Despite the international community's general acceptance of product ecolabelling, the approach has caused controversy in several international fora, including the WTO Sub-Committee on Trade and Environment and FAO's COFI. General concerns about ecolabelling are its potential to act as a barrier to trade and its coherence, or lack of it, with international trade rules. More specific concerns arise when applying ecolabelling to products from marine capture fisheries because these have special characteristics.
OECD has defined environmental labelling as the "voluntary granting of labels by a private or public body in order to inform consumers and thereby promote consumer products which are determined to be environmentally more friendly than other functionally and competitively similar products". A distinction is usually made between labels assigned on the basis of product life cycle criteria and so-called "single issue labels", and the latter are often excluded from ecolabelling programmes. This is in accordance with the general principles adopted by the International Organization for Standardization (ISO) which prescribe, inter alia, that "the development of environmental labels and declarations shall take into consideration all relevant aspects of the life cycle of the product". The product life cycle approach is followed by many ecolabelling programmes, including the EC Flower, the Nordic Green Swan and United States Green Seal ecolabel award schemes.
While no explicit definition has been adopted by either WTO or FAO, an implicitly wide definition of ecolabelling has been used in past debates at sessions of WTO's Committee on Trade and the Environment (WTO/CTE) and COFI. This broader definition encompasses product labelling that conveys any type of environmental information. However, as the central concerns of primary resource-based industries include sustainable use of the exploited natural resources and the conservation of habitats and related ecosystems, future ecolabelling in fisheries is likely to focus on these aspects and not encompass all of the other environmental impacts (e.g. energy use) that are assessed for most of the industrial products for which a life cycle approach is used.
How ecolabelling works
Ecolabelling is a market-based economic instrument that seeks to direct consumers' purchasing behaviour so that they take account of product attributes other than price. Such attributes can relate to economic and social objectives (fair trade; support to small-scale fishers; discouragement of child labour) in addition to environmental and ecological ones. Consumers' preferences are expected to result in price and/or market share differentials between products with ecolabels and those that either do not qualify for them or whose producers have not sought to obtain them. Potential price and/or market share differentials provide the economic incentive for firms to seek certification of their product(s).
The label helps consumers to distinguish a product according to desirable attributes without requiring them to have the detailed technical knowledge and overview of production processes and methods that underlie the certification criteria and certification itself. The label is a cost-effective way of supplying consumers with relevant product information that may influence their purchasing and consumption decisions.
Consumers' product choices and their willingness to pay a higher price for an ecolabelled product will depend on their general capacity to address, and willingness to respond to, environmental concerns through purchasing behaviour, and on their level of awareness and understanding of the specific objectives pursued through the labelling scheme. While there is considerable evidence that consumers' responsiveness to environmental product attributes varies among countries as well as within them (among different strata of the population), there is still a scarcity of reliable data on the gains in market shares and prices of ecolabelled products compared with non-labelled products. Northern European and North American consumers with good incomes and a high level of education have a moderate, and sometimes, strong, tendency to choose an ecolabelled product over a non-labelled one, even when the former costs slightly - but not much - more. There is evidence that ecolabels covering product attributes that relate not only to lower environmental impacts, but also to assumed higher product quality in terms of nutritional and/or health benefits, can realize significant price premiums and show strong growth in market shares, although such products are still operating from a small base. This applies to organic food products, for example.
Consumer confidence and trust are essential for a successful ecolabelling programme. If the purchase of ecolabelled products is to be sustained, consumers need to be confident that the scheme's objectives are being reached. If consumers feel misled or become confused by a large variety of competing ecolabelling schemes within the same product group, they are likely to return to cheaper non-labelled products. Certification criteria that are clear and precise and a certification procedure that is independent and verifiable ensure that the label conveys accurate and sufficient information. Third-party certification through private or public certifying agents whose qualification and independence have been established would ensure the reliability and accountability of the programme and consumers' confidence in it. The international harmonization of criteria and standards can prevent the consumer confusion that could arise with multiple, competing ecolabelling schemes based on different, and perhaps deceptive, criteria and standards. All ecolabelling schemes require a stringent chain of custody, so that the product can be traced throughout the full production, distribution and marketing chain down to the retail level. This presents particular difficulties in marine fisheries, where fleets are often away from port for considerable periods, may fish several different species in one trip and may transship and/or transform products for different markets at sea. Although these difficulties can be overcome, the costs associated with performing fisheries tasks within a system that includes proper inspection and control procedures can be a problem.
The feasibility of achieving fisheries management objectives through ecolabelling schemes depends on certain requirements being met. The economic incentive created by the labelling scheme needs to be sufficiently high to encourage the fishery management authority and participants in the fishery to seek certification and cover the related fisheries management and labelling costs. However, the fact that many of the fisheries that are currently biologically and/or economically overexploited could produce high economic returns if they were managed on sound economic and biological principles, suggests that economic incentives may not be the most important constraint to realizing effective fisheries management. Instead, political and social considerations are likely to be important reasons why many marine fisheries remain poorly managed. Nevertheless, the public relations, awareness creation and educational activities that may accompany an ecolabelling programme could eventually also make a difference in the political arena, and contribute to the kind of political will that is needed if society and politicians are to shoulder the short-term costs of fisheries management for the longer-term good.
There is no guarantee that the widespread adoption of ecolabelling programmes for marine fisheries would result in the better management of global fisheries in toto. At present, only a small fraction of global fish consumers (most of them living in Europe and North America) are likely to be responsive to ecolabels. Most of the future growth in global fish demand, however, will be in Asia, Latin America and Africa. The private sector is likely to react by directing to ecosensitive markets only those products that can be certified at a low cost, while other products will be directed to markets that are not ecosensitive. It cannot be guaranteed therefore, that when a particular fishery fulfils the certification criteria, excess fishing capacity will not be redirected to other uncertified fisheries. This could increase the pressure on some fish stocks in favour of those for which certification is profitably applied. Such negative spillover effects are not unique to ecolabelling schemes and can arise from any fisheries management approach that does not encompass specific measures to avoid the undesirable transfer of excess fishing capacity.
Although some of the best managed marine fisheries are currently found in developing countries, in general these countries face greater difficulties in achieving effective fisheries management and, therefore, in participating in ecolabelling programmes than industrialized countries do. The reasons for this are manifold and include the preponderance of small-scale and artisanal fisheries, where management is more complex because of the large number of participants and their lack of alternative remunerative employment opportunities; the multispecies characteristics of tropical fisheries; a lack of the financial resources needed to retire significant amounts of excess fishing capacity; and the limited technical and managerial capacities of government agencies, many of which face reductions in their budgetary allocations. Consequently, technical and financial support would be needed to facilitate the participation of developing countries, as well as of several countries in transition, in ecolabelling programmes.
Ecolabelling and international fish trade
Fish and fishery products are among the most widely traded natural resource-based goods. About 38 percent of global fisheries production enters international trade. For many developing countries, foreign exchange revenues from fish exports make a major contribution to the balance of payments and are thus of strategic macroeconomic importance. In the three major global fish importers (Japan, the EC and the United States), the processing, wholesaling and retailing of imported fish are of considerable economic significance, and they satisfy the consumer demand that is not met by domestic production.
The large and increasing trade of global fisheries production and the fact that much of the trade flow is from developing to industrialized countries indicate the potential of ecolabelling as both an incentive to improved fisheries management and a barrier to trade. Currently, much of the ecologically aware consumer demand is concentrated in the main fish-importing countries, with the exception of China which has become a major fish importer only in recent years.
There is no unanimous view on how international trade rules, including the WTO Agreements, can be interpreted by and applied to ecolabelling schemes. One area of divergent opinions is the extent to which WTO rules encompass production processes and methods that are not product-related. Another area of concern, which is not exclusively or specifically addressed by ecolabelling, is the establishment procedures and characteristics of international standards.
In October 1998, FAO convened a Technical Consultation on the Feasibility of Developing Non-discriminatory Technical Guidelines for Ecolabelling of Products from Marine Capture Fisheries. This consultationidentified a number of principles that should be observed by ecolabelling schemes. They should:
- be consistent with the Code of Conduct for Responsible Fisheries;
- be voluntary and market-driven;
- be transparent;
- be non-discriminatory, by not creating obstacles to trade and allowing for fair competition;
- establish clear accountability for the promoters of schemes and for the certifying bodies, in conformity with international standards;
- include a reliable auditing and verification process;
- recognize the sovereign rights of states and comply with all relevant laws and regulations;
- ensure equivalence of standards among countries;
- be based on the best scientific evidence;
- be practical, viable and verifiable;
- ensure that labels communicate truthful information; and
- provide for clarity.
The 23rd and 24th Sessions of COFI in 1999 and 2001 requested FAO to monitor developments in the ecolabelling of fish and fishery products but at that time there was no unanimous view on the desirability of FAO to lead a process of developing international guidelines. In accordance with the wishes of Members for FAO to monitor the developments in fisheries ecolabelling, the Fisheries Department published in 2001 a comprehensive technical paper on product certification and ecolabelling for fisheries sustainability. In addition to a discussion of the theoretical foundation and international trade law implications, the publications also comprise a detailed review of various labelling and certification schemes in capture fisheries and aquaculture.1
At the request of the 25th Session of the Committee on Fisheries (COFI), Rome, Italy, 24 to 28 February 2003, FAO convened the Expert Consultation on the Development of International Guidelines for Ecolabelling of Fish and Fishery Products from Marine Capture Fisheries, 14-17 October 2003, Rome, Italy. In the course of discussions both in plenary and small working groups, the expert consultation produced draft international guidelines for the ecolabelling of fish and fishery products from marine capture fisheries.2 The draft guidelines comprise principles, minimum substantive requirements, criteria and procedures for the ecolabelling of fish and fishery products from marine capture fisheries.
The guidelines draw upon various sources including relevant guides of the International Organization for Standardization (ISO), the WTO Agreement on Technical Barriers to Trade (TBT), in particular, Annex 3 Code of Good Practice for the Preparation, Adoption and Application of Standards, and the work of the International Social and Environmental Accreditation and Labelling (ISEAL) Alliance.3
As directed by the 25th Session of COFI, the draft international guidelines were submitted to the 9th Session of COFI Sub-Committee on Fish Trade, Bremen, Germany, 10-14 February 2004. The COFI Sub-Committee noted the benefits to fisheries managers, producers, consumers and other stakeholders of internationally agreed and widely accepted and applied guidelines that ensure the credibility and trustworthiness of voluntary ecolabelling schemes for fish and fishery products.
At the recommendation of the Sub-Committee FAO organized a Technical Consultation in October 2004 to finalize the draft guidelines for their consideration by the 26th Session of COFI in March 2005.
In the World Trade Organization (WTO)
The issue of labelling requirements for environmental purposes has become, since the 4th WTO Ministerial Conference in Doha, November 2001, an issue of special focus in the work of the WTO Committee on Trade and Environment (CTE). At the Doha Ministerial Conference, WTO members instructed the CTE to undertake further work on labelling requirements for environmental purposes and in particular to:
- look at the impact of eco-labelling on trade;
- examine whether existing WTO rules stood in the way of eco-labelling policies; and
- identify any WTO rule that would need to be clarified.
In conformity with its mandate, the CTE published in July 2003 its final report to the 5th WTO Ministerial Conference in Cancun, September 2003.4 Most CTE Members agree that voluntary, participatory, market-based and transparent environmental labelling schemes are potentially efficient economic instruments in order to inform consumers about environmentally friendly products. As such they could help move consumption on to a more sustainable footing. Moreover, they tend, generally, to be less trade restrictive than other instruments. However, the report also notes that environmental labelling schemes could be misused for the protection of domestic markets. Hence, these schemes need to be non-discriminatory and not result in unnecessary barriers or disguised restrictions on international trade.5
With respect to voluntary environmental labelling schemes, the CTE report stresses the importance of the TBT Agreement's Code of Good Practice for the Preparation, Adoption and Application of Standards, and encourages the acceptance of this Code by the bodies developing labelling requirements. Moreover, the report recalls that the TBT Committee's Decision on the "Principles for the Development of International Standards" provides useful guidance also for environmental labelling standards. These principles are: transparency, inclusiveness or openness (that all stakeholders be involved in the development of the standard), impartiality and consensus, effectiveness and relevance, coherence, and, wherever possible, responsiveness to the needs and interests of developing countries.6
While international standards for labelling have a significant potential to facilitate trade by promoting the convergence of labelling requirements, the CTE report notes that there was a need to better involve developing countries in the setting of environmental standards and regulations, whether at the national or international level. It reiterates that developing countries were at a disadvantage due to limited or ineffective participation in these processes.7 Moreover, for developing countries, the recognition of the equivalency of their own certification systems was an area of particular concern. In this connection, it was important to concentrate on assisting developing countries to design schemes that supported environmental objectives within their own domestic context.8
In parallel to the debate in FAO, several developments have taken place that aim at influencing the purchasing behaviour of fish consumers against a background of increasing media attention to sustainability issues in marine fisheries. These include the appearance of various schemes of fish purchasing guides by organizations such as Monterey Bay Aquarium and National Audubon Society in the United States, Seafood Choices Alliance - a Web site bringing ocean conservation to the table, Greenpeace, WWF Sweden's consumer guide and others. At the corporate level, companies such as Unilever and Carrefour included sustainability criteria in their product procurement policies encompassing, inter alia, fish and fishery products.
Most notable is the recent expansion of fishery production that has become certified and ecolabelled under the Marine Stewardship Council. The expansion is the result of three major fisheries becoming certified, namely Alaska salmon in September 2000, New Zealand hoki in March 2001 and South African Hake Trawl Fishery in April 2004. These three fisheries, out of a total of ten certified fisheries, contribute about 95% of the volume of MSC certified fishery production.
Notable are also the MSC certification of small volume but high value fisheries, namely the Western Australian Rock Lobster fishery and the Red Rock Lobster fishery of Baja California, Mexico. The latter is the first small-scale developing country fishery certified by MSC.
The volume of MSC certified fishery production is expected to further increase significantly over the coming years. The Bering Sea/Aleutian Islands and the Gulf of Alaska pollock fishery, the world's largest whitefish fishery with an average annual harvest of 1.1 million tonnes, has just passed the MSC Principles and Criteria after a three year assessment.
Other larger volume fisheries which are among the fifteen fisheries currently undergoing MSC assessment include the salmon fishery, and the halibut and sable fish fisheries in British Columbia, Canada; the halibut and sable fish fisheries in Alaska, United States; the United States Freezer Longline fishery for cod in the Bering Sea and Aleutian Island; the Chile industrial hake fishery; and the pelagic freezer trawler fishery for North Sea herring.
Based on the MSC model, the Marine Aquarium Council (MAC), an international, not-for-profit organization, has initiated a certification programme for quality and sustainability in the marine aquarium industry. The certification programme provides independent third party certification and labelling for tropical and other fish used in the aquarium trade through a multistakeholder process consistent with WTO, ISO guidelines and core MAC standards.
MAC is also involved, together with the International Marine life Alliance (IMA) and The Nature Conservancy (TNC), in the development of a set of industry ‘best practice' standards for the live reef food fish trade, covering the chain of custody from reef to restaurant.
In 1997, the Nordic Council of Ministers began developing criteria for an environmental label for fish. The Nordic Technical Working Group on Fisheries Eco-labelling Criteria proposed an arrangement for the voluntary certification of products from sustainable fishing that was adopted by the Nordic Ministers of Fisheries in August 2001. The Working Group's recommendations are based on the Code of Conduct for Responsible Fisheries, FAO's Technical Guidelines for Fisheries Management and the Precautionary Approach, and the Biodiversity Convention. So far no ecolabelling scheme has been set up and no fisheries are certified based on these criteria.
In 2000, Japanese tuna boat-owners launched the Organization for the Promotion of Responsible Tuna Fisheries (OPRT) to promote conservation and sustainable use of tuna through the cooperation of all stakeholders in tuna fisheries. OPRT is supported by the Japanese government and includes important tuna longlining participants from China, Taiwan (Province of China), Indonesia, Republic of Korea and the Philippines. In addition to its work on developing a "positive list" of large-scale tuna longline fishing vessels that operate in compliance with resource management measures, OPRT is also engaged in developing a consumer-oriented
1 Wessells, C.R.; Cochrane, K.; Deere, C.; Wallis, P.; Willmann, R. Product certification and ecolabelling for fisheries sustainability. FAO Fisheries Technical Paper. No. 422. Rome, FAO. 2001. 83p.
2 Report of the Expert Consultation on the Development of International Guidelines for Ecolabelling of Fish and Fishery Products from Marine Capture Fisheries. Rome, Italy, 14-17 October 2003. FAO Fisheries Report. No. 726. Rome, FAO. 2003. 36p.
3 ISEAL alliance is a formal collaboration of many of the leading international standard-setting and conformity assessment organizations that focus on social and environmental issues.
4 WT/CTE/8, 11 July 2003
5 WT/CTE/8, paragraph 30
6 WT/CTE/8, paragraph 38
7 WT/CTE/8, paragraph 31
8 WT/CTE/8, paragraph 32