Shifting focus: The impacts of sustainable seafood certification
Overfishing is a significant global challenge with 33% of global fisheries currently overfished. Market incentives provided through certification are one way to encourage fisheries to fish sustainably. Global certification initiatives like the Marine Stewardship Council (MSC) use consumer awareness around issues like overfishing as part of the solution to help drive improvement in sustainability.
Currently over 440 fisheries worldwide and 21 in Australia are carrying MSC’s sustainability recognition, representing 17% of global wild catch production and 46% of Australia’s commercial catch. In 2020, there are over 18,000 labelled products bearing the MSC blue tick ecolabel on supermarket shelves, sold by fishmongers and served in restaurants around the world.
Best western – WA fisheries leading the way
The market-based approach of ‘rewarding the best and incentivising the rest’ started 20 years ago, when the first fishery in the world achieved MSC certification, the West Australian Rock Lobster fishery.
There was a step change in Western Australian certification when, in 2012, the Western Australian State Government made a world first commitment offering financial and regulatory support for any of the 50 state-based fisheries that wished to be assessed against the MSC’s Fisheries Standard. As of 2020, 10 of Western Australia’s state-based fisheries have now met the MSC requirements representing around 90% of the wild catch value in the state’s commercial fisheries. By lowering the cost of entry, fisheries could effectively try being certified, and only pay later for annual audits if successful in obtaining certification. If there was no benefit in engaging in the MSC program, there were opportunities to step away with minimal financial expense, although potential risks to reputation.
With 10 fisheries already certified to the MSC standard in Western Australia, the regional representation of sustainable fisheries in WA is significantly higher than global average. But global leadership has not seen the State government waiver in its ambitious commitment to sustainability. There remains a financial mechanism to support the remaining 40 Western Australian fisheries on a case by case basis if they wish to engage in the MSC program.
How does MSC certification work?
MSC certification works through an independent, third party auditing mechanism to verify wild catch fisheries meet MSC’s sustainability standards and to verify the integrity of the supply chain. For those partners using the MSC blue tick on consumer-facing products, Chain of Custody certification of the whole supply chain is needed to offer a credible guarantee of traceability, ocean to plate. The latest DNA testing of MSC labelled products revealed that 99.6% of MSC labelled seafood is correctly labelled.
At the fishery level, MSC’s theory of change posits that sustainable fishing practices are incentivised by access to market benefits, e.g., higher prices or ‘price premium’, access or retention of market share, supply chain efficiency (see this research paper by Arton et al., 2020). Indeed, MSC certified products are well recognised by consumers in Europe and North America and are often required by the major supermarket outlets in those countries. In Australia you may have also noticed it on some seafood products in Coles, ALDI and Woolworths.
New research on why fisheries seek certification
Recently, collaborative research from CSIRO and MSC in Western Australian MSC certified fisheries indicates that for some fisheries, showcasing their sustainable practices to gain social acceptability is key, rather than capturing economic benefits such as price premiums.
So why would fisheries choose to get MSC certified but not label their fish to showcase their sustainable fishing practices, and thus not use the market value proposition the program was built on? Can an independent assessment against sustainability credentials positively influence their relationships and acceptance across their stakeholder network?
With financial support from WAFIC (through a Fisheries Research and Development Corporation grant) and MSC (with support from the Walton Family Foundation), CSIRO were commissioned to undertake a research project to determine the socio-economic effects of engaging in the MSC program. Until this stage, the perceived social and economic impacts of certification for Western Australia’s fisheries were largely anecdotal. This research, in which over 30 interviews with key stakeholders were conducted, has helped capture the expected and witnessed impacts of certification across seven different MSC fisheries that operate in (or from) Western Australia.
Strengths in social acceptance
Contrary to expectations for many of the Western Australian MSC fisheries, social acceptance (or social licence to operate) was a primary driver behind engaging with the MSC program – instead of capturing market benefits through price premiums. It seems that the social acceptability of fishing practices (i.e. the way they are regarded by their local communities and regulators) and fisheries management (i.e. the way their management is regarded by the public) are important drivers for showcasing sustainable fishing practices through formal certification.
Fisheries are not the only industry pursuing the holy grail of social acceptance. After all, social acceptance of industry practices ensures ongoing access to the resource. In the case of newly accredited Western Australian MSC fisheries they were gaining this social acceptance with regulatory and financial support. One respondent commented: “Yeah, yeah. Social license sort of stuff … I think people [in the industry] realised how important it was to have that certification when we we’re being attacked as not being sustainable.”
For MSC fisheries, social licence includes the social legitimacy of their operations and that they meet stakeholder and local community expectations. But new research (to be published in a forthcoming paper) involving the Western Australian MSC certified fisheries showed there are a number of different aspects to it. For instance, social licence for industry and acceptance of their operations can be provided by different sources: i.e. the general public, the local community, the industry stakeholders, the market, the government, or governance institutions. It turns out that the perception of social acceptance of Western Australian MSC certified fisheries by these different sources is not uniform (see Figure below).
Digging deeper, consumers who buy the MSC labelled product in a domestic or export market are in essence accepting (or showing their approval for) MSC fisheries through their purchase. Prior to our analysis we expected this to figure prominently for respondents given MSC is a market-based instrument. However, our survey respondents perceived that the markets were not a main source for social licence because much of the West Australian product is sold without the MSC label because even though the fishery is certified the supply chains are not. But there are some notable exceptions in Australia, where entrepreneurial initiatives (and integrated supply chains) have helped some fisheries sell with the label and thus capture significant price premiums.
In Western Australia, government approval of fisheries was largely demonstrated through the funding that was provided for the fisheries to seek MSC certification (see this research paper by Bellchambers et al 2016). Government approval of industry is important, but if the public perceive that their interests are being overlooked this can result in a backlash, which can ultimately impact industry’s social licence. However, from our interviews and analysis it seemed that most stakeholders perceived that MSC certification had improved general public support for government decisions on fisheries management .
Whilst the MSC program tends to incentivise fishers, supply chain partners and seafood brands to engage, the government regulators are an important stakeholder group to engage, find leadership and to showcase a return on the regulatory investment in meeting third party sustainability expectations. Those working within the regulatory environment largely saw positive impacts originate from engagement in the MSC program across environmental and social metrics but also improvements across institutional impacts.
Improvements to the MSC value proposition
The research findings combine with other research results which has shown MSC generates environmental, economic and social impacts. We also find it generates institutional benefits. But what the Australian example shows, with unexpectedly low economic benefits experienced by some fisheries being counterbalanced by non-market benefits, is the need for different strategies where the market value for selling sustainable seafood is yet to emerge or doesn’t exist. MSC could develop targeted approaches for these types of contexts, providing an incentive to sustainability that might go beyond market benefits. On the other hand, the same government support that in Western Australia created enabling conditions for the MSC program to deliver positive change, may have been the reason why fisheries have not gone out of their way to market their products or develop new supply chain contacts to reach consumers interested in a certified supply chain.
The Western Australia State Government will support the full reassessment costs for COVID-affected MSC fisheries in 2020/21. This is a blessing and a curse for MSC’s outreach program – good that the financial burden of MSC is not an issue at reassessment for affected fisheries, but it may mean that partners have less skin in the game and therefore less of an incentive to recuperate value when marketing products or selling the sustainability story of their fishery.
The findings of our socio-economic study will help MSC, industry and the regulator better understand the unique needs of each fishery as they decide whether an MSC journey is one they wish to undertake.
Whilst a voluntary approach and recognising that MSC certification is not the only way to determine whether a fishery is operating sustainably, the findings of this study will help fishery stakeholders better understand the diversity of the MSC’s value proposition. It also helps recognise that meeting sustainability requirements is no longer solely driven by market interests. A MSC fishery can make its own value proposition if it thinks hard enough about where they wish to seek value.