural rubber being produced by small farm holders, it is a well-known fact that the natural rubber supply chain is both complex and fragmented. 

The natural rubber supply chain includes farmers/plantations, dealers/intermediaries, processors, traders, manufacturers such as Nokian Tyres, and finally, consumers of rubber products. Generally, farmers/plantations sell the milky latex to local dealers, who in their turn sell the latex forward to processing plants. Thereafter, the processing plants purify the natural rubber, process it and sell it onwards to traders or directly to customers, such as Nokian Tyres. Nokian Tyres purchases natural rubber from processing companies and trading companies.

As a manufacturer that does not own natural rubber plantations or processing plants, Nokian Tyres is positioned at the end of the natural rubber supply chain. Due to our position in the natural rubber supply chain, and the complex nature of the supply chain, Nokian Tyres generally does not have direct access to the farmers/plantations of natural rubber, and transparency and traceability in the supply chain is therefore problematic. Regardless of this limitation, Nokian Tyres is committed to supporting and promoting the sustainable and responsible sourcing/procurement and use of natural rubber.

1.3 About the Sustainable Natural Rubber Policy

With the Sustainable Natural Rubber [Sourcing/Procurement] Policy (the “Policy”), Nokian Tyres’ goal is to contribute to sustainable business practice throughout the entire natural rubber supply chain, and thereby also contribute to a more sustainable development and future. With this Policy, our aim is to clarify and communicate Nokian Tyres’ commitments and our corresponding expectations on our suppliers.

The Policy covers various commitments related to social and environmental aspects, such as human rights, labour rights, and protection of the environment and biodiversity. The Policy is further aligned with the Global Platform for Sustainable Natural Rubber’s (GPSNR) policy framework and its eight core components.

Nokian Tyres reserves the right to revise, update and enhance this Policy, at any time, if considered needed in the light of the result and experience arising from its implementation in practice.  

 
2. NOKIAN TYRES EXPECTATIONS ON ITS SUPPLIERS

Nokian Tyres encourages all actors in its supply chain to strive towards the shared goal of achieving a more sustainable natural rubber supply chain. We hope that this Policy, and by actors within our natural rubber supply chain aligning with it, will be one step on the journey towards that shared goal.

Nokian Tyres expects its natural rubber suppliers to adhere to the Policy to the parts that it is applicable on them. In the context of this Policy, natural rubber supplier (hereafter referred to as “supplier” or “suppliers”) concerns traders and processing companies. Nokian Tyres further expects its suppliers to promote and cascade the principles and requirements of this Policy further down their own supply chains. Nokian Tyres expects its suppliers to use reasonably available means and efforts to ensure that relevant actors in their supply chain act in accordance with the expectations set in this Policy.

In addition to adhering with this Policy, Nokian Tyres requires its suppliers to, at a minimum, comply with all applicable laws and regulations in the countries where they operate. This includes, in particular, but not limited to, laws and regulations related to human rights, labour standards, land use and the environment.  Nokian Tyres condemns all forms of corruption, including bribery and extortion, and expect the same of its suppliers. Suppliers are also required to comply with Nokian Tyres Supplier Code of Conduct.

Nokian Tyres will prefer suppliers that act in conformance with the Policy. Nokian Tyres is committed to providing timebound requirements to its natural rubber suppliers for meeting the requirements in this Policy.

 
3. CARING FOR PEOPLE
3.1 Respecting human rights

Human rights belong to everyone and every human being has the right to be treated with dignity. Nokian Tyres acknowledge that the natural rubber supply chain is connected with social risks and may, in worst cases, have adverse impacts on the enjoyment of human rights.

In accordance with the UN Guiding Principles on Business and Human Rights (“UNGPs”), Nokian Tyres recognizes that companies have a responsibility to respect human rights. Nokian Tyres is committed to respecting and supporting all internationally recognized human rights, including the International Bill of Human Rights and the principles concerning fundamental rights set out in the International Labour Organization’s Declaration on Fundamental Principles and Rights at Work. In line with the UNGPs, Nokian Tyres seeks to avoid causing or contributing to any adverse human rights impacts and to prevent and mitigate any harm linked to their operations. Nokian Tyres expects the same level of commitment by its suppliers in regards of respect for human rights.

Nokian Tyres is further committed to maintaining a group-level grievance mechanism (in line with UNGP effectiveness criteria) appropriate for receiving complaints and providing opportunity to remedy adverse human rights impacts caused through production or sourcing/procurement, and expects the same in regards of its suppliers.

3.2 Promoting decent working conditions & living environment

Promoting and ensuring decent work is an essential aspect of sustainable and responsible development. Decent working conditions involves, for example, opportunities for work that is productive and delivers fair income, security in the workplace and social protection for families, and better prospects for personal development. Nokian Tyres is committed to conduct its business operations in a manner upholding the principles on fundamental rights set out in the International Labour Organization’s Declaration on Fundamental Principles and Rights at Work and expects the same of its suppliers.

The International Labour Organization’s Declaration on Fundamental Principles and Rights at Work includes the following categories and builds on the following conventions:

  • Freedom of association and the effective recognition of the right to collective bargaining (ILO C87 & C98)
  • Elimination of forced or compulsory labour (ILO C29 & 105)
  • Abolition of child labour (ILO 138 & 182)
  • Elimination of discrimination in respect of employment and occupation (ILO C100 & C111)

Nokian Tyres expects its suppliers to share its strive towards a more socially sustainable supply chain, where decent working conditions are promoted. Nokian Tyres is committed and further expects its suppliers, for example, to: 

  • Actively prevent child labour and ensure that no individual under the age of 15 or under the minimum age for work or mandatory schooling as specified by the local law, whichever is higher, is employed.
  • Provide its employees at least with the minimum wage as required by local laws. The wages paid to employees are further expected to constitute a decent living wage [1], based on and in accordance with reliable methodologies and calculations.
  • Provide employees with reasonable and fair working hours and ensure that employees’ working hours does not exceed the maximum set by the local laws or ILO standards.
  • Provide its employees with a safe working environment, and actively strive for prevention and minimization of exposure to health risks and accidents and provide employees with necessary personal protective equipment (PPE) to ensure a safe working environment.
  • Support and promote diversity and gender equity in employment practices.
  • Respect the rights of migrant and foreign workers and promote ethical recruitment practice and take reasonable steps to ensure that recruitment fees and other associated costs are not born by employees.
  • Provide all employees with written contracts in a language they can understand and that is specifying their rights and terms and conditions of employment.
  • Provide decent living conditions (e.g. adequate housing, access to drinking water and the right to food and food security) for employees working and living on site, and to support the same for local communities.
  • Encourage the development of local communities by fostering the economic, social and cultural rights of local communities, including through access to education and employment (the point concerns in particular natural rubber plantations).
  • Ensure that labour rights related safeguards apply to all employees, with no distinction being made on discriminatory grounds or employment status, such as contract, temporary and migrant workers, and that on-site contractors are granted the same level of labour rights as the supplier’s own employees. 
3.3 Promoting responsible land acquisition & respecting land tenure

In addition to applicable national and international laws and standards, Nokian Tyres acknowledges and respects the customary, traditional, and communal land tenure rights of indigenous peoples and local communities. Nokian Tyres conducts its operations in accordance with the UN Declaration on the Rights of Indigenous Peoples (UNDRIP) and encourages its suppliers to do the same.

Nokian Tyres is committed to not knowingly contribute, directly or indirectly, to actions which might lead to the illegitimate appropriation of land to the detriment of local communities or populations. To support this commitment, Nokian Tyres expects that its suppliers, if/when planning, establishing, restoring, or transforming corporate plantations and/or industrial sites, as well as associated infrastructure, apply the methodology and Guidelines on Free, Prior and Informed Consent (FPIC), developed by the UN-REDD Programme.

Further, Nokian Tyres expects its suppliers, for example, to:

  • Respect and protect customary, traditional, and communal land tenure rights
  • Avoid land grabbing practices and approaches
  • Provide adequate and fair remedy through appropriate, mutually agreed measures in cases where the supplier previously has caused or contributed to the appropriation of or harm to the lands, territories, resources or rights of indigenous people or local communities without securing FPIC. Implementation is jointly monitored by the community and the GPSNR member and/or by mutually agreed third party(ies).
  • Establish effective and culturally appropriate channels for dialogue with indigenous people and local communities

 

4. CARING FOR THE ENVIRONMENT AND CLIMATE

Natural rubber is, in itself, a sustainable and renewable material. However, Nokian Tyres acknowledges that the natural rubber supply chain can put strain on and may have negative impacts on the environment and the climate when not cultivated, produced or processed in a sustainable way. Nokian Tyres is therefore committed to promoting and supporting a natural rubber supply chain that is environmentally responsible. Our goal is to manage the environmental impacts of our products over their entire life cycle and we want to be an international industry leader also in terms of environmental matters.

4.1 Fighting climate change

Climate change poses a threat to the entire planet and all of its inhabitants. Climate change also poses risks to the tire industry by, for example, causing extreme weather that negatively impacts natural rubber producers. Nokian Tyres acknowledges that large companies, alongside nations, play a key role in fighting global warming and climate change. Nokian Tyres is committed to reducing its carbon footprint and have taken steps towards that commitment. We have, for example, set our own strict targets to combat global warming as a part of the Science Based Targets initiative.

Nokian Tyres expects its suppliers to join in the combat against climate change. Suppliers are, for example, expected to:

  • Manage their operations in a manner that minimizes and mitigates greenhouse gas emissions (including carbon emissions) and to actively seek for low carbon solutions, when possible.
4.2 Protecting biodiversity, natural forests, flora and fauna

Protecting and improving biodiversity is an essential condition for sustainable economic and human development. The increased global demand for natural rubber risks putting strain on biodiversity and forests by, for example, clearing forests for rubber plantations. Nokian Tyres supports the long-term protection of natural forests and other ecosystems and their conservation values, and supports restoration of deforested and degraded rubber landscapes. Although our own operations have little direct effect on biodiversity, our strive is to take such aspects even better into account and continuously improve our own performance.

Nokian Tyres expects its suppliers to share its strive towards a natural rubber value chain that takes biodiversity and healthy and functioning ecosystems into account. Nokian Tyres is committed and expects its suppliers to:

  • Support and promote the protection and preservation of areas of High Conservation Value (HCV) and High Carbon Stock (HCS) (the point concerns in particular industrial plantations).
  • Prevent deforestation by producing and/or sourcing natural rubber in a way not contributing to deforestation or degradation of HCVs, and to identify and manage areas for development and conservation in accordance with methodology and guidance consistent with the HVC[2] and HCS[3]
    • Natural rubber from areas that have been deforested or where HCVs have been degraded after the cut-off date of 1 April 2019 is considered to be non-conforming with this Policy.
  • Take steps to support the long-term protection of natural forest and other ecosystems and their conservation values, and to restore or support in the restoration of deforested and degraded rubber landscapes.
  • Commit to minimizing impact on biodiversity and to take steps to support the protection of wildlife (including endangered and threatened species).
  • Prevent air, water and soil pollution by applying proper processes and technologies.
  • Protect both water quantity and quality and to prevent water contamination (e.g. from agricultural and industrial chemicals), as well as erosion and sedimentation.
  • Protect soil quality by, including but not limited to, preventing soil contamination, erosion, nutrient degradation, and subsidence.
  • Take steps to ensure that fire is not used in new or ongoing operations for land preparation, land management, waste management, or for any other reason[4].
  • Promote the protection of peatland by taking steps to ensure that natural rubber is not planted on or sourced from known peatland.
4.3 Promoting resource efficiency

The increasing global demand for natural rubber causes increased pressure on the relatively limited geographical area in which rubber trees grow. Nokian Tyres is committed to continuously developing and improving our own products, functions, and production facilities to optimize material use of natural resources, including raw material such as natural rubber, and thereby minimize strain on the environment. Since 1995, Nokian Tyres and other companies in the tire industry established the Finnish Tyre Recycling Ltd in order to promote the centralized collection and utilization of tires nationally. As one of the original founders, we are involved in their work of looking for new ways to recycle and utilize tires, and thereby contribute to efficient use of resources. Nokian Tyres is committed to continuously optimize our consumption of natural resources overall.

Nokian Tyres is committed and expects its suppliers to:

  • Manage their operations in a manner that maximizes natural resource efficiency.
  • Manage their operations efficiently to minimize rate of energy usage, e.g. by applying proper processes and technologies.
  • Take action to reduce the amount of waste by, e.g. having systems for the collection, processing, and recycling of waste.
  • Take action to minimize water consumption by implementing water efficient processes.
  • Support trainings, and/or other types of knowledge and information sharing, for natural rubber producers, including smallholders, to improve yield and quality (the point concerns in particular processors and middlemen).
4.4 Environmental management

Nokian Tyres' goal is to manage the environmental impacts of our products over their entire life cycle. We want to be an international industry leader also in terms of environmental matters. Nokian Tyres encourages suppliers to move towards more environmentally friendly production. We also prefer suppliers with an ISO 14001-certified environmental management system.

Nokian Tyres expects its suppliers to:

  • Support a precautionary approach to environmental challenges
  • Strive to verify the origin of raw material in order to ensure compliance with the Policy
 
5. SUPPORTING ENCHANCED TRACEABILITY, SUPPLY CHAIN MAPPING AND SUPPLIER ASSESSMENT

Due to the nature of the natural rubber supply chain being fragmented and complex, visibility and traceability into the supply chain brings challenges. There are approximately 3–6 million farmers of natural rubber who collect the milky latex or cup lumps and sell them to local dealers, and more than 85% of the world’s natural rubber is produced on farms smaller than two hectares in size whose daily output may be just a couple of kilograms of latex.

Given the nature of the natural rubber supply chain and Nokian Tyres position within it, Nokian Tyres acknowledges that there exist challenges in achieving full traceability of the whole natural rubber supply chain. However, Nokian Tyres is committed to support initiatives leading towards increased traceability and mapping of the natural rubber supply chain, in order to be better placed to prioritize risk mitigation actions in the supply chain.

Nokian Tyres is committed to assessing the sustainability performance of its natural rubber suppliers. In line with this commitment, we already track the sustainability of our natural rubber suppliers with largest spend by conducting third-party sustainability audits and require all our new suppliers that are critical in terms of sustainability to fill in self-assessment.

Nokian Tyres supports and encourages its suppliers and actors within its supply chain to take appropriate steps to increased traceability and transparency, at a minimum to an appropriate jurisdictional level, in the natural rubber supply chain.

 

6. POLICY IMPLEMENTATION, COMPLIANCE & MONITORING
6.1 Implementation of the Policy

We admit that at the moment of the publishing of this Policy, we are not yet fulfilling or operating fully in line with all of the commitments made, and we are humble towards the fact that we still are on a journey towards achieving the target of a more sustainable natural rubber supply chain. However, this Policy reflects our ambition level, and it is our strong intention to meet the commitments made, and to implement all requirements arising from GPSNR.

To facilitate the implementation of this Policy, Nokian Tyres will identify existing gaps and create action plans support the implementation of its commitments. In the future, the aim is also to provide training on the Policy commitments for relevant actors. Although we might not be fully there yet, Nokian Tyres is committed to embedding commitments made in this policy into decision-making processes.

Nokian Tyres also aims to regularly engage with actors and stakeholders in its supply chain to support their conformance with the Policy. Nokian Tyres is also willing to participate in/support multi-stakeholder planning and policy efforts that uphold the GPSNR principles at a landscape, jurisdictional or other spatial level.

6.2 Non-compliance with the Policy

Nokian Tyres acknowledges that compliance with certain parts of the policy may bring challenges for some of its suppliers. However, we still expect all our suppliers to align with this Policy, to the parts applicable to them, and to actively strive for its successful implementation.

In case of proven non-compliance with the Policy, Nokian Tyres will together with the supplier develop an improvement program to move towards conformance with the Policy. Nokian Tyres is also committed to, together with the supplier, developing time-bound remediation plans for past or ongoing harm. If the non-compliance is severe, or if the agreed improvement plan is not fulfilled, Nokian Tyres may suspend and/or terminate the business relation with the supplier.

Nokian Tyres provides its suppliers and external stakeholders a channel to confidentially report any concerns and situations that may constitute non-compliance with this Policy. The whistleblowing channel is available by email at whistleblow@nokiantyres.com.

6.3 Monitoring and Communicating on Progress

Nokian Tyres is committed to monitor the implementation of the Policy and transparently communicate on the progress. Nokian Tyres commits to report publicly on the progress and outcomes related to policy related commitments on an annual basis on its webpage and in its annual report. Nokian Tyres also commits to set public, time-bound and geographic-specific targets for policy related commitments.   Nokian Tyres is looking forward to maintaining an active and regular dialogue with stakeholders to provide relevant information, and the opportunity for feedback and suggestions related to fulfilment of commitments made.

 

[1] Living wage should be understood as defined by the Global Living Wage Coalition; “The remuneration received for a standard workweek by a worker in a particular place sufficient to afford a decent standard of living for the worker and her or his family. Elements of a decent standard of living include food, water, housing, education, health care, transportation, clothing, and other essential needs including provision for unexpected events.”

[2] HVC Approach is to be understood as defined by the HCV Resource Network (https://hcvnetwork.org/)

[3] HCS Approach is to be understood as defined by the HCS Approach Steering Group (http://highcarbonstock.org/the-high-carbon-stock-approach/)

[4] With the exception of justified and documented cases of fire break establishment, waste management for sanitary reasons where public garbage collection is not available, phytosanitary and other emergencies.