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MSC reaches tipping point

Group's future will hinge on its ability to reduce the length and cost of fishery assessments

By Steven Hedlund
January 01, 2007

In his two-plus years as CEO of the Marine Stewardship Council, Rupert Howes has accumulated more than 200,000 frequent flyer miles encouraging harvesters, processors, wholesale-distributors, retailers and foodservice operators in every corner of the globe to participate 
in the organization's seafood eco-labeling program.

The MSC was struggling to stay afloat when Howes took the helm in late 2004. The London-based nonprofit, launched by Unilever and the World Wildlife Fund in 1997 to promote well managed and sustainable fisheries, had just laid off about one-third of its 30-person staff, and only 10 fisheries had been independently certified under its standards for environmentally responsible fishing.

But Howes' persistence has paid off. Now 22 fisheries are MSC-certified, 18 fisheries are undergoing assessment, and as many as 30 fisheries are being considered for assessment. Retail sales of MSC-labeled products topped $235 million worldwide in 2006, up 76 percent from 2005. There are now 472 MSC-labeled seafood products sold in 25 countries, more than double the number available in 2004.

The MSC's budget, funded mostly by charitable grants, reached about $3 million in 2006, up from roughly $845,000 in 2004. And the MSC staff is back to 30.

But the council isn't out of trouble. The reassessment process, which can take more than two years and cost upward of $250 million, is too lengthy and expensive, and there are not enough accredited certifiers, say participating fisheries.

Howes says the MSC is aware of the problems.

"We've put a lot of effort in-
to addressing these concerns," 
he asserts.

The council is standardizing the assessment process to reduce its duration and cost and plans to unveil the new criteria at the International Boston Seafood Show in March, says Howes. The group is "actively" seeking new certifiers to add to the six now accredited, he adds. In 2004, there were only three certifiers worldwide.

"The MSC has had its ups and downs over the years," Howes acknowledges. Establishing a seafood eco-labeling program has been "harder than anyone realized."

Whether the MSC withstands the test of time and benefits the health of each certified fishery remains to be seen. But it's evident that the practice of buying sustainable seafood - seafood harvested at a rate that doesn't exceed the rate of regeneration and doesn't permanently harm the ecosystem - is here to stay.


Advancing sustainability

Sustainability was just a blip on seafood buyers' radar screens in 1997 when Unilever partnered with the WWF to form the MSC. The group's aim is to reward well-managed and sustainable fisheries with an eco-label. Accredited certifiers judge the health of a fishery and the ecosystem and its compliance with fishing regulations. To use the eco-label, suppliers, retailers and foodservice operators must also be certified to ensure the product's traceability.

The hope is that eco-labeled seafood fetches a premium price, because consumers are increasingly willing to pay more for seafood harvested in an environmentally friendly manner. To many seafood companies this 
is a smart business decision, because they can't profit from depleted fisheries.

Despite its honorable intentions, the MSC was initially met with cynicism from all sides. At the time, Unilever owned Gorton's of Gloucester and controlled about 20 percent of the U.S. frozen-seafood market, and the WWF is one of the world's largest environmental groups.

"Within the seafood industry, there was a deep suspicion about a collaboration between one of the world's largest seafood companies and an NGO," says Michael Sutton, VP of Monterey Bay Aquarium and director of the Center for the Future of the Oceans in Monterey, Calif., who at the time worked for the WWF and championed the MSC.

"There was concern that this was a 'greenwash.' Partnerships between industry and NGOs were not common then," recalls Sutton, now an MSC board member. "I was told [by industry] to get out of town and take my ideas with me."

Meanwhile, the environmental community questioned the program's ability to curb overfishing due to its ties to industry. The MSC is still trying to shake this misperception, even though the organization has been completely independent of Unilever and the WWF since 1999.

Despite the skepticism, the MSC forged ahead. In 2000, Western Australia rock lobster became its first certified fishery, followed by Britain's Thames herring and Alaska salmon. Seven fisheries were certified in the next four years, including one of the world's biggest whitefish harvests, New Zealand hoki. But only a handful of retailers and foodservice operators, mostly in Europe, sold MSC-labeled products.

Scott Burns, former director of the WWF's Marine Conservation Program in Washington, D.C., and a former MSC board member, blames the initial lack of interest at the retail and foodservice levels on the limited number of certified fisheries.

"It's a chicken-and-egg problem," says Burns, now director of the Walton Family Foundation's Conservation and Environment Program.

Seafood buyers were reluctant to participate because there were too few certified fisheries, and fisheries were reluctant to join because there were too few certified seafood buyers, he explains. But once more fisheries became certified, more seafood buyers followed.


Changing of the guard

Burns also attributes the MSC's recent turnaround to Howes' leadership.

"Rupert has done a great job," he says. "He has a lot of 
energy and works hard. He's a great listener."

"The leadership team has never been stronger," concurs Sutton. "Rupert is the kind of person we needed 10 years ago."

Howes joined the MSC from the London-based sustainable-development organization Forum for the Future, where he served as director of its Sustainable Economy Program for seven years. Previously, he worked for KPMG, an international accounting and consulting firm.

Both Burns and Sutton agree that the MSC has reached 
"the tipping point" and is now mainstream.

The MSC's recent success is also due to the growing number of seafood buyers incorporating sustainability into their purchasing criteria. Merely a trend in the late 1990s when the MSC was conceived, sustainability is now a full-blown movement within the seafood industry.

When seafood buyers think green, the MSC is an obvious choice, because it offers the only program in the world that's fully consistent with the United Nations' Food and Agriculture Organization's seafood eco-labeling guidelines, a recognition it attained in September.

"We have no reservations about [the MSC] and believe it truly is the only worldwide program that addresses the needs of our sustainable-seafood platform," says Peter Redmond, VP of Wal-Mart's seafood division.

"The MSC is recommended by all sorts of parties, including the WWF, Greenpeace, Environmental Defense [and seafood] suppliers," he adds. "Therefore, we know the program is well accepted. The bottom line is that there are no other organizations out there that offer this sort of a program at this time."

Besides receiving the FAO's blessing, the MSC's greatest accomplishment last year was 
perhaps Wal-Mart's pledge in January to purchase all of its wild seafood, excluding value-added, branded product, from MSC-certified fisheries in three to five years.

Wal-Mart is prompting other retailers, foodservice operators, suppliers and fisheries, especially in the Untied States, to seek certification, says Howes. The world's largest retailer, with more than 6,600 stores worldwide, is already selling at least 10 MSC-labeled products, including Alaska salmon, pollock and surimi seafood and New Zealand hoki.

Costco, Safeway, Wegmans, Whole Foods, Trader Joe's and Target also are carrying MSC-labeled products. Wal-Mart, Costco and Safeway are among the nation's five largest food retailers, representing more than $225 billion in annual food sales.

Phil Fitzpatrick, the MSC's new commercial director of the Americas and former group managing director of the Americas for salmon-farmer Marine Harvest, says he's in talks with most of the nation's top 10 supermarket chains and a few broadline distributors, including Sysco, and institutional foodservice operators, including Aramark, about joining the program. Fitzpatrick's role is to increase U.S. participation in the MSC.

Restaurant chains are a tough sell, he says, because they menu mostly farmed seafood, and the MSC certifies only wild product.

The MSC board voted against expanding its program to include farmed seafood at its biannual meeting in Bangkok, Thailand, in November. Howes says the MSC doesn't want to compromise its focus on wild seafood by getting involved in aquaculture.

The MSC eco-label was quicker to catch on in Europe than in the United States, because Europeans are perceived to be more environmentally conscious than Americans. But, as of November, 93 MSC-labeled products were available in the United States, ahead of the United Kingdom (85), Switzerland (69), Germany (57) and Sweden (44).

The MSC eco-label is also gaining traction beyond the U.S. and European markets. Last year, Japanese retailers, including Aeon, the nation's biggest, began selling MSC-labeled products. Argentina became the world's first 
certified scallop fishery, and Atlantic Canada became the 
world's first shrimp fishery to seek certification.

Now, more than 3 million metric tons of seafood originate in fisheries engaged in the program, including 42 percent of the world's salmon catch and 32 percent of the prime-whitefish catch, reports the MSC.

"The rate of new fisheries [seeking certification] shows that 
the MSC is here to stay," says Fitzpatrick.


Recertification hurdles

However, the MSC's staying power will hinge on its ability to reduce the length and cost of assessments, which may deter fisheries from seeking certification. The problem emerged over the past two years when the 
first few certified fisheries applied for recertification, as required every five years. The process has been longer and costlier than 

As of mid-December, only two fisheries, Western Australia rock lobster and Thames herring, have been recertified, and five fisheries are seeking recertification. The rock lobster fishery was recertified in early December, more than two years after it applied.

"Our experience has been a mix of frustration and alarm at what seems to be a continual raising of the bar in regard to application of the MSC principles," says Guy Leyland, executive officer of the Western Australia Fishing Industry Council.

"Recertification shouldn't be like starting all over again," he argues. "The MSC assessment methodology [needs] to be incorporated and streamlined with existing statutory requirements for fisheries management."

Alaska's salmon fishery expects to be recertified by October, 
more than two-and-a-half years after it applied.

"It's taking a long time," says Denby Lloyd, director of commercial fisheries for the Alaska Department of Fish and Game. "We're facing much more scrutiny the second time around."

The fishery had to extend all of its deadlines to meet the MSC's reassessment requirements. That's because this time the fishery is being assessed not as a single unit but as 16 separate entities determined by geography and fishing gear. So it's possible, but unlikely, that not all 16 will be recertified, says Lloyd.

He also is concerned about the inordinate cost of reassessment, which will total about $250,000, funded by state and federal grants. That's not including his staff's time.

"Some fisheries aren't going to be able to afford that," he notes.

"We had reservations about the MSC eco-label because it's expensive," says David Goldenberg, CEO of the California Salmon Council, which applied for certification of its chinook fishery in early 2004.

"If we didn't apply, the market would look at us and say, 'Can't you pass?'" he says. "But we don't have millions [of dollars] like Alaska's salmon industry."

The council's budget, funded by a 2-cent-per-pound surcharge on salmon, totaled only about $40,000 last year, down significantly from previous years due to the near shutdown of California's chinook fishery to protect Klamath River salmon.

"Not all of us have deep pockets," says Goldenberg. "We have a love-hate relationship with the Marine Stewardship Council."

"The process is expensive, which may result in only wealthy and elite fisheries becoming certified, [with] marginal but well managed fisheries not being able to afford certification," says Leyland. "It would help if there were a greater number of accredited certifiers."

Fisheries put assessments out to bid to accredited certifiers, which are independent of the MSC. The cost of assessment will drop as the MSC accredits more certifiers, increasing the competitiveness of the bidding process, says Jim Gilmore, public affairs director for the At-sea Processors Association.

The APA hosted two meetings in Seattle in October to alleviate Alaska salmon and pollock processors' concerns about the length and cost of reassessment. The MSC was on hand for the second meeting.

"The MSC is trying to standardize the process so that it's consistent," says Gilmore. "We don't want to wonder what'll happen in five years. We want to know what the field will look like before we play. Every five years we don't want to go through a knock-down, drag-out process."

Gilmore says it's too early to 
say whether Alaska's pollock fishery will seek recertification for early 2010.

Rick Muir, VP of block sales for American Seafoods Group in Seattle and president of the Association of Genuine Alaska Pollock Producers, says his company remains committed to the MSC.

"We're firmly behind it," he says. "We want this to work, so we share with the MSC what we think will make this work."

American Seafoods, which sells unfinished pollock products to secondary processors, hasn't attracted new customers as a result of the MSC eco-label, says Muir. But the eco-label is strengthening the company's relationships with its existing customers, who are dedicated to procuring sustainable seafood, and its pollock products are commanding a higher price, he explains.

In addition to the marketplace, the eco-label is also benefiting the health of fisheries and the ecosystem, though it's harder to gauge its impact, says Monterey Bay's Sutton. He points to two separate studies conducted by the Packard Foundation and London's Imperial College that indicate the MSC has improved the way fisheries are managed.

"There's wider recognition now that fisheries are in trouble," says Sutton. "Public policy alone is incapable of [replenishing fisheries]. We need to harness the power of commerce. That's where change will come from.

"The seafood industry deserves credit," he adds. "Companies are stepping up to the plate and recognizing that [sustainability] is the wave of the future."

"I want to work with the marketplace to bring change. That's my favorite part of the job," says Howes. "I can't imagine doing anything else."

Thanks to Howes' leadership, the MSC is catching on with fisheries and seafood buyers worldwide and looking to a bright future.


Associate Editor Steven Hedlund can be e-mailed at shedlund@divcom.com


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