May 29, 2007
REPORT ON ECO-LABELLING CONFERENCE AND WORKSHOP
Ninety-one participants attended the conference across the country, primarily from various federal government departments, with representatives of six provinces (including PEI), and only three harvester representatives (NS, PEI and BC). The meeting was hosted by DFO and co-chaired by Kevin Stringer, national Director General Resource Management, and Lori Ridgeway, Director General International Policy and Integration. Presentation by Lori Ridgeway: The workshop was called to inform industry of the situation regarding eco-labeling. While certification and eco-labeling are not new issues, now there is increasing pressure and urgency with some threats of de-listing Canadian fish products that are not certified. An eco-label is a voluntary market-based incentive for sustainable and responsible fisheries and aquaculture and is considered a "seal of approval" given to products deemed to have fewer negative impacts on the environment than functionally or competitively similar products. It includes both a certification plus a label (if a chain of custody can be demonstrated) and requires the payment of a licensing fee. Eco-labels are now squarely in debate as part of market-based incentives to encourage sustainable management - they are here to stay. They are being used by large food suppliers and retailers to ensure product health and safety, sustainability, legality, country of origin and a host of other emerging standards and issues. Tracking and traceability are common elements of the process. No separate Canadian eco-label exists. It would be too costly to develop and the independent labels have already established themselves with multinationals. In keeping with the United Nations Food and Agriculture Organization’s (FAO) guidelines for harvest fisheries, Canada accepts the Marine Stewardship Council (MSC) as the most appropriate eco-label. MSC certification can be costly with certification for an individual fishery or unit thereof costing a minimum of $75,000. Certification for Canadian Sockeye Salmon has already cost some $400,000 and is not yet certified. In-kind DFO contribution is estimated to be close to $300,000 for this one fishery. Canadian fisheries currently seeking formal certification are the BC salmon fishery, Pacific halibut, Canadian Northern Prawn trawl fishery, Gulf of St. Lawrence shrimp, BC dogfish and Pacific hake. MSC does not yet certify aquaculture, but is developing a program. MSC is a permanent fixture in eco-labels. A federal-provincial forum will be held in June and DFO is orienting its policies and checklists to better align the Canadian fishery to eco-label requirements. Ocean to Plate Approach and The Resource Management Sustainable Development Framework: Kevin Stringer: External pressures such as the cost-price squeeze (dollar up 41% in 4 years, fuel up 55% in 4 years, etc.), changing environment conditions and the failure of aquaculture to achieve its expected potential have exposed a series of internal weaknesses in the industry such as overcapacity in harvesting and processing, lack of integration between harvesting and processing, an aging workforce and reliance of EI, and government policies focusing on maximizing employment not efficiency. The result is short seasons with a race to harvest and process, lower quality and an inability to market Canadian fish products effectively. Especially vulnerable are resource-reliant coastal communities. DFO resource management objectives are changing from the old "maximum sustainable yield" to an eco-based system using the precautionary approach. The strategy to implement these objectives includes addressing market factors, such as eco-labeling, and socio-economic issues in support of the long-term sustainability of the resource. These objectives are supported by policy initiatives such as Capital Gains Tax Exemption, EU Shrimp Tariffs, Quebec Temporary Allocation, Seafood Value Chain Roundtable and Preserving the Independence of the Inshore Fleet. Resource management has drafted a Fisheries Sustainability Checklist to follow in monitoring progress in management of each species, developing stewardship profiles to establish stock-specific profiles to advance sustainability, and will develop an overall report on Progress Towards Sustainability to meet international commitments and public/market pressure. The Future of Eco-Labeling/Certification: John Sackton, Seafood.com: In the past ten years there has been a major multinational corporate buy-in to the eco-label approach. MSC is the "gold standard" eco-label accepted by Wal-Mart, Unilever, Tesco, etc. It has come closest to meeting FAO guidelines. Major retailers want to build customer trust in their brand and secure a reliable seafood supply chain. Their overriding goal is building brand loyalty. Eco-labeling is the biggest single change in the industry since 1997. While eco-labeling addresses major issues, other concerns such as contamination, mislabeling, adulteration of product, black market shipments, and questionable product treatment still must be dealt with by governments. Eco-labeling is not without its critics in the fishing industry, governments and non-government organizations (NGO’s). Not all retailers want the same eco-labeling scheme, the FAO is concerned that poor countries will not be able to meet certification standards, some governments see certification as an intrusion on sovereign activity, some NGO’s worry about too much industry influence over the process and proponents are divided over what sort of approach to take towards aquaculture. Food safety is a major consideration and cannot be voluntary; traceability is vital. Traceability is the ability to know the vessel, method, date and location of capture. It includes processing parameters of what factory, what additives, what location, what other products are processed there, lot numbers etc. Import and lab inspection certificates are included as are the time and temperature handling until delivery. Full safety and economic integrity issues will force full consumer disclosure for seafood processes that are now unregulated. The challenges for eco-labeling are how to become part of traceability within the supply chain and how to normalize costs. It will not command a retail price premium. It is a cost of doing business and retailers will not absorb this cost. Wal-Mart: Wal-Mart has 6,792 stores worldwide and has committed to purchasing all wild-harvested seafood products only under the MSC label within the next 4-years. The Wal-Mart Seafood Sustainability Network vision sees stable and/or restored ocean fisheries meeting present and future consumer needs; wise global management of the ocean commons; certified sustainable fisheries and aquaculture worldwide; and seafood practices that do not threaten species with extinction. In the wild fishery, Wal-Mart attained assistance in 2004 on sustainability issues from Conservation International. In 2006 the company approved the Marine Stewardship Council (MSC) certification program. In 2007 projected sales volume of MSC certified products is $72 millions. Wal-Mart is now looking at certifying farmed fish products under the ACC certification program. By 2008 the company will buy farm-raised shrimp only from ACC certified sources. Sustainability is now a way of life for Wal-Mart, a road map to the future. Unilever: Unilever sells products in 100 different countries and has an annual sales turnover of 42-billion EU dollars. The company polling shows that NGO’s have more credibility with the consuming public than do corporations or governments. There is increasing public awareness of "overfishing" issues and responsibility is being delegated to the brands to take action. Consumers are looking for more holistic propositions that fit into their wider lifestyle and reflect their environmental and ethical concerns. Unilever has three motivations regarding fish sustainability: to secure a long-term supply base; to meet consumer expectations; and to earn/maintain the license to operate. To this end Unilever has pledged to buy all its fish from sustainable sources; i.e. MSC label as a credible, independent seal of approval. Unilever feels that only one eco-label is appropriate, the MSC label. Unilever continues to be committed to buy all its fish from sustainable sources; Unilever continues to use the MSC label as the only eco-label on its fish products. It will take some time, but the company sees eco-labeling as a key element to sustainable fish sourcing and sales on both the supply side and the consumer side. The MSC Certification Process: Tavel Certification Inc. Tavel Certification Inc. is an independent consultant/certifier for the MSC program based in Halifax, N.S. There are three principles to the MSC approach to sustainable fishing: Condition of Candidate Stock – maintenance or re-establishment of healthy target population; Impact of Fishery on Ecosystem – assess and reduce impacts to maintain/improve ecosystem integrity; and Fishery Management Systems – develop/maintain fishery management system to effectively implement the above. A certification body approved by MSC to provide independent certifications to the MSC standards conducts the certification process. The certification body will contract a team of experts to assess the candidate fishery. A unit of certification is a fishery or fish stock (a biologically distinct unit) combined with the fishing method/gear and practice (vessels pursuing the fish of that stock). Certification can be defined by the management system boundaries and may include one or several stocks. The client is the entity responsible for the candidate fisher certification and may be a fishery organization, a company or a government department. All contracts must include an option for others in the same fishery to "buy-in" to the certification. Certification does not allow "free riders" or "exclusion of competitors." There are five major steps in the MSC certification process: Pre-assessment – gap analysis Prior certification assessment contract Certification assessment Reporting/conditions/certificate Post certification and chain of custody – annual surveillance audits It is a lengthy and complex process. To achieve timely results at reasonable cost it is suggested that the client study and understand the certification process. A pre-assessment should be done as soon as possible. The unit designated for certification and the potential conditions that might be imposed should be considered carefully prior to signing a full assessment contract. All affected stakeholders should be informed early on in the process. The client and science/resource management must communicate early, defining the support required and when, and developing a realistic timeline. It would be in the best interest of the client to contract a project manager to oversee its part of the process and to deal with certifiers, science and resource managers. The MSC: Governance and Organization: The Marine Stewardship Council is a fully independent international not-for-profit organization since 1999. Its specific aims are to contribute to reversing the decline in global fish stocks, deliver improvements in the marine environment, and contribute to securing fishers livelihoods. MSC offices are located in London, The Hague, Seattle, Tokyo and Sydney, Aus. It has a 15-person board of directors from various international locations, a technical advisory board of 15 people, and a 35-50-person stakeholders council representing fisheries, processors, government, NGO’s and academia. The demand for MSC certified fish is 23% of US retail and 16% of US foodservice. There are now 115 labeled products in the US. In the UK and Europe demand is coming from 60% of the retail market and 40% of foodservice market. There are over 400 products labeled in the UK and Europe. 84% of consumers would like to buy sustainable seafood if it was labeled and 90% of consumers want a label on products or on menus. The three MSC Standard principles of the sustainability of the stock, ecosystem impact and effective management are rigorous standards with strong roots in the FAO Code of Conduct for Responsible Fisheries. While MSC is well based to examine larger fisheries, it is working to develop guidelines for assessing data-deficient and small-scale fisheries (<30m.t. landings). It is developing a risk-based approach utilizing traditional ecological knowledge. Field trials are planned for this year. Mixed fisheries can also be certified; i.e. Alaska salmon (5 species, multiple gear types, 16 management units). To receive MSC certification a fishery must achieve a rating of 80% on a range of 90 separate indicators. MSC does not look at social or allocation issues; these are seen as being the responsibility of sovereign governments. Other fisheries now undergoing the MSC certification process: Maine lobster, English Channel lobster, California Dungeness crab, Japanese snow crab, Japanese flathead flounder, Gulf of St. Lawrence shrimp, Northern shrimp, UK mackerel and herring.
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