Third Party Certification: Challenges & Opportunities
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1 Third Party Certification: Challenges & Opportunities Dr Michael Harte National Manager - Marine -Australia Seafood Directions October 2011 SFNI
2 About Who are - Australia? Part of the International Network, the world's largest and most experienced independent conservation organisation The largest conservation organisation in Australia, with more than 80,000 supporters and active projects throughout Australia and the Oceania region Works to conserve Australia's plants and animals, by addressing climate change, driving market transformation and preserving and protecting freshwater, marine and land environments and species Focus on conserving biodiversity and reducing our footprint Science based and solutions orientated 25 October
3 Transforming Markets Context The Seafood Industry A billion people in the world rely on seafood. Many, many millions more enjoy seafood as part of a healthy diet. Over the next 40 years, the demand for seafood will grow, as the world s population increases by almost 30 percent. As a conservation organization, cares about how the demand for seafood impacts fish stocks, the marine environment and communities dependent on fishing. Brian J Skerry Na8onal Geographic Stock Jürgen Freund / - Canon Michel Gunther / - Canon 25 October
4 Transforming Markets Using markets to change sector environmental performance works to conserve the world s biological diversity, ensure that the use of renewable natural resources is sustainable, and promote the reduction of pollution and wasteful consumption. s market transformation strategy helps us do this by: Engaging with multiple stakeholders to develop environmental standards and voluntary certification schemes; Seeking out one-on-one engagements with strategic corporate partners to promote responsible sourcing throughout the supply chain; and Promoting responsible commodity investments with the financial sector. 25 October
5 Certification Basics Seafood certification For what purpose? Identify seafood products that meet or exceed agreed standards providing purchasers a degree of certainty about the environmental credentials of the product. Incentivize environmental improvement by rewarding better performance through the potential for improved market access, price premiums and security of supply. AFMA 25 October
6 Certification Basics Seafood certification Why does this matter in Australia? According to the 2011 FRDC report on community perceptions of the fishing industry: 37% percent of people believed the industry was sustainable; 26% believe it is unsustainable; and 37% are uncertain. 63% of potential consumers doubt the sustainability of our fisheries! Richard Wilson, Rockhopper / Canon 25 October
7 Certification Basics Do we need independent third party certification Self claimed sustainability by any fishery, industry, government, or NGO are not sufficient. Third party certification is essential for the credibility, reliability, fairness and truthfulness of the claim. Without third party certification there is the possibility for any claim of sustainability to become arbitrary and discriminatory in trade and fair competition. 29 September
8 Certification Basics Independent third party certification Voluntary certification Certification is a voluntary, third party assessed standards based approach to improving the environmental performance of capture and farmed seafood. Certification identifies well-managed fisheries according to standards for the sustainable use of the fisheries resources and impacts of harvest on marine ecosystems. Voluntary standards pull legislated standards and industry norms along, while maintaining a gap between statutory compliance and best practice voluntary standards. Certification only works if there is the demand for certified seafood and the most progressive operators can distinguish themselves from those doing business as usual at a given point in time. 25 October
9 Certification Basics Certification schemes Versus seafood guides Certification schemes are voluntary and certification is based on third party assessment of the environmental effects of the product. They usually have an associated eco-label (e,g. MSC) with additional chain of custody requirements. Seafood guides, provided by a variety of groups and organisations, are not formal third party certification schemes. Increasingly sophisticated and targeted they provide self-assessed claims or product descriptions against a set of sustainability criteria. Seafood guides may or may not reference the outcomes of third party certification. naturepl.com / Onne van der Wal / 29 September
10 Certification Standards Accreditation Standards All credible third party accreditation guidelines for fisheries and aquaculture are based on FAO guidelines for certification of capture fisheries and aquaculture addressing: (1) State of the stock; (2) Ecosystem impacts; and (3) Quality and effectiveness of fisheries management systems. Some may also address social aspects. 09/08/14-10
11 Certification Standards A credible standard for certification is Focused on key fisheries impacts. Performance-based measures outcomes not process Meets the International Social and Environmental Accreditation and Labelling (ISEAL) Alliance requirements. Multi-stakeholder involvement and transparency standard setting and assessment. Compliant with domestic and international law (including trade) meaning they have to be voluntary, market driven, transparent, & based on sound science. Applicable to in a wide range of management contexts and fisheries types. Continually improving through periodic review and updating. Hartmut Jungius / -Canonn 29 September
12 Certification Results Marine Stewardship Council Just the facts The number of certified Fisheries as of October 2011 was 132. The number of fisheries in full assessment for certification as of October 2011 was 130. Six percent of wild-caught seafood by volume is certified and another five percent is in assessment. There are more than 12,000 MSC-labelled products on sale globally, in over 70 countries with a retail value of over US$2.5 billion annually. 29 September
13 Opportunities and Challenges But third party certification costs! Costs of certification include: The compliance costs of moving to higher sustainability standards for industry, suppliers and government. Funding of Fisheries Improvement Projects intended to address areas needing improvement to achieve or retain certification. The cost of certification ranging for the MSC from $10,000 to over $500,000 for the biggest most complex fisheries. The cost of remaining certified. Chain of custody requirements associated with the use of ecolabels. 29 September
14 Opportunities and Challenges Third Party Certification Is it worth it? Producers of certified products and those thinking about certification are demanding proof of real benefits to justify the costs of the assessment process and of practicing sustainable fishing. The benefits must outweigh costs. Benefits can be: Market related - through Increased prices, market /supply chain access and increased sales or a combination of both. Brand related - by avoiding negative publicity about the environmental impacts associated with consuming seafood and by reduced intervention in fishery by fishery management. Jürgen Freund / -Canon 29 September
15 Opportunities and Challenges Third Party Certification Does demand result in a price premium? If consumers value certified seafood products they will by certified products over non-certified products. This should create a price premium. Hypothetical data studies have shown consumers prefer certified seafood products over non-labelled, and a willingness to pay a positive premium. Actual retail price premiums of around 14% for MSClabelled Alaska pollock were found in data from UK supermarket sales. But the jury is still out on whether real price premiums exist and if they do who receives the premium. 29 September
16 Opportunities and Challenges Third Party Certification Does certification reduce brand risk? Responsible sourcing policies by the worlds have them selecting promoting sustainable seafood for their customers. Doing so is smart business, third party certification, ecolabels and chain of custody systems reduce the risks to brands and therefore increase brand values in competitive market places. For harvesters there is anecdotal information that certification of a fishery provides greater regulatory certainty and places industry rather than government in the drivers seat. AFMA 29 September
17 Other Issues Managing cost-effectiveness for small scale fisheries in developing and developed countries. Standardization between existing certification schemes and emerging ones. Assessing farmed and wild caught products in an equitable way. Maintaining transparency and credibility of all parts of the certification system. Ensuring quality assessments by certifying bodies. 29 September
18 Opportunities and Challenges Conclusion The success of certification programmes in fisheries depends upon: (i) Enough well-managed fisheries becoming and remaining certified, placing a critical mass of certified product into the supply chain; (ii) Creating incentives to change poorly managed fisheries into well-managed fisheries. naturepl.com / Doug Perrine / As Cathy Roheim writes in a recent peer-reviewed paper: The most compelling evidence that benefits outweigh the costs comes from the behaviour of the fishing industry itself: the number of fisheries in assessment and becoming certified continues to grow. 29 September
19 Thank you wwf.org.au 2010,. All photographs used in this presentation are copyright protected and courtesy of the -Canon Global Photo Network and the respective photographers. 29 September
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