SGS : Corporate Social Responsibility in the Seafood Supply Chain

The 140 billion USD global seafood industry is complex, highly regulated and continuously monitored.

Sustainability is vital for the wild caught, and aquaculture segments.

Traditional aquaculture is currently favored as a long-term solution to global animal protein shortages, and it is reinventing itself with technical adaptations. Nonetheless, consumers, NGOs, the media, and the scientific community are defining sustainability more broadly, to include management systems, procedures and practices. Given the industry's supply chain complexity, there has never been a better time for stakeholders to collaborate, and build longer-term sustainable solutions.

Points of Reference/Current Regulations

Seafood buyers, compliance/CSR managers and CEOs of many retail and manufacturing brands, are aware of the brand risk of non-compliance, and the cost of managing a response.

United States

The California Supply Chain Transparency Act requires a company to disclose on its website its initiatives to eradicate slavery and human trafficking from its direct supply chain for the goods offered for sale. A company must disclose to what extent it:

• Engages in verification of product supply chains to evaluate and address risks of human trafficking and slavery
• Conducts audits of suppliers
• Requires direct suppliers to certify that materials incorporated into the product comply with the laws regarding slavery and human trafficking of the countries in which they are doing business
• Maintains accountability standards and procedures for employees or contractors that fail to meet company standards regarding slavery and human trafficking
• Provides employees and management training on slavery and human trafficking

KnowTheChain.org has reported that a 2015 study found that 47% of its survey on companies subject to the Act, were not disclosing sufficient information on their websites.

Additionally, the HR 644 Trade Facilitation and Trade Enforcement Act of 2015 bans US imports of slave-produced goods. Shipments in which forced labor is suspected will be seized, and further imports blocked.

United Kingdom

The Modern Slavery Act of 2015 makes provisions about slavery, servitude and forced or compulsory labor, and about human trafficking, including provision for the protection of victims; an Independent Anti-slavery Commissioner; and connected purposes. It clearly sets out definitions, requirements and penalties, including imprisonment. As no corporation could afford the loss of critical staff, the urgency for due-diligence, transparency and collaboration in the supply chain has increased.

However, in March 2016, Supply Management reported that 75% of small to medium size enterprises would not know how to respond if supply chain slavery was uncovered. Moreover, 67% reported that they had done nothing to tackle supply chain slavery.

European Union

The Council of the European Union (EU) has endorsed proposals authorizing Member States to ratify the International Labor Organization's (ILO) new Protocol to the Forced Labor Convention and recommending they do so by the end of 2016. Countries that ratify the ILO Protocol agree to:

• Prevent the use of forced labour, in particular in the context of trafficking in human beings
• Improve the protection of victims
• Provide access to compensation

Current Findings

Notwithstanding the media's focus on forced labor, or conditions at sea, there is still scope for improvement with respect to compliance with local laws and third party ethical and labor standards. Some of these improvement areas are described below. Lack of enforcement of existing laws is a common thread across international boundaries.

Management Systems: Lack of a corporate social compliance program, lack of transparency of any system beyond tier one suppliers. If there is a plan, there must also be training and implementation of the plan into the supply chain.

Employment Freely Chosen/Forced Labor: Once policymakers and industry align on the removal of excessive recruitment fees, an end could be expected to the practice of bribes to enforcement agencies, and to the egregious practices of some labor agencies.

Health & Safety: Building safety and fire code violations, blocked or missing fire escapes and extinguishers, lack of adequate emergency lighting and evacuation plans, neglected maintenance of dormitories, insufficient and or employee-paid personal protective equipment.

Working Hours: Local limits exceeded and employers failing to allow workers their legal time off. Training programs often focus on the trade-off between production and fatigue, turnover and potential food safety consequences.

Compensation: Overtime compensation does not match legal requirements. Workers paid hourly, or by the piece suffer as a result of non-conformities in calculating differences against minimum wage requirements. Frequent underpayment of overtime to factory staff.

Discrimination: Gender and age discrimination may occur more frequently at labor agencies than at seafood operations.

Collaboration and training within the supply chain is critical to correcting these issues and building more sustainable supply chains.

Trends and Actions

Lack of transparency and the speed of social media have resulted in negative news about the seafood industry, a business that the world needs to trust as a sustainable and healthy source of protein. There is a benefit to transparency. Moreover, there has been greater interest in tackling parallel challenges to supply chain sustainability including illegal, unregulated and unreported (IUU) fishing, which deprives legal fisherman and coastal communities of up to 125 billion USD per year.

The Chartered Institute for Procurement & Supply (CIPS) and Walk Free Foundation together published an introduction for procurement professionals on Modern Slavery. The section entitled 'How businesses should respond', cites three essential elements:

• Understanding and commitment
• Leadership on auditing
• Accountability

Applied equally, the seafood industry can use these broad responses. Stakeholders must continue to engage governments and policy makers to enforce existing laws, and/or amend laws to close gaps. Removing the dark shadows in its supply chain, the industry will win back the trust and buying power of consumers and help ensure its longevity.

Seafood Services From SGS

SGS offers social responsibility audits against private, food retail and manufacturing codes of conduct as well as the recognised, third party standards including SA8000, BSCI, SMETA, and addendums through GlobalGap GRASP, and GAA Best Aquaculture Practice (BAP), leading to certification where appropriate. Certification helps you to satisfy customer expectations by demonstrating the plans, programs and systems that each standard demands. We are active in dialogues regarding the monitoring of fishing vessels and expect to report further on this important segment.

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For the complete range of SGS services and support visit SGS Food Safety page.

For further information, please contact:

Kevin Edwards
Director Business Development & Technical Support
t: +1 973-461-7903

References

Know the Chain
Modern Slavery Act 2015 - Legislation
UK SMEs unaware Modern Slavery Act
Europa - Forced labour: Commission welcomes adoption of Council decisions to implement new ILO Protocol
NOAA - U.S., European Union to Strengthen Cooperation to Combat Illegal Fishing
CIPS ModernSlavery_Broch WEB