The Difference Between Verification and Traceability

By Bradley Soule, Chief Fisheries Analyst
20th June, 2019

Last week, I was invited to participate in a panel at the Seaweb Seafood Summit by David Schorr of WWF U.S. to talk about the role of verification in seafood supply chains and its role in the Global Dialogue on Seafood Traceability (GDST). This was one of the more challenging panels I’ve done because I got to go from the practical level we usually work at and talk about the model and theory of change that Nick Wise and I had in mind when we founded OceanMind. This theory came from conversations years ago between Satellite Applications Catapult and the Pew Charitable Trusts and others on how to get the support and technologies we were building out into the world to help folks who were already trying to do the right thing. The basis of my thoughts here come from the work I’ve been doing with enforcement agencies and seafood buyers throughout my career. Both lines of work are really about compliance and deterrence theory and how they support sustainable use of ocean resources: Specifically, how do we encourage and cajole people to follow rules necessary for sustainability. What made this panel even more fun was that we were driven by David to really get at the core of the question of the private sector’s role in verification. Additionally, I really liked to tag team with Francisco Blaha (also a Seafood Champion this week!). Francisco and I have spent a lot of time talking about these topics already, usually over a cold drink eating street food in Bangkok. So it was a joy to get to really hash out some of these ideas with him as well as with Ben Shepperd of Streamr, who I hadn’t met before. He brought a very practical approach to blockchain and traceability that I found refreshing considering how much we read about how blockchain will solve all our problems.

I felt the need to spell out the key message here to help continue the important debate on this issue because of the importance of the topic and because I felt some of the press coverage didn’t capture the point I was trying to make (most likely due to me tripping over my own words sometimes when I speak). The question is, do seafood buyers have a role in verifying the compliance of activity on fishing vessels they buy from related to labour, fishing rules/sustainability, and health/food safety protocols? My (likely obvious) answer is yes.

In order to explain why, it’s first critical to explain the difference between verification and traceability. The phrase garbage in/garbage out really explains this principle well. Traceability is required in order to ensure legality and sustainability, but it doesn’t guarantee it. However, the ocean conservation and sustainable seafood communities use the word “traceability” as if it solves all our problems to know what boat caught a fish. This is why so many folks claim blockchain will solve all the problems; because they confuse traceability, which is a system, with verification, which is an action. Traceability by itself makes no claim as to the state of the product or information that can be followed from one point to another through a system. In order to claim that a product has certain values like being from a sustainable fish stock and being free of IUU caught fish, the claims have to be verified, even if the product is traceable back a specific vessel.

The next question is why can’t we just trust governments to take care of all of this for us? We pay taxes for compliance, there are mandatory catch certificates for import to the EU, the yellow card/red card system, etc. And yes, there are some excellent examples in the fisheries world of strong “cultures of compliance” where industry, management, and the compliance community work together to define management measures based on quality science that have legitimacy in the regulated community, which has a strong incentive to make sure everyone follows the rules and works collaboratively with enforcement to identify and solve issues. I started my enforcement career in Alaska where, despite some strong disagreements, this was the case.

However, in most of the world this is NOT the case. In most of the world, the relationship between the regulators and the regulated industry is a cat and mouse game. You are caught or you are not caught. If the government doesn’t actually prosecute someone, then that must show that everyone perfectly followed the rules. But that’s not how most of the world works. There are a lot of people out there who try to do the right thing, even when no one is watching. Then there are a few people who will always break the rules and enforcement systems need to be designed to catch and severely penalize these people. Then there are a majority of people who respond to a risk-reward calculus that looks at the risk of being caught and what the potential penalty might be. Most enforcement systems in the world, fisheries and elsewise, are built around this concept of compliance. However, the systems that work the best are those that use the economic and social system as part of ensuring compliance. This means we do not solely trust the government to be perfectly effective in finding every possible violation and it’s also why I used a Tom and Jerry cartoon to demonstrate the relationship between government regulators and enforcement when there is no buy-in and no reinforcing system of ensuring compliance within society. Government officials might be trying their best, but especially in fisheries they are woefully under-paid and under-resourced. In Majuro, one of the busiest transhipment ports in the world, there are only 5 inspectors. And yet in fisheries we have built a system that mandates governments to guarantee that there are no problems through catch certificates even when it is frequently impossible for them to have reviewed all the relevant records and conduct inspections and investigations to look for these problems.

To be very clear, I do NOT mean that government has no role. It is imperative that governments create the rules for the market to work effectively and implement compliance systems that remove the worst actors and encourage compliance through a variety of carrots and sticks for those that are influenced one way or another. However, seafood buyers have a huge role to play by adding another element of risk and reward that affects the decision calculus for whether to comply with certain rules. With the right data in hand, buyers can verify the accuracy of claims, thereby building trust within supply chains and supporting efforts to ensure compliance with sustainable management measures. This verification process can be targeted at the highest risk parts of the supply chain, which can be identified through a structured due diligence approach such as in BSI PAS 1550:2017 (“Exercising due diligence in establishing the legal origin of seafood products and marine ingredients”). While geared at EU importers, we’ve found it to be an excellent framework to help seafood buyers establish the information collection, risk analysis, and risk mitigation systems they need. Additionally, while not as easily quantified, there is a strong benefit that comes from enhanced trust between seafood buyers and sellers from this kind of process. It can result in more secure purchasing relationships for buyers who have increased trust that their supplier is doing the right thing and greater credit and security for sellers who have more communication and validation from buyers that leads to longer term relationships.

Many organizations are already partnering to engage in pre-competitive collaborations to pool their resources to conduct this kind of risk mitigation. Great examples of this include the partnership between the Royal Thai Government and Seafood Task Force in Thailand on both Port State Measures Agreement implementation as well as improving control of the Thai-flagged fleet. In both circumstances, industry is leading the way by helping the government improve and then using the transparent results of government inspections to demonstrate to supply chains that all risks were properly identified and addressed. Similarly, many restaurants, retailers, and processors of Barents Sea cod formed an Industry Group Agreement to voluntarily ensure that none of their source vessels were fishing in waters exposed by retreating sea ice from climate change in the Arctic. These private sector initiatives compliment the compliance and enforcement efforts of government. They ensure a level playing field that increases benefits for legal fishers and increases transparency to buyers about operators that may be skirting the rules. As Francisco likes to say, this kind of activity brings light into darkness.

So how does this all fit with the GDST and traceability? As several of us said during the panel, there should be an expectation that key information like permits, vessel tracking, and crew information needs to be systematically shared through traceability systems so that it can be cross-checked at any point, at least internally but also by 3rd party organizations. The standardization of the way this information is shared and the creation of the expectation for sharing can hopefully be accomplished through the GDST. This could create a system driven by industry that could make it easy to answer the question of do I have enough information to tell if there is a problem and what is the assessment if I do have the information. Unfortunately, most seafood supply chains currently do not have the systematic access to this information required to provide the kind of verification that a growing and hungry global population will require. But I look forward to working with the organizations in the GDST to hopefully build and define that system.

One final note that I would be remiss not mention and that is worthy of another discussion on it’s own: As we build verification and traceability systems, it is critical to look at the impact on small scale fishers who have unique needs, represent a major portion of global take, and have more economic reliance on fishing for food and economic security than the large businesses we think about when we talk about sustainability.