SEAFOODNEWS.COM [The Editor’s View] by John Sackton May 13, 2015 — The Marine Stewardship Council has a mess on its hands in Alaska.
The Alaska Salmon Fishery has always been MSC certified, as it was one of the first iconic fisheries the MSC used to demonstrate best practices for the MSC ecolabel. But after ten years and disputes over branding and problems with demands on the ADF&G, the major producers were no longer willing to be part of the client group, and many stopped using MSC certification for salmon in favor of Alaska’s RFM certification.
As a result, the MSC scrambled to recruit a client for the five year re-certification, and offered to pay for most of the certification. Industry reports were that the more than $100,000 cost for the recertification was 75% paid for by the MSC. In 2013 and 2014, a small number of companies kept using the MSC certification, representing about 20% of Alaskan salmon production.
After the first year, the initial client, the Purse Seine Vessel Owners Association, withdrew, and a new client took over their certificate in 2014.
In 2015, with the changed landscape on branding, a big salmon run on the way, and demands by German processors that only MSC labeled salmon would be acceptable, the processors, both large and small, representing the remaining 80% of Alaskan production decided to rejoin the MSC client group.
Wonderful said the MSC. The prospect of reintegrating all Alaska salmon into their certification scheme would provide revenue, would boost their credibility, and would eliminate some of the fierce criticism the MSC has faced in Alaska.
But a rogue Client Group stood in the way.
The current client group – called the Alaska Salmon Processors Association, consisted of 9 companies who used the certificate in 2014:
10th & M Seafoods
E.C. Phillips and Son
Silver Bay Seafoods
Copper River Seafoods
International Seafoods of Alaska
Ekuk Fisheries
The Auction Block Company
Hoonah Cold Storage
Double E Foods
Since April the group has refused to give any answer to the request of ten additional companies to join.
Under MSC rules, the only requirement for additional companies to join a client group is that a cost sharing mechanism is agreed upon. In this case, the ten companies joining, who represent 80% of the total fishery, said they would pay 100% of the actual costs plus administrative expenses, back to 2012.
At this point there is no cost sharing scheme acceptable to the MSC that could be proposed by the Client group that the new members would not accept.
The FAO says that the owner of a certification scheme, in this case the MSC “should have a written policy and procedures, applicable to accredited certification bodies, for dealing with any complaints and appeals from involved parties in relation to any aspect of certification or de-certification.”
The MSC has a very robust transparent system in place for the fishery assessment process, including a well documented complaint resolution procedure.
Where the MSC violates FAO Guidelines, is that it has no such procedure in place to resolve disputes where clients act in contravention of MSC rules.
The MSC says this issue is up to its certifiers, but it provides no mechanism to enforce its requirements on both certifiers and clients.
The whole concept of the MSC as a measurement organization is that it relies on the public money spent on fisheries management to create the conditions for a fishery to be sustainable. It then measures that fishery, and ‘rewards’ those fisheries that meet its standards with recognition in the market place.
But the MSC chain of custody rules limit the use of the chain of custody to a subset of companies participating in the fishery — sometimes to a single company.
The mechanism is that the fishery certificate is issued not to a fishery, but to a ‘client’ who then specifies which entities are eligible to be first receivers, and use the MSC chain of custody. All other users of the chain of custody have to trace back to these original first receivers.
The MSC gains revenue by promising marketing deals to clients, and by making this type of exclusive pledge, the organization sells its certification program. But the basis of the successful fishery is the public support by the entire sector – including government and all the participating companies.
There is nothing unfair about privatizing the measurement system and requiring users to pay for it.
Where the FAO guidelines against discrimination are violated is when the client acts in a discriminatory way, such as refusing to allow other users of the fishery to join the client group on request, and on payment of a fair share of the expense.
This is somewhat of an embarrassment for the MSC. There are many national rules barring discrimination, and in particular US anti-trust law does not allow companies to arbitrarily discriminate.
The corrective measure to meet FAO demands would be for the MSC to set up clear rules for client behavior, and a dispute resolution mechanism when clients violate those rules.
Unfortunately, the MSC may feel too dependent on its ability to cut special deals with clients to agree to such a standard enforcement mechanism.
The key is that the MSC considers its rules for clients to share certificates as “guidance”, and as not enforceable.
There was considerable debate in the latest revision to the chain of custody guidelines as to whether rules for clients should be enforceable, and it was decided to keep all certificate sharing options voluntary.
Here the MSC has failed.
By not making clear and mandatory rules for certificate sharing, and by not implementing a clear and transparent dispute resolution mechanism, the MSC is condoning illegal business discrimination, and is allowing just the discriminatory type of behavior the FAO has warned against.
In this instance, a number of smaller Western Alaska companies want to get MSC chain of custody this year, but are being stonewalled. For native Alaskan Companies to be discriminated against in this way should be of direct concern to the FAO.
At the same time, the larger companies are also being denied any response. The Client Group rightly fears that under US Law, if they allow in one new member, then they must allow in other members on the same terms or they are legally at risk.
The MSC would say that they are open to all and non-discriminatory because any group can become a client.
But this has led to the absurd situation of multiple clients paying to certify the same fishery – wasting public resources and imposing a ‘Tax”. This happened in the Maine Lobster Fishery, and it happened in Newfoundland with the shrimp fishery. In Maine, the added costs are likely over $100,000.
In each case, the companies seeking to get chain of custody for fisheries by joining a client group are dealing with fish they already had paid for in terms of management and public support. Yet they were denied access to the existing Client group.
But the bottom line is the fact that any group can become a client and pay a certifier and get a certificate from the MSC is not enough to avoid discrimination.
In the WTO and FAO, discrimination is aimed at gaining unfair market advantage. This is exactly what the MSC condones by refusing to set up a true system of rules and dispute resolution for its Client groups.
The MSC should have a written policy for all client groups on certificate sharing, spelling out responsibilities, providing a dispute resolution system, and the right for the MSC to require a certifier to suspend and re-issue a certificate to a new client group when it finds violations of its policies on non-discrimination.
Until they correct this deficiency, it is fair to say they are out of compliance with FAO guidelines.
In the meantime, the outlook for a resolution of the Alaska chain of custody situation is unclear. But the refusal of the MSC to step and control a rogue Client is a true failure.
The MSC as the standard owner, has the right to suspend or revoke a certification of a fishery. In this case it has the power to correct the situation not by decertifying the fishery, but by withdrawing the certificate for cause, and reissuing the certificate to a newly constituted Client Group that would truly reflect the Alaska salmon industry.This
opinion piece originally appeared on SeafoodNews.com, a subscription site. It has been reprinted with permission.