In July 2023, US Congress Senate Finance Committee Chairman Ron Wyden sent a letter of enquiry to car seat giant Lear regarding leather procurement in Brazil.

The environmental NGO EIA and others are investigating Brazil’s leather industry, claiming that illegal ranching is destroying Amazonian forests and that poor working conditions are a violation of human rights. Against this backdrop, Lear, which holds approximately 20% of the global market share for automobile leather seats and procures 70% of its leather materials in Brazil, has been singled out as a target. Depending on the results of the investigation, this could spread to other companies in the industry.

However, Brazil’s exports of cowhide peaked in 2014 and have been in steady decline, and the correlation between car seats and illegal logging in the forests is still unclear. And Lear states that “if there is a problem with a supplier, we will switch to a supplier that does not have a problem”, which seems to indicate that it is only a supplier problem.

However, it should be noted that the purpose of the question in this case is “to ask the upper levels of the supply chain about compliance with the supply chain as a whole”. This is similar to the question of who bears the licensing costs of standard-essential patents (SEPs). In the automotive industry, suppliers have customarily borne the SEP costs, but recently a precedent has been set that the car manufacturer should bear the costs.

The need for greater compliance at the upper levels of the supply chain may provide an opportunity to stimulate demand for recycled materials, whose high cost has been a bottleneck to their widespread use.