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In plain sight

  With responsible leather manufacturing still a key concern for the industry, Sarah Swenson, environmental manager, and Jon Clark, chief executive officer, both of PrimeAsia – renowned manufacturers of high-quality lifestyle and sports leathers for footwear, apparel and goods – dissect why transparency is vital for progress.

  Transparency in the leather industry – an often-misunderstood business – is vital because of the speed of global data exchange and communication in today’s world. The leather industry has lagged behind providing transparent data and communication of how the industry operates today and its goals for the future. Past negative experiences with the media or non-governmental organisations have made some industry members hesitant to become more transparent. However, without increasing transparency, the industry is likely to become even less accurately understood and a target for further inaccurate campaigns. PrimeAsia promotes the stance that company information including environmental, health and safety, workers rights, industry challenges and tanning technologies must be available and discussed among its stakeholders to provide a clear perspective of responsible leather manufacturing.

Now you see me

  PrimeAsia has become transparent by providing data on the company’s goals, challenges and performance in many forms, but most importantly by publishing the company’s annual report. PrimeAsia’s annual report follows the Global Reporting Initiative guidelines, which disclose the environmental,economic, social,human rights and product responsibilities of the company.PrimeAsia published its first report encompassing 2012 data in mid-2013 and will be publishing its second report on 2013 data in mid-2014. These reports provide stakeholders with clear measures to evaluate the actions and progress of a company against its goals.Since PrimeAsia’s 2012 annual report,the company has reduced energy usage by 5%, kept water usage at the same level and decreased waste output by 21%.

"The leather industry has endured multiple negative campaigns against using natural leather for consumer products based on old reports and segments of the industry not compliant with current regulations. "

  PrimeAsia’s tanneries greatly decreased water usage after joining the Leather Working Group in 2007 – around 40% companywide – by implementing major water-recycling systems. More complex leather products, increased small-order levels and average batch size decreasing from 650ft2 in 2008 to 500ft2 in 2013, made further water reductions a challenge at PrimeAsia. A challenge the company is working to solve by installing smaller tanning drums and developing new leathers.Transparency allows stakeholders to understand the challenges as well as progress towards goals.

  The majority of the data within the PrimeAsia annual report has been verified during a Leather Working Group (LWG) audit. The tannery being LWGaudited provides resource invoices, wastewater treatment reports and operating permits among many other forms of data to a third-party observer.The LWG offers a collaborative platform where all tanneries are held to high

PrimeAsia by numbers

  2,184 Hours PrimeAsia employees donated last year to local community projects such as environmental cleanups. This represents an increase of 27.8% from 2012.

  50 Hours a year PrimeAsia employees participate in covering subjects such as health, safety, quality and the environment.

In 2013, PrimeAsia employed:1,012 women 1,309 men

Fight the good fight

  The leather industry has endured multiple negative campaigns against using natural leather for consumer products based on old reports and segments of the industry not compliant with current regulations. If the leather industry does not start publishing and providing current data and best practices in action, all industry outsiders will grasp are the negatives of using leather.

  The current debate about chrome VI in leather is one example. Well-managed tanneries practising current technologies are not manufacturing leather with chrome VI and neither do they emit chrome VI in their wastewater. Due to a few underperforming tanneries that fail regulations, chrome-tanned leather is labelled as an environmental hazard. Leather is tanned using chrome III,which is an important trace metal ion essential for living species, and the average concentration of chromium III in the Earth’s crust is around 100ppm.Chrome-tanned leather is safe and has unique performance properties, similar to stainless steel that also uses chrome,which cannot be matched identically by any other tanning method. Yet the true facts of chrome’s role in the leathermanufacturing process have often been inaccurately portrayed in media sources,leading consumers to register chrometanned leather as unsustainable, which it is not. To solve this lack of transparency,the leather industry cannot solely depend on experts writing articles stating the facts of current leather manufacturing. Everyone in the industry needs to participate in the education of their stakeholders to reverse the domination of negativity surrounding many common leather topics.

"Since PrimeAsia’s 2012 annual report, the company has reduced energy usage by 5%, kept water usage at the same level and decreased waste output by 21%."

  Education of stakeholders can be accomplished in numerous ways,including environmental seminars for tannery employees, discussing changing leather technologies with brands and ensuring local communities understand what the company is doing to guarantee a safe and healthy environment.

  PrimeAsia lists its stakeholders in the stakeholder section of the annual report (section 4.24). The next section (4.25) reports on the way the company identifies and selects stakeholders with whom to engage. PrimeAsia collaborates with multiple stakeholders throughout the supply chain including leading training for employees, discussing relevant topics with customers, seeking to educate consumers about leather and providing leather manufacturing tours within PrimeAsia’s tanneries. Communication channels need to be developed so that brands and nongovernmental organisations seek out members of the leather industry for answers to questions, rather than using out-of-date reports. It is essential that stakeholders throughout the leather industry all take a role in providing accurate and clear information about today’s leather manufacturing. Some customers already require multiple forms of information from tanneries including energy, water, waste and human-rights data. However, the industry needs to go further to explain the reasons for challenges and progress within its data.If the industry cannot clearly explain why failures or achievements are happening, then the public will start making their own conclusions.

One for all

  The leather industry as an entity is blamed for violations of regulations and a lack of transparency. Thus, as an industry, it needs to collaborate to improve the accountability of all members, providing momentum to those struggling. Those in the industry who are underperforming need to be held accountable for providing action plans to start meeting regulations. As the top leather industry participants move forward towards further transparency, there is an even greater disparity between the members of the industry left behind. The media and consumers view the leather industry as a whole; what one segment fails to accomplish, for example, a well-run wastewater treatment plant, affects the entire leather industry’s achievements. It is up to the leather industry and not only the brands and governments to hold other members accountable for their actions.

  While the industry is often divided over issues, best practices should be shared and developed in industry-wide organisations such as the Leather Working Group and Leather Naturally!. Industry organisations seek to provide forums for leather stakeholders to discuss industry topics and hold other members accountable before disseminating the data and results to the wider public.

  Transparency shows compliance to stakeholders and provides supply chains with the information necessary to make fast changes according to today’s dynamic world of manufacturing. These past several months in the leather industry have shown that members who cannot learn and adapt will not be able to be able to keep up in an ever more dynamic supply chain. Transparent data provides the supply chain and stakeholders with an understanding of the rapidly changing progress, goals and challenges within the leather industry. More importance and pressure will be placed on supply chains to show improvements in the environmental, and health and safety fields. If the leather industry fails to become transparent, it risks being sidelined from important supply chain discussions because the assumption may be that the leather industry is not changing. The leather industry needs to show progress through transparent data to verify that leather is not only a heritage material but an innovative solution.

The preferred procurement policy

  Over a number of years, while PrimeAsia has seen a growth in its annual production, it has experienced a decrease in average order size, as a result of the changing dynamics of its customers’ markets. PrimeAsia’s average annual leather consolidated batch size decreased from 650ft2 in 2008 to 500ft2 in 2013.

  PrimeAsia understands the importance of a sustainable supply chain and seeks to engage and purchase from suppliers who have similar sustainability visions. To advance this priority, PrimeAsia instituted a preferred procurement policy, which sets certain sourcing requirements for wet-blue hides and chemical suppliers. These requirements include restricted substance testing, LWG audits for wet-blue suppliers,and demonstration of upstanding environmental management in all aspects of suppliers own manufacturing and sourcing policies.

  PrimeAsia employees are free to join collective bargaining groups – 49% of PrimeAsia employees belong to collective bargaining agreements, the vastmajority of whom are Vietnamese.

  For further information, read PrimeAsia’s annual report sections Procurement Practices,and Freedom of Association and Collective Bargaining.

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