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The Sustainable Supply Chain Summit 2014

19/11/2014 - 20/11/2014, London

Get answers to the latest issues and initiatives affecting your supply chain. Back for the 9th year, The Responsible Supply Chain Summit is the world's leading meeting place for senior executives looking to put sustainability at the heart of their supply chains

Seafood labelling – A fishy tale?

Seafood sustainability labelling has become a big business in its own right. There are growing fears that everything is being certified but little actually being done to protect fish

Meeting unprecedented demand

If you’re in Tesco in London or Whole Foods Market in Boston and are inclined to factor in the environment when you food shop, and you love seafood, you’ll recognise the blue fish, a check mark and the words “Certified Sustainable Seafood MSC”.

But if you really care about sustainability, you might also ask: what does this label really mean?

The MSC – Marine Stewardship Council – says the “sustainable” label means that fishermen caught the seafood with methods that don’t deplete its supply and help protect the environment in the waters where it was caught. That’s a critical issue, with global demand for seafood at an all-time high and as much as one third of the world’s well-studied fish stocks “overexploited”, and an additional quarter of those stocks “at or very close to the limit,” according to a recent UN report. In Europe an estimated 88% of stocks are overfished.

Variations of the label from a handful of competing organisations have been around since 1997, when the MSC was founded. It’s the biggest of the seafood eco-labels and dominates in the United Kingdom, most of northern and western Europe and North America, while its biggest competitor, Friend of the Sea (FOS) has made inroads in eastern Europe, Switzerland, Italy and many developing countries.

There’s also a slew of smaller non-governmental upstarts, with names such as the International Fish Meal and Fish Oil Organisation, Global Trust, Aquaculture Stewardship Council, and some regional labels such as the Alaska Seafood Marketing Institute and Iceland Responsible Fisheries. They label everything from wild and aquaculture farm fish and fish feed, to supermarket standards.

They each have unique twists. FOS for example promotes its carbon footprint standard, which it enforces by requiring certified companies to buy carbon offsets (a practice that gets mixed reviews from environmentalists).

Each label is trying to take a slice of what has become a booming and lucrative business: selling seals of approval so guilt-conscious foodies can feel a little better about the gradual depletion of our world’s fisheries.

Born of necessity

The MSC is the 900lb gorilla, both loved and loathed. It was born out of crisis in the early 1990s. Michael Sutton, one of its founders and now vice-president of the Monterey Bay (California) Aquarium, hatched the idea with colleagues at the WWF when the cod industry in Nova Scotia teetered on collapse in 1992. “We were not only trashing our marine environment, but we were ruining the character of coastal communities that had existed on fisheries for centuries,” Sutton commented recently to US National Public Radio. And plunging cod stocks were not the only problem; the stress extended to swordfish, marlin, tuna and other species. This was a fishing crisis, and it was worldwide.

The dreamers at WWF came to a stark realisation: governments could not be relied upon to monitor and regulate fishing. Neither did they believe consumers would drive change; at that point there was virtually no interest or demand in sustainably caught seafood. They realised – heretically to some purists in the environmental community – that only big business itself could turn this supertanker around. Intentions were not the issue; it didn’t really matter to them whether a company wanted to protect the environment or were mainly seeking a marketing edge.

So, instead of concluding that Big Fish was evil incarnate, they went into the belly of the whale, meeting with Unilever, then one of the world’s largest producers of frozen seafood. Their pitch: overfishing is not only bad for the environment, but it’s really bad for business. If you deplete the oceans, there’s not much to sell. Unilever bit, and by 1997, they had jointly rolled out MSC.

To critics of MSC – and sceptics of food labelling – the decision to partner with a transnational corporation compromised the concept from the start. After all, MSC’s business model would come to depend on the revenue generated by the licensing fees it charges businesses for the right to sell seafood with its label – meaning they had to walk a fine line between disciplining and encouraging the corporations that paid them.

And if food-labelling sceptics believed Unilever – which later sold its seafood business and exited the seafood business altogether – was a questionable partner, they viewed MSC’s decision to partner with Wal-Mart in 2006 as a pact with the devil. This was the time when Wal-Mart was under intense fire for its labour practices. The Bentonville behemoth saw the MSC as a way to score points in the environmental community and gain a marketing edge – and just maybe to do the right thing.

As recently as a decade ago, there was still little demand for sustainable seafood. The decision by Wal-Mart to commit to MSC was a game changer that rescued the certifying organisation from near bankruptcy and put seafood labelling on the map. “Once Wal-Mart made a commitment … every other major retailer had to follow suit, because none of them wanted to be less progressive,” Sutton told US National Public Radio (NPR) in February. “Overnight, the demand far outstripped the supply.”

Grown into a whopper

MSC, which had limped along for years on meagre foundation grants and miniscule licensing fees, was soon rolling in money, and its costs and pricing escalated in tandem. The certification process that once took weeks can now take years and can cost as much as $250,000. Since its founding, MSC has attached its certified label to more than 170 fisheries, with longtime clients spending as much as $18.7m over the years on certification.

“We want to see the global oceans transformed onto a sustainable basis,” said Rupert Howes, MSC’s chief executive, in the same NPR broadcast. But that’s a huge challenge, say researchers who have scrutinised the evolution of what looks like a thriving international business or NGO. MSC now has more than 100 employees worldwide.

It still has lots of quirks, particularly its unsuitability in the developing world. Smaller fisheries in regions where sustainable fishing remains mostly an aspiration can’t afford to be certified with MSC, leaving little incentive for them to improve. That’s left an opening for FOS and other upstarts.

Rather than months or years, FOS’s certification process takes days or weeks, even for complex aquaculture producers. Instead of audits costing hundreds of thousands of dollars, it uses existing data and charges as little as $10,000.

Does bargain-basement pricing mean a less reliable label? That’s MSC’s contention, calling itself “the best programme to drive uptake of sustainable seafood in the market and protect fisheries and their surrounding ecosystems”. Independent researchers deliver a more mixed verdict. A 2012 report commissioned by WWF – which has long since cut its ties with the MSC baby it birthed – found that FOS’s ecosystem and habitat criteria were 20% more effective than MSC’s. However, overall, MSC was the only one of four schemes judged compliant across most of 17 sustainability measures.

That’s little solace to uncompromising environmentalists who believe all the labelling schemes are variations on greenwashing. They say MSC in particular has compromised its standards to keep up with booming demand from the hands that now feed them – Wal-Mart, Tesco and the other big supermarket chains. “MSC is doing the business of the business community,” Daniel Pauly, a fisheries professor at the University of British Columbia, said to NPR.

He’s not the only or even the sharpest critic. In April the journal Biological Conservation published a scathing critique. “When consumers want sustainable fish there are two options to meet the demand: fisheries can become more sustainable or the definition of sustainable can be watered down to be practically meaningless – with MSC seafood, the definition has been repeatedly watered down,” says Jennifer Jacquet, a New York University environmental studies programme professor and one of 11 authors of the study.

Getting through the net?

“MSC’s narrow definition of sustainability is out of step with the general public perception of what that term means,” says Claire Christian, another of the study’s co-authors and a policy analyst at the Antarctic and Southern Ocean Coalition, a conservation NGO. “When MSC labels a swordfish fishery that catches more sharks than swordfish ‘sustainable’, it’s time to re-evaluate its standards.”

MSC and even some sustainability experts take umbrage at what they believe are criticisms based on unrealistic expectations. In fact, some university researchers are pushing for an utterly pragmatic approach, harking back to the decision to bring Wal-Mart into the fold. They say tightening oversight, as Jacquet and others argue for, could actually harm the most vulnerable fisheries.

It’s “an open question … whether certification and eco-label programmes should raise the bar of sustainability, which may result in decreased market opportunities for small-scale and data-limited fisheries,” argue a team of 18 prominent experts in a Public Library of Science analysis of eco-labels published in 2012. They conclude that eco-labels are now so ubiquitous in developed countries with sophisticated fisheries management and strong central government that the focus should shift to brining in smaller fisheries in developing countries. If that means moderating standards and other barriers to entry, so be it.

Returning to the question “what should consumers expect from these eco-labels?”, the answer is: a lot. There are now numerous organisations competing to check on one aspect or another of the fishing business, from potentially destructive catching methods, such as the use of explosives, poisons or trawls, to habitat protection and corporate governance issues.

But what about the fish we eat? That’s a different and dicey question. ClientEarth, an aggressive and uncompromising British environmental law NGO, recently completed a survey of supermarket seafood. It targeted Tesco, Asda, The Co-operative, Lidl, Marks & Spencer, Sainsbury’s and Waitrose, reviewing labels on a variety of fish, including tuna, haddock, cod and farmed fish.

ClientEarth’s conclusion echoes similar investigations in the United States and elsewhere. It found a “confusing array of claims”, ranging from “sustainably sourced”, “protects the marine environment”, “responsibly farmed” to “fish for life” – none of which were defined or frankly mean very much. Different supermarkets even used the same terms to mean different things. A seafood eco label is like Woody Allen’s Zelig – it’s a chameleon concept, as is the word “sustainability” itself.

ClientEarth also says it found numerous instances in which the claims did not match up to the reality of how fish were caught or where they came from – or were sneakily deceptive. For example, some tinned tuna carried a “dolphin friendly” label. That sounds informative, but the tuna were caught in areas where there was no threat to dolphins. Perhaps cynically, it diverts the attention of consumers away from the harmful effects the tuna fishing method had on other threatened species such as turtles and sharks.

ClientEarth urges consumers to storm government consumer protection offices to press their complaints.

Ironically, the dramatic growth of the foodie movement and the expanded demand for “sustainable” seafood may actually increase damage to world fisheries. “The retailers and wholesalers all want access to this kind of label because they’re trying to … make money with their consumers,” said Jim Barnes, director of the Antarctic and Southern Ocean Coalition to NPR. “There’s nothing wrong with that: that’s how the world works. But to get on line with big chains as your [friends] leads you down a path that I don’t think the originators of the MSC intended.”

The MSC could not disagree more. “If you really want to contribute to the transformation of our economic systems more generally, you have to engage with the big guys,” MSC chief executive Rupert Howes said responding to Barnes. “That will drive change.”

Jon Entine, executive director of the Genetic Literacy Project, is a senior fellow at the Center for Health and Risk Communications and STATS (Statistical Assessment Service) at George Mason University.

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