Traceability in supply chain is not always welcomed by traditional industries, the global seafood industry is a valid example. Digital Asset Live Editor-in-Chief talked to Bubba Cook, the Program Manager at World Wildlife Fund International Smart Fishing Initiative.
Q1: You are the Western and Central Pacific Tuna Program Manager at WWF-International Smart Fishing Initiative. Can you tell us how the blockchain component of this initiative functions?
A1: We recently restructured our organisation and, while I am still the Western and Central Pacific Tuna Programme Manager, it is within WWF-New Zealand and operating under the WWF Global Oceans Practice.
Seafood is a truly global commodity. A fish caught in one part of the globe might change hands dozens of times and undergo multiple forms of processing and packaging before reaching its ultimate destination – or destinations – thousands of miles away. As a result, seafood supply chains are often opaque and complex. Information is maintained in silos by separate supply chain actors in such a way that it is virtually impossible to fully or effectively trace a seafood product from its origin to its ultimate fate. This obscured supply chain ecosystem allows some actors to access and exploit those supply chains without being subject to recognised legal and ethical standards.
Over the last five years, increasing international media coverage has highlighted evidence of human rights violations as well as other illegal and unethical practices in various fisheries across the globe. Analyses and associated media have highlighted Illegal, Unreported, and Unregulated (IUU) activities, including overfishing, human rights abuses, and fraud in the global seafood industry. At the same time, companies practicing environmental and social responsibility are often not fully recognised for their efforts. People can often paint industry leaders with sustainable practices and fair labour standards with the same broad brush as the illegal and unethical producers. Additionally, in an effort to reduce brand and reputation risk, end markets are seeking mechanisms to ensure that they do not source from supply chains engaged in illegal or unethical practices. At its core, markets, and increasingly consumers, are simply seeking to purchase from supply chains that they can trust.
Fully transparent and traceable seafood supply chains, facilitated by the blockchain technology, could potentially solve the problem of IUU fishing in supply chains. Blockchain technology’s inherent transparency and traceability could effectively eliminate illegal or unethical seafood from the supply chain. It would achieve this unprecedented outcome by empowering seafood buyers and consumers to make well-informed commercial choices based on verifiable information. It would also provide an effective platform for regulatory authorities to identify and address potential risks.
Very simply, under the WWF pilot project a combination of RFID and QR codes were used to capture information throughout the supply chain. The nature of the longline fishery allows for each fish landed on a fishing vessel to be tracked by affixing a tag on the fish before it is placed into the hold. This tag follows the fish and is scanned at various devices positioned on the vessel, at the dock, and in the processing facility. At the end of the fishing trip and on return to port, each tagged fish is scanned and verified at landing and is then transferred to a processing facility. Within the processing facility the tag stays with the fish through the entire process to ensure the continuity of the fish story, with tags being cloned and distributed to support processing into smaller product portions. This is the extent of where the technology has been fully proven in this pilot project.
Moving forward, the expectation is that once products are packaged and tagged in the processing facility, the products will enter distribution channels to their destination markets. At this point users can engage blockchain apps to track the fish downstream to the retail outlets and finally to the consumer. At each step of the way, the system, through different supply chain actors simply scanning the tag or QR code on the packaging and entering some key pieces of information, maintains and builds the “story of the fish.” Actors can also view the history of the products they are handling.
We have successfully executed one off deliveries of fish at retail and consumer levels as demonstrated in the video you saw, but have been unable to take the technology to scale despite ongoing discussions with retailers in New Zealand and Australia.
Q2: You have altered WWF from a reactive to a proactive NGO within the seafood traceability. How did you do that, what has changed?
A2: WWF has always been a science-based and solutions oriented NGO, which sets it apart from some other NGOs and one of the reasons I have chosen to work there.
Thus, I would not characterise WWF as “reactive” because we have historically engaged in many “proactive” efforts to address complex conservation issues, such as through the establishment of market based solutions like the Marine Stewardship Council that empowers consumers to make informed choices about the seafood they buy. WWF is also one of the organisers and facilitators of the Global Dialogue on Seafood Traceability, which is an international, business-to-business platform established to advance a unified framework for interoperable seafood traceability practices that brings together a broad spectrum of seafood industry stakeholders from across different parts of the supply chain, as well as relevant civil society experts from diverse regions.
We have also taken the unprecedented proactive step of forming a blockchain supply chain “profit for purpose” joint venture between WWF and Boston Consulting Group Digital Ventures called OpenSC. OpenSC is currently tracking Antarctic toothfish for Austral Fisheries in Australia and is presently looking to expand work into the Pacific tuna fisheries.
So, I wouldn’t say that our approach to seafood traceability (or traceability of other commodities with an environmental impact) has changed. However, I will say that thanks to rapidly advancing data capture technologies, data analytical tools, and novel solutions like blockchain our focus has certainly shifted in favour of greater attention to the potential of markets to have a much greater impact on environmental issues through informed buyer and consumer purchasing. For my part, I saw blockchain as a gamechanger relatively early in its development for supply chain traceability and transparency and jumped at the chance to trial and lead the development of the technology, recognising the huge potential it could have in the supply chain context.
Q3: Among most common issues in fishing are illegal, unreported and unregulated fishing, fisheries mismanagement, and lack of data collection. How can your solution help abate these problems, can you give examples?
A3: Fully transparent and traceable seafood supply chains, facilitated by the blockchain technology, could potentially solve the problem of IUU fishing in supply chains. Electronic data capture technologies in fisheries are rapidly being adopted across all fisheries, including electronic logbooks, video monitoring, automated data analysis driven by artificial intelligence, and satellite remote sensing. Blockchain technology’s inherent transparency and traceability could effectively eliminate illegal or unethical seafood from the supply chain, by building on these data capture tools and the Internet of Things (IoT) in a way previously unavailable with traditional paper based record keeping systems due to the real time and instantaneously interrogable nature of electronic data.
In an effort to reduce brand and reputation risk, end markets are seeking tools to ensure that they do not source from supply chains engaged in illegal or unethical practices and, thus, have a vested interest in requesting, viewing, and verifying claims of suppliers that have heretofore unavailable or unreliable before blockchain. By empowering seafood buyers and consumers to make well-informed commercial choices based on verifiable information that is immutable, you can, over time, identify those supply chain participants that meet a best practice standard and reward them through preference or premium while at the same time exclude poor performers and habitual offenders from the supply chain. In time, markets could demand that no producer will receive access unless they meet a certain minimum information standard that can ensure products are legally, sustainably, and ethically produced. Lastly, it would also provide an effective platform for regulatory authorities to identify and address potential compliance risks in the supply chain as well, such as through mass balance reconciliation that indicates the entry of illegally caught product into a legally operating processing facility.
On a more micro scale, a buyer or consumer could identify that an individual fish was harvested legally because, for instance, that fish would have records maintained on the blockchain that would indicate: (1) the license and other permits of the vessel to fish in that area; (2) redundant data points verifying the legality of the area where the fish is caught (date/time stamp, geolocation, etc.) including the GPS of the device scanning the tag, Vessel Monitoring System (VMS), and Automated Identification System (AIS); (3) the type of gear used to harvest that fish; and (4) whether a fisheries observer was on board the vessel to assess and verify catches.
Q4: Blockchain is now widely used to ensure traceability. As you grew up in the fishing family and have worked close to the ocean, how else do you think blockchain may be used in coastal areas and at the sea?
A4: I think blockchain has an incredibly important role to play in two discrete conceptual areas in addition to the supply chain traceability space. First, I think improving equity and rent capture to the actual fishermen on the water doing the work is one important aspect. By creating transactional transparency and visibility in the supply chain, we will be able to see clearly what transactions are providing value and which are not.
Supply chain experts refer to this as “disintermediation” of the supply chain. I would refer to it as a potential “flattening” of the supply chain, where the “waste” in the middle that piles up from unscrupulous middle men that provide little or no value for a transaction begins to be exposed and is pushed out resulting in supply chains shortening between the producer and end market. Ostensibly, removing this “slop” from the system and the additional transparency afforded by blockchain would allow the benefits to accrue in two directions – to the producer and to the consumer – in the form of greater profits for the efforts of the producer and lower costs of the product for the consumer.
This would, in turn, have direct benefits for the ocean environment by rewarding those fishermen engaged in environmentally sustainable practices as well.
Second, I think there is a huge potential for blockchain to address issues in the human rights and labour rights space. One of the reasons I initially explored blockchain and aggressively pursued it is because of an event that happened in 2015. On Thursday, September 10, 2015, Keith Davis, an Observer in the IATTC Transshipment Observer Program and my personal friend, went missing following a transhipment on his vessel. All evidence would ultimately suggest he was murdered. He was deployed on the M/V Victoria No.168, a Japanese/Panamanian owned carrier under a Panamanian flag that was, at the time, transhipping from the M/V Chung Kuo No. 818, a Chinese Taipei owned vessel under a Vanuatu flag. Immediately following this event and in an effort to secure justice as well as ensure that this never happened again, I reached out to industry and NGO partners to see if there was any way to strand the tuna on board that vessel indefinitely until we could secure some justice for Keith. Ideally, I wanted to impose a market policy against any supply chain in which an observer, or a crewmember, goes missing at sea. Where in the past there was an assumption of “if there is no body then there is no crime,” I wanted to see a policy of, “if there is no body there is no market.” If another observer – or crewmember – of ANY nationality in ANY fishery disappears, there should be a policy in place that directs markets to unequivocally reject any further shipments from any vessel, agent, owner, or subsidiary involved in the incident until such time that they can prove, beyond reasonable doubt in a court of law in the appropriate jurisdiction, that foul play was not involved. Everyone I spoke to at the time sympathised with what had happened, but also emphasised that the supply chains were so diffuse and so opaque that there was no way to realistically prevent that shipment (or any future tainted shipment) from reaching the market. A few weeks later, the tuna on board that vessel – the product of criminal activity and symbolically soaked in human blood – was on the plates of unwitting consumers and the M/V Victoria No.168 was back out operating at sea without consequence. I vowed that I would figure out some way to create the transparency to prevent the potential of something similar happening in the future.
For crewmembers specifically, opportunities afforded by blockchain that allow for self-sovereign identity facilitated by biometrics would create a level of freedom that is unprecedented for seafood workers that often find themselves held in bondage by vessel masters that lock their documents in a safe onboard the vessel or otherwise use that threat to control and oppress workers. Additionally, markets and consumers could see if personnel involved in the production of the seafood they purchased were subject to fair labour standards or, at an even more granular level, whether they were paid on a regular basis. All this becomes possible with an immutable, distributed, and interrogable ledger.
Q5: In your line of work, you work closely with governmental agencies. In your experience, how do they percieve blockchain technologies?
A5: Yes, I work closely with multiple national and regional government authorities. At the moment, most government officials view blockchain in one of two broad ways. First, they either don’t fully understand the function and the potential of the technology in a supply chain context and are either intimidated by it or at least skeptical of it. There is still a steep learning curve for many government officials whose only knowledge of blockchain is what they heard or read about Bitcoin in the media, which only serves to create even more fear and misunderstanding of the technology. Second, many governments are just trying to maintain existing infrastructure and bring operational systems into the 20th century, much less the 21st. As such, their priorities do not lie with the implementation of an innovative technology, especially when so many records are still maintained on paper. So, even if they understand it, they justifiably put it into the “too hard” box. Add the factor that few blockchain firms are providing realistic business case and costing models for implementation and it further deprioritises even exploring the technology. At the moment, it is a novelty in the same way electronic banking was in its early days. Q6: What impedes blockchain adoption in fishing?
Anyone who has spent much time working in the fishing industry knows how reluctant, if not resistant the sector can be to change. However, it is past time for the seafood industry to embrace a digital revolution in supply chain management. With about 90 percent of fish stocks either fully fished or overfished, there is simply no room for an increase in volume to support further profitability within the system. For this reason, any economic gains must come from improvements in the overall value of the fisheries. While value increases can be secured through several means, it will inevitably require improvements in supply chain efficiencies that will only be secured through full traceability.
Much of the longline fishery in the Pacific remains heavily reliant on paper-based processes in both Government agencies and in fishing companies. For any kind of traceability to work well it requires as much digitisation of processes along the supply chain as possible in addition to some interoperability of information systems. A first step to using blockchain technology would need to be the utilisation of a digital traceability platform that can capture the KDEs necessary for traceability.
Cooperation of downstream supply chain actors is an important constraint on adopting blockchain traceability as all the supply chain actors must be incentivised to participate the process. Without agreement among all parties to maintain traceability or without appropriate incentives to effectively engage in the process it is difficult if not impossible to achieve “Bait to Plate” transparency.
My view is that the biggest impediment to adoption of blockchain technology is philosophical and political in nature rather than technical. Traceability standards are increasingly accepted and agreed among all supply chain actors. Data capture technologies are mature, robust, and increasingly economic and practical for implementation. Blockchain itself has advanced rapidly in the last two or three years and, just like the early days of the internet, will unquestionably advance more rapidly, so technical limitations of transaction times, storage capacity, and energy usage will undoubtedly be improved in the near future. The potential disruption of existing supply chains, including disintermediation as well as the advantages and disadvantages that come with radically improved transparency, will unquestionably create incentives to find every reason possible NOT to engage in a blockchain solution. Philosophically, the fishing industry as a whole is opposed to general transparency, much less the radical transparency offered by blockchain, even though fisheries are a public resource, managed using public funds, and intended to be managed in the public interest, and therefore information about those fisheries and how they are managed and exploited should be – public.