Ecolabels and fish trade

Ecolabels and fish trade:
Marine Stewardship Council
certification
and the South African hake industry
by
Stefano Ponte *
tralac Working Paper
No 9/2006
August 2006
* Senior Researcher, Danish Institute for International Studies
[email protected]
Abstract
Protecting consumers from unsafe food, the environment from overexploitation of
resources and pollution, and workers and producers from unjust labour and trade
relations are generally considered objectives worthy of intervention – whether
through regulation or, increasingly, through the establishment of voluntary standards
and codes of conduct. Yet, abstract principles are eventually applied in concrete
situations and have a variety of effects on differently endowed countries, groups and
individuals. Developing countries have been generally reluctant to participate in
ecolabelling initiatives. They have highlighted the embedded protectionist elements
of some of these initiatives, and the naiveté of some standards in assuming that
certain models of environmental management can be exported tout court to the
South. This reluctance has been countered by assurances of transparency, nondiscrimination and technical assistance. In essence, ecolabels are assumed to be
‘good for the global commons’ and their justification has been offered within a
discourse of science, objectivity, independent certification, transparency and systems
management. If shortcomings arise, they can be fixed technically and managerially.
Yet, the case study of Marine Stewardship Council (MSC) certification of the hake
industry in South Africa illustrates that ecolabelling is sought in the context of
competitive
pressures,
political
economies,
and
specific
interpretations
of
conservation, not simply on the basis of value-free science or systemic management
alone. Although couched in ‘impartial’ readings of conservation and competition,
MSC certification in South Africa was employed as one of the tools against the
redistribution of fish quotas away from ‘white-owned companies’ to the possible
benefit of ‘black-owned companies’.
Developing country fisheries, and small-scale ones in particular, have been
marginalised in the MSC system. This is not surprising if one looks at comparative
evidence from other ‘new wave’ sustainability initiatives in timber and coffee. Entry
barriers to ‘sustainability’ entail economies of scale and scope that require
managerial resources and access to networks. Because managerial and systemic
objectives are harder for developing country actors to match, this creates a hidden
imbalance in favour of the better-endowed participants. The paper concludes that
independent auditing, transparency of standard-setting, accountability, and the need
for standards to be based on ‘good science’, are not enough to facilitate certification
1
in small-scale developing country fisheries. What is needed are special systems of
compliance and verification that cater to their needs. Until this happens, and until
premiums are not paid at the producer level, MSC and similar initiatives will keep
putting ‘sustainability’ at the service of commercial interests.
2
Table of contents
List of Abbreviations ................................................................................................................ 4
Acknowledgements ................................................................................................................. 5
1.Introduction................................................................................................................6
2. Ecolabels and fisheries ...................................................................................................... 9
3. The Marine Stewardship Council initiative .................................................................... 12
3.1 General features ......................................................................................................... 12
3.2 Early criticism of MSC ................................................................................................ 15
3.3 New challenges ........................................................................................................... 17
4. MSC and the South African hake industry ................................................................... 25
4.1 Main markets for South African hake....................................................................... 25
4.2 Industry structure ........................................................................................................ 27
4.3 Motivations for the adoption of MSC certification .................................................. 31
4.4 The certification process ............................................................................................ 36
4.5 Verification after certification ..................................................................................... 40
4.5 MSC, hake and beyond ............................................................................................. 43
5. Comparative analysis: timber, fish and coffee .............................................................. 45
6. Conclusion .......................................................................................................................... 47
Appendix 1: Ecolabels and WTO rules ............................................................................. 52
3
List of Abbreviations
ANC
African National Congress
ASHQI
Association of Small Hake Quota Industries
COFI
FAO Committee of Fisheries
CTBT
Committee on Technical Barriers to Trade
CTE
Committee on Trade and Environment
EEZ
Exclusive Economic Zone
EUREP-GAP Euro-Retailer Produce Working Group - Good Agricultural Practices
FAO
Food and Agriculture Organization
FSC
Forestry Stewardship Council
GAA
Global Aquaculture Alliance
GATT
General Agreement on Tariffs and Trade
HDI
Historically-Disadvantaged Individual
ICSF
International Collective in Support of Fishworkers
ISEAL
International Social and Environmental Accreditation and Labelling
Alliance
ISO
International Standards Organization
MAC
Marine Aquarium Council
MCM
Marine and Coastal Management
MLRA
Marine Living Resources Act
MSC
Marine Stewardship Council
npr-PPMs
non-product related process and production methods
pr-PPMs
product-related process and production methods
RFMO
Regional Fisheries Management Organization
SACIFA
South East Coast Inshore Fishing Association
SADSTIA
South African Deep-Sea Trawling Industry Association
TAC
Total Allowable Catch
TBT
Agreement on Technical Barriers to Trade
USEPA
United States Environmental Protection Agency
WTO
World Trade Organization
WWF
World Wildlife Fund for Nature
4
Acknowledgements
Fieldwork for this project was funded by the Danish Social Science Research Council
(SSF). I would like to thank the Program on Land and Agrarian Studies (PLAAS) at
the University of the Western Cape and the Trade Law Centre for Southern Africa
(tralac) where I was affiliated while in South Africa. Thanks also to various officers at
Marine and Coastal Management for their openness and collaboration during
fieldwork. Special thanks go to Trudi Hartzenberg, Moenieba Isaacs, Jesper
Raakjær, Lance van Sittert and Andries du Toit for their intellectual and moral
support. Valuable feedback on earlier versions of this paper was also received from
Jennifer Bair, Simon Bolwig, Constance Douglas, Steen Folke, Peter Gibbon, Stine
Jessen Haakonsson, Dave Japp, Peter Kragelund and Niels Jon Mortensen. All
mistakes, misinterpretations and undue omissions are my own.
5
1. Introduction
Protecting consumers from unsafe food, the environment from over-exploitation of
resources and pollution, and workers and producers from unjust labour and trade
relations are generally considered objectives worth intervention in development
circles – whether through regulation or, increasingly, through the establishment of
voluntary standards and codes of conduct. Yet, abstract principles are eventually
applied in concrete situations and have a variety of effects on differently endowed
countries, groups and individuals. What may seem a good idea to consumer groups
or government agencies in a Northern setting, may not turn out to be so
advantageous to producers in the South – even though the initial stimulus in the
North may have been exactly to safeguard these producers.
Food safety, environmental and social standards have become key features in the
trade of agro-food products in the last 15 years. International organisations,
government agencies, industry associations, and NGOs behind the formulation of
these standards were initially defensive of efforts aimed at critically examining their
effects in different settings. Questioning the inherent ‘justness’ of these initiatives was
considered reactionary and necessarily intended to discredit them. This may still be
the case in certain circles, but recently there has been a more open attitude towards
reaching a better understanding of the contradictions, limitations, and differential
impact of these standards. From a ‘defensive’ phase, these organisations and NGOs
have now moved into a ‘constructive dialogue’ phase, where they are making efforts
to be more inclusive (sometimes for public-relations reasons), and to reflect upon
past experiences to improve the content, monitoring and management of their
standards. In other words, they are trying to ‘make their system management right’.
This means that standards development procedures, governance structures,
indicators, monitoring, verification and management systems have become much
more sophisticated than even a decade ago. Where there has been little movement
so far has been in acknowledging that standards are developed and applied in
specific political economies, within complex power relations, and in extremely diverse
local conditions and politics. In a sense, an increased focus on systems management
brings these initiatives even further away from a politico-economic understanding of
their effects.
6
The growth of market-based instruments such as ecolabels or other ‘sustainability’
labels reinforces a systems management approach to food safety and environmental
and social protection. The legitimacy of these instruments in a neo-liberal setting is
based on non-discrimination and equality of opportunity. In this line of thought, if the
system has been devised openly, is monitored transparently, and is administered
properly, standards simply perform a market-lubricant function of providing full(er)
information to those involved in transactions. Where clear disadvantages are
highlighted for certain countries, groups or individuals, technical assistance and
capacity building instruments are provided, or simply suggested, as solutions.
This paper is mainly empirical in nature and is based on original fieldwork material
collected for the second in a series of three studies on the political economy of
standards on food safety, social and environmental impact, quality management and
geographic origin. The three case studies examine the impact of these standards on
developing country agro-food export industries in Africa (coffee, fish and wine) and
on small operators in these. A first case study was dedicated to ‘sustainability’
standards in coffee (Daviron and Ponte 2005; Giovannucci and Ponte 2005; Ponte
2004; Ponte and Kawuma 2003). The second and current case study covers
standards in two export-oriented fish industries: Nile perch in Uganda (food safety
and quality management standards) (see Ponte 2005; 2007); and hake in South
Africa (Marine Stewardship Council standard). A third case study will focus on quality
management and geographic origin standards in the wine industry, also focused on
South Africa. Finally, comparative and more theoretical work will follow in the context
of recent theoretical discussions on governance and upgrading in global value chains
(Gereffi, Humphrey and Sturgeon 2005; Ponte and Gibbon 2005).1
Fieldwork for the MSC case study was undertaken in London at the offices of the
Marine Stewardship Council (May 2004) and in South Africa (July-August 2004;
June-December 2005). In addition to secondary data and documentary collection, a
total of 51 semi-structured interviews were carried out. These included interviews
with MSC officers, members of the certification team that worked on MSC certification
1
This paper does not include a detailed analysis of global fish markets and trade rules, and has only
limited coverage of the local context in which the South African hake industry operates. For a broader
understanding of these issues, this paper should be read in relation to: (1) an article on the role of
subsidies, tariff and non-tariff barriers in shaping market access to the EU for African fishery products
(Ponte, Raakjæar and Campling 2005); and (2) two papers on ‘Black Economic Empowerment’ and
other processes of transformation in South African industrial fisheries (Crosoer, Ponte and Van Sittert
2006; Ponte and Van Sittert 2006).
7
for hake in South Africa, South African hake industry association officers, officers of
the
regulatory
agency
(Marine
and
Coastal
Management,
MCM),
quality
management companies, fisheries consultants, interest groups, conservation NGOs,
and representatives of twelve companies/groups holding hake quotas. These
included the top five companies by size of quota allocation (representing 75% of total
allocated quota in 2005) and seven medium and small quota holders. To maintain
confidentiality, the identity of individuals and companies covered during fieldwork has
been concealed (interviews are coded MSC1 to MSC4 if they took place in London at
MSC; and SAH1 to SAH47 if they took place in South Africa and refer to the hake
industry).
MSC, South Africa and the hake industry were selected – an instructive combination
for a case study for the following reasons: (1) MSC is the main ecolabel in the global
fish market; (2) only two developing country fisheries have been certified, in South
Africa and Mexico; (3) MSC certification in South Africa concerned the hake industry;
hake is also the largest fishery in the country, accounting for approximately 50% of
total value of catches and 40% of total value of exports; and (4) South Africa is the
largest exporter of fishery products from Africa by value (Ponte, Raakjær and
Campling 2005).
Much of the burgeoning literature on the effects of standards, labels and certifications
in agro-food trade focuses on two aspects: (1) standard setting (development of
principles, indicators, measurement devices and compliance systems) and (2)
standard implementation (compliance and certification). Two areas that have been
relatively neglected are: (1) standard adoption (decision to attempt compliance and
certification); and (2) standard verification after certification (routine monitoring,
auditing, and recertification). This paper, while covering some ground in relation to
standards setting and implementation, places particular emphasis on standard
adoption and verification after certification. On what basis do industry actors and
associations decide to implement a standard? What are their motivations? What are
the expectations and political/economic calculations? What is routine verification
achieving? Under what circumstances is it possible to ‘fail’ after certification? What
are the commercial and political pressures under which verification takes place?
8
Section 2 of the paper provides a taxonomy of ecolabels in fisheries. Section 3
discusses the history and general characteristics of the Marine Stewardship Council
(MSC) initiative, and the criticism that has been levied against it. Section 4 examines
the political economy of adoption, implementation and further verification of the MSC
standard in the South African hake industry. Section 5 places the MSC case study in
a comparative setting, drawing from other ‘sustainability’ initiatives in timber and
coffee. This is followed by a conclusion and by Appendix 1, which examines whether
ecolabels are in breach of WTO disciplines.
2. Ecolabels and fisheries
In the last couple of decades, FAO and conservation groups have repeatedly
highlighted the plight of over-exploitation of fish stocks around the world, and the
impact of intensive fishing efforts on the overall aquatic environment. To address
these challenges, several fishery management systems have been devised, such as:
(1) legal instruments, including global conventions and national/local fisheries laws;2
(2) soft instruments, such as the FAO Code of Conduct for Responsible Fisheries;
and (3) market and civil society initiatives, such as the ISO 14000 series of standards
and the MSC label (Allison 2001: 942). Due to the perceived failure of international
and national law to control fishing behaviour, governance of fisheries is increasingly
carried out through voluntary codes of conduct and market-based instruments
(Allison 2001).
Environmental labelling initiatives in fisheries can be of voluntary or mandatory
nature (see Box 1). They include ecolabels, single-attribute certification, report cards,
and information disclosure on hazard warnings (USEPA 1993; Wessells et al. 2001).
2
The need for improved fisheries management and conservation of biodiversity were recognised as
early as the 1982 UN Convention on the Law of the Sea. Further political support and increased
visibility were given to fisheries management at the UN Conference on Environment and Development
in Rio de Janeiro in 1992, including a specific call to expand environmental labelling. Marine
conservation and biodiversity objectives were embedded in the 1992 Convention on Biological
Diversity (CBD). The 1995 FAO Code of Conduct for Responsible Fisheries and the 1972 Convention
on International Trade in Endangered Species of Wild Fauna and Flora (CITES) provide additional
instruments for conservation and fisheries management efforts (Wessells et al. 2001: 2).
9
Box 1: Environmental labelling initiatives in fisheries
(1) mark of origin, used to draw attention to the origin of fish (sometimes this is
mandatory);
(2) product certification and catch documentation, sometimes used in relation to import
and export controls, or by Regional Fisheries Management Organizations (RFMOs) to
promote compliance with conservation and management objectives;
(3) EU requirements to mark or label the commercial designation, production method and
area of capture of fish;
(4) ‘dolphin-safe’ and ‘turtle-friendly’ labels on tuna and shrimp respectively, designed to
minimize by-catch (see Appendix 1);
(5) current development of standards and certification systems for organic seafood,
especially for aquaculture products;
(6) Nordic Technical Working Group on Fisheries Ecolabelling Criteria, adopted by
Nordic Ministers of Fisheries in 2001 for use in the North-eastern Atlantic region;
(7) Marine Aquarium Council (MAC) certification for ornamental marine life, aimed at
conserving coral reefs;
(8) Global Aquaculture Alliance (GAA) codes of practice and certification on
environmentally responsible aquaculture products;
(9) ISO 14000 series standards on environmental management performance, and ISO
14020 series standards on designing and implementing environmental labelling
programs;
(10) MSC label on sustainable fisheries.
Source: Wessells et al. (2001: 5-10).
Ecolabels are seals of approval that transmit environmental information to
consumers. They are normally based on life-cycle analysis that is devised to
determine the environmental impact of a product or service from point of production
to point of disposal. These labels are awarded to products that are deemed to have a
more friendly impact on the environment than ‘functionally-equivalent or competitively
similar products’ (Wessells et al. 2001: 10; see also Appendix 1). Fishery ecolabels
tap into a perceived growing consumer demand in developed countries for
environmentally friendly products and production processes (Ibid.). They can be
categorised in three broad groups:
(1) First party labels: they are developed by individual companies, are based on their
own standards, and transmit information about environmental management to
consumers or other operators via a ‘self-declared’ label.
(2) Second party labels: they are developed by industry associations, sometimes with
inputs from conservation and consumer groups, and are applicable to the members’
products; they can be verified internally or through an external auditor or certifier.
10
(3) Third party labels: they can be developed by public, private, or public-private
initiatives; they are theoretically independent from market players; a third-party
certification system is in place, and the use of a label is licensed to the producer or
retailer for use on- and/or off-product; ‘chain of custody’ certification is usually
required to assure traceability of the product and separation from non-labelled
products; accreditation of certifiers is provided either by the initiator of the label or,
increasingly, by an independent organisation (cf Wessells et al. 2001: 11).
Wessells et al. (2001: 54) state that ‘voluntary ecolabelling provides one of the leastcoercive market-based mechanisms to improve conservation outcomes’. They
highlight the potential commercial benefits of ecolabelling for fishery industries, which
include: (1) gaining access to new premium markets; (2) adding value to existing
products; (3) expanding presence in existing markets; (4) maintaining market share
in competitive markets; (5) achieving product differentiation and export earnings; (6)
providing opportunities for attracting capital investment and new joint venture in
developing countries; and (7) maximising long-term competitiveness (Ibid.).
At the same time, a number of concerns arise from the adoption of ecolabels in
fisheries: possible lack of transparency and participation in standard-setting;
underlying protectionist motives; high potential costs of complying with required
management practices and data collection; high costs of certification in developing
countries relying on expensive imported experts; inadequate institutional and
technical capacity in developing countries (Ibid.: 55-57); and the de facto mandatory
nature of ecolabels when a majority of market players require them.
Voluntary ecolabels in fisheries are a recent phenomenon, and their coverage of
products and markets has been so far limited. Their potential for future expansion
can be linked to three main factors: (1) market/consumer acceptance; (2) whether or
not they are recognised as being actually beneficial to the sustainability of fisheries
resources; and (3) whether or not they comply with WTO rules. The first two factors
will be analysed in some detail in the next section of the paper. A discussion on WTO
compatibility can be found in Appendix 1.
11
3. The Marine Stewardship Council initiative
3.1 General features
Ecolabelled products are a small but growing segment of the fish industry. Their rise
relates to increasing concern with environmental issues, including the management
of natural resources, and to increased competition in the retail sector, thus the search
for additional properties in products to add profitability and/or market share. The
history of voluntary labels before the advent of MSC was limited to two single-issue
labels, aimed at reducing by-catch of dolphin in tuna fishing and of turtles in shrimp
fishing. In both cases, the main issue was not one of over-fishing and over-capacity,
but one of animal rights and the protection of endangered species (Allison 2001: 945;
see Appendix 1). Current efforts in developing organic certification of fishery products
are mainly focused on aquaculture (Mansfield 2004).
The Marine Stewardship Council is the main third-party certified ecolabel that covers
wild-catch fisheries.3 It was established in 1996 as a joint initiative of the World
Wildlife Fund for Nature (WWF), the world’s largest private non-profit organisation,
and Unilever, the world’s largest frozen fish buyer and processor. Unilever operates
its own internal evaluation system on ‘sustainable fisheries’4, but also actively
promotes MSC certification among its suppliers. At the MSC launch, Unilever
committed to buy fish only from sustainable sources by the year 2005. MSC became
an independent initiative in 1999. In the words of a representative of MSC ‘half of the
fishery world hated Unilever; the other half hated WWF; continuing the original setup
would have been crazy’ (MSC2). The idea behind the initiative is to address
worldwide decline in fish stocks by awarding ‘sustainably-managed’ fisheries with a
certification and a label that could be affixed to retail products (MSC2). The
underlying claim is that governments and international organisations on their own
have failed to implement sustainable management in fisheries.
3
Other minor fishery ecolabels include: (1) Carrefur’s own ‘Pêche responsible’, a first-party label
introduced in 2004 in France and Belgium, covering only a frozen product line consisting of Icelandic
cod fillets; and (2) the ‘Friend of the sea’ label (a project of the Earth Island Project Network), which
covers both farmed and wild-caught fish and shellfish products; this label is presently used only in Italy
– by Carrefur for farmed seabass and seagram, and by Coop Italia for a range of canned seafood
products (Globefish 2005).
4
Source: Fishing for the future: Unilever’s fish sustainability initiative (FSI). [Online]. Available:
http://www.unilever.com/Images/2003%20Fishing%20For%20The%20Future%20II%20Unilever's%20
Fish%20Sustainability%20Initiative_tcm13-5078.pdf (accessed February 2006).
12
MSC certification is administered through a chain of custody system that keeps
‘sustainable’ and ‘other’ fish separate from each other from catch to supermarket
shelf or ice display (MSC1). In the view of its promoters, MSC allows consumers to
promote sustainable fishing through a market-based (rather than regulation-based)
mechanism (MSC2). Certification is granted against a specific standard called the
‘Principles and Criteria for Sustainable Fishing’ (thereafter ‘the MSC standard’).
Assessment is carried out on voluntary basis by accredited third-party certification
bodies. The MSC standard is based on three principles, which are elaborated by a
number of criteria (MSC 2004b: 4):
1.
The status of the target fish stock
‘A fishery must be conducted in a manner that does not lead to over-fishing or
depletion of the exploited populations and, for those populations that are depleted,
the fishery must be conducted in a manner that demonstrably leads to their recovery’
(Ibid.: 14).
2.
Impact of the fishery on the eco-system
‘Fishing operations should allow for the maintenance of the structure, productivity,
function and diversity of the ecosystem … on which the fishery depends’ (Ibid.: 15).
3.
Performance of the fishery management system
‘The fishery is subject to an effective management system that respects local,
national and international laws and standards and incorporates institutional and
operational frameworks that require use of the resource to be responsible and
sustainable’ (Ibid.: 16).
The third principle is where the socio-economic aspects of a fishery are considered.
However, explicit reference to equity concerns, and the impact on fisheries on local
communities are vague and defined without reference to historical dynamics. MSC
has actively avoided including social aspects in its certification system, as they would
be ‘too difficult and complex to comply with’ (MSC2). Management system criteria
include provisions for transparency and the involvement of stakeholders, a design
that is ‘appropriate to the cultural context, scale and intensity of the fishery’ (MSC
13
2004b), the observation of legal and customary rights, and the provision of incentives
(economic and social) that contribute to sustainable fishing.
At the catch level, certification is awarded to a ‘fishery’, not to individual operators.
Individual operators in the trade, processing and retail sectors can apply for chain of
custody certification and for the use of the MSC logo. Certification is carried out by
independent bodies that are accredited by the MSC Accreditation Committee. In the
future, accreditation will be carried out by an independent organisation. The
certification process starts with a confidential pre-assessment by a certification body
for a client or client group. Clients are usually associations of fishing operators that
catch and handle one or more species in a specific area. If the results of the preassessment are such that the client decides to go ahead with a full assessment, an
expert team is appointed. This team develops performance indicators and scoring
guide-points (MSC1). Stakeholders can at this point provide feedback on the
suitability of these indicators. The fishery is then scored against these indicators,
which are aggregated to obtain a score for each of three principles. Depending on
the score, a fishery can be: (1) rejected; (2) asked to fulfil some pre-conditions before
obtaining certification; (3) certified with conditions that need to be addressed within a
certain period; or (4) certified with no conditions. Fisheries that are certified are
subject to annual audits. After five years, a new assessment has to be carried out
(MSC1; MSC 2004a).
Box 2: MSC’s view on the benefits of its certification:
For the Fishing Industry:
- Evidence and recognition of good fisheries management
- Improved fishery management
- Preferred supplier status and potential for increased returns – particularly in niche markets
For Retailers:
- Demonstrates commitment to buy from well-managed, sustainable sources
- Increased confidence in sustainability of product
- Maintaining or increasing market share
- Stability of supply
For Consumers:
-Confidence that buying MSC-certified products will not contribute to overfishing or harm
marine ecosystems
- Empowers consumers to influence management of fisheries
Source: Peacey (2000: 4)
14
In Box 2, we can see that MSC lists a number of benefits of its certification for the
fishing industry, retailers and consumers. Noticeable is the lack of reference to a
premium for the fishing industry in these statements – ‘increased returns’ are of more
generic nature and could refer to a larger market share. This is consistent with most
‘new wave’ certification schemes on sustainability – such as Forestry Stewardship
Council (FSC) certified timber (Klooster 2005; Taylor 2005), and Utz Kapeh and
Rainforest-certified coffees (Giovannucci and Ponte 2005; Muradian and Pelupessy
2005; see Section 5; Table 7). These schemes, while offering preferred supplier
status to certified suppliers, rarely offer a premium. In time, the standards that
underpin them may become the new ‘minimum standards’ for the market, effectively
redesigning the nature of market access. This has already happened to food safety
and good agricultural practice standards such as EUREP-GAP (Hanataka, Bain and
Busch 2005). ‘Old wave’ coffee certification schemes, such as fair trade and
organics, do offer premiums over non-certified coffees at the production level.
3.2 Early criticism of MSC
The set-up of MSC’s governance structure and the elaboration of its standard drew a
heated debate in fish industry circles in the second half of the 1990s. Many of these
early discussions can be found in various issues of SAMUDRA, a publication of the
International Collective in Support of Fishworkers (ICSF), and are summarised in
Constance and Bonanno (2000). In short, ICSF and other critical stakeholders
questioned the MSC initiative on the basis of: (1) the motivations of Unilever in
starting it; (2) the centralised and corporate structure of MSC; (3) a bias in favour of
industrial fisheries, and developed country fisheries in particular; (4) the lack of
consultation with fishers in general, and developing country representatives in
particular; (5) the perception in developing countries that ecolabels constitute
technical barriers to trade; (6) the financial and human resource costs that achieving
certification would entail in developing country and especially artisanal fisheries; and
(7) the recognition that the current state of scientific knowledge is no guarantee of
sustainability – one contributor argued that the Newfoundland cod fishery would have
been awarded the label just before its collapse (see also the New Zealand hoki story
below) (SAMUDRA, various).
15
In the 1990s, MSC and other supporters of the initiative responded to these criticisms
in the pages of SAMUDRA, assuring that workshops and consultations were being
carried out around the world. MSC also argued that their certification system was
being field-tested in various settings, including small-scale fisheries and fisheries in
the developing world. It assured that because the scheme was voluntary, it would not
be imposed on anyone, and that it would be market-neutral and non-discriminatory.
Finally, MSC claimed that their standard was not going to work against the interests
of small-scale fishers because it would promote, among other things, sociallyresponsible fishing.5 As a matter of fact, an argument was made that MSC ‘could
actually result in a market advantage for Southern fisheries’ (Ibid.), and that the
experience of FSC supported such a proposition – as if managing fish and forests
were similar processes.6
The comments summarised above show that the original governance structure of
MSC was not perceived to be sufficiently inclusive. As a result, alongside the Board
of Trustees, the executive decision-making body of the MSC, two groups reporting to
it were created in 2000: the Technical Advisory Board and the Stakeholder Council.
The Technical Advisory Board provides advice on technical, scientific and quasijudicial issues to the Board of Trustees; it has some ‘delegated decision-making
authority over the technical and methodological guidelines used by certification
bodies when assessing fisheries and chain of custody’ (Cummins 2004: 88). The
Technical Advisory Board is comprised mostly of fishery and ecological scientists,
and of experts on chain custody and processing; there is only one natural resource
economist in the Technical Advisory Board, and no other social scientist. The
5
Interestingly, in one contribution, WWF argued that they had ‘invited social scientists and experts on
Southern fisheries’ (SAMUDRA, January 1998: 28; emphasis added), rather than from Southern
fisheries, to make sure that their standard was non-discriminatory.
6
Opposition to MSC in the 1990s also came from a very different source. In 1998, the Nordic Council
sponsored a FAO ‘Technical Consultation on the Feasibility of Developing Non-Discriminatory
Technical Guidelines for Ecolabelling of Products from Marine Capture Fisheries’. The argument put
forward by the Nordic Council was that fishery ecolabels (read ‘MSC’) do not fulfil the requirements of
transparency and credibility set by the 1995 FAO Code of Conduct for Responsible Fisheries. The
Council further claimed that global reach and credibility could only be achieved under the guise of
FAO (SAMUDRA, December 1998: 22). This arose from the deep suspicion among Nordic fishery
industries and governments of the motivations of the other partner in MSC, namely the WWF, with
whom they had earlier conflicts on the protection of marine living resources (SAMUDRA, April 1999:
27). This attempt at sidelining MSC was not thwarted by supporters of MSC, but rather by countries,
especially in Latin America and Asia, that saw ecolabels of any kind as a form of discrimination
against their fishery products. This position was forcefully put forward by Mexico, which had lost
significant export earnings as a result of the ‘dolphin-friendly’ tuna dispute with the US, despite having
won the formal case at the GATT/WTO level (see Appendix 1). More recently, a sign of a possible
turn-around in Nordic countries has been the announcement that the Norwegian saithe fishery has
started an assessment with MSC.
16
Stakeholder Council represents specific interests, grouped under eight categories,7
among which we find a ‘developing nation group’ represented by three academics
(from Brazil, Mexico and Nigeria) and a Canada-based organisation of fish
harvesters and workers. Half of the members of the Stakeholder Council are
appointed by the Board; from 2004, a Stakeholder Council Steering Group has been
created to ensure more coordination between the Council and the Board.
Even though MSC has been fashioned after the Forest Stewardship Council (FSC,
established in 1993, also with input from WWF and other conservation groups), the
latter is an open-member organisation, while the MSC structure is ‘significantly
different and more corporate. Its managerial structure is designed to insulate the
Board of Trustees from the political influence of civil society actors … The
Stakeholder Council can only advise the Board of Directors on its views, it cannot
compel them to take action; and there is no equivalent of FSC’s biennial General
Assembly where stakeholders put forward resolutions to alter the organization’s very
constitution’ (Gale and Haward 2004: 28-29). Gale and Haward (Ibid.) tentatively
argue that WWF, having learnt from the FSC experience, decided to promote a less
inclusive and more efficient governance structure for MSC that could keep up with a
fast-moving business environment. This very insulation, however, meant that MSC in
its formative years was blind to the needs of developing country fisheries, and smallscale ones in particular.
3.3 New challenges
In the 2000s, criticism of the MSC initiative coalesced around three main issues: (1)
limited market coverage; (2) the actual ‘sustainability’ of certified fisheries; and (3) the
failure of certifying a significant number of developing country fisheries and of
adapting the standard to small-scale, data-poor fisheries.
Limited market coverage
In the first few years of operation, MSC certified a number of fisheries of limited
commercial importance to Unilever and other industrial processors and came under
7
The eight groups are: scientific, academic and resource management interests; general conservation
NGOs and interests; marine conservation NGOs and specialist interests; general interests and
organisations; catch sector interests; supply chain and processing interests; retail, catering and
processing interests; and developing nation and fishing community interests.
17
fire for it. This prompted MSC to pay more attention to commercial interests and
volume requirements of certified fish. To some extent, this has been achieved. By
early 2006, MSC had certified 15 fisheries, among which large fisheries such as
Alaska pollock, Alaska salmon, New Zealand hoki, and South African hake. Alaska
Pollock is the largest fishery in the world, supplying most of the raw fish material to
fast food chains, including McDonald’s. Four of the certified fisheries in 2006 were
going through re-assessment. There were also 21 fisheries undergoing first
assessment
and
‘dozens
more
in
the
confidential
pre-assessment
stage’
(Fish4Thought, March 2006). The most important fisheries undergoing assessment
are North Sea herring and Chilean hake, although the assessment of the latter
seems to have been in a dormant phase since 2003. In 2004, MSC estimated that
certified and under-assessment fisheries represented four per cent of global wild
edible supply of fish (MSC1; MSC2). If we consider only certified fisheries, however,
this proportion in 2004 was less than one per cent. Within some sub-categories, MSC
seems to be much stronger. According to 2006 estimates, fisheries that have
obtained or are undergoing MSC certification represent 32% of the global ‘prime
white fish’ catch and 42% of the wild salmon catch (Fish4Thought, March 2006).
MSC-certified products have significant commercial presence at the retail level only
in the UK, Switzerland, and Germany – with some presence in the US, France and
other European countries (MSC2). In 2003, Sainsbury was the first retailer that
committed to source fish only from sustainable sources (Cummins 2004: 93).
According to MSC, 223 labelled products are marketed in 23 countries worldwide.
Eighty-nine per cent of these products contain Alaskan salmon or New Zealand hoki.
The MSC logo is used by 12 European retail chains under their own private label on
more than a total of 70 products. Two-thirds of these products are found in two Swiss
retail chains.8 In key fish markets such as Spain and Italy, however, very few MSClabelled products are available to the public.
As mentioned above, in 1996 Unilever had committed to purchase all its fish from
sustainable sources by 2005. Most of the fish Unilever sells comes from groundfish
species, specifically Alaskan and Russian pollock, Russian and Norwegian cod,
saithe and haddock, South African and Chilean hake, and New Zealand hoki. These
8
Source: [Online]. Available: http://www.globefish.org/dynamisk.php4?id=2495 (accessed March
2006).
18
are sourced in the form of frozen blocks from around 100 suppliers and sold mainly
as frozen products under Unilever’s own brands, such as Iglo, Birds Eye, Findus,
Frudesa and Knorr. By the end of 2004, Unilever was buying about 50% of fish used
in Europe (not the overall volume) from MSC sources,9 and expected this figure to
rise to 60% by the end of 2005.10 Unilever’s turnover on frozen fish products in
Europe is USD 1.25 billion a year (The New Zealand Herald, 18 July 2005).
One of the main setbacks Unilever experienced in relation to MSC-labelled products
was the marketing disaster of New Zealand hoki in the UK. It heavily promoted
‘sustainable’ New Zealand hoki in an attempt to break British consumers’ preference
for cod and haddock. The campaign started in 2002, pitching MSC hoki products
under the Birds Eye brand at one-third discount under the price of ‘unsustainable’
cod – a hoped for win-win situation of cheaper and more sustainable fish.11 The
uptake from consumers, however, was less than satisfactory. In addition, Unilever
suffered from a retailer price war on cod, a big seller where margins are normally low.
Cod prices soon became lower than those for MSC-labelled hoki. By 2004, all
supermarket chains had delisted hoki products (Ibid.). In addition to highlighting the
limited power that even giant branded food processors have vis-à-vis supermarket
chains, the hoki story suggests that marketing ‘sustainability’ is tricky in an
environment of competitive pricing.
Given that a typical European hypermarket or medium sized supermarket sells
several hundred seafood products, the incidence of MSC is still small, with the
exception of Switzerland (where 70 different products carry the MSC label). This
situation may change dramatically, however, following the announcement that WalMart has committed to sell only MSC-labelled fresh and frozen seafood in North
America within 3-5 years. Metro, the world’s third largest retailer, and Deutsch See,
Germany’s leading seafood supplier, have announced that they will increase the
availability of MSC-certified seafood in Germany (Fish4Tought, March 2006). The
certification of Alaskan pollock is also having an impact in terms of the number of
products carrying the MSC label, especially in the UK. Finally, traditional and
9
Alaska pollock, South African hake and New Zealand hoki are MSC-certified; Chilean hake is
undergoing certification.
10
Source: [Online}. Available: www.unilever.com/ourvalues/environmentandsociety/sustainability/fish
(accessed March 2006).
11
Incidentally, the first cod fishery (Pacific freezer longline cod) started an assessment with MSC in
January 2006.
19
important fish markets, such as Portugal, Spain and Italy, are slowly adopting a small
number of MSC products (under the South African brand I&J) (Fish4Thought March
2006).
As an MSC officer stated (MSC2) ‘certification is driven not by consumers, but by
supermarket chains and branded processors’ based in developed countries. ‘MSC is
used by these corporations as one of the tools in their Corporate Social
Responsibility portfolio … Selling fish is about three things: (1) white quality; (2)
price/quality ratio; and (3) as an afterthought, sustainability’ (MSC2). MSC is sought
by retailers and branded processors also because of its chain of custody system,
which ensures traceability from vessel to point of sale (MSC2). MSC has had some
difficulties in gaining consumer recognition and market acceptance in the first few
years partly because it did not certify fisheries that could supply large volumes. Large
processors and retailers seek high volumes and continuity of supply. This is
particularly important for retailers to avoid ‘stock-outs’ (see also Gibbon and Ponte
2005). In a sense, the certification of South African hake (see below) was an
important step for MSC to ensure adequate volumes of white fish to large fish
processors and supermarkets chains (MSC2).
Sustainability
A second line of recent criticism has come from conservation groups arguing that
certified fisheries are not ‘sustainably managed’ in reality. The New Zealand hoki
fishery is, again, at the centre of this criticism. The seafood industry in New Zealand
is the fourth largest export earner, and 25% of fish exports are represented by hoki.
Forest and Bird, a conservation group based in New Zealand, appealed against the
certification of the hoki fishery in 2001 arguing that the fishery was ‘clearly
unsustainable’. A formal dispute panel was formed in 2002 and confirmed the
certification outcome, although it raised issues in relation to the impact of the fishery
on the surrounding environment.12 In 2001, the total allowable catch (TAC) for hoki
was 250,000 tons. By 2004, the New Zealand Ministry of Fisheries had to cut down
the TAC to 100,000 tons following reports of rapidly decreasing stocks. Forest and
Bird called on MSC to withdraw its certification of the hoki fishery, due to the dramatic
decrease in stocks and also because the fishery ‘kills hundreds of absolutely
12
Source: [Online]. Available:
www.forestandbird.org.nz/mediarelease/2004/0523_unsustainablehoki.asp (accessed March 2006).
20
protected seals, petrels and albatross every year’ (Ibid.). The Hoki Fishery
Management Company responded that it was actually a sign of proper management
that the TAC had been cut, and that poor recruitment was due to environmental
factors.13
Whatever the reason for poor recruitment, the hoki saga raises the issue of what a
fishery can possibly do to lose MSC certification. One of the MSC principles states
that fishing activities need to be conducted ‘in a manner that does not lead to …
depletion of exploited populations’ (Principle 1). If good management takes place,
and the fishery is depleted, this is still ‘sustainable’. Apparently, only nonmanagement and depletion would lead to decertification. The hoki story is even more
peculiar, as the fishery went through reassessment in the period March 2005-March
2006 – a result of which it was recommended for recertification. This happened
despite a peer-reviewer noting that ‘The fishery 1) has been or is very likely to have
been experiencing overfishing for some time, 2) is depleted or very near depleted,
and 3) is not likely to experience significant recovery based on the model projections
and lack of a rebuilding plan. Therefore, I would suggest that a passing score on
Principle 1 is largely unjustified’ (Ibid.: 62).14 To this, the evaluation team responded
that:
Principle 1 relates to avoiding over-fishing and depletion of the exploited
population, but also to modifying fishing practices so that there is
demonstrable recovery. In its evaluation of the fishery, the team provides
standards in relation to the level to which recovery should occur (both
target and limit). Furthermore, the team notes that the catch limit has been
reduced and fishing practices modified to promote recovery, although it is
much too soon to determine whether recovery is occurring at a reasonable
rate and there is no formal recovery plan. (Ibid.)15
These events should be read in connection to internal discussions at MSC that took
place in 2004 on whether the term ‘sustainability’ should be removed from the
13
Source: [Online]. Available: www.hokinz.com (accessed March 2006).
Source: New Zealand Commercial Hoki Fishery. 2006. MSC Fisheries Certification: Final Report.
[Online].
Available:
http://www.msc.org/assets/docs/New_Zealand_Hoki/Final_RepApri2006.pdf
(accessed May 2006).
15
Source: Ibid.
14
21
claim.16 At a joint meeting of the Stakeholder Council and the Technical Advisory
Board in May 2004, a decision was made to stick to the term.
Developing country, small-scale and data-deficient fisheries
A third line of criticism against MSC concerns the failure of certifying developing
country fisheries, especially artisanal ones. Linked to this concern are issues of
compliance, certification costs, and shortcomings of scientific data (MSC4). So far,
only two developing country fisheries have been certified (South African hake and
Mexican Baja California Red Rock Lobster) and two are undergoing certification
(Chilean hake and Patagonian scallops [Argentina]). All four fisheries are located in
more advanced developing countries. Especially in the early years of operation, MSC
did not pay much attention to developing country needs (MSC2; MSC4), despite the
warnings raised as early as 1996 in the pages of SAMUDRA by ICSF.
Representatives from developing countries were only invited to one consultative
meeting in London. Out of about ten workshops that were carried out to present the
initiative to various fisheries, only one took place in a developing country (South
Africa).
Barriers to achieving MSC certification in developing countries range from
institutional weakness (lack of know-how) to financial costs (MSC does not provide
funding, although it facilitates contacts). Now a ‘Sustainable Fisheries Fund’ has
been set up, independently from MSC, to help developing country fisheries to go
through the certification process (MSC4). However, the fund can only make small
grants to ‘help ensure broadbased stakeholder input into fishery assessments . . . It
will not be in a position to support large-scale research projects’ (SAMUDRA July
2002: 25).
The costs of MSC certification to the client industry can be broken down in three
components: (1) pre-assessment; (2) fishery assessment; and (3) annual audits. Preassessment costs range from a few thousand USD to over 20,000 USD. Direct costs
for a full assessment have varied between under USD 35,000 for a small, simple
16
New Zealand hoki is not the only MSC-certified fishery where doubts persist on ‘sustainability’. An
article in The Guardian (21 February 2004) mentions a series of investigations funded by five large US
foundations on MSC certification of Alaskan salmon, South Georgian toothfish, Alaskan pollock and
New Zealand hoki. These revealed serious flaws, especially in relation to hoki and toothfish.
22
fishery to almost USD 350,000 for a large, complex fishery (MSC1; MSC2).17 The
overall cost of obtaining certification depends on the nature of the problems
uncovered in the assessment and the corrective actions that have to be undertaken.
Most MSC products are processed seafood preparations. Retailers are generally
able to push chain of custody and licensing costs upstream to processors. Therefore,
retailers are generally supportive of what is for them a ‘cost-free’ initiative (MSC2).
However, in the food service sector, where margins are small, chain of custody costs
make a difference. This explains why MSC has made limited inroads in this sector,
together with the problem of ‘visibility’ of the logo and a more complicated
management of traceability (MSC2). Market penetration has also been small in the
fresh fish sector. Placing labelled fresh fish on ice presents challenges as ‘operators
may not be aware of where to put the logo’ (MSC2). In terms of cost reduction
initiatives, MSC is cooperating with the British Retailer Consortium to coordinate
auditing, so that processors can go through a joint audit for both certifications
(MSC1).18
The last article on MSC that appeared in SAMUDRA (July 2004: 41-42) highlights
that financial arrangements for certification are left to private negotiation between
clients and certification agencies. The same article calls for MSC to channel such
negotiations, which would allow discounts and ‘soft’ payment options for selected
fisheries. It also calls for a revision of principles and criteria, either amending them to
fit developing country fisheries and small-scale fisheries, or devising a separate set
of principles and criteria for these fisheries. Another problem with certification costs is
that only three certifiers are currently accredited to carry out fishery certification,
providing a small base for competitive pricing.19 At the same time, the Technical
Advisory Board has registered ‘concerns by some certification bodies about fishery
assessment clients shopping around for an easier assessment.’20
17
See also: MSC. Information sheet 4 – Costs explained. MSC: London. [Online]. Available:
http://www.msc.org/assets/docs/fishery_certification/InfoSheet4_Costs.pdf (accessed February 2006).
18
Other costs related to MSC certification are the cost of chain of custody assessment and logo
licensing. The cost of chain of custody certification varies with size and complexity of the supply chain.
MSC estimates range between USD 1,000 and 5,000 (Peacey 2000: 4; MSC4). Off-product use of the
logo is granted under a licence agreement with MSC’s trading company, MSCI. The fee for on-product
use of the logo is USD 2,000 for companies under a 1 million turnover, otherwise 0.1% of value of
sales. Agreements are signed between MSCI and retailers or their suppliers, mostly the latter (MSC4).
19
Three more agencies are accredited for chain of custody certification only; six agencies are
undergoing accreditation for fishery and/or chain of custody accreditation.
20
Source. MSC Technical Advisory Board, public summary, meeting No. 7, 6-7 June 2005, p.2.
[Online].Available:
23
MSC has finally recognised that its standard and certification procedures are not
geared towards the realities of developing country fisheries, especially small-scale
and data-deficient ones. A special programme (MSC Developing World Fisheries
Programme) is seeking to improve the awareness of MSC in developing countries
and to develop guidelines for the assessment of small-scale and data-deficient
fisheries.21 The project aims at developing guidance for certifiers on the use of
‘unorthodox’ information on fisheries, such as traditional ecological knowledge and
management systems. It also aims at using a ‘risk-based’ approach to qualitatively
evaluate fisheries.22 The aim is not to write a separate standard, but rather to develop
‘operational interpretations’ to assess small-scale and data-deficient fisheries.23 It is
still early to assess the likely impact of such a programme. Funding will not be
available to developing country fisheries directly from MSC, however.24 Failure in
certifying developing country, small-scale fisheries in the short-to-medium term will
seriously dent the legitimacy of MSC. Given that more than half of global fish exports
come from developing countries, one would expect MSC to push harder on this
element even just on the basis of strictly commercial criteria.
The challenges highlighted in these pages refer to the MSC initiative as a whole. The
case study of MSC certification of South African hake that follows will highlight how
ecolabelling is far from being a non-political, neutral and scientific tool in the fight
against over-fishing and towards guaranteeing the sustainability of marine resources.
In South Africa, MSC certification was sought in an environment of competition
against other hake/hoki supplier countries to Northern fish importers and processors
(especially Unilever), of internal divisions within the hake industry (between trawlers
and longliners), and of fears of further quota losses due a post-apartheid,
http://www.msc.org/assets/docs/Governance/PubSumm_TABMeeting7_Jun2005.pdf
[
(accessed
February 2006).
21
Wilson et al. (2002) suggested possible modifications to the current MSC certification methodology
and practice to accommodate the needs of ‘small-scale’ fisheries. In their report to the MSC, they
suggest the use of ‘local ecological knowledge’, combined as appropriate with ‘research-based
knowledge’, they list specific indicators that are appropriate to developing country fisheries, and argue
for the possibility of using analysis of hazard (a specific threat to sustainability posed by the practice)
when analysis of risk (the calculated probability of a practice having a negative impact) is not possible,
practical or it is too expensive.
22
Sources: Interview MSC4 and MSC. Protecting fisheries, improving livelihoods: MSC Developing
World Fisheries Programme. MSC, London. [Online]. Available:
http://www.msc.org/assets/docs/Resources/DWP_6pp_final.pdf (accessed January 2006).
23
Source: MSC minutes of the Special joint session of the Stakeholder Council and the Technical
Advisory Board – The MSC claim of sustainability, Rome, 27 May 2004.
24
MSC refers interested parties to the Sustainable Fisheries Fund, administered by the Resources
Legacy Fund, the WWF Community Fisheries Grants, and the Sea Change Investment Fund.
24
government-engineered attempt to ‘transform’ industrial fisheries. The rest of this
paper seeks an understanding of MSC certification and of its effects that are political
and politico-economic, rather than biological/scientific and managerial per se.
4. MSC and the South African hake industry
4.1 Main markets for South African hake
The value of hake exports is approximately 40% of the total value of South African
exports of fish and fishery products. This represented a value of 2.6 billion ZAR or
USD 143 million in 2003. Sixty per cent of hake exports by value are frozen fillets,
23% are frozen fish (mostly headed and gutted) and 17% are fresh fish (mostly just
gutted) (Fish Industry Handbook 2004; see Table 1).
Table 1: South African hake exports (2003)
ZAR (´000)
fresh hake
frozen hake
frozen fillets
total hake exports
total fish exports
187,014
250,661
647,580
1,085,255
2,625,645
USD
% of total % of total
hake
fish
exports
exports
24,704,624
33,112,417
85,545,575
143,362,616
346,848,745
17
23
60
100
41
100
Exchange rate 1USD=ZAR 7.57 (www.oanda.com, average for 2003)
Source: Fish Industry Handbook: South Africa, Namibia and Mocambique 2004
Spain imports 38% of all value of hake exports from South Africa, followed by Italy
(17%), Australia (13%) and Portugal (12%). Exports to EU-15 countries make up
almost 80% of all South African hake exports by value (see Table 2). In terms of
volume, South African hake represents 19-21% of total EU hake imports (depending
on the data source and the year). South African hake imports represent 19% of total
fresh hake imports into the EU, 25% of frozen hake (headed and gutted) imports, and
23% of frozen fillet imports (see Table 3).
25
Table 2: South African hake exports by country of destination (2003)
fresh hake
(ZAR)
Austria
Belgium
Denmark
Finland
France
Germany
Greece
Ireland
Italy
Luxembourg
Netherlands
Portugal
Spain
Sweden
UK
frozen hake
(ZAR)
frozen fillets
(ZAR)
50
total (ZAR)
932,342
8,455,331
91,872,460
981,063 40,073,841
126,376,379 179,104,880 111,193,501
2,322,253
2,109,758
2,330,155 15,621,265
150
5,115,102
147,051
0
60,123,039
17,087,487
1,767,927
191,729
188,150,286
0
9,387,673
132,927,364
416,674,760
2,322,253
20,061,178
20
675,707
19,425
0
7,942,277
2,257,264
233,544
25,327
24,854,727
0
1,240,115
17,559,757
55,042,901
306,771
2,650,090
EU-15
USA
Australia
Other
242,507,899 185,727,825 425,720,275
1,213,817
1,739,116 62,988,048
2,680,326
50 134,647,217
853,955,999
64,727,164
137,327,593
112,807,926
8,550,484
18,141,029
3,863,176
Total exports
187,014,000 250,661,000 647,580,000 1,085,255,000
143,362,616
2,039,017
1,011,350
724
100
5,115,102
147,051
total (USD)
763,988
187,353
1,427,494
57,320,034
15,888,784
339,709
191,729
500 169,051,575
19,098,211
% of
% of
exports to
exports to
all
EU
countries
0
1
0
0
7
2
0
0
22
0
1
16
49
0
2
0
0
0
0
6
2
0
0
17
0
1
12
38
0
2
79
6
13
3
Exchange rate 1USD=ZAR 7.57 (www.oanda.com, average for 2003)
Source: Own calculations from Fish Industry Handbook: South Africa, Namibia and Mocambique 2004
Table 3: EU-15 imports of hake from third countries (2003)
From all third
countries
tons
fresh hake
frozen hake
frozen fillets
other
total*
total**
49,570
69,567
122,873
18,713
260,723
260,723
From south africa
% of total
volume of
imports
tons
9,558
17,520
28,372
na
55,450
51,663
19
25
23
21
20
Sources: all third countries: Lien (2006); South Africa: * Table 2; ** Lien (2006)
South Africa is the third largest exporter of hake to the EU by volume, behind
Namibia and Argentina (see Table 4). Hake itself represents 20% of total EU-15
imports of groundfish by volume, the largest single species after cod (Table 5). In
essence, the hake sector is a key component of the South African fish export
industry. The EU, and especially Spain, is its main destination market. Conversely,
South Africa is an important source of total hake imports to Europe. Hake itself a
major component of total European groundfish imports.
26
Table 5: EU-15 imports of groundfish (2004)
Table 4: EU-15 imports of hake by main exporting country (2004)
tons
Namibia
Argentina
South Africa
Chile
Uruguay
Other
Total
76,392
56,695
48,590
28,132
14,472
33,241
257,522
tons
% of total
30
22
19
11
6
13
100
Source: Lien (2006)
% of total
hake
hoki
haddock
saithe
cod
redfish
pollock
257,522
12,002
79,068
74,190
258,719
52,503
217,900
20
1
6
6
20
4
17
total of 7 main species
other saltwater species
other freshwater species
of which Nile perch and
tilapia imports from
Lake Victoria
951,904
198,242
119,854
75
16
9
Total
59,555
1,270,000
100
Source: Lien (2006)
4.2 Industry structure
The hake fishery of South Africa is currently organised into four sectors: deep-sea
trawl, in-shore trawl, longlining, and handlining, of which deep-sea trawl is by far the
most important. The hake fishery started in the 1890s, with the employment of the
first deep-sea trawlers, and grew rapidly after World War II. Before 1978, the fishery
was by and large unregulated and catches peaked at over 300,000 tons in the early
1970s. Following the establishment of an Exclusive Economic Zone (EEZ) in 1977,
the industry has been regulated through the allocation of an annual total allowable
catch (TAC) quota and of individual (non-tradable) quotas assigned to fishing
companies. Foreign vessels have been excluded from the EEZ from 1983. The
regulatory agency in charge of fisheries is Marine and Coastal Management (MCM),
a branch of the Ministry of Environmental Affairs and Tourism.
The hake deep-sea trawl TAC has fluctuated between a minimum of 105,000 tons (in
1983) and a maximum of 140,000 tons (in 1997), generally hovering around 130,000
– 135,000 tons since the early 1990s. Two species of hake are caught in South
African waters: Merluccius paradoxus and Merluccius capensis. The former is mainly
caught by deep-sea trawlers, but also by longliners; the latter is caught mainly by
inshore trawlers and the handline sector. For the first time, the 2005/06 assessment
provided a split among the two species. Currently, 83% of the hake quota is reserved
27
for deep-sea trawl, 6% for inshore trawl, and 10% for longline and handline combined
(MCM 2006: 6-7; see Table 6).
Table 6: Structure and characteristics of South African hake industry
Quota
allocation (%
of total hake
quota)
Actual TAC
volume
(metric tons,
2006)
Number of
rights
holders
Jobs
sustained
Jobs per
1000 tons of
TAC
83
6
124500
9000
11000
5500 (max)
46
17
132
na
8938
1480
1495
na
71
164
136
na
Proportion of
TAC by HDIcontrolled
companies
(%; 2002)
25
50
90
na
Sectors
deep-sea trawl
in-shore trawl
longlining
handlining
Sectors
deep-sea trawl
in-shore trawl
longlining
handlining
10
Main export
forms
Size of
operations
Fleet (no. of
vessels)
Proportion of
TAC by HDIcontrolled
companies
(%; 2006)
frozen, fresh
frozen, fresh
fresh
(little export)
large
medium
medium-small
small
79
31
64
130*
43
54
91
(low)
Source: www.feike.co.za
* Total allocated effort (TAE)
Deep-sea trawl
The deep-sea trawl fishery is the most important fishery in South Africa and in the
last decade has accounted for approximately half of the wealth generated from
commercial fisheries in the country (MCM 2006: 6). According to data provided by
fishing companies for the 2006 long-term rights allocation, the deep-sea hake trawl
sector provides 8,938 jobs (see Table 6), most of which are full-time with benefits.
Sixty-five per cent of full-time jobs are land-based. The total book value of assets in
the industry is reported at over ZAR 890 million (or USD 139 million) of which 79% is
harbour and sea-based (MCM 2006). About two-thirds of the total hake trawl catch is
landed in order to be packaged and exported in one of over 50 shore-based facilities
(a few of these have ‘value-adding’ processing lines). The balance is processed and
packaged aboard factory ships at sea (Hutton 2003). The deep-sea trawl fleet is
constituted by 79 vessels, over half of which are factory vessels with freezing and/or
processing facilities, and the rest are wet-fish vessels.25 Established rights holders
are organised in the South African Deep-Sea Trawling Industry Association
25
All vessels are stern trawlers and have a typical length of 30-70m. Typically, wet-fish vessels land
50 tons of fish. Factory vessels can process fillets on board, and typically process 400-500 tons of fish
in 35-40 day trips.
28
(SADSTIA). Newer and smaller entrants in the industry have formed a separate
organisation, the Association of Small Hake Quota Industries (ASHQI).
In order to understand what drove the deep-sea trawl hake industry to apply for MSC
certification in the early 2000s, it is first necessary to provide a historical background
of hake quota allocations in the context of apartheid and post-apartheid politics. The
history of the hake trawl fishery under apartheid is one of exclusion. The system
systematically excluded ‘black’ ethnic groups from access to fishing quotas, licenses
and harbours.26 When individual quotas were introduced in 1979, three white-owned
companies controlled over 90% of the TAC. Despite the entrance of other trawling
companies in the following years, the TAC remained in the hands of white capital. By
1991, there were less than 20 quota holders in the hake trawl sector, and 80% of the
TAC was still in the hands of two groups. The opening up of the industry to
disadvantaged groups started only in the early 1990s (Hersoug and Holm 1999;
Nielsen and Hara 2006; Van Sittert 2002a; 2002b; Ponte and Van Sittert 2006).
Following the first post-apartheid elections in 1994, there were high expectations
among disadvantaged groups that the ANC-led government would radically alter the
distribution of fishing rights even in industrial fisheries such as hake (Nielsen and
Hara 2006: 47). The period of 1995-2000 was marked by the entrance of new players
despite the protestations of the established industry. It was also marked by the long
and tortuous formulation of a new fisheries policy, the 1998 Marine Living Resources
Act (MLRA). The MLRA mandated that the fishing industry should reflect in
ownership and management the demographics of contemporary South Africa. The
urgency of an upcoming election and the assumed appeal to the coloured vote in
Western Cape translated in the ANC minister exercising the powers conferred under
the MLRA to redistribute access rights. However, the proposed redistribution of 199899 provoked an unprecedented legal challenge from the established industry. The
subsequent government defeat in the courts, in combination with the ANC loss in the
provincial elections of 2000 in the Western Cape, resulted in the effective
abandonment of the ‘external redistribution’ agenda (Van Sittert 2002b).
26
In this paper, I use the term ‘black’ as defined in the ‘Broad Based Black Economic Empowerment
Act’: ‘a generic term that means Africans, Coloureds and Indians.’
29
The first half of the 2000s saw the start of a switch from an ‘external’ transformation
approach focused on new entrants to an ‘internal’ transformation approach focused
on what happens within established companies. The argument put forward by the
government regulator (MCM) was that: (1) with some exceptions, new entrants had
not performed well in the 1990s, often leasing their rights to others – thus operating
‘paper quotas’; and (2) large fishing companies had already started an internal
process of transformation that should not be discouraged (Fish Industry Handbook
2002: 242). The 2001 allocation, which for the first time covered a period of four
years instead of one (2002 to 2005), provided the maintenance of the status quo in
the distribution of quotas. This meant that in 2002 only 25% of the total TAC was in
the hands of majority HDI-owned companies (HDI = historically-disadvantaged
individuals) (MCM 2004: 11). This period also witnessed a second wave of litigation.
From 2001 to early 2004, MCM defended 40 court cases successfully (Fishing
Industry News Southern Africa, April 2004: 23). In 2006, the proportion of the total
TAC controlled by majority HDI-owned rights holders increased to 43% (for details on
the 2006 allocation, see Ponte and Van Sittert 2006).
In-shore trawl
Inshore trawl grounds are located on the South Coast between Cape Agulhas and
East London. To protect the inshore areas, vessels operating in the inshore fishery
may not exceed 30m and may not use heavy trawl gear. In addition, vessels fishing
on deep-sea trawl permits may not operate in water depths of less than 110 meters
or within 20 nautical miles of the coast, whichever is the greater distance from the
coast. However, inshore vessels are not restricted from fishing deeper than 110m
(MCM 2005a). The inshore hake trawl fishery employs 31 vessels, with an average
length of just over 20 metres. Its transformation record is slightly better than the
deep-sea trawl industry, but not by much: in 2002, HDI-owned companies controlled
50% of the in-shore hake TAC (MCM 2004: 15). This proportion increased to 54% in
2006 (see Table 6). Rights holders in the inshore trawl fishery are organised in the
South East Coast Inshore Fishing Association (SECIFA).
Longlining and handlining
Longlining is a technique that was used originally by the Portuguese and Spanish. It
was first introduced by a South African company using Spanish vessels
experimentally, and later expanded through Portuguese interests. Hake caught this
30
way (both in-shore and deep-sea) is exported with minimal processing (usually, only
cleaning and gutting), thus does not require large capital outlays (SAH41). Longline
vessels are much smaller and cheaper than trawlers. Hake of this kind (called PQ, or
premium quality) is air-freighted chilled on ice. It attracts a premium price. Many
players in the longlining industry have direct relationships with Spanish importers
(SAH11). Longlining is a relatively new ‘official’ technique in hake fishing in South
Africa.27 The first rights were issued in 1997/98, but the process remained blocked in
litigation for 2-3 years. The allocation issue was finally resolved in 2002, when
longline operators were awarded quotas for a four-year period (SAH43). There are
currently 64 vessels in operation in the sector. In general, MCM is seen to have
facilitated the establishment of a longlining industry for political reasons – over 90%
of the longline TAC is held by HDI-owned companies (SAH35; MCM 2004: 16).
Finally, the handlining industry is a small component of the hake industry (although
not small as a method of fishing in general). The fresh hake export market was
actually supplied first by handliners in the early 1990s. Before then, handliners were
targeting other species, hake catches were incidental and volumes insignificant
(SAH43). The handline industry is actually dominated by whites (Ibid.). Handline
management takes place through an allocation of effort (a limited number of boats
and crew are allowed) (SAH35). In general, much less information is available on
handlining than on the other three hake sectors. By regulation, the allocated effort is
for a maximum of 130 vessels and a total crew of 785, equivalent to a maximum
volume of 5,500 tons.
4.3 Motivations for the adoption of MSC certification
Various motivations for seeking MSC certification were mentioned by South African
hake industry actors in interviews with the author. I have divided these in two
categories: ‘official’ motivations are those promoted by MCM and by major SADSTIA
members – these fall within mainstream understandings of what ecolabelling can
achieve in competitive fish markets. ‘Unofficial’ motivations are those stemming from
27
Longlining at the commercial level was started by one of the medium-sized trawling companies in
1983 targeting kingklip. The fishery was stopped in 1990 due to signs of kingklip stock depletion.
Longliners at that point started to target hake and obtained a quota. When fresh hake exports started
to gain momentum in 1992, MCM closed a legal loophole that had allowed longliners to fish hake with
a shark longline permit, and started a longline experiment (1994-1997).
31
domestic politics or are reflections on the established relations of power within the SA
hake industry (see Box 3). Among the ‘official’ motivations, we find the following:
(1) MSC certification was expected to allow South Africa to remain competitive
internationally; the South African hake industry started being serious about MSC
certification only after the competing New Zealand hoki industry achieved its own
MSC certification.28 One of the arguments was that they needed to ‘keep up’ with
New Zealand and keep abreast of other competitors such as Namibia, Argentina and
Chile (SAH1; SAH4; SAH15; SAH38). Yet, it is not completely clear whether
Argentina and Namibia should actually be seen as pure competitors. One of the two
main fishing companies in South Africa has invested in fleet and processing plants in
Argentina. Some South African companies also hold quotas in the Namibian hake
fishery.
(2) Some actors in the South African hake industry hoped that MSC would open up
markets (or allow them to increase market share) in countries where there is
environmental demand, such as in the UK, Germany and Switzerland. Others argued
that they saw MSC certification as a preparatory move in the expectation that more
‘traditional’ markets such as Spain, Italy and Portugal would become more
environmentally sensitive (SAH29; SAH30). Finally, others mentioned the need to
increase volume (if not price) in some markets that for South African exports are still
small or emerging such as the UK, the USA and Australia (SAH1). Finally, MSC was
expected to be received well by the upscale domestic market – Woolworths, the main
up-market retail chain in South Africa, has indeed started carrying the MSC logo on
its private brand of frozen fish products.
(3) The industry argued that it needed to cater to Unilever’s demands, whatever
these may be. Unilever, one of the founders of MSC, is the main buyer of fish from
the two dominant companies in the South African hake sector; therefore, these
companies felt the need to defend their status of preferred suppliers. According to a
representative of one of the major fishing companies in South Africa, they were
actually under direct pressure from Unilever to certify hake with MSC (SAH19).
28
MSC and WWF held a workshop in South Africa in 1999 to promote the MSC concept. At that time,
the South African industry was not convinced and thought it would be demanding and expensive. The
hake industry actually asked MSC to be certified for free. After New Zealand hoki was certified,
however, the South African industry changed its mind (SAH11; SAH19).
32
(4) Finally, there were hopes that MSC would be followed by a market premium for
‘sustainable’ fish, therefore adding value in non-material aspects of fish quality – an
expectation that has not materialised so far.
Box 3: Motivations for adopting MSC certification: ‘official’ and ‘unofficial’
‘Official’ motivations:
- International competitiveness – keep up with New Zealand hoki (also MSC certified); and
remain ahead of Namibia, Chile and Argentina;
- Open up/increase market share in new markets where there is ‘environmental demand’
(UK, Germany, Switzerland) – mostly for frozen products; keep ahead of possible
developments in ‘traditional’ markets, such as Spain, Italy and Portugal;
- Buyer demand – Unilever is the biggest buyer of fish for the two main South African fishing
companies; maintaining preferred supplier status; defensive mechanism;
- Achieve a price premium for sustainable fish management.
‘Unofficial motivations’:
- Entrench interests of major South African fishing companies;
- Avoid external transformation via ‘conservative management’ legitimised through MSC
certification; the claim is that fewer players entail easier management of the resource;
- Intra-industry battle – marginalise longliners, seen as competitors; send message that only
trawling is sustainable; trawling and longlining in the same areas threaten the resource;
pressure to limit the expansion or even deregister the longline industry.
Source: Own interviews
While these ‘official’ motivations played a role in gathering momentum for the
application of MSC certification, three other ‘non-official’ motivations seem to have
provided the decisive stimulus. The first is that MSC certification would have
benefited the two large companies that dominate the industry. These companies
have ‘value-added’ lines, where they prepare processed products such as fish
fingers, burgers, cutlets, and marinated fillets. The MSC label ends up mostly on the
frozen export product (fished mainly by trawlers) rather than on the fresh export
product (fished by longliners and trawlers). There is a good historical record of
fisheries management in South Africa, so there was a certain level of confidence that
certification would not have been problematic for the trawl industry. These two
companies dragged along SADSTIA and the in-shore hake sector, even though other
companies have much less interest in MSC certification because their main markets
(domestic, Spain, Italy) are not particularly interested in ecolabelling for fisheries
products (SAH1; SAH23; SAH42). This view is shared by MSC officers in London as
well. According to one of them, ‘commercially speaking, Spain is the main buyer of
South African hake, and MSC certification for the main Spanish fish importers would
33
be a good reason to avoid buying fish’ (MSC4). As of 2005, only three companies
held a MSC chain of custody certification in South Africa.
In essence, smaller players in the deep-trawl hake industry (and the in-shore trawl
industry as a whole) were mostly passive regarding the prospect of achieving MSC
certification, especially given the fact that it would not cost them much if anything
(see below). They took SADSTIA’s ‘official’ arguments for certification at face value
and did not perceive that there were other motivations behind the initiative that could
have worked against them (SAH7; SAH24; SAH29; SAH32, SAH34; SAH37).
The second ‘unofficial’ motivation is that MSC certification was expected to provide a
guarantee against the possibility of a further re-allocation of quotas away from the
main (white-owned) fishing companies as a result of the ongoing process of
‘transformation’. These companies sought to gain international recognition for their
efforts to ‘sustainably manage’ the South African hake fishery (SAH1; SAH4; SAH15;
SAH36; SAH38). MSC certification helps large quota holders to make claims against
further fragmentation in the allocation of hake quotas. As we have seen above, very
few players held HDST hake rights up to the 1990s (see Ponte and Van Sittert 2006).
But following the end of apartheid, the number of rights holders increased to 40-50.
In addition, quotas were assigned to longliners and handliners alongside the trawling
industry. The overall argument constructed by large trawling companies is that it is
easier to manage the resource and police catch levels when there are few players in
the industry (SAH1; SAH 4; SAH 11; SAH17; SAH21; SAH23; SAH26; SAH28,
SAH38; SAH42). This argument was developed and put forward at a key moment in
time, when the regulatory agency in charge of managing quotas (MCM) was
thoroughly revising its system of allocation.
According to a South African hake operator ‘MSC certification had a political value,
showing the government that the industry is serious about conservation. The industry
association also believed that the discipline of planning for MSC certification was a
way to keep the government interested in fishery conservation’ (SAH4). Another
added that ‘the two main fishing companies were under pressure because of the
transformation process. They were trying to preserve the oligopoly condition of the
industry. Conservative management of the resource helps big companies because of
34
more difficult management with more players. MSC certification was a political move,
not an environmental one’ (SAH36).
A number of industry actors suggest that large hake quota holders expected that
MSC certification (through its managerial demands) would safeguard their
allocations. These companies were seeking ‘legitimacy’ in the new South Africa
through ‘internal transformation’ (‘Black Economic Empowerment’ deals, ‘blackening’
of management), rather than ‘external transformation’ (entrance of many new
players, radical redistribution of quotas). Interestingly, this safeguard worked only
partially as some companies lost significant allocations in 2006 (see Ponte and Van
Sittert 2006).
The third motivation relates to an intra-industry battle between the trawling and
longlining sectors after the establishment of the latter in hake fishery in the early
1990s. This conflict is couched in two discourses: one of natural resource
management; and one of job creation and the ‘ideal’ structure of the industry. But
mainly, for the trawling industry, keeping longlining out of the MSC process sent an
implicit message that longlining is not sustainable (SAH1). Not that longliners would
have been willing to cooperate with trawlers on MSC certification – they perceive that
their main market (Spain) is not interested in it and the MSC process as an
expensive one. According to a prominent player in the longline industry, ‘MSC is a
scam … the premium stays with the brand owner that puts the label on … MSC will
matter for longliners only if the EU starts to ask for it in regulation’ (SAH41).
The conservation conflict around trawling and longlining runs as follows: longliners
accuse trawlers of destroying the seabed and of catching small fish; trawlers accuse
longliners of targeting bigger females. There is no definitive evidence on which of the
two techniques affects the hake stock more adversely, but there is a general
scientific understanding that a badly managed combination of the two can be lethal
(SAH36; SAH38). When only hake trawling took place, hake could find sanctuary in
rocky areas where trawling is not possible. When these areas started to be targeted
by longliners, this sanctuary was removed. MCM has been considering two options:
(1) fisheries management areas that are separate for longlining and trawling; and (2)
that each fishery conducts environmental assessment on their activities at their own
cost (SAH35). Neither of these plans has been operationalised so far.
35
The second conflict revolves around claims about job creation and industry structure.
Before fuller information on job creation was available with the 2006 quota allocation,
the trawling industry claimed to be creating 60 jobs per 1000 tons of fish allocated.
The longline industry claimed to be creating 125 jobs per 1000 tons allocated
(SAH41). As we can see in Table 6, these claims seem to be supported by new
evidence. Longliners argue that they are a threat to the trawling industry, not to the
hake stock. This is because if they can show that they are a viable business, and that
they do not have deleterious impacts on the stock, there could be political pressure to
increase their share of the total hake TAC (SAH6). A prominent figure in the trawling
industry claims, on the other hand, that ‘longliners promote a romantic and false idea
of gentle-fishing, small-scale operations, which plays well in current South African
politics. Yet, they are hard to monitor. At the end of the day, they are competitors to
the trawling industry: fish is fish is fish’ (SAH4).29
4.4 The certification process
MSC certification was the result of an evaluation process that lasted almost two
years, and that started with an application prepared by SADSTIA (SAH4). As seen
above, within SADSTIA, the drivers of this initiative were large companies that have
interest in defending their quota allocation from further erosion to the benefit of other
trawling companies and the longline industry. They also have value-added lines
producing retail pack products, and the MSC logo is more easily used on retail packs
than on fresh fish sold on the ice display (SAH19; SAH38). The overall cost of fishery
certification to the industry was USD 100,000 in direct costs of certification, plus USD
100-200,000 to meet conditions in the mid-term (SAH4).30 The direct cost of
certification has been paid by SADSTIA members in proportion to the quota allocated
to them.
29
The battle over ‘legitimate’ industry structure and size of operations was also played within the
trawling industry itself. When MCM proposed in 2005 to re-allocate 10% of the deep-sea hake trawl
quota specifically to SMMEs, it faced direct pressure and media-propagated criticism from large
fishing companies. Eventually, it had to withdraw the proposal (see Van Sittert and PontePonte and
Van Sittert 2006).
30
Chain of custody certification did not entail substantial changes at the processing plant level
(SAH25; SAH26). The only issue was to keep South African hake separate from South American hake
that is imported in frozen blocks to manufacture some fish products for the domestic market. Because
South African companies do not export these products, this was relatively easy to achieve (SAH31).
36
The assessment conducted by the certification body resulted in a relatively high
scoring on stock management (88 points out of 100; the minimum pass is 80) – the
first of the three principles of the MSC standard. According to industry sources, this
was expected as there has been a relatively long history of proper monitoring of the
resource in South Africa. One condition was appended by the certification team: the
development of a sampling programme (to be implemented within two years from
certification) to address deficiencies in understanding the variability of recruitment to
the populations and the age structure of both hake species (Merluccius capensis and
Merluccius paradoxus) (Powers et al. 2004: 40).
In relation to the second principle (ecosystem impact), the South African hake
industry barely made the grade (80 points). Gaps were identified in four areas: (1) bycatch management; (2) ecosystem relations; (3) impact of trawling on the benthic
habitat; and (4) impact of trawling on seabird populations. In relation to the first area,
the certification team demanded the development of a by-catch management plan
within a year from certification (and its implementation within 18 months). In relation
to the second area, an appraisal of research requirements within 12 months was
mandated, followed by initial outputs of research within two years. In relation to the
third area, the certification team demanded further research efforts, a review of gear,
the identification of habitat types, and considering the creation of protected areas. In
relation to the fourth area, the development of a monitoring plan was mandated
within six months of certification, and implementation of such a plan within 12 months
(Ibid.: 40-42).
In relation to the third principle (fishery management system), the industry’s score
was relatively high (88 points). The only condition placed was a review of the
compliance system, possibly followed by instruction, training or corrective actions,
within 12 months (Ibid.: 42).
Despite the fact that the South African hake industry achieved certification, a number
of problematic issues arise: (1) the trawling sector has been certified, but not the
longlining sector, even though they exploit the same stock; (2) furthermore, there are
questions about whether the stock is shared with Namibia, which is not certified
either; and (3) complaints have been raised on the relevance and rigidity of some
indicators in the MSC standard, and on the lack of participation by some segments of
37
the industry in the process. I take these in turn in the next paragraphs. In the
following section, I examine the process of post-certification monitoring and
verification.
Trawling vs. longlining
Hake longliners (and handliners) have not been certified, either because they lacked
a strong association that could represent them and guarantee a proper management
system or because they are one of the potential threats to the incumbent oligopoly. A
paradoxical situation has thus been created, where the trawling sector in a fishery is
certified ‘sustainable’, while the smaller-scale longline sector catching the same stock
is not. Yet, the overall stock is deemed to be ‘sustainably managed’. MCM did raise
this issue with the certifiers, but the response from MSC was that their approach
focuses on fishery by fishery (a management approach), not stock by stock (SAH11).
However, the establishment of separate fishing grounds for the two industries
(admittedly, a potentially difficult political process) was not suggested by MSC
certifiers as a way of addressing this issue, apparently because it is not up to the
certifiers to tell the state how they should manage their resources. In addition to this,
it is peculiar that a stock is said to be sustainable even though it is made up of two
separate species and there was only limited knowledge of the two individual stocks at
the time of certification (although more research has been mandated by MSC in this
area).
One stock, two countries
The MSC approach is to divide up fisheries in management units, even though they
may share the same stock. This allowed MSC to certify the South African hake
industry without certifying the Namibian sister industry, even though it is widely
believed that they share the same stock. According to one informant, Namibia first
considered applying for MSC certification, but then decided against it because it
would encounter problems in qualifying due to management problems – there are
uncertainties about the health of the stock in Namibia, plus the country allows seal
culling (SAH1). A trawling operator stated that he approached the Namibian Minister
of Fisheries to explore the possibility of a joint MSC certification, but the Namibians
refused, arguing that they did not need MSC as they had ‘an efficient management
regime in place already’ (SAH38).
38
A strict interpretation of sustainable management of stock would suggest that the
South African fishery could only be ‘sustainable’ if both it and the Namibian fishery
were certified, but the latter either did not want or was not invited to participate in the
certification process. Therefore, the certification team stated that ‘although mixing [of
the South African and Namibian stocks] will inevitably occur, from a fishery
management perspective the South African hake populations may be considered as
a discrete stock’ (Power et al.: 5).31 This managerial approach to sustainability allows
MSC to ‘match market demand’ by ensuring appropriate supply volumes of certified
fish.
Relevance and rigidity of indicators, participation in the process
Thirdly, the MSC standard was reportedly too rigid to accommodate South African
realities. Some indicators and conditions were not flexible enough, and data had to
be ‘massaged in’ (SAH1). Other conditions were ambiguous (especially in relation to
eco-system impact). Some indicators did not apply at all (socio-economic impact on
coastal communities is not so relevant in an off-shore industrial fishery). Other key
indicators were missing, such as labour conditions on vessels, transformation and
equity issues – although they are not part of MSC’s focus (SAH1). Priority was given
to ‘system functioning’ objectives, again indicating a bias towards a managerial
approach to sustainability.
Conservation groups also complained that ‘the certification process could have been
better in the initial stages with better stakeholder participation …[the certification
agency] met environmental groups individually, but there was no stakeholder forum
to exchange ideas and comments’ (SAH36). When the draft report came out, no
scores
were
available
…
[Conservation
groups]
asked
to
turn
some
recommendations into conditions. The team responded that only by scoring below a
certain level, you could set conditions, but no indications were given on the scores.
Eventually, the team was persuaded. The final report came out with the scoring, but it
31
Biological justifications of this argument have also been attempted. According to a scientist at MCM,
catch levels in Namibia are low, while they are higher in South African waters. This may suggest a
natural barrier between the two countries, perhaps due to high fresh water discharge and
sedimentation from the Orange River (SAH11). Others have pointed out that this barrier cannot be
larger than 5 km from shore (SAH24) on the boundary between the two countries. Another informant
stated that ‘it is inevitable that there is migration between the two countries, especially of the deep-sea
species’ (SAH11). In a 2004 workshop hosted by the Benguela Large Marine Ecosystem (BCMLE)
programme it was stated that ‘there are reasonable grounds that M Paradoxus might be a single stock
that moved between the South Coast and the northern extremes of Namibia’ (Fishing Industry News,
June 2004: 30).
39
would have been too late to do anything about it’ (SAH36). According to WWF, even
after certification, there has been no concerted effort to work on implementation of
conditions, and this has been done on an ad hoc basis. WWF would like to see a
consultative
implementation
committee set up
for
that purpose, including
stakeholders from government, industry and NGOs. Conversely, some industry
players complained that conservation groups exercised undue influence and
managed to convince the certification team to insert some conditions to certification
relating to bird mortality, eco-systems impact analysis and impact on benthic habitat.
The certification team had suggested inserting only recommendations in relation to
these issues (SAH1; SAH36).
4.5 Verification after certification
In 2005, the South African hake industry was subjected to the first surveillance
exercise by the certifying team. This resulted in a surveillance report released in May
2005 (Tingley et al. 2005) that covers progress in all the conditions that were set at
the time of certification. It is worth going into the details of some of these to
understand in broader terms what it means to maintain compliance with the MSC
standard.
Condition 1 related to by-catch and refers to the claim that there are some species
under pressure from hake trawling (kingklip especially). The condition demanded a
management plan to be in place within 12 months and its implementation soon
thereafter. Disagreements within the industry on a by-catch policy meant that it was
not prepared in time for the first surveillance visit by the certification team.32 Yet, the
surveillance report noted that the industry had made moves in that direction, and that
implementation was going to proceed quickly after the plan was in place. The
message is that although the system is not in place, it would be soon. This should be
read in connection with Condition 6 on compliance monitoring. In this case, the team
32
MCM developed a by-catch policy proposal, but the industry rejected it. MCM wanted the industry to
deduct by-catch volumes from the allocated hake quota. The industry wanted a system where bycatch should be in line with historical performance (SAH11). Even within SADSTIA there have been
different ideas on how to manage by-catch. Different companies have different business models, and
for smaller companies by-catch is more important for their financial stability. Large companies wanted
to establish a maximum proportion of by-catch over the hake quota allocated. Medium and small
companies instead argued for a system based on historical performance and an indication of not going
above these levels. They also proposed an inverse proportional system, where smaller companies
could have larger proportions of by-catch (SAH28).
40
observed that measures have been implemented, and that partial fulfilment is due to
‘ongoing issues with staffing’. The report notes that ‘no regulatory infringements
occurred during the current reporting period’ (Tingley et al. 2005: 12). Problems with
staffing (see also below) should raise alarm on the ability of the regulatory agency to
carry on managing the resource effectively. Yet, here they are used as a mitigating
factor.
In addition to this, in July 2005, a hake trawler was arrested and fined by MCM for
‘illegally catching’ snoek. The vessel was found in possession of 39 tons of hake (for
which it has a quota allocation) and 300 tons of snoek, which is supposed to be ‘bycatch’ (Cape Times, 20 July 2005). An industry operator, however, claimed that
everyone has been using by-catch to make their operations more viable for at least
15 years.33 Evaluated in terms of systemic performance, the arrest of the vessel is a
positive outcome, thus will be probably scored positively by the next monitoring team
– at least in relation to the by-catch condition. However, the underlying situation is
not addressed.
Condition 2 related to deficiencies in understanding the variability of recruitment to
the population of both species of hake. Albeit not specifically to address the MSC
conditions, MCM has created two dedicated posts for fish ageing and a hake
fecundity sampling program. This was deemed to have met the condition, which was
‘closed’. A brief look into the recent history of human resource management at MCM
is necessary at this point. First of all, the two positions were created, but no indication
was given on whether the posts have been filled. A large number of advertised
positions in MCM have not been filled in the last decade (SAH47). MCM has
experienced a severe ‘brain-drain’ of managers and fishery scientists in the last
decade, a trend that has accelerated in the 2000s (see below). Therefore, and again,
matching the systemic requirement does not necessarily mean that there is capacity
to carry out the work program.
33
In general, a vessel is operational for a total of 10 months a year. If, for example, a vessel has a
quota of 1,400 tons of hake, and catches 250 tons each trip, it will fulfil its quota in the equivalent of
seven months of operation. It needs to recoup at least the capital costs for the remaining three months
as well. Targeting snoek, a low value, low profit species, is one of the ways of doing this. But the real
money is in monk and kingklip fishing – the two species targeted in the by-catch management plan
mandated by MSC certifiers (SAH 47).
41
Condition 3 related to gaps in understanding of ecosystems relations. This is one
aspect that even MSC recognizes as difficult to achieve, even in the most advanced
fisheries. In addition to a new research program on the topic, the certification team
noted that the allocation policy of 2006 ‘explicitly recognises the ecosystem approach
and it seems will be entrenched in the future management of all fisheries’ (Tingley et
al. 2005: 7). A policy statement is sufficient to appease the certifiers. As long as (the
appearance) of movement is made towards an abstract goal, certification will not be
lost.
In its general comments, the monitoring team reflected upon the results of stock
assessment in 2004, which indicated that stock levels had not changed. The team
noted a series of weaknesses in data collection and in the understanding of longterm historical and ecological implications. According to an informant, ‘the hake stock
is going through a tough time at the moment, although MCM is doing a good job in
management. In the last 1-2 years, catch per unit of effort has decreased, and
smaller sized fish are being caught. Small size is not necessarily a bad sign, it means
that there is good recruitment, but it needs to be accompanied by catch of many
bigger fish as well. This is not happening’ (SAH37). There are also widespread
concerns about the sustainability of the resource in Namibia, where there is
speculation that overfishing is taking place. South African operators feel that the
Namibian TAC is too high (SAH46). Interestingly, the 2006 TAC in South Africa was
reduced by 10,000 tons below the 2005 TAC. This figure, however, was arrived at on
the basis of the precautionary principle – for the first time since the 1970s the hake
survey did not take place in 2005 due to an unresolved dispute on overtime payment
for the vessel crews that were supposed to operate the survey. This led to a nonscientific reduction that could in theory undermine MSC certification. Yet, ‘MSC
needs South Africa hake, especially after New Zealand hoki collapsed … following
MSC certification!’ (SAH46).
The overall assessment of the monitoring team was a positive one, and continuation
of certification was recommended. No MSC-certified fishery has been decertified so
far. Is this an instance of ‘path dependency’ or a sign of improved management?
South African observers of the fish industry made it clear that with the current rate of
loss of scientists and managers at MCM, there will be no capacity to properly monitor
the use and possible abuse of quotas (SAH45; SAH46). Thirty-five scientists have
42
left MCM between 1996 and 2005 (Fishing Industry News, December 2005: 12). In
January 2005, two of the key management figures at MCM resigned in response to
being accused of racism and lack of transformation at MCM during a formal briefing
to the portfolio committee on environment and tourism. This is particularly interesting
as one has impeccable ‘struggle credentials’, and the other is a ‘previouslydisadvantaged individual’. After their resignation, the Minister brought them back
under a consultancy contract to carry out the same functions (at a much higher cost)
(SAH44; SAH46).34 According to an industry source, current management at MCM
lacks deep understanding of allocation issues. After the 2006 allocation, which for the
first time assigned quotas for a period of 15 years (instead of one year, or more
recently five years), compliance by industry to regulation is likely to decrease. A
review of allocation should follow every 2-3 years to assess compliance with the
terms of the allocation policy, but there is no capacity at MCM at present to
undertake that. ‘Many quota holders are privately admitting that there will be a free
ride for the next 15 years’ (SAH46).
4.5 MSC, hake and beyond
The expected commercial benefits that were to accrue to the South African hake
industry from MSC certification have for the most part not materialised. The MSC
standard explicitly refers to the provision of ‘socio-economic incentives for
sustainable fishing’. Yet, according to industry sources, MSC fish is sold at the same
price as ‘regular’ fish at the retail level (SAH38). A source at MSC explained that
retailers refused steadfastly to put a price premium on the labelled product (MSC2).
They argued that the product would sell only if it did not cost more to the consumer,
and that the organic premium works only because it is sold as a ‘health’ benefit, thus
refers directly to benefits accrued to the consumer (SAH1; SAH43; MSC2). This is
reflected in prices paid for MSC fish to South African exporters, which is the same
paid for ‘other’ fish. As in other ‘sustainability initiatives’ in the agro-food sector, MSC
certification may only entail maintaining a preferred supplier status, rather than
providing an explicit financial incentive to ‘sustainable’ producers (see Daviron and
Ponte 2005; Giovannucci and Ponte 2005). This has led one of the drivers of
certification to state that MSC had not delivered commercial advantages to the
34
Three further senior officers left MCM or took leave of absence in the first few months of 2006
(www.feike.co.za).
43
industry – neither in terms of a premium nor in terms of market share (SAH38).
Another company, however, has started to sell small amounts of its own branded
frozen products with the MSC logo in ‘traditional’ markets such as Spain, Portugal
and Italy. In terms of actual impact on sustainability, recent reports emerged
suggesting that the hake stock is in danger, and that catches are at historically low
levels (Fishing Industry News, June 2006: 10; Mail & Guardian, 30 June 2006). This
is similar to what happened to the hoki industry in New Zealand, suggesting that
MSC and other market-based instruments per se are not sufficient to ensure
sustainability. One of the most respected fisheries management experts in South
Africa, Horst Kleinschmidt, proposed a ‘rescue plan’ for hake that smacks of old-style
regulation, not market-based labelling: establishing extensive Marine Protected
Areas and a strict compliance regime, and putting observers on all vessels (Fishing
Industry News, June 2006: 11).
However, the relative commercial failure of MSC for the South African hake industry
may not be such a problem, since the drivers of the initiative have achieved two other
objectives. First, the longlining industry has not been allocated a higher proportion of
the total hake TAC in 2006. But even more importantly, MCM embedded the
argument that fewer players are better for conservation than a larger number in its
own policy that guided the 15-year allocation of 2006 (MCM 2005b). No new entrants
were assigned quotas and some of the smaller existing quotas were not renewed.
Although the big companies lost a proportion of their quotas (a sizeable volume for
one of the main players), the allocation of long-term rights is likely to create a
secondary market for quotas. As a result, an even more concentrated industry may
emerge in the mid-term (Ponte and Van Sittert 2006).
Given the lack of price incentives, it is unlikely that MSC certification will be
expanded to other fisheries in South Africa. The South African who sits in the
Stakeholder Council of MSC (a representative of a mid-sized trawling company) has
been working on sensitising the MSC on the specific problems of small fisheries in
relation to certification (SAH7). Also, conservation groups have been trying to attract
funding to certify other, smaller, fisheries in South Africa. They argue that, despite the
launch of the Sustainable Fisheries Programme, it is still a huge problem to find
funding and organise fisheries to prepare for certification. One of these groups wants
to facilitate longline hake and West Coast Rock Lobster, but they are encountering
44
problems because of lack of incentives for the fisheries. ‘If there is no premium in it,
these smaller fisheries will not get involved … They will not do it just for the sake of
the environment; only if there is a market incentive; in South Africa, there are no
strong NGOs that could smear mud on big fish companies’ (SAH36).
5. Comparative analysis: timber, fish and coffee
The main commercial interests for fishing industries in applying for MSC certification,
in South Africa and elsewhere, have been to obtain (or maintain) preferred supplier
status with fish buyers and to expand (or maintain) market share. There has been
little discussion in the sustainability standards literature of what this commercial
approach means for actually matching sustainability objectives. In relation to
sustainable timber initiatives and the Forest Stewardship Council (FSC) certification,
Klooster (2005) argues that large buyers, such as IKEA and Home Depot, do not only
demand certification, but also high volumes, uniform characteristics and a
competitive price. ‘These commercial values condition the ability of other actors to
fully realise the social and environmental values of environmental certification of
forests’ (Ibid. 404). In the same way, the certification of large fisheries such as
Alaskan pollock, New Zealand hoki and South African hake was a central commercial
objective for MSC, an objective that put sustainability per se in the background.
Table 7: 'Sustainability' certifications in coffee, timber and fish
Product
Coffee
Timber
Fish
Certifications and
labels
Old
wave/
new
wave
(O/N)
Fair trade
Organics
Utz Kapeh
Rainforest Alliance
Bird-friendly
FSC
MSC
O
O
N
N
N
N
N
Corporate
Public
Stakeholderinvolvment in
support for
driven?
formulation?
certification?
N
N
Y
N
N
Y
Y
Y/N
Y
N
N
N
Y
N
N
Y*
N
N
N
N
Y**
Premium
paid to the
producer?
Producers
bear cost of
certification?
Small
producerfriendly?
Special
flaxibilites
for smallscale
producers?
Y
Y
N
Y/N
Y/N
N
N
N
Y/N*
Y
Y
Y
Y
Y
Y
Y/N
N
N
N
N
N
Y
Y
N
N
N
Y
N
* Many organic certification schemes are subsidized either by governments or aid agencies
** Support in terms of providing scientific/managerial resources, research inputs
Case studies on timber and coffee, alongside the case study of fish in this paper,
have shown that sustainability certifications can marginalise smaller producers and
producers in poorer countries (Klooster 2005; Taylor 2005; Giovannucci and Ponte
2005; Daviron and Ponte 2005; see Table 7). These studies also show how
certification agencies have recognised the problem of marginalisation and tried to
45
address it externally by inviting small producers to contact NGOs or foundations that
would provide technical assistance and capacity building. Only those initiatives that
are (at least partially) stakeholder-driven, however, have developed special
flexibilities for small-scale producers.35 ‘Old wave’ certifications are the only ones
paying regular premiums at the farm (or cooperative) level, and are the only ones
where certification costs are not fully paid by producers.36 In no case where corporate
involvement was heavy at the time of starting a sustainability initiative a premium is
paid to producers on a regular/systematised basis (see Table 7).
Klooster (2005) aptly describes the historical path of FSC certification in four phases.
It is worth describing them here in some detail, since the flow of events follows fairly
closely the one described above for MSC. In a first phase, conservation groups
organised boycotts and direct actions against big wood retailers and logging
companies. The parallel in fisheries was the pressure from conservation groups
against consumption of ‘dolphin unfriendly’ tuna, and other initiatives that drew lists of
‘irresponsible’ fisheries to be boycotted by consumers. In a second phase, WWF and
other groups started to work on guidelines for ‘good wood’ buying and then facilitated
the creation of an organisation (FSC) that also included large wood buyers, and a
standard to be applied. As we have seen above, WWF was also instrumental in
setting up the MSC and in drawing the standard together with Unilever. In a third
phase, the same conservation groups aggressively promoted the FSC label among
retailers under the silent threat that avoiding certification would damage their brands.
During this phase, certification also spread to forest management companies. The
FSC initiative, which started as a grass-roots campaign to curb deforestation in the
tropics, became a mainstream, ‘document-intensive, buyer-driven preoccupation for
delivering large quantities of certified wood products to market, with a focus on big
forest producers and large wood consumers’ (Klooster 2005: 412; Taylor 2005). As a
result, 80% of the current certified forest area is located in the US, Canada and
Europe – with only 10% in tropical countries, and only 3% under community
management (Ibid.). There are strong parallels with MSC here as well, with the
important caveat that developing country fisheries were never a priority to begin with
at MSC. According to Klooster, FSC is going through a fourth phase that entails
35
In the case of fair trade coffee, only smallholder members of cooperatives can be certified.
In fair trade coffee, cooperatives do not pay for certification. In organic coffee, producers do pay for
certification, but often not in full – in many schemes, governments and aid agencies heavily subsidise
the cost.
36
46
working on corrective measures to reduce costs of certification and modify
methodologies and indicators to adapt them to the needs of small-scale producers.
Exactly the same is happening within MSC. The difference is that FSC, a memberdriven organisation, has devised a special procedure for small-scale forest
management; in organic coffee, a special ‘group’ procedure has been devised to
minimise the costs of certification in developing countries; instead, MSC is
considering special ‘flexibilities’ within the same procedural framework and standard
that are applied to large, developed country fisheries.
A similar overall evolution of events took place in two ‘new wave’ coffee sustainability
initiatives, with the difference that Rainforest Alliance and Utz Kapeh skipped the first
phase of ‘negative publicity’ altogether, since this ground had already been covered
by the fair trade movement and NGOs such as Oxfam. Rainforest Alliance and Utz
Kapeh were able to focus on a more ‘positive’ approach, and a commercially-friendly
one, from the start. They also adopted standards on environmental impact and social
conditions of production that individually were less demanding than existing fair
trade, organic and ‘shade-grown’ standards (Giovannucci and Ponte 2005). In all
three value chains for timber, fish and coffee, ‘new wave’ certification organisations
rarely provide direct funding for facilitating standard compliance. Normally, they
facilitate access to a network of foundations and NGOs financing these initiatives
(usually on a small scale) and providing technical assistance. This is consistent with
a neo-liberal approach to trade, where inequality of resources can be addressed by
equality of opportunity, even though technical assistance is spotty, politicallymotivated, and reliant on expensive expatriate advice.
6. Conclusion
Many observers of agro-food industries in the South see third-party certification and
labelling as a way of addressing skewed power relations along global value chains.
First- and second-party certifications are indeed more open to manipulation by
powerful actors (Mutersbaugh 2005) than third-party certifications. Yet, third-party
certifications only go part of the way, as they play themselves within specific political
economies and power relations (Hanataka, Bain and Busch 2005). By externalising
functions such as achieving sustainability, ‘lead firms’ in global value chains, such as
large retailers and branded processors, may actually be in a better position to focus
47
on what they do best and at the same time outsource ‘trouble-solving’. This allows
them to be even more ‘hands-off’ with their immediate suppliers and to outsource
‘non-core’ functions more effectively – thus to perform better in key financial
indicators. Lead firms then can pay better attention to short-term returns, play more
effectively in switching between ‘preferred’ suppliers, and fine-tune economies of
scale and scope to their advantage (Ponte and Gibbon 2005). This happens in an
operational environment where the extra costs of achieving food safety,
environmental and social standards are moved up the value chain towards
producers. Increased sustainability may indeed result from these initiatives, but
Northern consumers and corporations rarely foot the bill.
Not surprisingly, developing countries have been generally reluctant to participate in
ecolabelling initiatives. They have highlighted the embedded protectionist elements
of some of these initiatives, and the naiveté of some standards in assuming that
certain models of environmental management can be exported tout court to the
South. This reluctance has been counteracted with assurances of transparency, nondiscrimination and technical assistance. In essence, ecolabels are assumed to be
‘good for the global commons’ and their justification has been offered within a
discourse of science, objectivity, independent certification, transparency and systems
management. As long as market-based mechanisms of ensuring sustainability, such
as ecolabels, are seen as ‘neutral’, larger politico-economic factors, market
structures and the role of special interests and expert knowledge will remain in the
twilight.
The Maritime Stewardship Council (MSC) initiative has offered more sophisticated
fish suppliers a way of increasing their visibility in the market place under the guise of
sustainability, alongside other ‘new wave’ sustainability certification schemes, such
as Forestry Stewardship Council (FSC) certified timber (Klooster 2005; Taylor 2005)
and Utz Kapeh and Rainforest Alliance-certified coffees (Giovannucci and Ponte
2005). These schemes, while offering preferred supplier status to certified suppliers,
are expensive to comply with and rarely offer a premium. In time, the standards that
underpin them may become the new ‘minimum standards’ for the market, effectively
redesigning the nature of market access. This has happened, for example, to
voluntary food safety and good agricultural practice standards such as EUREP-GAP.
48
‘Old wave’ coffee certification schemes, such as fair trade and organics, instead offer
premiums over non-certified coffees at the production level. Fair trade attempts to
address some of the inequalities that are built within the trading system itself. The
organic movement questions the very nature of an industrial approach to agriculture.
In both cases, however, these ‘radical’ challenges seem to be on the wane (Guthman
2002; Raynolds 2002; 2004; Raynolds, Murray and Taylor 2004; Taylor 2005) in the
name of commercial success. This has happened in parallel to a general move from
a holistic and hands-on engagement with suppliers and towards more hands-off,
auditable, systemic and managerial approaches to sustainability (Daviron and Ponte
2005). In these approaches, expert knowledge has come to play an increasingly
important role. Scientists (marine biologists in the case of MSC) and systems
managers are key actors. Social scientists and even economists are relatively
marginalised. At the same time, activists are ‘expertised’. If shortcomings arise, they
can be fixed technically and managerially.
But systemic compliance masks as much as it reveals. For example, the arrest of a
vessel that fished illegal quantities of by-catch is a positive indicator for MSC in terms
of fisheries control, monitoring and compliance. But the underlying cause of by-catch
fishing (assuring the financial viability of a fishing company) is not addressed. The
ritual of verification is used to reconcile the contrasting objectives of ensuring both
conservation and financial viability. In similar ways, in the Ugandan Nile perch
industry, important chunks of the regulatory and monitoring system on fish safety
exist only on paper. The food safety assurance system there allows the achievement
of a series of contradictory objectives: to facilitate efficient logistics and ensure food
safety; to match market demand and take care of sustainability; to implement a topdown food safety monitoring system and a bottom-up fisheries co-management
system. This means that at least some food safety-related operations have to be
carried out as ‘rituals of verification’ (Ponte 2005; 2007; Power 1997).
Thus,
conformity to systems performance and specific rules becomes more important than
achieving the stated objectives of ‘sustainability’, safe food or fair trade. Principles
are being ‘chocked’ by managerial rules and demands, although a countermovement may be detectable in the auditing profession to go ‘back to principles’.
Verification in particular is explicitly constructed as a pedagogical exercise. It is not
meant to exclude, but to teach management and better conformity. This is implicit in
49
the nature of auditing (Power 1997), but does not bode well for actually achieving
‘sustainability’.
Much of the literature on sustainability labels has focused on standard setting,
governance and implementation. Under this rubric, the MSC initiative has been
criticised on a variety of counts: for having been driven by the largest commercial
player in the industry – at least at the beginning; for not having consulted with fishers
and with developing country industry actors at the stage of standard development; for
having a centralised and corporate structure; for being biased in favour of industrial
fisheries – and developed country fisheries in particular; for the high costs of
compliance and certification; and for not ensuring ‘sustainability’.
This paper placed more emphasis on the motivations behind the adoption of MSC,
on verification procedures that follow certification, and on local settings. MSC
certification, far from being simply a neutral and equal instrument yielding better
conservation for humanity, is achieved in the context of global and local competition,
special interest battles, and local politics. In South Africa, although couched in a
discourse of conservation, MSC was one of the instruments used to justify positions
in debates that had race relations and possible redressing of past wrongs under
apartheid as the main issues at stake. It was played as a tool against the redistribution of quotas away from main, white-owned, quota holders to the possible
benefit of ‘black’-owned smaller quota holders and new entrants within the deep-sea
hake sector. It was also used as a tool to avoid redistribution of quota away from the
large, mainly white-owned, deep-sea trawling sector to the advantage of the mostly
‘black’-owned longlining sector. Similarly, in the case of timber, ‘FSC [certification in
Mexico] provides communities and indigenous groups with a defence against
criticism for their alleged role in forest degradation and sometimes has been a key
resource in communities and indigenous groups’ struggle for more secure land
resource tenure’ (Taylor 2005: 138). Local politics and the situated political economy
of conservation do matter for ‘sustainability’ certifications.
Developing country fisheries, and small-scale ones in particular, have been
marginalised in the MSC system. Only two fisheries in South Africa and Mexico have
been certified so far. This is not surprising if one looks at comparative evidence from
other ‘new wave’ sustainability initiatives in timber and coffee. Delivering
50
‘sustainability’ at no additional cost and in large volumes demands standards that are
tough in terms of systems compliance, but actually quite approachable in terms of the
thresholds of sustainability indicators. Entry barriers to ‘sustainability’ entail
economies of scale and scope that require managerial resources and access to
networks. Because managerial and systemic objectives are harder for developing
country actors to match, this creates a hidden imbalance in favour of more endowed
participants.
A stimulus for revising the MSC system in a way that is friendlier towards developing
countries could have been the adoption in March 2005 by the FAO Committee of
Fisheries (COFI) of voluntary guidelines for ecolabelling of fish products (FAO 2005).
These guidelines provide a framework of reference for governments and
organisations that have or want to establish ecolabels for marine capture fisheries.
They include the need for independent auditing, transparency of standard-setting and
accountability, and the need for standards to be based on ‘good science’. They also
lay down minimum requirements and criteria for assessing whether a fishery should
be certified and an ecolabel awarded, drawing on FAO’s Code of Conduct for
Responsible Fisheries.
Unfortunately, transparency and inclusivity in standard setting do not work
retroactively. Also, instead of calling for special standards and verification systems to
be applied in developing countries, the FAO guidelines simply call for ‘financial and
technical support’. MSC stated that its system would be wholly consistent with the
FAO guidelines by June 2006 (Fish4Thought, March 2006). The MSC system can
apparently be fixed just by outsourcing accreditation to an independent organisation,
and by making ‘decisions relating to complaints and appeals … fully independent of
the MSC. A fee structure for complaints is a further necessary change to conform
with the guideline, and this will be designed to protect equitable access for all interest
groups’ (ISEAL Gazette, March 2006).
Special systems of compliance and verification are necessary to cater for the needs
of developing countries and small-scale producers. MSC was proposed such an
instrument (see Wilson et al. 2002), but decided not to adopt it. Until this happens,
and until premiums are not paid at the producer level, MSC and similar initiatives will
keep putting ‘sustainability’ at the service of commercial interests. The most
51
important question is not whether a set of stricter or looser standards are needed to
ensure ‘proper sustainability’. What is more important is to promote a movement from
rules and indicators back to principles. This entails a less managerialist approach
and more room for judgment on how principles can be achieved in specific political
economies and local conditions.37
Appendix 1: Ecolabels and WTO rules
This Appendix examines the issue of WTO-compatibility of ecolabelling in general
terms, and specifically in relation to the basic principle of non-discrimination. In
relation to trade-related environmental issues, the principle of non-discrimination
ensures that national environmental protection policies do not arbitrarily discriminate
between foreign and domestically produced ‘like products’ (‘national treatment’
principle, GATT Article III), or between like products imported from different trading
partners (‘Most-Favoured Nation’ or MFN principle, GATT Article I). The issue of nondiscrimination has been discussed in the Committee on Trade and Environment
(CTE) in relation to general product-related environmental requirements, and in the
Committee on Technical Barriers to Trade (CTBT) in relation to the interpretation of
the Agreement on Technical Barriers to Trade (TBT) (Vitalis 2001).
Ecolabelling has been in the workplan of CTE since 1994, but only with the Doha
work programme in 2001 did the CTE receive a formal mandate to address this
issue. CTE only acts as a convener for discussions. It does not have formal rulesetting powers in the area of ecolabelling, thus its recommendations would have to
be decided upon by the Committee on TBT (Rotherham 2004). ‘The CTE has
recognised that ecolabelling programs can be valuable environmental policy
instruments. Nonetheless, there is also concern that the use of ecolabelling schemes
may reduce market access for some countries because of the potential for
prohibitively expensive or complicated requirements, or by the inadvertent or
intentional creation of disguised restrictions on trade’ (Polack 2003: 6).
The TBT agreement was adopted to clarify the treatment of technical requirements
under the GATT and to ensure that these do not create unnecessary barriers to trade
37
Unfortunately, fair trade, which was based on a less managerialist approach than other
sustainability initiatives, is actually going the opposite way with the separation of producer support
functions from certification.
52
(Grote et al. 1999). TBT differentiates technical requirements in two categories: (1)
technical regulations, which are mandatory; and (2) standards, which are voluntary.
Both regulations and standards may also relate to ‘terminology, symbols, packaging,
marking or labelling requirements as they apply to a product, process or production
method’ (TBT Agreement, Annex 1).
The TBT Agreement and its ‘Code of Good Practice for the Preparation, Adoption
and Application of Standards’ prohibit both technical regulations and standards from
discriminating between domestic and foreign products that are alike and between
‘like products’ from different WTO members. Yet, the TBT also states that ‘no country
should be prevented from taking measures necessary to ensure ... the protection of
human, animal or plant life or health, [or] of the environment ... at the levels it
considers appropriate’ (Preamble, TBT Agreement).
Technical regulations are presumed not to create unnecessary obstacles to trade if
they are based in accordance with a relevant international standard (Gardiner and
Viswanatan 2004). There is no such statement in relation to standards, such as ecolabels. Yet, ecolabels are still subject to the provisions of the TBT Code. Thus,
standardising bodies need to: adopt existing international standards; make efforts to
harmonise standards; avoid duplication or overlap with other standardising bodies;
and make available copies of the standard for comment (TBT Annex 3). Articles 11
and 12 of the TBT specifically call on developed countries to recognise the difficulties
that developing countries may have in setting and applying regulations and
standards, and to provide technical assistance and special and differential treatment.
A heated debate has been taking place on the interpretation of the TBT in relation to
ecolabels. This debate can be simplified into three basic stances. A first stance
questions whether the TBT covers eco-labels at all. According to a second stance,
ecolabels are consistent with TBT provisions only when they convey information on
product-related process and production methods (pr-PPMs). These refer to
differences in the physical characteristics of a product, even if the change in these
products comes about as a result of requirements addressing process or production
methods. This stance states that if labels convey information on non-product related
PPMs (npr-PPMs), such as the environmental effects associated with production that
are not incorporated in the product, they should not be regulated by the TBT.
53
Arguments against npr-PPMs arise from concerns, especially by developing
countries, that they would be used as protectionist devices. Protectionist outcomes
can arise as the result of arbitrary rationales that may undercut comparative
advantages that developing countries may have, and from ‘well-intentioned but
parochial understandings of what is environmentally sound that are derived from
domestic ecological conditions that may not apply to conditions in distant countries’
(Wessells et al. 2001: 64). A third stance argues that TBT should also cover nprPPMs (Rotherham 2004). This is because even though a product itself may not harm
the environment during or after its use, the methods used for its production or
processing may have had adverse environmental impacts. Therefore, it is argued
that both kinds of PPMs should be regulated by the TBT, ‘provided that the provision
of …information should not be made in a way that restricts the availability of products
about which less is disclosed’ (Vitalis 2001: 6-7).
Generally speaking, developing countries favour the interpretation that npr-PPMs are
not covered by the TBT Agreement. They fear that if they were to be covered by
TBT, this would allow developed countries to use them to extend their domestic
production methods related to environmental matters extra-territorially. Developing
countries are also worried that npr-PPMs would open the door to the consideration of
social conditions of production, such as labour standards. Developed countries argue
in favour of coverage of npr-PPMs, and generally emphasise their importance to
further environmental objectives. These countries also highlight ecolabelling
schemes which use npr-PPMs exist already, and thus that these schemes should be
subject to discipline (Polak 2003: 6-7).
Two WTO-level disputes are particularly relevant in relation to the discussion of
ecolabels covering npr-PPMs. Incidentally, both these disputes relate to fishery
products – the so-called ‘tuna-dolphin’ and ‘shrimp-turtle’ cases. The first relates to
attempts by the US to prohibit imports of tuna caught by countries using purse
seines. The US justified this move on the basis that this fishing method results in bycatch and death of many dolphins. The first challenge to this regulation was brought
by Mexico to the GATT in 1991. The second challenge to the ‘tuna-dolphin’
regulation was brought by the Netherlands and the EU to the WTO in 1994. In both
cases, the US lost. Specifically, the panels found that US rules contravened the TBT
because they were regulating non-product-related PPMs. However, the 1991 panel
54
accepted the US voluntary ‘dolphin safe’ tuna labelling scheme as consistent with the
provisions of the TBT. It ‘noted that the voluntary label did not illegally restrict the
sale of tuna since tuna products could be freely sold both with or without the ‘dolphin
safe’ label, and because any competitive advantage conferred by the label depended
on the free choice of consumers to give preference to tuna carrying the “Dolphin
Safe” label’ (Wessells et al. 2001: 63; see also Bonanno and Constance 1996).
Because there have been no similar precedents regarding the application of WTO
rules to transnational ecolabelling schemes, it is not clear whether this applies to the
MSC label as well.
The shrimp-turtle case was brought by India, Pakistan, Malaysia and Thailand
against the US. The US had mandated that countries that trawled for shrimp in
waters where marine turtles occur must equip their vessels with turtle excluder
devices. In 1998, the Appellate Body found this provision in breach of the TBT on the
basis of extra-jurisdictional and unilateral application of domestic law. For some, the
verdict indicated lack of sensitivity of WTO on environmental issues. Others read it as
an encouragement to adopt transparent and multilateral considerations of
environmental issues into trade negotiations (Gardiner and Viswanatan 2004: 21-22).
As mentioned above, the 2001 Doha Declaration instructed the CTE to examine
whether existing WTO rules stand in the way of ecolabelling, and to identify any rules
that should be clarified. The CTE was supposed to bring forward a proposal at the
Cancun ministerial in 2003, but the EU failed to gather enough support for it. The
collapse of talks in Cancun then made progress on minor issues even more difficult.
It is unlikely that any further discussion or resolution will take place within WTO on
ecolabelling in the near future. A second route for discussion would be through reopening discussions on the TBT Agreement, but almost all WTO members are
against this option. Ecolabelling will not be discussed within the current Fourth
Triennial Review of the TBT either.38
Where there is more consensus within WTO discussions in relation to ecolabels is
that transparency and non-discrimination need to be assured in developing, adopting
and applying them. This in practice means that the MSC label is unlikely to be found
38
Source: [Online]. Available: http://www.wto.org/English/tratop_e/tbt_e/tbt_agenda_march06_e.htm
(accessed March 2006).
55
in contravention of WTO rules, unless it is found in breach of the TBT Code.
Furthermore, FAO took an important initiative to address transparency and nondiscrimination in the preparation, adoption and application of fisheries ecolabelling
schemes. Its 2005 ‘Guidelines for the ecolabelling of fish and fishery products from
marine capture fisheries’ (FAO 2005) are likely to provide the international standard
against which non-discrimination will be measured. Three of the 14 principles upon
which the guidelines are based can be used to safeguard developing countries:
Principle 2.5 on non-discrimination; Principle 2.10 that allows traditional knowledge of
the resources as a legitimate source of information; and Principle 2.11 demanding
‘practical, viable and verifiable’ labelling schemes (FAO 2005: 1-2). The guidelines
for setting up standards require transparency and ‘participation of all interested
parties, especially of those of developing countries’ (FAO 2005: 12). The guidelines
for accreditation specifically state that full recognition should be given to the special
circumstances and requirements in developing countries (FAO 2005: 16). The
guidelines for certification state that access to certification should not be conditional
upon the size or scale of the fishery (FAO 2005: 22).
56
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Working Papers
2002
US safeguard measures on steel imports: specific implications
by Niel Joubert & Rian Geldenhuys.
WP 1/2002, April
A few reflections on Annex VI to the SADC Trade Protocol
by Jan Bohanes
WP 2/2002, August
Competition policy in a regional context: a SADC perspective on trade investment & competition issues
by Trudi Hartzenberg
WP 3/2002, November
Rules of Origin and Agriculture: some observations
by Hilton Zunckel
WP 4/2002, November
2003
A new anti-dumping regime for South Africa and SACU
by Stuart Clark & Gerhard Erasmus
WP 1/2003, May
Why build capacity in international trade law?
by Gerhard Erasmus
WP 2/2003, May
The regional integration facilitation forum: a simple answer to a complicated issue?
by Henry Mutai
WP 3/2003, July
The WTO GMO dispute
by Maxine Kennett
WP 4/2003, July
WTO accession
by Maxine Kennett
WP 5/2003, July
On the road to Cancun: a development perspective on EU trade policies
by Faizel Ismail
WP 6/2003, August
GATS: an update on the negotiations and developments of trade in services in SADC
by Adeline Tibakweitira
WP 7/2003, August
An evaluation of the capitals control debate: is there a case for controlling capital flows in the SACU-US free trade
agreement?
by Calvin Manduna
WP 8/2003, August
Non-smokers hooked on tobacco
by Calvin Manduna
WP 9/2003, August
Assessing the impact of trade liberalisation: the importance of policy complementarities and policy processes in a
SADC context
by Trudi Hartzenberg
WP 10/2003, October
An examination of regional trade agreements: a case study of the EC and the East African community
by Jeremy Everard John Streatfeild
WP 11/2003, October
62
Reforming the EU sugar regime: will Southern Africa still feature?
by Daniel Malzbender
WP 12/2003, October
2004
Complexities and inadequacies relating to certain provision of the General Agreement on Trade in Services
by Leon Steenkamp
WP 1/2004, March
Challenges posed by electronic commerce to the operation and implementation of the General Agreement on
Trade in Services
by Leon Steenkamp
WP 2/2004, March
Trade liberalisation and regional integration in SADC: policy synergies assessed in an industrial organisation
framework
by Martine Visser and Trudi Hartzenberg
WP 3/2004, March
Tanzania and AGOA: opportunities missed?
by Eckart Naumann and Linda Mtango
WP 4/2004, March
Rationale behind agricultural reform negotiations
by Hilton Zunkel
WP 5/2004, July
The impact of US-SACU FTA negotiations on Public Health in Southern Africa
by Tenu Avafia
WP 6/2004, November
Export Performance of the South African Automotive Industry
by Mareika Meyn
WP 7/2004 December
2005
Textiles and clothing: Reflections on the sector’s integration into the post-quota environment
by Eckart Naumann
WP 1/2005, March
Assessing the Causes of Sub-Saharan Africa's Declining Exports and Addressing Supply-Side Constraints
by Calvin Manduna
WP 2/2005, May
A Few Reflections on Annex VI to the SADC Trade Protocol
by Jan Bohanes
WP 3/2005, June
Tariff liberisation impacts of the EAC Customs Union in perspective
by Heinz - Michael Stahl
WP4/2005, August
Trade facilitation and the WTO: A critical analysis of proposals on trade facilitation and their implications for
African countries
by Gainmore Zanamwe
WP5/2005, September
An evaluation of the alternatives and possibilities for countries in sub-Saharan Africa to meet the sanitary
standards for entry into the international trade in animals and animal products
by Gideon K. Brückner
WP 6/2005, October
Dispute Settlement under COMESA
by Felix Maonera
WP7/2005, October
63
The Challenges Facing Least Developed Countries in the GATS Negotiations: A Case Study of Lesotho
by Calvin Manduna
WP8/2005. November
Rules of Origin under EPAs: Key Issues and New Directions
by Eckart Naumann
WP9/2005, December
Lesotho: Potential Export Diversification Study: July 2005
by Ron Sandrey, Adelaide Matlanyane, David Maleleka and Dirk Ernst van Seventer
WP10/2005, December
African Member States and the Negotiations on Dispute Settlement Reform in the World Trade Organization
by Clement Ng’ong’ola
WP11/2005, December
2006
Agriculture and the World Trade Organization – 10 Years On
by Ron Sandrey
WP1/2006, January
Trade Liberalisation: What exactly does it mean for South Africa?
by Ron Sandrey
WP2/2006, March
South African merchandise trade with China
by Ron Sandrey
WP3/2006, March
The Multifibre Agreement – WTO Agreement on Textiles and Clothing
by Eckart Naumann
WP4/2006, April
The WTO – ten years on: trade and development
by Catherine Grant
WP5/2006, May
A review of the results of the 6th WTO Hong Kong Ministerial Conference – Considerations for African, Caribbean
and Pacific (ACP) Countries
by Calvin Manduna
WP6/2006, June
Trade Liberalisation: What exactly does it mean for Lesotho?
by Ron Sandrey , Adelaide Matlanyane and David Maleleka
WP7/2006, June
A possible SACU/China Free Trade Agreement (FTA): Implications for the South African manufacturing sector
by Hans Grinsted Jensen and Ron Sandrey
WP8/2006, July
Trade Briefs
2002
Cost sharing in international dispute settlement: some reflections in the context of SADC
by Jan Bohanes & Gerhard Erasmus.
TB 1/2002, July
Trade dispute between Zambia & Zimbabwe
by Tapiwa C. Gandidze.
TB 2/2002, August
2003
Non-tariff barriers: the reward of curtailed freedom
by Hilton Zunckel
TB 1/2003, February
64
The effects of globalization on negotiating tactics
by Gerhard Erasmus & Lee Padayachee
TB 2/2003, May
The US-SACU FTA : implications for wheat trade
by Hilton Zunckel
TB 3/2003, June
Memberships in multiple regional trading arrangements : legal implications for the conduct of trade negotiations
by Henry Mutai
TB 4/2003, August
2004
Apparel Trade and Quotas: Developments since AGOA’s inception and challenges ahead
by Eckart Naumann
TB 1/2004, March
Adequately boxing Africa in the debate on domestic support and export subsidies
by Hilton E Zunckel
TB 2/2004, July
Recent changes to the AGOA legislation
by Eckart Naumann
TB 3/2004, August
2005
Trade after Preferences: a New Adjustment Partnership?
by Ron Sandrey
TB1/2005, June
TRIPs and Public Health: The Unresolved Debate
by Tenu Avafia
TB2/2005, June
Daring to Dispute: Are there shifting trends in African participation in WTO dispute settlement?
by Calvin Manduna
TB3/2005, June
South Africa’s Countervailing Regulations
by Gustav Brink
TB4/2005, August
Trade and competitiveness in African fish exports: Impacts of WTO and EU negotiations and regulation
by Stefano Ponte, Jesper Raakjær Nielsen, & Liam Campling
TB5/2005, September
Geographical Indications: Implications for Africa
by Catherine Grant
TB6/November
2006
Southern Africa and the European Union: the TDCA and SADC EPA
by Catherine Grant
TB1/2006, May
Safeguarding South Africa’s clothing, textile and footwear industries
by Gustav Brink
TB2/2006, May
Agricultural Safeguards in South Africa
by Gustav Brink
TB3/2006, May
The WTO Trade Policy Review Mechanism: application and benefit to SACU
by Paul Kruger
TB4/2006, June
65