Business.2010 newsletter: Agribusiness

Volume 3, Issue 2 - February 2008: Agribusiness

Retailers push sustainable shrimps

Although the majority of agriculture, aquaculture and fisheries production is still used in the country of origin, the integration of global markets is leading to a growing proportion to be traded internationally. This is primarily destined, in one form or another, for the shelves of food retailers in the northern hemisphere. Fish is the most internationally traded food commodity, and tropical shrimp one of the most valuable traded fish commodities. The largest retailers are working more closely with their suppliers on production standards to ensure not only food safety and quality but increasingly sustainability and responsibility as well, essential to their brand reputation. This is being driven by a number of complex factors, principally: food scares; changing legal frameworks; increased market concentration; changing consumer expectations and corporate social responsibility. Although our understanding of the role of voluntary standards and certification schemes is still evolving it is now widely accepted that, when governed in a credible, inclusive and transparent manner, they can be essential tools for achieving biodiversity conservation, sustainable use, social equity and business objectives.

European retailers and shrimp aquaculture
Aquaculture has recently overtaken fisheries in the supply of fish products to retailers and global markets, reflecting not only the levelling off of global fish catches but also the industrialisation of aquaculture. Tropical shrimp has been at the forefront of this transition. In the last twenty years the shrimp aquaculture industry has grown rapidly in the coastal regions of many tropical countries and shrimp now accounts for around 20% of traded fish products. Whilst this has provided economic benefits for some groups in society, shrimp aquaculture has also been associated with large-scale ecological damage, in particular of mangrove forests, and marginalization and impoverishment of local communities.

The ecological and social impacts of shrimp aquaculture have been reported on by scientists and NGOs for over twenty years, but credible market based solutions to address these external costs have been slow to take hold, and problems persist (1). Voluntary standards and certification have been proposed in consuming countries as a way to improve the industry and minimise some of the core impacts. Dutch and European retailers and their suppliers have recently developed a shrimp aquaculture standard with the organisation GLOBALGAP (formerly EurepGAP). This is the first time that a GlobalGAP standard aims to address a range of social and ecological issues, and the first time NGOs, including IUCN NL and OxfamNOVIB, have been invited to advise on environment, biodiversity and local community issues.

ONE standard
GLOBALGAP is one of the largest and most powerful voluntary standard setters in Europe. It is a membership organisation set up by some of Europe’s largest retailers and their suppliers whose principal aim is “to establish ONE standard for Good Agricultural Aquaculture Practice (G.A.P.) with different product applications capable of fitting to the whole of global agriculture”.

Many of GLOBALGAP’s retail members have committed to purchase only from GLOBALGAP certified suppliers in the near future. GLOBALGAP is a B2B label (see box, opposite page), and once certified to a particular standard, producers are entered into a database and have much easier and immediate access to the huge and lucrative European retail market. To date, GLOBALGAP has issued over 70,000 certificates covering over one million ha of crops, livestock and aquaculture (pre-farm gate) in more than 80 countries. The GLOBALGAP aquaculture base is currently expanding to include new standards for shrimp, pangasius, tilapia and undoubtedly many more species in the future (2).

Standard development and governance
Standard development is a crucial stage in designing a credible voluntary standard, as the experts involved, decision-making and overall governance of the process will ultimately determine which issues are to be addressed by a standard. If a standard aims to address environment and social practices in production, then the governance of this process must be credible, inclusive and transparent. A key challenge is of course identifying and engaging the relevant stakeholders. It is often local NGOs who have the deepest and clearest understanding of these issues and are perhaps most suited to frame such standards. However, local NGOs are not yet convinced of the benefits of standards and certification and have been reluctant to engage in such processes. A key reference document for many in the field of standard setting for social and environmental practices is the ISEAL Code of Good Practice article in this issue, pp. 16-17.

The GLOBALGAP salmon aquaculture module, currently the only functioning GLOBALGAP aquaculture module, was reviewed in a recent WWF report on certification schemes aimed at benchmarking all existing aquaculture schemes against a set of criteria (3). The research reviewed over 30 certification programmes, and “identified numerous shortcomings, constraints and challenges with existing programmes that need to be addressed if they are to help the sector achieve long-term sustainability”. GLOBALGAP scored well in Animal Welfare, Health Issues and Verification Procedures, achieving on average over 80%, but scored relatively poorly in three key areas: environmental issues, community issues, and standard development and governance. Low scores on environment and community issues might be explained by the absence of environmental and social science experts and NGOs in the development of the salmon module, which also demonstrates the importance of this stage.

The three main concerns, amongst others, regarding standard development and governance described in the report are that GLOBALGAP offers: (1) Limited process of external stakeholder involvement in standard development; (2) Limited openness of governance (only open to retailer and supplier members); and (3) Insufficient independency of standard creation and standard holding body.

GLOBALGAP’s recent experience of better inclusiveness in the development of the soon to be released shrimp standard with the advice of IUCN NL and OxfamNOVIB should help in the development of environment and social standards and understanding NGO positions on these matters in the future. But challenges still remain as to how GLOBALGAP will address issues raised by many in the NGO community, and expressed in the WWF report, related to governance. Retailers dominate decision making in GLOBALGAP, and whilst NGOs have recently been invited to provide advice and input, they are very much external stakeholders and have no decision-making power. It is not yet clear how GLOBALGAP will demonstrate that the current governance system can deliver appropriate, robust environmental and social standards, or whether indeed they will open up the governance structure to become truly transparent, inclusive and multi-stakeholder in the future.

What is a standard?
are essentially documents of codified information, approved by a recognized body, that provide rules, guidelines or characteristics for product or production processes, and for which compliance is voluntary. Standards often communicate good or best practice, and are frequently complemented by some sort of certificate, label, or other assessment to assure conformity.

Standards exist for a wide range of crops, livestock and aquaculture products, from coffee to poultry to salmon, and cover an increasing number of issues, from food safety, animal rights, labour issues, environment and, more recently, biodiversity and community rights. Developing and governing voluntary standards is a very complex, technical and political affair, and there is now a significant portfolio of assurance schemes working to different standards and at regional, national and international levels.

Certificates and labels may be visible to the final consumer (Business to Consumer; B2C), such as the Marine Stewardship Council, or between businesses themselves (Business to Business; B2B), such as food safety initiatives. Access to certain markets, particularly in OECD countries, increasingly depends on demonstrating to customers, primarily via the use of voluntary standards and certificates, that products have been produced according to the principles of sustainable development.

Burning questions
The growing role of private standards is providing many opportunities to achieve biodiversity objectives in unison with more market and business oriented approaches. Three burning issues remain though for all organisations, private or otherwise, concerned with achieving such objectives.

Firstly, to what degree does a particular system effectively deliver what is being communicated to the market? WWF’s report certainly provides an excellent overview, and indeed concluded that no existing aquaculture system does this. This is the core of many local NGO concerns with certification as they are yet to see such initiatives deliver the environmental and social standards targeted. Improvements are certainly needed to existing systems before voluntary standards achieve their theoretical potential and prove to be anything other than ‘new clothes on the same emperor’. This should be coupled with much more independent field-based academic research to investigate long term benefits and shortcomings. Conscious efforts are needed to ensure systems do not exclude small farmers from market access with unachievable standards and little investment or incentive.

Secondly, given the increasing role private voluntary standards are playing, what will become of the role of governments in the governance of food production systems? Will governments revert to ensuring that private voluntary standards are run in credible ways, or will governments also allow this to be left to the market? The FAO is currently engaged in a process to “develop international guidelines on aquaculture certification, through a credible and transparent process” Should governments consider taking a more hands-on role in ensuring such guidelines are followed by the relevant private sector bodies?

Thirdly, how do NGOs ensure that their own strategies related to food production are effective and credible in trying to influence and collaborate with business? Governance of voluntary standard initiatives forms the cornerstone of their design and implementation, but many NGOs have limited knowledge on this new and often complex subject. A greater understanding of such market mechanisms is needed by both business and NGO communities if we are to find a permanent, trusted and transparent nexus where solutions can be found.

Mathew Parr is Project Officer, Europe and the World Ecology Programme, IUCN National Committee of the Netherlands (IUCN NL.
(1) De la Torre & Barnhizer, D. Eds. The blues of a revolution: the damaging impacts of shrimp farming. ISA Net/APEX, Seattle, USA. 2003.
(2) http://www.globalgap.org (accessed 20/12/07).
(3) http://assets.panda.org/downloads/benchmarking_study_wwf_aquaculture_standards_low_res_with_annex_.pdf. WWF is also running aquaculture roundtables for various species to “develop credible, voluntary standards geared toward minimizing or eliminating the main environmental and social impacts caused by aquaculture” (www.worldwildlife.org/cci/aquacultureoverview.cfm, accessed 20/12/07).
(4) http://www.enaca.org/modules/tinyd10/

  • United Nations
  • United Nations Environment Programme