Report on costs & benefits of compliance with voluntary market-based labeling & certification Schemes
Introduction and Objectives
Certified food sustainability standards are voluntary, usually third party-verified norms relating to environmental, social, ethical and food safety issues; developed to varying degree in consultation with a range of primary and secondary stakeholders and experts in these fields. They are adopted by companies either as a complement or alternative to their own internal and supply chain quality assurance systems in order to demonstrate acceptable performance of their organizations or products in these areas. As such they are can also be viewed as a market-based approach (Appendix 1) approach to governing negative externalities of business practices. By addressing societally perceived deficits in areas of statutory governance, they offer companies an ‘outsourced’ means of defending their reputations and brands against civil-society (e.g. NGOs, media, celebrity chefs etc.) campaigns linked to such deficits. Consistent with this brand management rationale; standards may simply operate at a business to business (B2B) and/ or business to consumer (B2C) levels i.e. with or without a consumer-facing label.
Such governance attributes are of particular significance to European and other rich-country seafood buyers given the net global flows in seafood trade to ‘rich’ from developing economies where both capture fisheries and farmed production are often lightly regulated and value-chains highly fragmented posing challenges for internal quality assurance systems. Civil society campaigns of the kind described above are also likely to have greater influence in these rich markets, providing further impetus for seafood companies to engage in ‘ethical supply chain management’ of commercial entities beyond their own direct ownership and geographical legal jurisdictions (many standards also incorporate a separate chain of custody (CoC) standard to prevent non-certified products being sold as certified/ labelled along the supply chain).
The credibility, and arguably greatest inherent value of such standards is underpinned by a ‘third-party’ verification process, whereby in place of self-claims, independent ‘certification assessment bodies’ (CABs) audit compliance of companies or external suppliers against the standards. Both the eligibility and performance of CABs, along with standards setting procedures are themselves subject to formal accreditation processes and other tiers of normative standards, designed to further enhance credibility of the approach. Figure 1 shows the relations of these elements in a standard setting and certification process.
The first part of this report (Sections 3 and 4) we provide a theoretical overview of voluntary market-based labelling & certification focusing on schemes of greatest relevance to the major seafood commodity groups that are the focus of the PrimeFish project.
In the second part of the report (Section 5) we evaluate the role of sustainability certification in company strategic positioning based on a case study of the Global Salmon Initiative, an industry collaboration predicated on a commitment to 100% ASC certification of all member sites by 2020. In this section we also examine interactions, cost/ benefits and areas of overlap between mandatory and major voluntary certification and recommendation schemes (e.g. MSC, GlobalGAP, ASC, BAP, SFP, Monterey Bays ‘Seafood Watch’, Greenpeace Red-list), and identify harmonization mechanisms/ equivalence criteria for voluntary and mandatory schemes (e.g. Global Sustainable Seafood Initiative (GSSI)) with the aim of reducing costs to producers and improving overall compliance.
This output complements ‘the assessment of consumer attitudes toward certification’ schemes outlined in WP4 (Task 4.2).