Maintaining leather supply chain integrity

Mossel Bay, W. Cape, SA (10 January 2022) - Tanneries are aware of and under pressure to comply with a myriad of local and national regulations to continue their operations and stay in business. While there are many rules in place governing various aspects of tannery management, solid waste disposal, quality of effluent discharged, and air emissions are just a few.

During the last decade, the world has changed for tanneries. They must not only comply with local and regulatory authorities, but also conform to protocols set by non-governmental organizations that play a role in the determination of market access.

Traceability, animal welfare, and sustainability have been part of the bigger picture for many years, but more recently, these specific areas are under constant pressure to improve. To illustrate, as an example, many customers now require that the tannery with whom they do business must become a member of the Leather Working Group to maintain the business relationship. The reality is that there are no penalties, or fines, or close downs of enterprises; companies that do not fulfil the requirements and parameters set out by LWG are simply cut out of the supply chain. 

The leather industry probably has one of the most extensive supply chains, starting with farm location, farming procedures, and animal welfare. In addition to these factors, there is pressure to reduce the use of chemicals in the tanning and finishing processes that may adversely affect the health of the retail customers. In this complex supply chain structure, tanneries are pegged in the middle to ensure the flow of product. 

The tanning industry has often had a negative image, so a universal benchmark, such as the one set by LWG, is necessary to assure customers that the tanneries comply with  specific operational standards. 

LWG audit of certification assesses the environmental performance and compliance of tanneries.  The following aspects are audited:

 

 

Several CKI customers requested the group to join LWG as a member, which implied that both our tanneries would require auditing. The pressure to achieve successful audits for both tanneries was substantial as the continuation of business with these customers is vital. It would also have been disastrous had one tannery not passed. Since the merger in 2019, the two tanneries have progressed well as far as the integration of production is concerned. Thanks to hard work by our dedicated team, both tanneries were certified as LWG members. 

Personally, one of the outstanding positive experiences with the audits was the technical competence of the CKI staff responsible for their successful completion. I am not sure if we would have made it without their commitment. Credit also to Jutta Knoedler, the auditor who had the difficult task to do the audit via Teams. Proper preparation of all documentation was key to make the audits a success.   

 

We learned a lot about our own business with the LWG Protocol 7 which is setting the basis on how tanneries will need to be managed in the future. Every person involved (not just senior management) in the areas covered under the audit must be trained throughout their tenure (not just when the audit is due) about LWG Protocol 7, develop a general responsibility based upon it.

My observation is also that if a tannery wants to maintain its LWG certification in future, the appointment of staff with tertiary training in chemistry will be a necessity. To call in consultants on an ad-hoc basis to assist with the audit may work, but it will be costly; it thus becomes crucial to employ key staff with proper understanding of science. While management will make day-to-day decisions regarding the processes within the tannery in accordance with LWG requirements and relevant in-house cost compliance, an in-depth understanding of tanning science and forward thinking will be essential. 

There is also consensus that LWG Protocols are setting universal benchmarks for operational production processes within tanneries. LWG certification requirements will be evolving, and with audits biennially, tanneries will be hard pressed to keep up - environmental pressure on the industry will not relent. I am however of the opinion that with the third audit that the audit interval should be extended triennial intervals. 

All aspects for the industry, especially for exotic leather, are not covered by the LWG Protocol 7. The exotic tanning industry must discuss these aspects with LWG as to ensure universal benchmarking.

LWG certification was one hurdle that CKI successfully cleared. The next obstacles that lie ahead are animal welfare and clear traceability throughout the industry. Good progress has been made during the last 3 to 4 years. Currently 100% of leather sold is traceable to its source and animal welfare certification is at 90% compliance. A total of 350 ostrich farms must be  audited to achieve 100% animal welfare compliance. The administrative infrastructure required is substantial and costly as customers expect every individual ostrich skin that is sold must be verified that it originates from an animal welfare-certified farm.

Fortunately, the South African ostrich industry is well organized; it takes all welfare and environmental demands that have contributed to the increased demand for ostrich leather. The management of animal welfare, traceability, and biosecurity is overseen, administered, and controlled by the South African Ostrich Business Chamber. The reality is that the system is based on the integrity of all role players; constant communication is the key to ensure success.

Despite all its efforts to comply with the rules and expectations of the market, the leather industry in general will remain under constant pressure. It is just not acceptable that the industry is in the news for sensational negative news on the front pages. It is a tough challenge for the tanning industry to be in the general news for the right reasons. Take the COP26 as an example: the leather industry was well-prepared to put its case forward, and even with the support of HRH Prince Charles, the issue was outdone by a frenzied media, focused on Stella McCartney and her views.

Fashion brands use leather to make the most iconic handbags and accessories and in so doing generate in many instances close to 50% of their turnover, yet genuine leather is just not recognized for its contribution. Where is the problem? Is it that brands do not want to recognize that their customers’ first choice is genuine leather or is the problem with the leather industry being caught up in the idea that they are only involved in the industrial marketing of leather? 

The latter may be the problem in our approach.