Vietnam Rubber Group: Good Practices in Sustainable Rubber Forest Management

3:27:53 PM | 11/28/2022

Vietnam Rubber Group (VRG) accounts for only about 30% of the country's rubber area and output; however, it has always played a pioneering and exemplary role in sustainable rubber industry development and sustainable rubber forest management certification. Sustainable development is also one of VRG’s important policies to achieve three goals: Economic development, Environmental protection and Responsibility to the community and society.

Mr. Nguyen Van Thang, Chairman of the Board of Directors of Dong Nai Rubber Corporation (4th from left), receives the certificate of recognition as one of the Top 10 Sustainable Development Businesses in 2021

Environment-friendly and supportive of the community

The rubber tree in Vietnam originated from the Amazon forests (South America). Introduced from Indonesia in 1897, after 125 years of development, the tree has become an important multi-purpose and cash-earning crop for smallholder farmers in Vietnam. Currently, the rubber industry contributes over US$7 billion in export value every year and generates incomes for more than 500,000 people in natural rubber and rubber wood supply chains in Vietnam.

VRG has experienced various ups and downs during the long development of the Vietnamese rubber industry. From 78,000 ha initially assigned for management in 1975, VRG has to date developed more than 410,000 ha, including 110,000 ha abroad.

VRG defines sustainable business development as one of the important policies on operations of Vietnam's rubber industry and ensures economic development goals together with social responsibility and environmental protection. The group has developed policies and programs for sustainable development in the 2019-2024 period with 10 specific targets as the foundation and orientation for its sustainable development activities. VRG's sustainable development strategy also insists social responsibility be implemented throughout VRG, including its member companies. Legitimate rights, incomes and livelihoods of employees are always guaranteed by law and based on business performance.

VRG always tries to improve the incomes and the livelihoods of employees

The traditional relationship with the local community is further enhanced through VRG's continued contribution to the Government's rural development and poverty reduction programs. When it invested in Laos and Cambodia, many social security investment projects launched by VRG and its members have been highly appreciated and announced by host governments in many media. At the same time, the group has been increasingly trusted by local people who have become employees of VRG and its member companies.

VRG pays special attention to environmental values by applying new technical measures to reduce carbon emissions in production: Reducing chemicals; Growing with more organic fertilizers in use; Installing solar power for rubber processing plants; Building new latex processing processes to reduce electricity and diesel oil (DO) use by 40%; and Using advanced biological waste treatment technology to reuse 1.5 million cubic meters of treated wastewater a year for production (accounting for 25% of total water use). VRG always complies with the current Law on Environmental Protection in Vietnam. Presently, all wastewater treatment facilities of the group meet Vietnam's national standards on wastewater quality.

VRG pays special attention to sustainable development of rubber trees

VRG is the largest agricultural firm in Vietnam, with a registered capital of VND40,000 billion and 126 member companies, which manage huge land resources and operate in relatively large areas in key economic, security and defense regions like the Southeast, the Central Highlands, the Central Coast, and the Northern mountainous region. At the same time, the group has invested in developing rubber farms in Laos and Cambodia. As VRG always pays attention to biodiversity conservation policy, the firm has successfully planned 5,000 ha of natural forests and will expand protected natural forests to 20,000 ha by 2024.

VRG is currently promoting effective development in five core business areas: Growing, harvesting, processing and selling rubber; Rubber industry; Wood processing; Infrastructure investment in industrial zones on rubber land; and High-tech organic agriculture. During its operation, VRG is recognized as an excellent leader in sustainable development, based on three pillars: Economic development, Responsibility to community and society, and Environmental protection. This is not an easy path for businesses, especially when their business operations are being severely affected by the epidemic.

Promoting sustainable forest management

VRG is currently promoting Sustainable Forest Management Certification for rubber forests according to the Vietnam Forest Certification Scheme (VFCS) and the PEFC CoC Chain of Custody for its member units. In 2019, more than 11,400 ha of rubber was certified VFCS standards. In 2020, an additional 45,000 ha was certified and 100,000 ha was grown according to a sustainable forest management plan. In 2022, 300,000 ha of rubber forests in Vietnam will be certified.

VRG's leadership has devised a development strategy to 2025, with a vision to 2030. Particularly, the group regards sustainable development as a vital trend that every business must achieve if they want to survive in the current period of international economic integration, embedded with three pillars: Economic development, Responsibility to community and society; and Environmental protection. In 2019, the group had 10 affiliated companies recognized as the “Top 100" sustainable businesses in Vietnam. It had 14 units and 20 units in the Top 100 in 2020 and in 2021, respectively.

VRG will continue to expand sustainably managed rubber areas and certified forests in the coming time. Vietnam's sustainable forest management certification is of great significance to developing the market for legal, clean and traceable wood materials for wood processing and woodwork export. This also affirms the active implementation of sustainable forest management and forest certification, especially when Vietnam's forest certification system has been recognized worldwide.

In the following years, VRG will continue to effectively reconnect with the Forest Stewardship Council (FSC); develop a plan to grow 5,000 ha of forest and a geographic information system (GIS); reinforce sustainability certification by expanding the area for Vietnam's VFCS/FM sustainable forest certification; applying sustainable production techniques for rubber latex and rubber wood as well as cooperate in building solutions for forest conservation and forest restoration and regeneration techniques that meet FSC conditions for sustainable development of Vietnam's rubber industry and for sustainable management and development of the forestry sector as a whole.

By November 2022, 16 member companies of VRG were certified VFCS/PEFC-FM sustainable forest management for over 106,000 ha and 28 factories were certified PEFC-CoC Chain of Custody. In 2022 - 2025, VRG targets to have 139,000 tons of natural rubber and 970,000 cubic meters of wood, certified with VFCS/PEFC and to join the global supply chain.

VRG's sustainable development mission poses many challenges but also provides many opportunities to realize its vision and mission. In addition to mobilizing and upgrading all internal resources, VRG will continue to strengthen and expand cooperation with domestic and international organizations to update knowledge and approach the trend of the times, share practical experiences and enhance communications on its sustainable development results.

Tran Huynh (Vietnam Business Forum)