No turning back on traceability
Leather manufacturers in Brazil are in dialogue with partners in the meat and livestock supply chain to put in place a national traceability programme. The path to traceability is complex, but a decision on which system to use is close now and, crucially, all parties agree that there is no turning back.
Brazilian tanning industry body CICB hosted a successful edition of its Sustainability Forum at Fimec in Novo Hamburgo in March. At this year’s event, the theme was ‘Paths To Traceability’ and a large audience heard presentations and comments from all parts of the leather supply chain. At no point was the complexity of the path to traceability more in evidence than in the animated panel discussion, chaired by CICB executive president, José Fernando Bello, that brought the forum to a conclusion.
Two of the four speakers, Francisco Olavo Pugliesi de Castro and Fernando Sampaio, represented meat and farming industry organisations. The other two, José Roberto Pachecco from Midori Autoleather and Alisson Granemann de Medeiros from Viposa, represented the leather manufacturing sector. What follows is an account of the main points of discussion.
The aim of the CICB Sustainability Forum was to help build consensus and partnerships across the value chain on traceability. In the discussion panel, though, Francisco Olavo Pugliesi de Castro’s pro-farmer colours were on full display from the outset.
Mato Grosso, where Mr de Castro is from, is home to 33 million head of cattle, which farmers there raise to help feed the world. He is a third-generation beef cattle farmer at a ranch called Fazenda Paulicéia near Rondonópolis; he is also a qualified vet. He has senior roles in the National Agriculture and Livestock Commission (CNA) and in a group working to eradicate foot-and-mouth disease from Brazilian farms. If Mato Grosso were an independent country, he explains, the only places in the world that would have larger cattle herds would be India, the US and what remained of Brazil. He is proud of the livestock-rearing traditions that his country, his state and his family can lay claim to.
Zero Deforestation on the doorstep
He accepts that the work to take traceability forward is essential because there is a real need to demonstrate that products from Brazil and elsewhere carry no link to deforestation. He says the CNA is completely committed to putting in place tools that farmers in all parts of the country will be able to use so that the commission can establish “a definitive traceability network”. A group has been working inside CNA for some time now to decide on the best tagging, tracking and biometric technology to use and is now putting the finishing touches to a proposal that he says the entire meat and leather value chain will be able to present to the federal government in the coming months.
Some aspects seem clear to him already. In terms of timing, for example, CNA’s proposal is for the traceability data-capture to take place not at the birth of the calf, but at the moment the animal moves away from the farm where it was born and begins its journey along the supply chain. Mr de Castro says the reasons for the leather industry’s desire to engage with its upstream partners on traceability are also very clear to him. He continues: “Naturally, the hides you use belong to our cattle first, but the first people who have to take on the responsibility of looking after the hides are the livestock farmers.” This makes them a fundamental part of any traceability programme the other stakeholders decide on and it means that how they present the technology to the farmers is of great importance.
He does not view moves to make the traceability system obligatory as a good idea. Instead, the farmers should choose to take part and comply willingly in chipping their animals and capturing the biometric data.
Packers’ punch
CICB executive president, José Fernando Bello, maintains that the tanners’ organisation has a good relationship with the livestock farmers that CNA represents. There is ongoing, meaningful dialogue and plenty of openness, he insists, but he accepts that the day-to-day discussions that leather manufacturers have on questions surrounding circularity, traceability and sustainability are much more likely to be with the meat companies. It is from the meat companies, after all, that they source hides, usually after the animals have moved several times along the supply chain. “Tanneries trade with the meat industry, but the strategic sectoral actions involve the entire production chain,” he says.
According to Fernando Sampaio, sustainability director at Abiec (Brazil’s meat exporters’ association), good traceability initiatives have already come to light in slaughterhouses and in tanneries, although he acknowledges that there is often a gap between the two when it comes to sharing data. In the face of this information gap, he believes it makes sense to divide this discussion into two parts because, for him, there are two connected but different fundamental questions to address here. The first is to find the best way to trace the animal’s path, from its place of origin to the slaughterhouse. That means tracing the identity of the animal, and of the farm and of the farmer, three crucial pieces of information.
Secondly, details of the animal and its health records have been in place for some time. This is essential for food safety requirements at home and in many export markets. But Mr Sampaio says a consensus has been building up for a long time that this needs to go further. “Our companies want Brazil to be the biggest and best exporter of meat in the world,” he explains. “That means having systems in place that work at the highest level too. In a country the size of Brazil, of course, it is a challenge to put new systems in place. Nevertheless, I can say that there is a very clear understanding among meat companies and in the ministry of agriculture that Brazil needs a new public policy on the traceability of cattle and meat.”
Four pillars
The follow-up question that arises from this centres on exactly what extra detail, what extra information a system needs to be able to capture to take traceability programmes forward. Fernando Sampaio raises the social conditions of workers and the impact on communities of indigenous people as obvious and important examples. There are tools available already that allow companies to include this information in the data they capture, but no common set of criteria about exactly what to include. “Different markets around the world have their requirements, as do individual companies,” he explains. “But there is something else. If a farmer fails to fulfil the criteria the system sets out, what measures will we be able to put in place to support that cattle producer to help things on the ground get better? Just to cross the farmer’s name off your list of approved suppliers doesn’t bring any improvement on the ground because the farmer would still be there, continuing to raise cattle in the same way as before.”
Four pillars he picks out are to put a traceability system in place, for the system to include well defined criteria and good controls, to have a programme to help farmers that do not initially meet the criteria to improve, and to have accurate mapping so as to be able to home in on the areas that present the greatest risk to the beef and leather supply chain.
Leather perspectives
From a leather industry perspective, CICB’s José Fernando Bello insists that serious work is already going on in tanneries to keep track of the provenance of hides and to share information with customers. Even so, commentators in all parts of the world still seem keen to speak and write about links they perceive between Brazilian leather and deforestation, “sometimes telling the truth, sometimes spreading lies”, and he wonders how leather manufacturers can build even stronger links upstream partners and make progress on this together.
Alisson Granemann de Medeiros, who leads on sustainability for Santa Catarina-based leather manufacturer Viposa, recalls that, within living memory, the only answer tanners needed to give to any question about where they sourced hides from was to identify the packer company or slaughterhouse. Not now. He explains: “Now, with such intense focus on deforestation in the Amazon and in other regions, questions come in every day asking us about the farm that supplied the packer firm and the farm that supplied that farm, all the way back to the animal’s birth. In the large universe of suppliers, it is often difficult to obtain data, but we see an evolution in this sense.”
He hopes new traceability tools will open up “a great opportunity for dialogue” with partners all the way along the supply chain. “Transparency is of the utmost importance,” Mr de Medeiros says, “and it’s a good thing for us to join forces with our partners in the supply chain to make sure we have in place the information our customers are asking for.”
A bit further north, in the state of São Paulo, automotive leather producer Midori runs an extensive operation, and has done for 50 years now, since its Japan-based parent group acquired a local leather manufacturer, Curtume Atlântica. Today, its manager for new projects is José Roberto Pachecco. In asking him for his thoughts on traceability developments, the CICB executive president makes the point that this whole debate comes, for Midori, in the context of the particular demands of the automotive sector. Customers in the automotive industry, Mr Bello says, are famous for being the most forthright of all in terms of the requests they make of suppliers.
Mr Pachecco makes the point that meeting the stringent demands of automotive customers does bring one benefit for suppliers: they are already used to working with traceability systems. “Product quality and product safety have been of great importance in the automotive industry for a long time, so, today, we have traceability [of where the car was assembled and of which companies supplied the raw materials] built into the process. We are used to that, but traceability for social and environmental reasons from automotive companies is increasing. We are under pressure to provide more precision for our automotive customers.”
He points out that car companies are serious in their pursuit of alternatives to leather and, as far as he can tell, not only because of price, but also because of genuine concerns about animal welfare and a genuine desire to respond positively to the preferences of consumers who want vegan alternatives. “It’s going to be a lot of work,” he says.
Money talks
Agreeing with this, José Fernando Bello points out that applying tracing technology of any kind to Brazil’s entire cattle herd will be a huge task; the herd is made up of 220 million head he points out. This will require substantial financial investment as well, and he asks Francisco Olavo Pugliesi de Castro where the funding will come from, prompting a frank response. “In rural communities,” he says, “no one will install new technology into their operation unless they see what they will gain from it. Cattle producers are not going to put those systems in unless there is a financial benefit for them. If it is clear to them that they will gain from this, I believe they will push implementation through quickly. But it’s knowing how to pitch this to farmers in rural communities that is the key. You have to make it clear to them that they will benefit.”
His answer to the question is that the market as a whole must pay for the technology because all players along the supply chain will benefit, including tanners, because they will have good access to hides that meet all the traceability requirements of brands and finished product manufacturers. “If one wins, we all win,” he concludes, “including tanners because you will have wider market access.”
Midori Autoleather’s José Roberto Pachecco responds to this by saying that passing any extra cost on to customers in the automotive industry will not be easy and could even push them to speed up the replacement of leather among some car companies. The other tanner on the panel, Viposa’s Alisson Granemann de Medeiros, expresses sympathy for this point of view. He argues that leather manufacturers who have worked hard on previous projects to demonstrate the sustainability of the material they produce have been through this before. “The difficulty is in being able to say specifically what the added value of the new initiative will be,” he explains. But Mr de Medeiros also expresses optimism about the value-add a country-wide traceability technology solution could bring, with all the stakeholders involved benefiting.
CICB’s Mr Bello wonders if car companies that choose to use synthetic fibres instead of leather in seat covers will, in addition to having to work with lower-quality materials, face a second problem. He asks if the car makers will be required to put in place traceability programmes for the synthetic materials too. “Will they have to find out which barrel of oil provided the raw material for the fibres?” he asks.
The road ahead
No one on the panel imagines that the producers of synthetic materials will ever have to jump through that particular hoop, but they accept that in the beef and leather supply chain there is no turning back on traceability now. “It’s a path of no return,” Francisco Olavo Pugliesi de Castro says. And on behalf of meat exporters, Fernando Sampaio says he is sure too that the traceability technology system will become part of the value chain in the near future. “This is what the market is demanding, so, yes, there is no turning back,” he says. “This is an important period of change.”
José Roberto Pachecco also agrees, saying the automotive industry is not willing to wait for this any longer. “The path is there in front of us and there is no turning back,” he says, “so let’s move forward.”
Precisely for this reason, his leather industry colleague, Alisson Granemann de Medeiros, says he hopes for agreement soon on exactly what tool the Brazilian livestock, meat and leather sectors will use to make progress along this path. “That’s why this edition of the CICB Sustainability Forum will prove to be important,” he says. “This is where we can bring the discussions we have been having to a successful conclusion, bring any remaining doubters on board and move forward together.”
