Fisheries Committee on March 31st, 2010

[The Chair, Conservative, Rodney Weston]

We'll call the meeting to order.

I'd like to welcome Madam Bouffard to our committee meeting.

Madam Bouffard, I'd like to thank you for taking the time to come to our committee today. We look forward to your comments.

Before we begin, I'd like to make you aware that we generally allow about 10 minutes for presentations by our guests, and that committee members are restricted to a certain amount of time for questions and answers.

With that, Madam Bouffard, I'd ask you to introduce yourself, give us your title, and please proceed with your opening comments.

[Nadia Bouffard, Director General, Fisheries Renewal, Department of Fisheries and Oceans]

Thank you.

My name is Nadia Bouffard. I am the Director General of Fisheries Renewal at Fisheries and Oceans Canada. Essentially, my role is to oversee the renewal of national fisheries management in Canada to improve the sustainability of the fisheries.

Today I am mainly going to try to provide you with information about new market trends toward demanding proof of the sustainability of seafood, and to describe what the Department is doing to address that new trend. I will then answer your questions in the official language of your choice.

However, I would like to inform the committee that I ordinarily make this presentation with my colleague from the Aquaculture Management Branch, Trevor Swerdfager, who you heard last week, I believe. Unfortunately, neither Mr. Swerdfager nor his colleague could be here today.

If you like, I will cover the question of aquaculture eco-certification in a general way. If you have specific questions, I would like to give those questions to the Department so it can answer you in writing.

I would also like to note that the presentation you have in front of you is very detailed. I prepared it that way intentionally to give you the most possible information. However, I am going to talk about it in very summary fashion to keep more time for the question period.

If you would, go to page two of the presentation.

I essentially will cover a bit of the context, the options for eco-certification that are out there, and talk to you a bit about the Canadian experience. I will skip part 4, but have included it in this presentation to provide the committee with some background on the tracking and tracing of seafood, because it's an issue that is connected to eco-certification. If you have any questions, I'm willing to respond to them.

On the context, the green movement is hitting corporate boardrooms and it is a trend. It's not something that is starting, but has been around for a number of years. Those of you who may have participated in seafood shows, whether in Boston or Brussels, will notice how mainstream this trend is, particularly in the last couple of years. It's mainstream in the seafood sector, but it's also mainstream in the food sector. In fact, we're seeing the large retailers, as well as the food service sector, looking into this more and more. Their expectations are growing and the list of issues they expect information on is also growing. Their focus has been on environmental sustainability, food safety, and social responsibility, but there's also a whole list of other issues, as you can see on slide 5.

I think markets can be positive drivers for change. The ENGO community has actually targeted this. They have moved from engaging with governments to focusing on working with the retail sector and the food service sector, realizing that these sectors make a large part of the decisions on options available to consumers.

Their focus has been shifting to doing all kinds of things, including report cards on retailers. You may have seen these in the last couple of years. Greenpeace has issued report cards on the top ten retailers in Canada and the top ten in the U.S., and they've also done this in Europe. They've also formed close alliances with these businesses to work with them on their purchasing practices and the list of seafood products they purchase, trying to provide them with advice, based on their own standards, as to what these retailers and food service members, such as restaurants and chefs, should or should not purchase.

The movement started in the wild capture fisheries and has become more evolved today. It certainly is very relevant and important in the aquaculture sector and its operations. So what I will cover in terms of the options available is to demonstrate that while the wild capture fishery sector has evolved far more than the aquaculture sector, the aquaculture sector is actually learning from lessons we've learned on the wild capture side, and is moving rapidly.

Slide 8 provides you with a general description of the different options. When we hear about eco-certification we often hear about the Marine Stewardship Council and the like, but there are other options available out there on the markets.

There are different products or different ways of addressing sustainability. One is to have your fishery certified and assessed, which may or may not involve an actual label associated with your product. Other options include consumer guides, mostly developed by ENGO communities, which have also evolved into small, wallet-sized information cards.

Some governments around the world have developed their own sustainability standards and assessment processes. As well, retailers are starting to develop their own programs, working with ENGOs and others, including their own policies. They're actually being a little broader here than focusing on environmental sustainability of seafood alone, but are looking at it as a green movement within their overall purchasing practices and policies.

What's important to note from this proliferation of labels and other options is that there's a lot of information out there. There's some confusion, as different conclusions are being reached by different organizations on the same species, for example. This creates confusion in the minds of buyers and consumers.

There is also inaccurate and misleading information out there. I'll touch upon that as well in the different options that exist.

Slides 9 and 10 give you a bit of an example. I don't propose to go through this in detail, but I wanted to give you an example of a consumer guide developed by SeaChoice, which is an alliance of Canadian ENGOs, actually from both east and west coasts. They have done their own internal assessment. It's not a public assessment, though you can see from their website how they've come to their conclusions. They essentially boil it down, so that it's much easier and attractive to consumers, to a list of green, yellow, and red, depending on their conclusions whether it's a best choice, a choice with some concerns, or to avoid altogether.

Slide 11 shows you some of the eco-labels that are available on markets today. The one on the left corner, Marine Stewardship Council, as you'll see from my presentation, is the one that seems to be the gold standard in wild capture fishery out there, the one that's mostly picked up by large retailers and many of the fish producers around the world.

How has the market responded to this trend?

Demands for proof of sustainability of seafood and its source are increasing, and some of them are actually demanding specific eco-labels. Examples include U.K. buyers such as Tesco, Sainsbury's, and Marks and Spencer. They actually require specifically MSC-labelled products.

In terms of retailers' sustainable seafood policies and decisions, as I mentioned, you may have heard of Loblaws recently coming up with their own policies. They're actually going through their entire purchase list, working together with WWF, to determine what they're going to continue to sell and what they're going to take off from their shelves. Wal-Mart made a similar decision a couple of years back, committing to sell only sustainable seafood at a certain date. They've been moving that date along, working with different aquariums such as Monterey Bay and New England Aquarium.

The food service sector partnerships with ENGO groups are also influencing what you see at restaurants, and the chefs are actually picking up on this wave. They have a lot of influence in terms of what restaurants purchase in terms of seafood, but they also influence consumers and citizens through their cookbooks and through cook shows and the like.

The seafood sector--on slide 13--has responded by making decisions or not to eco-label their products. I stress the point that this is an industry decision. It's really a market-driven decision, in the end.

There are many choices, as I mentioned, that are available. Some involve in-depth assessments, some not. Some are public processes—

[Gerry Byrne, Liberal, Humber—St. Barbe—Baie Verte, NL]

Excuse me.

On a point of order, Mr. Chair, I understand that the witness's time may have lapsed; however, I think it would be very useful if we actually went through the entire deck.

[James Lunney, Conservative, Nanaimo—Alberni, BC]

Yes, I do too.

[Gerry Byrne, Liberal, Humber—St. Barbe—Baie Verte, NL]

This is a pretty important piece of business.

Rather than you having to interrupt, why don't I just propose that we just hear from the witness in...?

[The Vice-Chair, Liberal, Lawrence MacAulay]

Thank you very much, Mr. Byrne.

Ms. Bouffard, continue. Complete your presentation. You have all the time you want.

[Nadia Bouffard]

I appreciate the committee's flexibility.

Marine Stewardship Council, as I mentioned earlier, seems to be the most popular one in terms of what the markets are demanding but also what the fish producers around the world have chosen.

Eco-labelling options in the farmed species are evolving, as I mentioned. Aquaculture Stewardship Council has formed a group and standard based on WWF standards. As well, Aquaculture Certification Council has created a process based on Global Aquaculture Alliance standards. Those are two major groups, with some other groups, also developing different kinds of eco-labelling for aquaculture products.

In terms of governments' response, slide 14 is a general slide on governments around the world; I'll have a specific chapter dealing with the Canadian response. When countries started to look at the trends, picking up on the demands for sustainability, they got together at the FAO and developed FAO guidelines for eco-labelling for the wild capture fisheries. These guidelines essentially provide the acceptable process to flesh out an eco-certification process. Things like independent third-party assessments, transparency, public input, and an ecological standard based on the FAO code of conduct were essentially a summary of those guidelines.

Those guidelines were adopted in 2005. A lot of the eco-labelling organizations that existed at that time had to catch up with those guidelines, and they have amended their processes. By far, the Marine Stewardship Council seems to be the one that meets the most of the guidelines that were developed by the international community.

States have also responded around the world to this movement. You have different positions--from the hands off, it's a business thing, we're not going to get involved, to governments getting very actively involved. In New Zealand, the government has put some money on the table to help the industry to certify. Australia has its own processes to assess and certify their fisheries. They've hooked that with their permit to export products outside of the country, so there's actually an incentive there to make sure you meet the standard.

The U.S. has pretty much a hands-off approach. They essentially indicate to their industry, “You want information to go through your process. You decide to go through your process; get it off our website and do your thing.”

Alaska state had decided to certify all their fisheries under Marine Stewardship Council and had funded this. They decided recently that they want to get out of that process and let the industry figure out whether they want to continue under the MSC process. They have decided that they will continue for certain species. However, the Alaskan marketing institute has decided to create their own assessment and certification process. They're currently working on this. In the meantime, they will maintain the MSC processes, where they're on their way, and the labels until they replace it with this homemade-in-Alaska process.

The FAO is now looking at aquaculture certification guidelines, and we hope these will be finalized in June of this year. I think they're close to getting some proper guidelines for the aquaculture eco-certification processes.

The next part is on the Canadian experience. When we saw this movement growing into a mainstream trend, if you want, DFO did a market risk analysis on which markets of Canadian seafood producers were at risk of being asked for an eco-label--MSC or otherwise.

Slide 16 gives you a general summary of that analysis. This analysis goes a few years back, but I think it's still relevant today.

The results are actually fleshed out on slide 17. Not all markets demand proof of sustainability, and I would point to the Asian markets in particular, and southern Europe, though I'm starting to see southern Europe pick up that wave.

Northern Europe and the U.S. markets are higher risk--i.e., they are the ones that are demanding proof of sustainability. As I mentioned earlier, in the U.K. we have specific labels being requested of Canadian and other producers. These markets are not all demanding evidence through an eco-label, though. Some of them are satisfied with detailed information, and some actually are satisfied with government information that's available. The MSC is the gold standard, but not all markets are demanding MSC.

So why have some Canadian companies chosen the Marine Stewardship Council? I think the better people to put that question to are the industry, but I can sum it up from my experience and my discussions with the industry.

The MSC generally doesn't provide a price premium. They actually don't publicize that on their website, but when you talk to them they do admit to this. It does help, however, maintain and expand access into markets that demand MSC or proof of sustainability.

Those who want a competitive advantage often choose the MSC, and this is what we've seen particularly on the west coast, where American companies, particularly in Alaska, went down the route of the MSC, thereby forcing some of our Canadian producers who compete with the Americans to consider the Marine Stewardship Council route. We're seeing that starting, as well, on the east coast of Canada, with competitors going down the Marine Stewardship Council route in other countries.

Those who sell their products to buyers who are becoming more knowledgeable about the sustainability issue are now starting to ask for specific information, and specific third-party assessments, or having a third party looking at what they're doing. So as people become more educated about what sustainability means, get more educated about the information that's out there, they're being more and more demanding about evidence of the sustainability.

The next few slides focus on the Marine Stewardship Council. I wanted to give that information to the committee, but I'm not going to go through it in detail other than to specify that the Marine Stewardship Council is not a government organization. It was actually created by the WWF and Unilever, a food company in Europe. It's also not government funded, it's privately funded. It is an independent third party assessment process for wild capture fisheries only. It does not assess or certify aquaculture fisheries. It assesses only the ecological sustainability aspect of fisheries, with pre-established criteria and performance indicators. It's a very thorough process.

So you have the MSC setting a standard. You have certifying bodies that they accredit as being those that can do the assessment. These certifying bodies hire experts, science and management, to do the actual assessment. A contract is concluded between the certifying body and the industry, the client who decides to have their fishery assessed against the standards the MSC has set out. A certificate is issued, if successful, following the assessment.

The choice of whether or not to use an actual label, whether it's the MSC label, is really a business choice. You can't sell your product as MSC-certified without actually using or needing to use the label. In fact, a lot of the producers are actually not opting into using the label.

Using the label requires to have your chain of custody certified by the Marine Stewardship Council as well, and also to pay a licence fee for the use of the label. So if you sell, essentially, to large retailers that put your fresh fish on a counter as opposed to in a box, there's no point to paying to use the label.

Slide 20 gives you an example--actually, it's pretty accurate--of all the Canadian fisheries that are either certified by the Marine Stewardship Council. That's the top list. The bottom list shows the ones that are currently in assessment. You can conclude from these that a lot of Canadian producers have opted to go down the MSC route.

I understand that the swordfish harpoon fishery should be added. I just found that out. The draft report is out for public consultation. I would just note that this one is almost done, out of the list.

In terms of the global trend, information on slide 21 gives you an idea of the kinds of products and fisheries that are actually certified around the world.

The next slide gives you a bit of an example of how I'd describe the MSC process and the principles.

There's an excellent website for the Marine Stewardship Council that has the detailed decision trees and performance indicators, what bar you need to meet to get your certificate, and what bar you need to meet not to have any conditions associated to your certificate.

Are there other options? Yes, there are options for eco-certification processes, but not all are linked to actual labels. Fisheries partnerships and Friend of the Sea are examples where... Actually, fisheries partnerships in particular are a process to help the fishery evolve and improve its sustainability, but they don't actually have a label that you can put on your products.

The committee might be interested in two evaluation reports, one issued by the WWF and one by the Marine Resources Assessment Group report for Seafish. Those two organizations have benchmarked the existing eco-labelling and eco-certification processes, and they provide good information about whether these existing eco-labelling mechanisms are consistent with the FAO guidelines.

As well, the OECD is looking into this. Countries are starting to be worried about the proliferation of the various options out there, but also the differences between them. So they're seeking from the OECD an official benchmarking exercise to look at what's out there and whether they are consistent with the international standards set by the FAO.

[Raynald Blais, Bloc, Gaspésie—Îles-de-la-Madeleine, QC]

A point of order. I don't know whether you have fallen under Ms. Bouffard's spell, but I would ask her to go a little faster. You suggested that she take all the time she needed. I hope we can be generous at this point. But I was asking her to speed it up if possible. I do understand that Ms. Bouffard needs time for the presentation, but I would appreciate it if we could go faster, please.

[The Vice-Chair, Liberal, Lawrence MacAulay]

Thank you very much, Mr. Blais.

Ms. Bouffard, please continue, taking into account what our honourable colleague has said.

[Nadia Bouffard]

Thank you.

I propose that we skip to slide 27 to talk about what we've been doing with respect to eco-certification in Canada in terms of government, and end on that.

DFO, with the provincial governments, has developed a strategy for eco-certification, recognizing the trend and the importance of the issue for the Canadian fishing industry. Of course, again, this focuses on FAO-compliant processes that exist out there.

We also have had a lot of involvement in policy development for these eco-labels. I personally have been involved with the Marine Stewardship Council in the development of their criteria and their processes to ensure that what they're fleshing out is consistent with Canadian rules and management of fisheries. I also chair a committee of DFO and industry at which we have discussions about this particular issue, and my colleague Trevor has a similar committee with the aquaculture industry.

Of course, there's been some funding to the industry to help them meet and address these market challenges. ACOA and the provinces have provided funding. I don't have the details because they're not my organizations, but they have provided funding to producers and to industry to be able to go through some of these processes.

What are the impacts of eco-labelling on DFO? It involves, as I mentioned at the outset, an assessment of DFO's work, an assessment of our science and management. They assess, they identify gaps, and they identify corrective measures that they recommend to the government that manages the fishery. In our case, it's DFO. Those recommendations actually become conditions of the certificate, so the client industry has to meet those conditions within the existence of the certificate or they lose it.

DFO's involvement in these processes includes feeding the process, in terms of the assessment, as well as helping to meet those conditions. The best that industry can do--and we've been explicit about that with the industry--is to come to the department early in the process to talk about their expectations. They can talk about where they think gaps will be--we certainly can help in that respect--as well as identify where they think requirements will be, whether in terms of science or management, so that we can actually line it up with our planning and our budget and, if it is work, verify that it falls within DFO's purview.

Gaps requiring work of an incremental nature--either things that don't fall within what we had planned or things that are not within our mandate--would probably have to be paid by the industry or would be cost-shared with the industry. The bottom line, though, is that the best way DFO can support industry in meeting this trend is to continue not only to support the processes but also to continue to improve the way we manage our fisheries and aquaculture in a sustainable way. The stronger our regime is, the better they are prepared to meet the tests imposed by these eco-certification processes.

We've also been telling our story. I brought an example of a pamphlet that I use when we go to the Boston seafood show or the Brussels seafood show or when meeting with buyers. It generally describes the way we manage our fisheries and aquaculture in Canada. It is available on DFO's website.

We tell our story. We've not been good at that in the past, and we're trying to get better in terms of getting the information out. We also challenge conclusions. I mention that sometimes some of these processes have either erroneous information or information that is not up to date, so we challenge those conclusions by providing information and making the facts right.

That was what I had to say to the committee, and I'm open to questions.

[The Vice-Chair, Liberal, Lawrence MacAulay]

Thank you very much, Ms. Bouffard.

We will now open the questioning.

Mr. Byrne will lead us off.

[Gerry Byrne, Liberal, Humber—St. Barbe—Baie Verte, NL]

Thank you, Mr. Chair.

I enjoyed the presentation. I wasn't really up to speed on certification, and it provided with me a good background to it, so I appreciate your input.

I want to follow up on something you said. In the international experience, how is Canada comparing with...compared to our competitors, international governments that are helping to certify seafood that is produced by, say, us? You noted that Australia and northern European countries are actively involved in helping their fishers, their primary producers, to become certified.

How are they doing? Could you compare that to what Canada is doing?

[Nadia Bouffard]

I'd say we're in the middle. As I mentioned, there are countries that are hands-off. It's a business decision.

[Gerry Byrne, Liberal, Humber—St. Barbe—Baie Verte, NL]

Can you give me some examples of countries that are very much hands-on?

[Nadia Bouffard]

The United States.

[Gerry Byrne, Liberal, Humber—St. Barbe—Baie Verte, NL]

Tell us about it.

[Nadia Bouffard]

And Europe, to date, as well. However, I understand from their current debates on their common fisheries policy that they're starting to review their approach. I don't know where they're going to land after their review process.

[Gerry Byrne, Liberal, Humber—St. Barbe—Baie Verte, NL]

Could you describe the U.S. in a little more detail? What exactly are they doing in terms of their heavy hands-on?

[Nadia Bouffard]

They actually have a policy to that effect. NMFS has a policy on their website to that effect, that it's a business decision.

At the end of the day, what it means is that if producers wants to seek an eco-label, whether it's Marine Stewardship or otherwise, they will have to do their own legwork, look at information on NMFS's website, get their own information, hire their own consultants, and build their information and their stories, because it is a story that they're telling to the assessors.

You won't have things like interviews with scientists and managers to get a better understanding of how the fishery is managed, what the science is, and how it applies to that particular fishery, whereas we will have that in Canada. We'll sit down with the assessors and provide that kind of information.

[Gerry Byrne, Liberal, Humber—St. Barbe—Baie Verte, NL]

So the U.S. is very hands-off.

[Nadia Bouffard]

Yes.

[Gerry Byrne, Liberal, Humber—St. Barbe—Baie Verte, NL]

Give us some examples of very hands-on, where the government is extremely participatory with producers, and just describe the extent of that participation.

[Nadia Bouffard]

I would probably point to New Zealand, which is on the other side. New Zealand has, as I said, put a pot of money to help the industry go down the route of eco-certification. It's not just to pay for the actual fees of the process; it's also a country that has a cost recovery mechanism on a lot of its management process.

So the pot of money is also to help the industry meet the actual conditions and improve the management and science.

[Gerry Byrne, Liberal, Humber—St. Barbe—Baie Verte, NL]

I note that in the Canadian examples where MSC certification has been achieved, it's mostly in very prosperous fisheries that have more corporate concentration or control—shrimp, offshore scallop, lobster, offshore lobster, and other things. This seems to indicate to me, anecdotally, that because they're controlled by—and let's be very specific about it—Clearwater and others, they have the resources to be able to certify, whereas the smaller fisheries or the fisheries that are dominated by smaller players have not yet been certified.

Is there a positive correlation there, or a negative correlation?

[Nadia Bouffard]

It's probably a combination of factors. The cost is certainly one that's valid.

I think being organized is another reason. If you have a vertically integrated organization, it's easier to go through the process.

I also think the corporate world was more quickly in tune with the trend. They hopped on this trend very quickly. I've done this particular presentation with many industry forums on the east coast and the west coast—but mostly on the east coast—to talk to inshore harvesters about this trend and how they need to get ready and prepared to be able to sell their products.

At the end of the day, most fishermen fish because they want to sell their fish, and they need to be more connected to the reality of the markets. We've been trying to get that information out to harvesters so that they're more informed.

I know for a fact that the lobster industry across Atlantic Canada is starting to look at this. Some of them have started to do MSC pre-assessments. Others are looking at alternatives.

So the movement is moving there as well.