THE COMMODIFICATION OF GLOBAL GOVERNANCE?
FISHERIES CERTIFICATION IN THE ERA OF MARKET CIVILIZATION
PAUL FOLEY
A DISSERTATION SUBMITTED TO THE
FACULTY OF GRADUATE STUDIES
IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE DEGREE OF
DOCTOR OF PHILOSOPHY
GRADUATE PROGRAM IN POLITICAL SCIENCE
YORK UNIVERSITY
TORONTO, ONTARIO
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This dissertation examines some of the key characteristics of the emerging global organic crisis through an empirical analysis of a particular mode of environmental governance associated with market civilization. Specifically, this dissertation seeks to understand and conceptualize the emergence and extension of the Marine Stewardship Council (MSC) certification system, which was created by the corporation Unilever and the environmental organization World Wildlife Fund (WWF) in the late 1990s as a market-oriented approach to address the global fisheries crisis. Drawing inspiration from the Forest Stewardship Council (FSC), which links a performance standard defining sustainability to third-party certification and product eco-labelling, Unilever and WWF designed the MSC to create economic incentives for producing and consuming sustainable seafood. The MSC initiative has become a significant force in the global seafood trade in the early 21st century, with hundreds of fisheries in various stages of assessment and thousands of products displaying the MSC eco-label.
Can we understand third-party certification and labelling systems like the MSC as commodified forms of global governance? This dissertation seeks to answer this question by examining not only the object of MSC governance, seafood 'commodity chains,' but also overlooked mechanisms of governance in the MSC system. In the making and extension of the MSC certification system, such mechanisms of governance include: the reliance on consultancy services in the creation of the MSC; the shift in the MSC from depending heavily on charitable donations towards a more self-sustaining commercial entity supported by eco-label licensing revenues; the generation of large- scale demand for MSC-certified fisheries and products principally through oligopsonistic and Northern-oriented commodity chains; and the implementation of MSC certification in specific fisheries by professional certification companies contracted by fishery clients, the certificate 'holders.' The dissertation demonstrates how institutions and processes of third-party certification and labelling governance not only aid markets and commodification but themselves become growing sites of commodification. MSC certification does not displace state-centered management systems but facilitates the redefinition of existing and new governance frameworks in more commodified ways.
iv For
Patrick Mahoney
and
Theresa Foley Acknowledgements
This dissertation is the product of several years of personal and sometimes solitary work that has nevertheless been supported and influenced by many individuals to whom I extend gratitude. First and foremost, I owe thanks to my supervisor Dr. Stephen
Gill for demonstrating the virtue of scholarly collaboration and for his enthusiasm for, and support of, my research. Like many other students from around the world, I applied to York University's Graduate Program in Political Science to learn from and possibly work with Stephen, a path-breaking scholar of globalization and global governance.
Stephen's work played a crucial role in my intellectual development before and after we first met in September 2006. Above all, I thank Stephen for reminding me along the way to keep an eye on the broad-based relevance of my often quite specific empirical research interests. Without Stephen's encouragement, assistance and intellectual guidance, this dissertation would not have been possible. I feel extremely lucky to have had Stephen as my advisor during the formative years of my intellectual life.
The PhD core course in International Relations in which I first met Stephen provided an unexpected entry point into my then new research interest in global fisheries governance. I'd like to thank Dr. Susan Henders, who taught the second half of this course, for introducing me to Dr. Peter Vandergeest, Principal Investigator of the research project 'Privatizing Environmental Governance: A Global Analysis of the
Effects and Effectiveness of Environmental Certification for Farmed Salmon and
Shrimp.' I owe a debt of gratitude to Peter and to York Centre for Asian Research
vi Coordinator Alicia Filipowich. Through this project, I also met Dr. Derek Hall, who kindly agreed to join my dissertation committee and who provided a key source of guidance for this project. I owe Derek many thanks for his sharp advice and encouragement over the past few years. Thanks are also due to Dr. Robert Latham for participating on my dissertation committee, to Dr. Isabella Bakker for participating on my dissertation examination committee, and to Dr. Jennifer Clapp for agreeing to serve as external examiner for my dissertation defense.
I also owe a debt of gratitude to York University's Graduate Program in Political
Science. I am grateful to faculty members who taught courses that I had the pleasure to take at York University. In addition to taking some of Stephen's courses, I was very fortunate to have taken courses taught by Dr. Stephen Hellman, Dr. Susan Henders, Dr.
Jonathan Nitzan, Dr. Ananya Mukheijee Reed, Dr. Gabrielle Slowey, and Dr. Ellen
Meiksins Wood. And as anyone who has spent a lot of time• in• the south end of the 6 th floor of the Ross Building can appreciate, I am infinitely indebted to the staff at York
University's Graduate Program in Political Science, particularly Judy Matadial, Marlene
Quesenberry, Jlenya Sarra, and Angie Swartz.
Special thanks go to my former housemate Julian Germann, whose striking intellect and warm friendship accompanied all stages of my PhD studies. Looking back, I now realize that my first three and a half years at York University developed through an informal and intimate peer review process that I'm happy to say wasn't guided by principles of anonymity. I am also extremely grateful to Chris Wolsky for inviting me to
vii join an intramural hockey team at York University in the fall of2006. This meant a lot to me after being off the ice the previous year during my MA studies in Halifax. I'm also tremendously thankful for Rob Batarseh's friendship on and off the ice. Countless other colleagues at York University provided intellectual and moral support during PhD studies through a range of outlets from the classroom to hockey pools to bars stools.
In addition to support from colleagues and friends at York University, I am lucky to have a large circle of family and friends who enriched my life outside the academe.
Many thanks go to my parents, Allan and Ann Foley, for their encouragement and for giving me the opportunity to grow up in Tilting, a place I will always call home. I was lucky to have been able to visit home many times during my five years of PhD studies in
Toronto. Other friends from or still living in Tilting, perhaps Joe Bryan most of all, helped energize me along the way as well. Andre ('Onge') Foley and Trish Foley deserve special thanks for always providing a warm, welcoming, and fun place to stay while I visited St. John's. I'm also grateful to Charmaine Foley and Gus Broders for allowing me to stay at their homes while I conducted research in Halifax and to my sister
Melissa for allowing me to stay at her apartment while I carried out research in New
Brunswick. Back in Ontario, spending time with Wayne, Brenda, and Michael Mahoney
in Mississauga and with Chris, Jessie, and Brooke Burke and the Brookings family in
Pontypool provided regular sources of grounding and rejuvenation over the last three
years. I also extend thanks, gratitude and well wishes to all the people in Atlantic
Canada who agreed to take time out of their busy lives to talk to me about my research project. This includes but is not limited to academics, government officials, environmental organization employees, certification organization employees, and seafood industry workers.
Deepest gratitude is due to my best friend and partner, Andrea Mitchell, for all her patience, support, understanding and love through this academic journey. Andrea not only endured my regular musings and ramblings about my research, but also provided important editorial assistance by proof-reading the dissertation and bringing its graphs and figures to life. I'm also grateful to Andrea's parents, Jon and Monica, who have helped me in important ways. Finally, I am grateful to the Social Sciences and
Humanities Research Council (SSHRC) of Canada and the Ontario Graduate Scholarship
(OGS) program for financial support during my graduate studies.
Paul Foley
Bowmanville, Ontario
November 2011
ix Table of Contents
Abstract iv
Dedication v
Acknowledgements vi
Table of Contents x
List of Abbreviations Used xiii
List of Figures and Tables xiv
Chapter 1: Introduction 1
1.1 Problem - Commercial Fisheries Governance and the Global Organic Crisis 1 1.2 The Marine Stewardship Council 8 1.3 Argument 12 1.4 Research Procedures 21 1.5 Outline of Dissertation 23
Chapter 2: Global Governance, Market Civilization, and Certification 29
2.1 Introduction 29 2.2 Neo-liberal Historical Structures and Voluntary Approaches to Governance 33 2.2.1 Market Civilization 37 2.2.2 New Constitutionalism 39 2.2.3 Disciplinary Neo-liberalism 47 2.3 'Private' Transnational Governance and Certification 53 2.3.1 Authority and Legitimacy 57 2.3.2 The Changing Nature and Role of the State 62 2.3.3 Democracy and Social Justice 66 2.4 The Commodification of Global Governance 76 2.4.1 Globalizing Professional Markets 77 2.4.2 Third-Party Certification Markets 82 2.4.3 Labels and Certificates as Property 88 2.5 Conclusion 91
Chapter 3: The Creation and Structure of the MSC System 95
3.1 Introduction 95 3.2 Making the MSC 96 3.2.1 A 'More Suitable Partnership' 96 3.2.2 Designing a New Institution 100 3.2.3 Defining Principles and Criteria for Sustainable Fishing 102 3.3 Governing the Marine Stewardship Council 109 3.3.1 Board of Trustees Ill 3.3.2 Technical Advisory Board 114 3.3.3 Stakeholder Council 115 3.3.4 The International Secretariat and Chief Executive 118 3.4 The MSC Certification System 120 3.4.1 Professional Certification Companies 120 3.4.2 The Business Relations of Certification 124 3.4.3 Fisheries Clients, Certificate Holders 127 3.4.4 Eco-label Licensing and MSC Revenue Growth 145
3.5 Conclusion 153
Chapter 4: Civil and Political Society Interactions with the MSC 158 4.1 Introduction 158 4.2 Harnessing Oligopsony Power 160 4.2.1 Retailers and Supermarkets: 'The New Game Plan' 162 4.2.2 Food Service Sector 171 4.2.3 Producers 173 4.2.4 Fishers 175 4.3 North Atlantic State Responses to the MSC 182 4.3.1 The Nordic Proposal to FAO 186 4.3.2 Sweden 193 4.3.3 Iceland 195 4.3.4 Netherlands 199 4.3.5 France 200 4.3.6 United Kingdom 202 4.3.7 Canada 205 4.4 Conclusion 209
Chapter 5: The Local Political Economy of MSC Certification 212
5.1 Introduction 212 5.2 The Canadian Northern Shrimp Fisheries 215 5.3 Inshore Sector Production and Market Dynamics 222 5.4 Implementing MSC Certification 227 5.4.1 Assessment 228 5.4.2 Scoring and Conditions of Certification 231 5.4.3 Surveillance Audits 235 5.5 Certificate Exclusivity 240 5.5.1 Certificate Sharing 245 5.5.2 Dispossessing Certification 248 5.5.3 Repossessing Certification 253 5.6 Conclusion 258
Chapter 6: Conclusions and Future Directions 261
6.1.Summary of Findings 261 6.2. Beyond Voluntarism: Towards a New Democratic Law of the Sea? 271
Bibliography 281
xii List of Abbreviations Used
ASC: Aquaculture Stewardship Council ASP: Association of Seafood Producers DFO: Fisheries and Oceans Canada (formerly Department of Fisheries and Oceans, Federal Government of Canada) EU: European Union FAO: Food and Agricultural Organization of the United Nations FFAW: Fish, Food and Allied Workers FLO: Fairtrade Labeling Organizations International FSC: Forest Stewardship Council GATT: General Agreement on Tariffs and Trade ICSF: International Collective in Support of Fish workers IPE: International Political Economy IR: International Relations ISEAL: International Social and Environmental Accreditation and Labeling (Alliance) MSC: Marine Stewardship Council MSCI: Marine Stewardship Council International Limited NGOs: Non-governmental organizations NSMD: Non-state market-driven NAFO: North Atlantic Fisheries Organization OECD: Organization for Economic Co-operation and Development SFA: Shrimp Fishing Area TAC: Total Allowable Catch UK: United Kingdom UN: United Nations US: United States WTO: World Trade Organization WWF: World Wildlife Fund
xiii List of Figures and Tables
Figure 1.1 MSC certifications by FAO area 10
Figure 3.1 MSC administrative structure Ill
Figure 3.2 MSC labelled products by year 149
Figure 5.1 Pandalus borealis (Northern shrimp) 215
Figure 5.2 Canadian Shrimp Fishing Areas 0-7 218
Figure 5.3 Canadian landings and TACs of Northern shrimp by fleet, 1997-2009 221
Figure 5.4 MSC certifications in the Northern shrimp fishery by client and SFA in which shrimp is certified, 2011 257
Table 3.1 Stakeholder Council members, August 2011 118
Table 3.2 Accredited certifiers and number of fisheries certifications 123
Table 3.3 MSC fishery clients and fisheries 128
Table 3.4 MSC funding sources, 2005-2010 150
xiv CHAPTER 1 Introduction
1.1 Problem - Commercial Fisheries Governance and the Global Organic Crisis
Fishing for wild marine life is the last large-scale food gathering activity from a naturally re-generating resource.1 Wind-dried cod and ling in Medieval Europe was perhaps the first mass-produced food traded over long distances as a commercial commodity, providing a stable, lightweight, and transportable source of protein to
European 'consumers' as early as the end of the first millennium AD.2 By 1350, preserved and transported cod fish became Iceland's staple export commodity. Soon after, the English established a seasonal migratory fishery at Iceland, a fishery on which the infamous Newfoundland cod fishery would be based. Indeed, colonial transatlantic explorers celebrated the possibility of finding not only gold and silver but also a new major source of seafood. It was in this context in 1497 that Raimondo de Soncino informed the Duke of Milan of reports that John Cabot's findings to the west have the
English saying 'they could bring so many fish that this kingdom would have no further need of Iceland, from which there comes a very great quantity of fish called stockfish.'
' Shelton and Sinclair, 2008: 2307.
2 Recent revisionist archaeological evidence suggests that wind-dried codfish has been transported as commodities from Norway to England as early as 1100. See Barrett et al., 2008.
3 Quoted in Pope, 2004: 11.
1 The seasonal migration and then year-round colonization of the island of
Newfoundland, mainly by English and Irish settlers, experimented with the new political economies of capitalism.4 Historian Robert Sweeny even makes the provocative argument that the English fishing stations that developed in coastal Newfoundland in the
17th century formed the first capitalist society.5 The cod fishery, others have noted, was by far the most important component of European commercial activity in northern North
America during the early colonial period and for centuries remained much more important than the trade in furs.6 In Newfoundland colonial fishing societies, then, we arguably have one of the earliest situations of what we understand today as globalization.
And in the transatlantic trade of cod, we arguably have one of the longest established commodity chains for personal consumption.7
However, the largely unfettered expansion of commodity relations and, later, increasingly industrialized fisheries foreshadowed the ecological crisis of Northern cod in the 1990s.8 The extension of Canada's nation-state jurisdiction to 200 miles under
United Nations (UN) auspices in the 1970s and 1980s and the codification of the landmark Law of the Sea conventions appears to have in many ways initially exacerbated rather than eased the insecurity of cod and other fish stocks through
4 Pope, 2004: vii.
5 Sweeny, 2006.
6 Pope, 2004: 14.
7 The term 'commodity chains' was first used in by Hopkins and Wallerstein (1986) but popularized by work of Gary Gereffi and colleagues (e.g. Gereffi and Korzeniewicz, 1994) in the mid 1990s.
8 Rogers, 1998.
2 intensified industrial expansion of domestic fleets and processing capacity financed by
public and private monies. Almost four hundred years after the expansion of large-scale
transatlantic commercial fisheries in the Northwest Atlantic,
The resource-based communities of Canada are in crisis. Their ability to survive is now in question, not only because their resource bases have been foundering (for a variety of reasons), but also because the exigencies of deficit reduction and long-term recession have combined to cut away much of the state support that had kept them relatively secure in the past. This is as true in other parts of the world as it is in Canada, and it raises serious questions about the viability of rural communities in the current post-industrial era of globalization.9
The monumental collapse of cod fisheries that culminated in the 1992
moratorium on fishing Northern cod in Atlantic Canada epitomizes the relatively new
governance problems facing commercial fisheries in Canada and around the world.
Marking the complex and contested environmental collapse of the historic staple10 of the
North Atlantic political economy, the moratorium affected tens of thousands of workers
and led to high unemployment, migration and other social dislocations that effectively
undermined the livelihood of hundreds of communities on Canada's east coast. The
economic restructuring that occurred in the aftermath of the cod moratorium brought
about a 'crisis of social reproduction' in rural fishing communities," while the
managerial governance techniques that made overfishing possible have arguably been
reproduced and extended instead of fundamentally questioned.12 The failure to take
9 Ommer, 2002: 21.
10 Innis, 1940.
" Sider, 2003: 312.
12 Bavington, 2010.
3 natural barriers into account 'contributed to the crisis in Fordism in the fishery and these have continued to hamper efforts to establish a new effective regime of accumulation, not only in the North Atlantic, but globally as well.'13 For this reason, connections have been made between the political economy of resource depletion and economic dependence that characterized Atlantic Canadian coastal communities in the 1990s and the plight of local cultures in developing countries14 struggling to survive in the context of resource overexploitation and international trade and debt arrangements.15
Declarations of crisis are a prominent feature in the literatures describing the state of global fisheries. UN statistics regularly warn of the worldwide problem of overfishing, reporting that about 80% of commercially caught fish stocks were fully exploited or over exploited in 2007, for example.16 Scientific assessments published in leading scientific journals have until recently almost universally warned of the impending disappearance of the world's large fish species. Despite some signs of recovery, Worm and colleagues suggest that 63% of fish stocks worldwide require rebuilding.17 As wild capture fisheries face growing worldwide consumer demand and long-term legitimacy and governability crises, the rapidly expanding aquaculture industry is widely celebrated as a 'blue
13 Quoted in Rogers, 1998: 111.
14 The author recognizes the problematic nature of the term 'developing' country, as well as the similar terms such as the Global South and Global North. For purposes of consistency, however, the author uses the terms developing and developed countries.
15 Rogers, 1998.
16 FAO, 2009.
17 Worm et al. 2009.
4 revolution' that provides both an alternative source of seafood for growing worldwide consumer demand that can help preserve ocean ecologies and a new base for coastal economic development.18 Yet the expanding global aquaculture industry is also facing a long list of legitimacy problems that stem from coastal pollution and ecosystem damage, public health concerns, and local conflicts with traditional coastal fishers. There is concern that global demand for seafood will continue to outgrow supply even with the growth of the global aquaculture industry and the recovery of wild fish stocks in some key regions around the world. The crisis of global wild capture fisheries is therefore reflected in fundamentally conflicting forces: long-term imperatives for increasing global food supplies and long-term imperatives for ways to create better, more sustainable arrangements to limit, monitor and govern human access to, and reproduction of, naturally reproducing resources. A 2007 UN report concluded that without drastic changes in governance, the rising demand for seafood and other marine produce will lead to a collapse of today's commercial wild fish stocks by 2050.19 The stakes are high, for fish provided more than 2.9 billion people with at least 15% of their average per capita animal protein intake at the end of the last decade.20
The Northwest Atlantic cod fisheries in particular and the global seafood industry in general illustrate a quintessential example of what Stephen Gill calls global organic crisis, which refers to crises that are not narrowly ecological, economic, or political but
18 Coull, 1993; The Economist, 2003.
19 United Nations, 2007.
20 FAO, 2009.
5 represent the intersection of multiple problems that together constitute a set of challenges defining the limits and potentials for transformations of societies, cultures, and livelihoods on a global scale: 'The crisis therefore goes well beyond questions of capital accumulation and it indeed poses fundamental questions concerning the ethics and politics of the making of our collective future. It poses, in an acute way, the issue of i whether that future is sustainable in a political, social, and ecological sense.' The concept therefore refers to the global situation at the beginning of the twenty first century in a similar way that French historian Fernand Braudel described the 'limits of the possible' for civilizational change in Early Modern Europe. Indeed, the global organic crisis broadly understood reflects the contradictions of what Gill calls 'market civilization,' which is defined by
an individualistic, consumerist, privatized, energy-intensive and ecologically myopic, unequal and unjust pattern of lifestyle and culture that is currently dominant in world development. The outcome of this organic crisis will depend on the political struggles that emerge in response to that contradiction: the need for conditions of secure and indeed progressive social reproduction and development under conditions of ecological sustainability versus the intensified power and discipline of capital.22
The global organic crisis can illuminate multiple crises of knowledge production, livelihoods, politics, and governance in the global political economy of the international seafood trade. In similar ways, scholars have recently conceptualized how fisheries governance constitutes an especially 'wicked problem' because it involves multiple and
21 Gill, 2010.
22 Gill, 2010.
6 overlapping systems involving complex ecological, social, economic, and policy
•yy issues. The problem of governing capture fisheries in particular is significantly complicated by the fluidity, dynamics and complexity of marine ecosystems which makes it difficult to develop simple institutional solutions.24 Added to this are vexing epistemological problems of uncertainty in fisheries science, inadequate knowledge, the structure of fishing industries, and enforcement difficulties.25 Conditions of uncertainty tend to intensify distributive concerns and bargaining problems which have been at the center of the policy making efforts before and since nation-states 'enclosed' vast tracts of the ocean commons following the 1982 Third Law of the Sea Convention, which codified coastal states' authority to exclusive economic zones of 200 miles.26 Fisheries governors therefore face problems that are shaped by multifaceted and interrelated challenges not only to biological regimes of wild marine life forms, but also to the legitimacy of solutioneering science, state-centered managerialism, and anthropocentric ethics.27 Apostle and colleagues identify two interrelated processes that emerged in the
1990s to generate more fundamental challenges for fisheries governors. The first is the intensification of highly competitive global commodity markets and the second is a diminishing role of state governance in fisheries and the growing legitimacy of market
23 Jentoft and Chuenpagdee, 2009; Khan and Neis 2010.
24 McCay, 2008: 12.
25 Carr and Scheiber, 2002.
26 Alcock, 2002.
27 Bavington, 2010.
7 mechanisms as components of governance.28 Both processes appear to manifest in the
Marine Stewardship Council certification program.
1.2 The Marine Stewardship Council
In a context in which the legitimacy and effectiveness of state-based management regimes were coming under increased scrutiny in not only the fisheries sector but more generally in the heyday of neo-liberal globalization, powerful elements in civil society turned to the market to address the global fisheries crisis. Drawing inspiration from the
Forest Stewardship Council (FSC) certification and eco-labelling program that the World
Wildlife Fund (WWF)29 helped establish in 1993, the corporation Unilever, the world's largest seafood buyer in the early 1990s, and WWF, the world's largest environmental organization, announced their partnership in 1996 to create a 'Marine' Stewardship
Council (MSC). The 1996 Unilever-WWF Statement of Intent that first publicly announced the idea of the MSC referred to the Newfoundland cod fishery collapse as signalling the need for a new approach to addressing the problems facing global fisheries. 'To reverse the fisheries crisis,' WWF's Michael Sutton explained, 'we must develop long-term solutions that are environmentally necessary and then, through economic incentives, make them politically feasible.'30 The MSC was therefore designed with a very specific approach to governance, an approach designed to harness the
28 Apostle et al., 1998: 3.
29 The WWF has been renamed the World Wide Fund for Nature, but still uses the name World Wildlife Fund in the US and Canada.
30 Sutton, 1998.
8 disciplinary power of markets to create incentives for buyers to push world fisheries towards more sustainable production and consumption patterns.
After developing a performance standard designed to measure the sustainability of fisheries, the MSC was formally constituted as a not-for-profit charity organization in the United Kingdom (UK) in 1999 and started granting certification to applicant clients assessed by third-party professional certification bodies in 2000. Although the MSC struggled to gain significant uptake by fisheries and markets through the mid 2000s, the program experienced significant growth in the number of fisheries certified, the volume of fish certified, and the number of products sold with the MSC's blue eco-label by the late 2000s. By March 2011, 104 fisheries were certified to the MSC, 145 more were under assessment, and an additional 40 to 50 were estimated to be engaged in confidential Pre-assessments. In all, over 250 fisheries were engaging with the MSC after a decade of growth and more than 8000 products were being sold with the MSC's eco-label. The annual volume of fisheries products certified or in assessment reached 7 million tonnes in 2011, accounting for over 7% of the total capture production for direct human consumption according to the MSC.31 As shown in the map below, the vast majority of fisheries engaged in the MSC program by 2011 were located in the North
Atlantic Ocean, particularly in European waters, and, to a lesser extent, in the Northeast
Pacific Ocean.
31 MSC, 2011a.
9 Figure 1.1 MSC Certification by FAO Region
RISC Certifications by FAO Region, April 2011
K' m ta 0 FAO Region [X| lr>-Ass«sment ® Orttfted Source: Map created by author, with data from www.msc.org The MSC has received widespread acclaim and criticism in its first decade of operation. The MSC is suggested as a solution to the so-called 'tragedy of the commons' problem facing world fisheries in Jared Diamond's book Collapse: How Societies Choose to Fail or Succeed?2 and is put forward as a solution to the problem of declining fish stocks in the popular 2009 film The End of the Line. Around the world, a wide range of actors from policy makers to environmental non-governmental organizations (NGOs) 32 Diamond, 2005. 10 to corporate executives are looking to the MSC standard as a 'best practice' benchmark for managing and marketing 'sustainable' seafood. Social scientists studying the effects of globalization on fisheries include the implementation of market-oriented solutions like eco-labels as primary recommendations for addressing the crisis of global fisheries. Yet the MSC has been one of the most controversial private labelling schemes with global aspirations to appear in recent years.34 Significant concern has grown that the MSC's corporate roots and the central role of retailers in driving support for the certification of industrial fisheries has made the program a sophisticated tool for 'green washing' or 'blue washing' instead of providing incentives for the fundamental change required to address the global fisheries crisis. About half of the tonnage of MSC-certified fish are caught by pelagic, mid-water or bottom-trawling and most of the fish certified are traded within or between Europe and North America. Only four fisheries from developing countries had been certified by 2011, with only about 3% of the total certified tonnage caught off the coasts of developing countries—which produce the vast majority of the world's wild captured seafood.35 The program has also struggled to build support in major seafood producing and consuming countries such as Japan and China. There are also widespread concerns as to whether certified fisheries can really be considered sustainable. Some media has brought negative attention to the concerns of environmentalists and scientists over the certification of some high-profile, controversial 33 E.g. Taylor et al., 2007. 34 OECD, 2005: 263. 35 Mathew, 2011; Perez-Ramirez et al., 2012. 11 fisheries such as New Zealand hoki, Alaskan pollock, Antarctic krill, Ross Sea toothfish, Canadian sockeye salmon and Canadian longline caught swordfish. The MSC nevertheless continues to press ahead, showing strong signs of growth and implementing reforms on an ongoing basis to appease critics and stakeholders in its effort to become the undisputed 'gold standard' for global fisheries governance. The primary question that this dissertation addresses is not about the high profile debate over the environmental effects of the MSC. This author expects that despite the relatively transparent nature of the organization and the growing body of research on the MSC, we still know far too little about the implementation and effects of the MSC in particular fisheries. The dissertation refocuses attention on the emergence, structure, and extension of the MSC certification system, asking: what form of governance system is the MSC actually producing and can we understand this system as a commodified form of global governance? 1.3 Argument The central argument of this study is that our understanding of the emergence and evolution of the MSC can be significantly improved by conceptualizing the certification system as a commodified form of global governance. The commodification of governance is reflected not only in the object of MSC governance (the commodity chains in which fish are traded) but also undertheorized mechanisms and processes of governance in the MSC regime that existing literatures have largely taken for granted. In the making and evolution of the MSC, such commodified mechanisms of governance 12 include: the extensive reliance on consultants with experience in political and civil society; the shift of the MSC from depending heavily on charitable donations towards a more self-sustaining commercial entity supported by eco-label licensing revenues; the generation of demand for MSC products primarily through Northern-centric oligopsonistic supply chains; and the implementation of MSC certification in specific fisheries by professional certification companies contracted through fishery clients, the certificate 'holders.' Drawing on evidence mainly from North Atlantic fisheries, where the MSC's extension and uptake has been concentrated, this 'global to local' study sheds new light on how the MSC does not necessarily displace state-centered fisheries governance but facilitates the redefinition of existing and new frameworks in more commodified ways. The key finding of this re-appraisal of the MSC is that third-party certification and labelling governance not only aids markets and commodification but itself becomes a site of marketization and commodification. This analysis advances our understanding of the governance system that is being produced by the MSC, particularly with respect to political economy questions such as certification of what, by whom, through what mechanisms, and for what purposes. The distributional foundation and consequences of these new mechanisms of global governance have not been thought through, however, and some of the internal challenges to, and external criticisms of, the MSC system serve to illustrate important limitations of such commodified forms of global governance. In addition to making practical contributions to urgent and unresolved public policy debates about the most appropriate ways to address the global fisheries crisis, this 13 study engages with and makes important theoretical and empirical contributions to academic literatures in political science, and to literatures in other disciplines, that seek to understand and explain dynamics associated with new forms of global governance in general and third-party environmental certification systems in particular. My main theoretical contribution to the academic literature is the utilization, modification and deepening of a distinctive International Political Economy (IPE) approach pioneered by Robert Cox, and subsequently by Stephen Gill, Craig N. Murphy and others.36 Often referred to as neo-Gramscians, pioneers of this approach have also been influenced by the work of Karl Polanyi and Fernand Braudel. Arguably the most influential critical tradition in IPE, this approach is somewhat underutilized in research into private and non-state forms of global and transnational governance.37 While the existing literature tends to use institutional analysis to explain the emergence of the MSC and other certification and labelling governance systems, critical IPE allows us to place questions about transnational social forces, market power, and commodification at the centre of an analysis of governance. This study advances three innovative sub-arguments that draw particularly upon and deepen conceptual tools developed by IPE theorist Stephen Gill. First, new governance initiatives such as the MSC's certification and labelling system can be understood as forming part of a distinct governance realm of market civilization at the intersection of what Gill characterizes as new constitutionalism and disciplinary neo- 36 See, for example, Cox, 1983, 1987; Van der Pijl, 1984; Murphy, 1998; Gill, 1990. 37 For exceptions, see Sinclair, 2000; Levy and Newell, 2002. 14 liberalism, which involves the redefinition, restructuring and disciplining of global 10 governance according to neo-liberal principles of development. Second, there are crucial substantive, ontological and theoretical links between ecological processes, civil society agents, states, and the global political economy upon which MSC governance arrangements are built. Third, MSC governance arrangements are arenas in which consensus-building and accommodation are shaped by patterns of power, agency, and resistance across transnational, regional, national and local levels. It is helpful to further elaborate on these sub-arguments to frame the study. The first key sub-argument is that the MSC is built upon and complements governance movements associated with globalization that have, over the last 30 years, sought to redefine and reconstitute authority and governance globally by institutionalizing neo-liberal policies and principles in 'hard law' (e.g. macro-economic policies of states and regional organizations) in international and national frameworks. Gill conceptualizes crucial components of such governance transformations as the new constitutionalism of disciplinary neo-liberalism. The new constitutionalism refers to the main politico-constitutional mechanisms that serve to politically 'lock in' neo-liberal reforms in 'hard law' and insulate dominant economic forces from democratic rule, while disciplinary neo-liberalism refers to the wider discourse of governance that informs neo-liberal patterns of restructuring.40 Gill emphasizes the role of disciplinary 38 Gill 1995; Gill, 1998. 39 Gill, 2008. 40 Gill, 1998:23. 15 neo-liberalism and new constitutionalism in the 'worldwide market revolution,' whereby the nature and purpose of the public sphere has been redefined in a more privatized and commodified way.41 The proliferation of 'soft law' mechanisms of global governance and re-regulation such as voluntary social and environmental certifications has not been explicitly theorized in this approach, however. This is significant because soft law and private transnational governance systems have become key elements in the development of a full-fledged field of research on globalization and global governance.42 This dissertation proposes that the form and proliferation of voluntary certification systems is linked with efforts to devise regulatory forms compatible with the new constitutionalism of disciplinary neo-liberalism. Specifically, whereas Gill and colleagues mainly have studied dynamics that juridify neo-liberal governance relations in 'hard law' to protect capital, I argue that voluntary 'soft law' social and environmental certification systems represent part of the regulatory counterpart to the new constitutional global governance movement. This argument is similar to what Newell refers to as the growth in regulation for business in preference to regulation o/business in the global political economy over the last 30 years.43 This study therefore advances our understanding of historical changes in governance mechanisms associated with market civilization by interrogating the specificities of those mechanisms associated with the making and implementation of MSC certification. 41 Gill 1995; Bakker and Gill, 2003a: 29. 42 E.g. Cutler et al., 1999; Djelic and Sahlin-Anderson, 2006; Graz and Nolke, 2008a. 43 Newell, 2001. 16 The second sub-argument of this dissertation is that there are substantive links between ecological processes, civil society agents, states, and the global political economy, and therefore the conditions under which the MSC system has been made, constituted, and extended require analytical and explanatory tools sensitive to such links. Whereas mainstream approaches tend to reify states, markets, and civil society as separate arenas with distinct agents, critical IPE conceptualizes these spheres as dialectically interconnected through social forces. Social forces are constituted by ideas, institutions and material capabilities interrelating reciprocally at the interconnected levels of social reproduction, production, state-society relations, and world orders.44 This approach is distinguished from liberal pluralist approaches that assume a division between state and civil society, seeing the latter as an autonomous sphere inhabited by associations such as NGOs. In liberal pluralist perspectives of civil society, there is also a tendency to miss structures and sources of power and inequality, such as economic, gender and racial divisions.45 By contrast, this study does not draw a clear distinction between state and civil society and public and private spheres and indeed suggests that such dichotomies obscure the deeper social and political forces associated with changes in the global political economy.46 This is important because in the literature on private transnational governance that addresses non-state governance phenomenon like the MSC, the relationship between, and relative significance of, public and private actors is 44 Cox, 1987; Bakker and Gill 2003b. 45 Macdonald, 1994. 46 E.g. Gill, 1990,2008; Cutler, 1997; Cutler, 2001. 17 considered one of the most significant issues requiring conceptual and empirical clarification.47 The public-private dichotomy is arguably reproduced in much of the literature on state/non-state inter-actions, however, though some scholars are more attentive to integral political-economic perspectives.48 The starting point here is the study of social forces in global political and civil society, defined here to include the state, political and civic organizations, economic institutions and firms 49 Crucial to this perspective is the role of 'organic intellectuals,' who Gramsci viewed as 'concrete articulators' or organizers of hegemonic norms and key figures in the integration of historic blocs of different social forces through compromise and alliance-building. As Gill observes, organic intellectuals are a 'steering force in the political rule' of dominant social groups in a given historic bloc.50 This concept sheds light on the intellectuals and practitioners involved in standard-setting and certification organizations, the professional experts who operate in and across both political and civil society. These organic intellectuals are important agents in consensus-building, overcoming conflicts, and forming the ideational, discursive and institutional apparatuses for governing the global political economy. Our empirical analysis of the creation and extension of the MSC also illustrates why the public-private dichotomy is problematic for at least three reasons. First, the 47 Vogel, 2008: 275; Vogel 2010. 48 Nolke and Graz, 2008a; Ougaard, 2008. 49 Gill, 1997. 50 Gill, 1990:51. 18 production and management of marine resources in many jurisdictions' 200 mile Exclusive Economic Zones is constituted in large part through public policy and law. The economistic supply and demand typology of governance that characterizes the early global value chain approach, popular in studies of fruit and vegetable sectors, is for this and other reasons arguably less useful for food chains like fish that are defined by multiple public and private forces.51 In many jurisdictions, moreover, marine resources are technically owned by the state and the public citizenry through the public trust doctrine, even if access is effectively 'privatized' and limited to a small fraction of the public. Second, the MSC was constituted legally as a not-for-profit charity in the UK with a mandate to serve the 'public good' (internationally) by improving environmental practices. Third, the MSC standard is harmonized to a great extent with inter-national norms and standards and the expansion of the MSC has been shaped and facilitated by states in different ways.52 Moreover, the implementation of certification in particular fisheries often relies heavily on public authorities, many of which are increasingly introducing management measures to help fishing industries secure and maintain certification. This dissertation argues that explaining the MSC as operating through a commodified form of governance helps overcome the public-private dichotomy and the arguably similar conceptions of public-private hybrids that scholars often use to characterize organizations like the MSC. In other words, this dissertation makes an ontologically distinct argument: the MSC reflects transformations in governance 51 Wilkinson, 2006. 52 Gale and Haward, 2011. 19 frameworks associated with the deepening and extension of commodification across mutually constitutive state-civil society, public-private domains. From this perspective, the key question is not whether the MSC displaces state-centered fisheries governance but how far and in what ways does this new form of governance facilitate the redefinition of existing and new management frameworks in more commodified ways. The third sub-argument of this dissertation is that the system of global governance being produced by the MSC is a contested set of sites where power, agency, and resistance are located across transnational, regional, and local levels. Although the neo-Gramscian approach is methodologically sensitive to the levels of social reproduction, production, state-society relations, and world orders, multi-level and multi- scalar dynamics are under-examined in IR and IPE53 research and are also under- theorized, at least explicitly, in the literature on the new constitutionalism of disciplinary neo-liberalism.54 Studying 'the global' in terms of agents, institutions and practices at not only transnational, regional and national but also sub-national levels is increasingly recognized as important in international studies.55 The global governance movement studied here is shaped by overarching social forces associated with market civilization and disciplinary neo-liberalism, but a complex variety of market and non-market interests, agents, and organizations at different levels play important roles in the making and extension of the MSC system. This dissertation therefore argues that a holistic and 53 For an exception in IR, see Sjoberg, 2008. 54 Harmes, 2006: 734. 55 Paul, 2002; Sassen, 2005, 535; Bakker and Gill, 2003a, 33-34. dialectic macro-micro perspective is necessary to better understand and explain the emergence and evolution of the MSC as commodifying governance relations. Scholars have recognized the importance of multi-level governance processes in the emergence and evolution of MSC certification,56 but they tend to focus on macro and meso levels, particularly the organizational level of standard-setting and administration. The existing literature provides little systematic insight into the extension of MSC cn certification at the micro-level of particular fisheries systems. Prominent publications on seafood eco-labelling that have included case studies of some MSC certifications58 around the world tend to rehash the technicalities of certification without providing an understanding of the effects of certification on particular fishing activities and industry strategies.59 This dissertation develops a more comprehensive understanding of the MSC by exploring how far and in what ways certification is adopted, appropriated and commodified at multiple levels, including the 'local,' micro level of fisheries production. 1.4 Research Procedures Empirical data for this dissertation was obtained using a combination of methodological approaches, sources, and techniques, including participant observation at public MSC 56 E.g. Gulbrandsen, 2010; Gale and Haward, 2011. 57 For an important exception, see Ponte, 2008. It is notable as well that within the growing academic literature on the emergence and impacts of social and environmental certification systems, seafood certification remains understudied relative to forestry, labor, and agriculture certification systems. As Vogel points out, 'more research has been published on the Forest Stewardship Council and forestry codes than all other codes combined' (Vogel, 2008: 275). 58 E.g. Ward and Phillips, 2008. 59 Havice, 2010: 609. 21 workshops and presentations, and about 20 elite interviews in Atlantic Canada. The theoretical and historical documents and secondary sources used in this study are widely available in books, academic journals, and magazines. These academic documentary sources were supplemented and aided by 'grey literature' documents available on the Internet, including studies on the ecology, economy, and governance of fisheries produced by government agencies, international organizations, and consultancy firms. Primary and statistical data available through the Internet includes documents and published reports produced by the MSC, professional certification firms, and government departments and agencies. Data available on the Internet also includes documents and public reports produced by international institutions such as the Food and Agriculture Organization (FAO) of the UN and environmental organizations. Subscriptions to seafood industry news websites, magazines, and newsletters, which have been surprisingly underutilized in the existing academic literature on the MSC, also provided important sources of data for this study. Data was also obtained through personal observation at workshops, such as those at the 2011 Seafood Summit in Vancouver, meetings with academics, and interviews. Interviews, under informed consent and anonymity, were carried out near production sites for the case study on Atlantic Canadian shrimp certification. Interviews were carried out in Nova Scotia and Newfoundland from September to December 2009 and again in Newfoundland in July and August 2010. Open-ended interviews were conducted with government officials, top-level representatives of industry associations, certification auditors, members of conservation NGOs, as well as personal communication with 22 fishers and fish producers, union representatives, scientists, and academics. Interviews were not the primary data collection method for the dissertation but were crucial for revealing unexpected and undocumented dimensions of certification implementation at the level of production.60 This study therefore uses library and web-based documentary analyses, and interviews to study agents, institutions, and governance relations at global, regional, national and local levels. Using these methods, I have developed historical and theoretical analyses involving wider changes in the global political economy and the emergence and development of the MSC program and combined them with an empirically rich case study of MSC certification in Atlantic Canadian shrimp fisheries. This approach has been chosen to develop a comprehensive 'global-local' analysis of how far and in what ways the emergence and extension of MSC certification can be understood as a commodification of global governance. 1.5 Outline of Dissertation This dissertation documents and theorizes the creation and evolution of the MSC through four core analytical chapters and a concluding chapter. Chapter 2 situates the emergence and extension of the MSC against the backdrop of a literature on the re- constitution of global authority in an era of market civilization and a literature on certification and labelling in the global economy. The chapter consists of three main 60 The research followed academic ethical norms and practices in carrying out interviews. The central guiding ethical principles of this research are freely-given informed consent, privacy and confidentiality. All interviewees were informed of the research project and its goals. All interviewees shall remain anonymous and interview material shall remain confidential. 23 sections. The first section explores key historical structures of market civilization that shaped and defined the contours of global governance at the end of the twentieth century. It is argued that these historical structures, specifically new constitutionalism and disciplinary neo-liberalism, facilitated the emergence of voluntary, market-oriented forms of global governance during this time. The second section of chapter 2 explores some key debates in the more specific literature on certification and labelling standards, one of the most widely recognized examples of the institutionalization of 'private' transnational governance over the last two decades. Although the existing literature advances our understanding of how certification and labelling standards challenge our understanding of legitimate authority, the role of the state, and democracy, we know little about the material foundations of the emergence, extension, and reproduction of such institutions and processes. The third section of chapter 2 therefore addresses this gap and advances the literatures on global governance in general and certification and labelling in particular by analyzing the role and significance of professional labour markets, third-party certification service providers, and labelling and certificates as property. This section suggests that a better understanding of certification and labelling institutions requires analyses that take into account these highly 'commodified' institutions, relations, and processes of governance. We then turn to the empirical analysis of fisheries certification and labelling, asking can we understand the MSC system as a commodified form of global governance? Chapter 3 consists of three main sections which analyze the creation of the MSC, its administrative structure, and the business relations surrounding its certification 24 extension mechanisms. The first section examines the establishment of the Unilever- WWF partnership in the late 1990s, the process that defined the basic structure of the MSC organization, and the process through which the MSC's environmental standard for sustainable fishing was subsequently defined. The second section of chapter 3 analyzes the legal personality and internal administrative structure of the MSC, the main components of which consist of a Board of Trustees, a Technical Advisory Board, a Stakeholder Council, and an International Secretariat. The third section examines the MSC's certification system, the main agents of which are accredited professional certification bodies/companies, fishery clients ('certificate holders') who contract certification companies to assess 'their' fishery, and the MSC's subsidiary trading company which licenses the use of the MSC eco-label and collects fees and royalties from businesses that use the eco-label on behalf of the MSC. Chapter 4 consists of two sections which analyze the MSC's main market 'partners' and the growing politicization of fisheries certification in North Atlantic political economies. The first section argues that the principal thrust of the MSC's growth and extension in the seafood market are seafood buyers that are oligopsonistic, which refers to a market form with a small number of buyers relative to many suppliers. The uptake of MSC certification and labelling in these market structures is not driven simply by large buyers (such as retailers) themselves, but is also shaped by the MSC's strategic effort to partner with big buyers to meet growth objectives and by NGOs who offer big buyers technical services to make them and their suppliers comply with emerging sustainability requirements. The second section of chapter 4 examines state- 25 industry collaborative responses to fisheries certification in some North Atlantic countries. The main responses, though not mutually exclusive, include facilitating the domestic uptake of MSC certification on the one hand and the creation of alternative, national eco-labels on the other hand. Notably, national eco-labels tend to share some important characteristics with MSC certification, including claiming compliance with UN guidelines on seafood eco-labelling and relying on third-party certification companies. Chapter 5 examines the 'local' political economy of MSC certification, shifting the focus of attention towards what and who is certified at the level of production. Using the certification of Newfoundland and Labrador's inshore shrimp industry (Canada's first MSC-certified fishery) as a case study, chapter 5 argues that the unit of analysis at this level ought not to be the certified 'fisheries' per se but the fishery client, the 'certificate holder' in MSC parlance. The case study proceeds in three sections. The first section briefly overviews the historical development of the Canadian Northern shrimp fishery, which helps explain subsequent dynamics of MSC client formation and how power relations play out in certification. The second section examines the implementation of MSC certification in the Northern shrimp fishery, which shows how certification provides fishery certification clients with new channels of access to and influence over the policy making process and blurs the boundaries between public and private, state and non-state sources of authority. The third section examines the dynamics and implications of certificate exclusivity in fisheries certification in this case, which demonstrates how governance is commodified, struggled over, and used as a business tool in industry competition and conflicts. Though 'the Northern shrimp fishery' was certified, the fishery client only represented about half of Newfoundland and Labrador's shore-based processing companies; processing companies outside the 'client group' and independent fishers who sold to them were initially unable to sell their products as MSC- certified even though their shrimp originated from the same, putatively certified 'fishery.' Struggles over the exclusivity of the MSC certificate in this case subsequently facilitated changes in the composition of the initial processing organization that acted as client, which gained new members by sharing access to certification with other processing companies in 2009 and expelled a community-based integrated fisher- processor co-operative from the MSC client group in 2010. After losing access to MSC certification, the co-operative contracted a third-party certification company to acquire its own certification for ocean areas already certified as 'sustainable' and indicated its willingness to share access to its MSC certificate with any fishers who catch shrimp in areas covered in the application, including those who might normally sell shrimp to competitor processing companies. Chapter 6 concludes the study by summarizing the findings of this dissertation, reflecting on some of the broader implications of the study, and assessing the limitations of voluntary forms of global governance. The study concludes by arguing that a meaningful response to the global fisheries crisis will require far more inclusive responses than the voluntary and highly commodified approach adopted by the MSC. Such an alternative approach may require us to think creatively about developing a new democratic Law of the Sea, perhaps within the existing UN Law of the Sea, to more 27 effectively, equitably, and legitimately address the ecological, socio-economic, political and ethical crises that continue to plague ocean-based ecologies and livelihoods. 28 CHAPTER 2 Global Governance, Market Civilization, and Certification 2.1 Introduction Governance is a central organizing concept across social and management sciences, including the field of International Relations (IR) in terms of good governance, global governance and global environmental governance. The concept has become increasingly popular since the early 1990s, as the concept was being developed and expounded by the World Bank. Much of the IR literature has adopted the notion of 'governance without government,' a phrase coined by James Rosenau, to conceptualize non-state forms of governance in the global realm.61 Agents within civil society, particularly non-governmental organizations and multi-national corporations, have been seen as particularly important new sources and agents of global governance. As Pagden puts it, the term global governance is associated with 'a new way of characterizing international relations which would involve not only states, but also non-statal and avowedly non-political bodies, in particular international monetary agencies and multi national corporations.'62 The literature also often adopts the original, fourteenth century meaning of the term to govern, 'to steer,' when explaining the meaning of governance 61 Rosenau and Czempiel, 1992. 62 Pagden, 1998: 7. 29 and translates this understanding into today's context to mean regulating, guiding and mediating actions and inter-relations of people and things along a path.63 There are several distinct ways we can use the global governance concept, however. One is associated with traditional inter-national regimes, another concerned with impacts on global organizations' capacities for addressing world problems, and another concerned with adjacent political forces shaping global governance.64 The first two perspectives tend to be characterized by structural-functionalist assumptions, focusing on how to reproduce the existing social order in ways to make it work better, even marginally, rather than assessing what it will take to contest that order.65 Critical political economists have also questioned such approaches because they resonate with 'end of history' narratives that imagine politics as multilevel collective self-management without political contestation.66 This dissertation emphasizes elements of the third approach to global governance, which conceptualizes political economy, social forces, and contestation in the formation and transformation of global governance. From this perspective and considering the topic of study, this chapter starts by asking: if global governance is defined as steering, what were the conditions under which different steering wheels of global governance were defined in the late 20th century and who defined what steering wheels looked like? This chapter argues that historical structures 63 Latham, 2006. 64 Hewson and Sinclair, 1999: 18. 65 Latham, 1999: 35. 66 Walters, 2004: 36. of neo-liberal globalization and the social forces which underlie them help explain why the steering wheel of the MSC is defined as a voluntary, market-oriented approach to global governance. There is agreement in the academic literature that the creation and proliferation of non-governmental standard-setting certification and labelling organizations like the MSC are connected to broad worldwide transformations in governance that are in turn associated with globalization. But the casual way in which globalization is often briefly invoked and then put aside as a key reason for the rise of globally aspiring governance initiatives like the MSC obscures the significance of these transformations in governance and what is at stake with such changes. The purpose of this chapter is to situate the emergence of the MSC certification and labelling program within broader transformations in global governance and globalization at the end of the twentieth century. The chapter proceeds in three sections. First, the chapter begins by arguing that historical conditioning frameworks of global governance associated with what IPE theorist Gill calls market civilization facilitated the production and proliferation of voluntary, market-oriented forms of governance in the 1990s. An analysis of these historical structures of global governance helps us understand the historical, normative and political-legal-institutional context in which the MSC emerged and how these historical structures have shaped and defined key components of the form taken by the new organization and its approach to fisheries regulation. Here we explore important 31 historical structures of globalization, new constitutionalism and disciplinary neo- liberalism, which have defined the parameters of global governance at the end of the twentieth century. It is suggested that the widespread development of voluntary, market- oriented, privatized, and commodified approaches to global governance constitute a distinct historical movement of market civilization. This movement tends to be studied in the literature as the proliferation of different forms of'private' transnational governance, of which voluntary certification and labelling standards are a particular manifestation. The second section of the chapter then explores some key debates in the more specific literature on certification and labelling standards, focusing on implications of this form of governance for authority and legitimacy, the state, and democracy. This section argues that significant components of certification and labelling systems have not been systematically analyzed and theorized in this literature, namely (1) professional labour markets, (2) third-party certification service providers, and (3) labels and certificates. An understanding of these crucial components of governance reveals that certification and labelling not only provides the infrastructure for markets, but becomes a site of it. Here we propose to extend and deepen the literature on market civilization and the more specific literature on certification and labelling by suggesting that professional labour markets, third-party certification service providers, and labelling and certificates constitute commodified mechanisms of global governance. The point here is not to suggest that all forms of voluntary, private or non-state governance take on these features but to provide analytical tools with which to re-assess the MSC certification system in 32 subsequent chapters and, ultimately, to provide a means to compare and contrast this particular case of global governance with others. 2.2 Neo-liberal Historical Structures and Voluntary Approaches to Governance The method of historical structure in IPE is based on a historicist approach to social science which, in contrast to positivist approaches, does not assume there is a £•7 universally applicable science of society. Robert Cox pioneered the use of the term in IPE in the 1980s by drawing on the French Historian Fernand Braudel's use of the term, which covered systems of language, law, religion, morals, economic organization, family and social life.68 For Cox, the concept can be used to represent 'limited totalities,' that is a 'particular sphere of human activity in its historically located totality.'69 The method of historical structure thus gives material character to institutions and consecrated patterns of human relationships, with an emphasis on three conceptual spheres of activities on which a historical structure is constituted: social forces of production, forms of state, and world order. More recently, Bakker and Gill have made a significant contribution to IPE by deepening this framework with the development and elaboration of the concept of social reproduction to integrate studies of more basic human and ecological conditions of 67 Cox, 1995b: 52-53. 68 Cox, 1995a: 29. 69 Cox, 1995c: 100. 33 livelihood and survival on which historical structures and forms of political economy are built.70 Within each historical structure, three categories of forces interact: material capabilities, ideas, and institutions. Material capabilities refer to productive and destructive capabilities, including dynamic technological and organizational forces. Other forms include natural resources, technology, and wealth. There are two kinds of ideas. The first consists of intersubjective meanings, which Cox defines as 'those shared notions of the nature of social relations which tend to perpetuate habits and expectations of behaviour.'71 The second kind of ideas are collective images of social order held by different groups, including collective views as to what constitutes the legitimacy of prevailing power relations and the meaning of justice. These analytical tools provide a way to analyze the historical origins and meaning of 'common sense' ideas and assumptions on which voluntary, market-oriented regulation are based. The third set of forces, institutions, is also critical to this study. In this perspective, institutions reflect power relations and express collective ideas consistent with reproducing these power relations. Institutions are mechanisms that can reduce conflicts and provide methods for enforcing authority and power. Cox suggests that institutions can 'become the anchor for [a] hegemonic strategy since they lend themselves both to the representations of diverse interests and to the universalization of policy.'72 This method offers a consistent 70 Bakker and Gill, 2003b. 71 Cox, 1987:218-219. 72 Cox, 2002: 98-99. 34 theorization and explanation of changes in the contemporary global political economy because it 'synthesises the interaction of material, institutional and ideological forces, including culture, and gives them, where appropriate, a class dimension. It therefore enables a multifaceted answer to the question, "hegemony for whom?"'73 The method of historical structure also emphasizes processes of change and transformation, rather than order and stability. Historical structures and social events, including those that are the subject of this dissertation, are constituted and reconstituted by practices and processes which reflect distinct rhythms and historical tempos.74 Braudel offers a particularly useful way of conceptualizing history and historical change by distinguishing between three temporal levels, each of which involves a deeper and wider framing of the 'unit of analysis.' Braudel's first dimension is events-time or I'histoire evenementielle. This history, with the most rapid speed, works itself out in the short term as a sort of micro-history of individuals and events (e.g. famines, outbreaks of diseases, etc.).75 The second dimension is a history of conjunctures, which follows a broader, slower rhythm. In this time span, change takes place according to slow but perceptible rhythms peculiar to historical processes and patterns of usually a decade or more (e.g. trends in population growth, mortality rates, etc.). The third time span is the longue duree, with rhythms spanning centuries (e.g. general rise of life expectancy over the last few centuries). This dimension entails structural history which 'functions along 73 Gill, 1990: 230-231. 74 Braudel, 1980: 74; Gill, 1993: 44. 75 Braudel, 1980: 74. 35 the border between the moving and the immobile, and because of the long-standing stability of its values, it appears unchanging compared with all the histories which flow and work themselves out more swiftly, and which in the final analysis gravitate around it.'76 In this time-span, the focus is on fundamental social structures or sets of structures that assume a quasi-permanent character, including deeply embedded cultural and ideational structures that change very slowly. By approaching historical phenomena from the perspective of different speeds or rhythms, a historical structures approach enables the analyst to assess different forces that act to alter the 'unit of analysis' over time. The method of 'historical structure' therefore provides analytical tools capable of assessing the long-to short-term historical changes which conditioned the emergence and design of the MSC at the broadest level. The key point for this study is that from a historical perspective of what Braudel called the longue duree and the history of conjunctures, the late twentieth century era of globalization involves an intensification of liberalized and commodified sets of macro-historical structures that define key ideological, discursive and political conditioning frameworks of world commerce and its governance.77 Next, we explore key conditioning factors of neo-liberal globalization involving the redefinition, restructuring and disciplining of global governance according to commodified principles of development. An analysis of these historical structures helps explain why notions of regulatory voluntarism and consumer sovereignty became 76 Braudel, 1980: 74. 77 Gill, 1995; Gill, 1998. 36 'common sense' aspects of institutional governance responses to urgent global ecological problems like capture fisheries at the end of the 20th century. 2.2.1 Market Civilization Globalization is associated with the 'worldwide market revolution' whereby the nature of public interest, including the nature and purpose of public policies of states, has been redefined in a more commodified way.78 According to Gill, norms and values of capitalism have penetrated the gestes repetes of everyday life so much that the present conjuncture can be understood as neo-liberal 'market civilization.'79 This concept refers to both productive and destructive processes of marketization. For the former, the concept refers to the cultural, discursive and mythic representations of marketized definitions of human development and progress. These ideational dimensions are materialized in structures and policies of integration, accumulation, legitimation and consumption, configured by the power of transnational capital. For the latter, market civilization is linked with patterns of social disintegration, exclusion and hierarchy perpetuated through worldviews that are 'ahistorical, economistic, materialistic, "me- oriented," short-termist, and ecologically myopic.'80 Some of the consequences of late 20th century market civilization resemble the massive social and natural dislocation and devastation identified by Polanyi in his 78 Gill, 1995; Bakker and Gill, 2003a: 29. 79 Gill, 1995:399. 80 Gill, 1995:399. 37 analysis of nineteenth century market civilization.81 In late 20th century market civilization, human as well as ecological conditions of existence were increasingly conditioned by the long-term commodity logic of capital. Yet, as Gill warns, any significant effort to widen the possessive individualistic framework associated with market civilization 'would entail an intensification of existing accumulation consumption patterns, tending to deplete or destroy the eco-structures of the planet, making everyone less secure and perhaps more vulnerable to disease (even the powerful).'83 Therefore, these conditioning factors regulate not only inequalities involving the biological, daily and generational reproduction of labor power, identities and communities, but also 'are governed by similar processes of commodification, ultimately linked to transforming important aspects of life and nature into commodities... Thus depletion and destruction of ecological and biological structures and systems that sustain life is also linked to intensified commodification and exploitation of life forms and nature.'84 In other words, there is a contradiction growing between the security and power of capital (and its protection by the state) and the security and provisioning of stable conditions for social reproduction.85 The contradictions involve the social reproduction of super affluence for a small minority of the world's population 81 Notably, Polanyi argued that nineteenth century civilization rested on four historical institutions: the balance of power, the international gold standard, the self-regulating market, and the liberal state. 82 Gill, 1995: 399. 83 Gill, 1995:419. 84 Bakker and Gill, 2003a: 26. 85 Bakker and Gill, 2003b. 38 alongside increasing insecurity for the majority of the world's population whose day-to- day lives are governed by volatile food prices. 86 Instructively, this conception of world order does not assume a clear distinction between state and society. Like Polanyi, who argued that the creation of the self- regulating market economy as the 'fount and matrix' of 19th century market civilization was in part a product 'of highly artificial stimulants administered to the body social in a situation which was created by the no less artificial phenomenon of the machine,'87 Gill shows how neo-liberal market globalization is not just about the ideational and cultural transformations associated with the universalizing and normalizing tendencies of the marketization and commodification but a political project institutionalized in political, legal and quasi legal instruments at global, regional, national and local levels. The macro-governance structures of market civilization have been politically mobilized and 'locked in' through norms, mechanisms, and institutions associated with conditioning mechanisms of disciplinary neo-liberalism and its political and legal counterpart, new constitutionalism. 2.2.2 New Constitutionalism Inspired initially by the path-breaking political economy of Polanyi's The Great Transformation,88 Gill first coined the concept new constitutionalism to theorize 86 McMichael, 2003; Gill and Bakker 2003a: 27. 87 Polanyi, 1944: 3 and 157. 88 Comments made during the workshop, New Constitutionalism and World Order, York University, May 2011. contemporary changes in the global political economy in a 1992 article.89 The concept of new constitutionalism captures powerful and interrelated transformations of state forms and world order at the end of the twenty-first century. On the one hand, the rapid re- constitutionalization of world politics in the 1980s and 1990s was driven by the rise of neo-liberal and neo-conservative principles and policies in the UK and US. These principles and policies were associated most explicitly with Thatcherism and Reaganism, and experimented in Chile in the late 1970s, in other so-called developing countries in the 1980s, and in post-Soviet societies starting in the early 1990s. More specifically, the new constitutionalism refers to investor-centric macro-economic policies intended to maintain business confidence through the construction of consistent and credible political and legal climates for investment and accumulation, stressing the rule of law and expanded state activity for the legal protection of business.90 On the other hand, new constitutionalist frameworks have been observed in international trade rules at regional, the North American Free Trade (NAFTA) agreement for example, and international, the World Trade Organization (WTO) for example, levels. Most importantly, constitutionalization associated with trade and investment agreements protects capital from nationalization and particular forms of regulation. Laws and regulations made by democratically elected parliaments to promote the public interest in the environment, for example, may be challenged in dispute resolution mechanisms of NAFTA by businesses 89 Gill, 1992. 90 Gill, 1998: 38. 40 as a 'taking,' that is an expropriation of potential profits, if they can show that such laws or regulations might impact future expectations of profit.91 In contrast to other well-known IR approaches to legalization,92 Gill stresses contestation and change in three 'productive constraints,' which consist of (1) measures to reconfigure state apparatuses, (2) measures to construct and extend markets, and (3) measures to deal with dislocations and challenges. These productive constraints can be illustrated by a number of important examples. First, the imposition of new constitutionalism is reflected in the transformations from welfare states towards 'competition states,' a particular form of state associated with the historical movement towards 'flexible accumulation,' the transnationalization of capitalism and the resulting primacy of the commercial sphere.94 Transnationalization of capital accumulation occurs through legally binding agreements like the WTO, NAFTA, the Maastricht Treaty and the European Monetary Union, and bilateral investment treaties, which 'create hard obligations that cut deeply into the autonomy of public policy and national legislative processes.'95 91 Gill, 2002. 92 E.g. Abbott et al., 2000. 93 The key point is that liberal conception of state is limited and subordinated to interests within civil society: 'the state has limited legal competence because the constitutional framework of a liberal state is pluralist, with formal decentralization of power, or put differently, the subordination of the state to civil society. This framework of power is the corollary of the sovereignty of private property rights and freedom of contract written into, and protected by, constitutional form' (Gill, 2008: 164). 94 Gill, 1995; Cutler, 2002: 141. 95 Cutler, 2002: 141. 41 Second, efforts to construct and extend markets can be illustrated through the institutionalization of property rights where none previously existed, often referred to as primitive or original accumulation by Marxists. Systems of fisheries governance like different forms of 'catch shares' over fisheries resources provide an example of such processes, including, but not limited to, Individual Transferable Quotas (ITQs).96 Establishing property rights in fisheries governance is most often based on post-war bioeconomics doctrines associated with H. Scott Gordon's theory of common property resources and the subsequent 'tragedy of the commons' metaphor elaborated by Garret Hardin, 97 which defined the need for clearly defined property rights.98 The enclosure of fisheries resources through law as private property and tradable commodities can be seen as the predecessor of new waves of enclosures of the 1990s and 2000s, including World Bank efforts of agrarian reform and the commodification of the atmosphere through carbon trading schemes. 96 It is important to note that property rights and authority over rent creation can be limited to individuals or extended to firms, cooperatives, communities and other entities. 97 The most common justification of contemporary enclosure of fisheries and indeed other natural resources is often credited to Garrett Hardin's 'Tragedy of the Commons' article, published in the journal Science in 1968. Yet in an article published 15 years earlier, Canadian economist H. Scott Gordon defined the contours of the bioeconomics approach. 98 The first countries began to create individual fishing quotas in the late 1970s after acquiring jurisdiction over 200 mile limits, with New Zealand as the first country to adopt individual transferable quotas as national policy in 1986. Generally implemented with significant initial and ongoing institutional and legal backing of nation-states, dozens of fisheries have become subject to different kinds of property-assigning quotas or shares through the 1980s and 1990s. By 2003, 121 fisheries around the world were identified as managed using different variations of catch share quotas, and 27 more by 2008 (Costello et al., 2008). It is important to note that property rights and authority over rent creation can be limited to individuals or extended to firms, cooperatives, communities and other entities and associations. 42 A third set of measures consists of efforts to mitigate the consequences of dislocations, crises and challenges. This component is associated with what Peck and Tickell call 'roll-out' neo-liberalism. The roll-out phase of neoliberalization is the counterpart to the 'roll-back' phase, associated with the privatization of public policy and resources, de-regulation and transformation of Keynesian-Fordist regulatory regimes. Roll-out refers to efforts to stabilize and address dislocations and resistance. It thus conceptualizes processes that seek to 're-embed' neo-liberal market through 'third- way' mechanisms, including state-led encouragement of civil society services." Efforts to make new constitutionalism politically sustainable, reflected in the shift towards post- Washington consensus reforms that make space for the nominal abandonment of Structural Adjustment Programs in favour of Poverty Reduction Strategy Papers and the UN Millennium Development Goals, reflect this tendency. The advantage of this conceptualization is that it recognizes the significance of re-regulation, as opposed to characterizing neo-liberalism narrowly as representing just processes of de-regulation. Another key contribution of this framework is how it demonstrates the development of concrete principles and policies which neo liberalization proceeds through. Brenner and colleagues call new constitutionalism the parameterization of neo-liberalism, referring to ways that particular forms of policies are 'implemented, consolidated and reproduced through a complex of world-scale, 99 Peck and Tickell, 2002; Jessop, 2002; McCarthy and Prudham, 2004. 43 multilateral and supranational juridical-institutional rearrangements that impose new, 1 on relatively circumscribed parameters—in effect, an encompassing "rule regime.'" This dissertation argues that such parameters of global rule making have constrained, shaped and 'channelled' contemporary (global) environmental governance towards regulatory voluntarism. The global rule regime of new constitutionalism effectively 'locks out' substantial regulation or, at least, creates a significant 'regulatory chill' for the development of alternative forms of regulation, especially those associated with mandatory, so-called 'command-and-control' forms of environmental regulation. Examining the relationship between the WTO and Multilateral Environmental Agreements, Eckersley refers to these effects of new constitutionalist imperatives as a 'Big Chill,' a process she observes in: the conservative implementation of trade restrictive obligations to avoid the threat of legal challenge under WTO rules; the self- censoring of multilateral environmental negotiations in terms of trade restrictions; and the stalemate in the WTO's Committee on Trade and Environment to address the tensions with the WTO's environmental impact.101 In other words, the imperatives of hyper-liberalization of trade and investment competitiveness and the institutionalization of protections for capital undercuts potential for creating meaningful national policies for environmental protection, creating 'intense pressures to weaken environmental regulations which may deter foreign investment or raise production costs for 100 Peck, 2002; Brenner et al„ 2010: 194. 101 Eckersley, 2004: 26-27. 44 exporters.'102 Regulatory chill is difficult to prove, but well-documented trade controversies such as the 'Dolphin-Safe' tuna product labelling decision103 demonstrate the significant constraints imposed by new constitutionalist frameworks even in relatively 'trade-friendly' mechanisms of regulation such as eco-labels. The creation of the Dolphin-Safe label for tuna products in the US became highly controversial with the 1991 Dolphin Protection Consumer Information Act, which created import restrictions on tuna imports without the Dolphin-Safe label. A panel of the General Agreement on Tariffs and Trade (GATT), the predecessor of the WTO, later found the import restrictions to be in contravention of international trade law under GATT but found the voluntary certification scheme to be acceptable.104 The key point is that the global rule regime of new constitutionalism makes it difficult for governments to pursue 'disciplinary environmentalism' by using trade measures to punish foreign firms for environmentally destructive production practices and methods.105 The Dolphin-Safe tuna incident demonstrates why voluntary certification and labelling standards have gained such widespread popularity in the 1990s. An advantage of voluntary standards is that they are not formally mandated by governments and therefore can be considered outside the authority of the world trade rules. Salzman 102 Conca, 2000:485. 103 Constance and Bonanno, 1999. It is important to note that marine eco-labels before the emergence of the MSC were limited to single-issue labels aimed at reducing accidental catch of non-target species (i.e. dolphin-safe and turtle-safe) initiatives and were not third-party certified. 104 Appleton, 1997. 105 Eckersley, 2004: 29. 45 reports, for example, that a 1991 Organization for Economic Cooperation and Development (OECD) analysis reflected the general optimism over the potential impact of ecolabels. At the time, ecolabels were viewed by governments and environmental groups alike as a powerful, high-profile, low-cost, market-based instrument to promote environmental protection. Because they were voluntary, they acted as 'soft' policy instruments, complementing the more traditional command-and-control mandates.106 The founders of the MSC were aware of trade related debates about other eco-label programs when the organization was designed, and subsequently addressed concerns about the relationship between eco-labels and free trade rules with a number of features, including emphasizing: (1) voluntary, open access, non-discriminatory, and market based structure, (2) information clarification to consumers, (3) science-based, (4) auditing, accountability, verification, (5) harmonization and standards equivalence, and (6) regard for governmental rules and regulations.107 Rafols and Brander similarly note that, as far as they are not imposed by any government, the [MSC initiative does] not interfere with the multinational regulation of trade, and do not constitute a barrier to the international trade. This market-based approach can be therefore considered as an adequate perspective for improving sustainable forest and fisheries management.108 Moreover, then, at the level of implementing MSC certification, governments that clearly supported the MSC were initially reluctant to formally endorse the non-governmental standard, due in part to the problems that such endorsement may have in relation to 106 Salzman, 1997: 13. 107 Leadbitter et al., 2006. 108 Rafols and Brander, 2005: 662. 46 WTO rules relating to trade in fish products.109 Overall, then, the constraints imposed by the new constitutionalist global rule regime 'channelled' the evolution of global regulatory agendas in the direction of voluntary market-disciplinary mechanisms. In this context, we can understand the emergence of voluntary soft-law modes of governance like certification and labelling as efforts to devise regulatory forms compatible with new constitutionalism. 2.2.3 Disciplinary Neo-Liberalism Integrating Durkheimian and Foucauldian notions of discipline, Gill coined the concept of disciplinary neo-liberalism to refer to 'a concrete form of structural and behavioural power; it combines the structural and behavioural power of capital with "capillary power" and "panopticism." Neo-liberal forms of discipline are not necessarily universal nor consistent, but they are bureaucratised and institutionalized, and they operate with different degrees of intensity across a range of "public" and "private" spheres.'110 In the domain of trade and finance, for instance, disciplinary neo-liberalism is associated with the three C's of the power of capital. The three C's consist of efforts to redefine public policy in ways that 'prove their credibility, and the consistency of their policies according to the criterion of the confidence of investors.'111 The dominant discourse emphasizes the power and efficacy of the market to discipline economic and 109 Potts and Haward, 2007; Haward, 2009. 110 Gill, 1995. Gill, 2000: 4. 47 non-economic agents, a key theme in the emergence of corporate environmentalism in the 1990s. The concept of disciplinary neo-liberalism can be used to understand discourses and practices surrounding the emergence of the concept of 'sustainable development' in the late 1980s and 1990s and the subsequent ascendancy of the 'business case' for sustainable development that predominated in the 1990s and 2000s. The emergence and popularization of the concept of 'sustainable development' originated in the Brundtland report, Our Common Future, which defined sustainable development as development that 'meets the needs of the present without compromising the ability of future generations to meet their own needs.'1 '2 Although vague and not inherently linked with business interests, the Brundtland report called on the cooperation of industry and provided the central organizing concept for the corporate capture of the sustainability agenda in the 1990s.113 The 'Washington Consensus' of disciplinary neo-liberalism that increasingly defined the debate over development economics, trade, finance, and macroeconomic policy in the 1980s and 1990s can be compared with what might be called the 'sustainable development consensus,' which was firmly established and institutionalized in the state system during the 1992 UN Earth Summit in Rio de Janeiro. 1,2 United Nations WCED, 1987. 113 Sklair, 2000. 48 Reflecting an important shift in how the UN interacted with corporations,114 the Secretary General of the United Nations Conference on Environment and Development appointed Swiss billionaire Stephan Schmidheiny as Senior Industry Advisor for the 1992 Earth Summit. In the lead up to the conference, Schmidheiny formed the Business Council for Sustainable Development (now the World Business Council on Sustainable Development) and prepared a book, Changing Course: A Global Business Perspective on Development and the Environment, that defined a business case for sustainable development and outlined ways that businesses could lead the way towards a sustainable global economy. Changing Course provided a unifying agenda for business and industry to become more active in defining the shift away from the often anti-capitalist and anti- growth themes of environmental protection and conservation popular in the 1970s to a sustainable development agenda based on the idea that sustainable growth could be generated through open markets, free trade, market instruments and incentives, competitiveness, and self-regulation.115 A powerful legacy of the 1992 Earth Summit in Rio de Janeiro resulted in what Bernstein calls the 'compromise of liberal environmentalism,' an influential new orthodoxy which 'institutionalized the view that liberalization in trade and finance is consistent with, and even necessary for, international environmental protection, and that both are compatible with the 114 Just prior to the 1992 Earth Summit, United Nations Secretary General Boutros Boutros-Ghali announced that the United Nations Centre on Transnational Corporations, created in the 1970s at the initiative of developing country governments to monitor foreign investment in their countries, would be eliminated as an independent entity (Bruno and Kaliner, 2002: 26). 115 Schmidheiny, 1992. 49 overarching goal of sustained growth.'116 More specifically, Agenda 21, particularly chapter 8, of the Rio Declaration on Environment and Development, institutionalized norms and practices such as market instruments and the trend towards certification and labelling that legitimize the liberal approach to global environmental policy making. Prominent examples of market-oriented instruments that emerged in the wake of the Rio Earth Summit include the new certification and labelling program spearheaded by the founders of the Forest Stewardship Council, which was actually first introduced at the Rio conference, and the 1997 Kyoto Protocol of the Framework Convention on Climate Change. Post-Rio liberal environmentalism has been described by critics as heavily shaped by the ascendance of 'green veils' and 'green washing' produced through 'corporate environmentalism,' standing in sharp contrast to environmental justice 117 advanced by grassroots globalization. Although the World Business Council for Sustainable Development emerged as the most influential of the green business networks established in the 1990s, other global, national and local networks had one thing in common: an emphasis on self-assessment and voluntary codes, with decisive industry input into regulation.118 As Sklair puts it, 'from this powerful conceptual base, big business successfully recruited much of the global environmental movement in the 1990s to the cause of sustainable global 116 Bernstein, 2002. 117 Karliner, 1997. 118 Sklair, 2000. 50 consumerist capitalism.'119 Sklair likens this process to what Gramsci called the formation of a new historical bloc of sustainable development in which big business shaped a social movement initially defined by counter movements of radical environmentalism focused on a fundamental ecological crisis that threatened global capitalism into a social movement increasingly focused on isolated environmental problems with which businesses can cope and on mechanisms of regulation that can be 1 harnessed for economic growth and mass consumerism. Eco-labels have become one of the most widely and enthusiastically promoted strategies of individualist, consumerist responses to environmental regulation in the post- Rio era. The discourse surrounding eco-labels provides an important illustration of the powerful expectations surrounding disciplinary neo-liberalism. Eco-labelling, often married to third-party expert certification to add credibility, provides an option of 11 regulation for business rather than simply regulation o/business. Although seldom distinguished in the literature, there are actually two important market mechanisms associated with disciplinary discourses on eco-labels. Eco-labels are assumed to generate both a ratcheting up of market-wide environmental performance and legitimacy. First, the most popular market mechanism is the assumption that market-incentives can 'ratchet up' improvements towards more sustainable products and practices through consumer power. This supposed 'win-win' branding approach to regulation is based on '"Sklair, 2000. 120 Sklair, 2000. 121 This phrase is adopted from Peter Newell (Newell, 2001). 51 assumptions associated with political consumerism; that is, social and environmental problems can be solved by the use of product labelling or other kinds of information, such as certificates.122 Market mechanisms in this case refer to the idea that certain information provides an incentive that changes the behaviour of key buyers and sellers. Highly popular in business and corporate strategy studies, the idea is that credible labels potentially empower consumers to make sustainable choices and offer companies competitive advantages through enhanced reputations.123 The (economic-theoretical) expectation is that in return companies will receive benefits (usually in the form of increased market share or price premiums) that are excluded from non-participants, thereby creating incentives to comply with standards.124 The crucial disciplinary mechanism therefore generally refers to normative incentive-structures that are expected to generate buyer-driven 'ratcheting-up' processes with respect to environmental standards, thus raising environmental standards and 'the bottom line' at the same time. In theory, then, economic, institutional, and normative incentives (i.e. disciplines) 'drive' the regulatory process. Second, the branding and commodification of regulation through mechanisms like eco-labels also assumes a type of market accountability mechanism, referring to how consumers and investor beneficiaries are expected to not only effectively but also legitimately affect the choice of the regulatee. This market 122 Micheletti et al., 2004. 123 E.g. Klein, 1997. 124 Potoski and Prakash, 2005: 236. 52 accountability mechanism is central to claims that environmental and ethical consumerism represent. Although disciplinary neo-liberalism is most often applied to explain the investor-centric assumptions entailed in new constitutionalism, it is useful to refer to buyer-centric assumptions to capture the disciplinary neo-liberalist assumptions in the domain of consumption: sustainable development must be made compatible with maintaining buyer confidence and creating a stable or profitable business environment,125 premised on the assumption that investors and buyers, including the affluent consumers of seafood, are a privileged group who will act in the interest of the public good. Collective action problems, therefore, are reduced to possessive individual, self-help pathologies, reflected both in the pre-eminence of voluntary, industry-driven self-regulation and consumer sovereignty as grundnorms of neo-liberal re-regulation at the turn of the millennium. 2.3 'Private' Transnational Governance and Certification Voluntary systems of governance represent an important regulatory component of the neo-liberal global governance movement in social and environmental domains. In political science literatures, social and environmental certification and labelling are often situated within a broader proliferation of private or non-state transnational authority and governance that have also arguably been facilitated by the imperatives of new constitutionalism and disciplinary neo-liberalism. Since the late 1990s, the study of 125 Gill, 2000: 4. different forms of private or non-state transnational authority has developed into a major research agenda in political science. Present literatures on private or non-state regulation in political science, particularly within the field of IPE, are little more than a decade old, starting in the mid-to-late 1990s. Significantly, this new literature has helped shift IR away from earlier narrow debates over whether non-state actors matter to open up new research agendas concerning questions of how far and in what ways they matter.127 This shift in emphasis arguably represents an important element in a general reorientation of mainstream IR away from state-as-unitary-actor-centered ontologies of I o global studies. ? Often explicitly moving beyond the singular ontology of states or markets, studies of new agents and patterns of authority involving business entities, civil society organizations, and other agents are key elements in the development of a full- fledged field of research on globalization and global governance.129 Private and non-state forms of authority,130 regulation and governance are not of course a historical novelty, but the number and types of institutions that make rules and standards outside formal channels of state and inter-state authority have indeed 126 E.g. Clapp 1998; Cutler, Haufler & Porter 1999; Higgott, Underhill & Bieler 2000; Haufler 2001; Biersteker and Hall 2002; Graz and N6lke 2008a; Hansen and Salskov-Iversen 2008; Buthe and Mattli, 2011; Utting, Reed, and Reed, 2012 (forthcoming). 127 Arts et al., 2001; Buthe, 2004. 128 Ougaard, 2008: 387. 129 Graz 2001; Ougaard, 2008. 130 1 use 'private' and 'non-state' interchangeably but it is helpful to distinguish between two main types. The first group is private commercial enterprises, generally profit-seeking businesses of one form or another. The second is NGOs, some of which are part of broader social movements. This distinction is drawn from Higgott, Underhill & Bieler 2000. 54 substantially increased over the past two decades. Frequently studied voluntary, private or non-state-based regulatory authority includes industry and firm level self-regulation, corporate social responsibility initiatives, codes of conduct, public-private partnerships, and private social and environmental certification schemes. As Vogel puts it, 'private regulations that define standards for "responsible" business practices now exist for virtually every global industry and internationally traded commodity, including forestry, fisheries, chemicals, computers and electronic equipment, apparel, rugs, coffee, cocoa, palm oil, diamonds, gold, toys, minerals and mining, energy, tourism, financial services, and athletic equipment.'131 Inter-national institutions and nation-state governments are also participating in the institutionalization of'private' legal orderings. The UN's Global Compact, for example, invites businesses to enter into voluntary arrangements governing labour, human rights, and environmental practices in order to give globalization a 'human face.'132 The emergence of such institutions and programs is referred to by 133 Ruggie as signalling the emergence of a 'global public domain.' Certification and labelling programs developed and administered by NGOs have emerged as one of the most studied examples of private transnational governance in political science literatures. Numerous new voluntary certification and labelling programs have been developed over the last two decades by NGOs and industry associations in response to environmental and social controversies in forestry, 131 Vogel, 2010:71. 132 Cutler, 2005: 537. 133 Ruggie, 2004. 55 agriculture, aquaculture, fishing, tourism, mining and other industries.134 Well-known certification initiatives include the Coalition for Environmentally Responsible Economies, the Common Code for the Coffee Community (4C), Fairtrade Labelling Organizations International, the Social Accountability Standard 8000, the FSC, and the MSC. The emergence of the FSC in particular constituted a major development in the world of certification and labelling in the post-Rio era of liberal environmentalism. As mentioned above, the FSC was first unveiled at the 1992 Earth Summit where the consensus of liberal environmentalism was cemented by world leaders. The FSC certification and labelling system is particularly important because its model has been adopted in other sectors such as the marine domain (e.g. MSC, Aquaculture Stewardship Council, and Marine Aquarium Council), tourism (e.g. Sustainable Tourism Stewardship Council), and park management. However, there are also a wide variety of standards and certification programs in the global agrifood sector, particularly those addressing organic and fair trade certification.135 In coffee for example, there are five key third-party i iz certification programs, each with their own standards and procedures. While organic and fair trade certifications are the most well known certification systems in agricultural and food sectors, there are dozens more.137 What is at stake with the emergence and widespread use of 'private' transnational governance and what can the study of third- 134 Gereffi, Garcia-Johnson, and Sasser, 2001. 135 E.g. Raynolds, 2000; Raynolds, 2009; Scott, Vandergeest, and Young 2009; Hatanaka, Bain, and Busch, 2005. 136 Raynolds et al., 2007. 137 Raynolds and Wilkinson, 2007: 41. 56 party certification and labelling tell us about such transformations in global governance? Embedded in the academic dialogue on certification and labelling are concerns about the implications of such mechanisms of governance for three often interrelated concepts central to discipline of political science: legitimate authority, the state, and democracy. 2.3.1 Authority and Legitimacy In political science literatures, the most prominent conceptualization of third- party certification and labelling comes from studies of the FSC certification program. Drawing on pragmatic, moral and cognitive legitimacy making distinctions within organizational sociology, Yale University's Benjamin Cashore has conceptualized the FSC and similar certification organizations as non-state, market-driven (NSMD) governance, perhaps the most widely cited conceptual characterization of the FSC. Cashore and colleagues explain and theorize the emergence of, and legitimacy-making of, forest certification as a unique form of global governance, arguing that NSMD systems are potentially the most promising mechanism to fill the 'governance gap' left in the wake of state and inter-state management failures.138 Cashore distinguishes his perspective from Weberian and Gramscian approaches to organizational theory and conceptualizes legitimacy from the perspective of advances in organizational sociology.139 Cashore argues that NSMD governance systems comprise four related 138 Bernstein and Cashore, 2007; Auld et al., 2009: 189. 139 Cashore, 2002: 505. Building on the seminal work conducted by Cashore and colleagues, Gulbrandsen synthesizes rationalist and constructivist perspectives to analyze forestry and fisheries certification. Gulbrandsen's main focus, however, is to analyze and explain factors affecting the emergence, design and 57 characteristics that together render a new form of governance that existing political science literature has largely failed to uncover. NSMD governance is defined by (1) no use of Westphalian sovereign authority to directly require adherence to rules, (2) products being regulated are demanded by buyers along the supply chain, (3) authority is granted through internal evaluative processes, and (4) compliance is verified through third-party auditing.140 Significantly, then, for Cashore, 'the location of authority is grounded in market transactions occurring through the production, processing, and consumption of economic goods and services.'141 From a legal and sociological perspective, Errol Meidinger conceptualizes the FSC and similar programs as a form of competitive supragovernmental regulation, which refers to 'the hybridity and dynamically expansionary nature of this governance mode.'142 Meidinger suggests that important institutional features of forest certification include supragovernmentality, supply chain leveraging, institutional mimicry, participation and transparency, regulatory competition, and interactions with states. For Meidinger, standards of this type are generally for powerful but sensitive transnational commodity chains using conventional institutional arrangements and increasingly participatory and transparent procedures. States and businesses participate in these processes in multiple ways, but the prime movers are usually organizations set up for the express purpose of effectiveness of FSC and MSC processes and to compare variation across different certification regimes (see Gulbrandsen, 2010). 140 Cashore, 2002: 509. 141 Cashore, 2002: 512. 142 Meidinger, 2011. 58 developing and implementing standards, often in the first instance by nongovernmental organizations.143 Importantly, then, authority is not only grounded in market transactions along the supply chain, but compliance is verified by independent parties. Third-party certification systems like the FSC, MSC and many organic and fair trade systems go beyond industry codes of conduct because they usually involve prescriptive environmental and social rules, the accreditation of independent auditors, third-party auditing compliance, and the tracing of products along the supply chain.144 Third-party certification initiatives also require companies to voluntarily participate and to incur the costs of certification. Vogel calls third-party certification an example of 'civil regulation,' which can be distinguished from conventional forms of industry self-regulation in that firms are required to make expenditures and undertake commitments, and that stakeholders outside the firm, for example third-party auditors, are also involved.145 In contrast to first-party eco-labels such as retailer administered labels, third-party auditing regimes have been considered as having a relatively high potential for credibility and low risk of conflict of interest in the literature.146 Also focusing on the issue of legitimacy, Hallstrom and Bostrom conceptualize the FSC and MSC environmental certification and the new ISO 26 000 social certification as unique examples of what they call multi-stakeholder standardization, 143 Meidinger, 2008a; Meidinger, 2011: 411. 144 Gulbrandsen, 2006. 145 Vogel, 2010: 70. 146 Cashore et al., 2004; Gereffi et al., 2001; Hatanaka et al., 2005. 59 which they distinguish from temporary collaborative arrangements. Collaborative standards are those issued by organizations with members of the same organizational type, such as inter-governmental organizations and industry associations. Much IR literature, including regime theorists, limit analyses to collaborative standards in state- centric arenas such as the UN, G8, and OECD. By contrast, multi-stakeholder organizations consist of an 'assembly of organizations, including actors from diverse societal spheres' that generate hybrid authority.147 Such hybrid arrangements are expected to provide an advantage over, for example, proprietary standards.148 Like Cashore, Hallstrom and Bostrom utilize organizational theory to explain the nature and significance of the FSC and MSC, but, unlike other works, focus far more explicitly on theorizing the hidden interests and power struggles taking place in the efforts and activities of legitimation. Using a critical social constructivist perspective, Hallstrom and Bostrom significantly extend our theoretical and empirical understanding of legitimacy, authority and power in the organization of FSC and MSC environmental standards and the ISO 26000 social standard. In contrast to neo-institutionalist tendencies to focus on institutional forces of scientification and rationalization, they adopt an organizational process perspective which emphasizes contested practices of organizing, legitimizing and contesting activities of standard-setting.149 The study is also critical in the sense that it challenges excessively optimistic assessments of new transnational 147 Hallstrom and Bostrom, 2010: 10. 148 Hallstrom and Bostrom, 2010: 9. 149 Hallstrom and Bostrdm, 2010: 5. multi-stakeholder standardization institutional experiments and recognizes imbalances in power, interests and strategy in what they consider a 'fragile' making of legitimate authority. They therefore distinguish their approach from neo-institutionalism by employing a more explicit power-centered constructivist perspective, arguing that 'ignorance of an actor's interests, motives, and power, as used in the rule-setting process, results in an ignorance of the real conflicts and friction embedded in global politics.'150 From this perspective, Hallstrom and Bostrom emphasize the question of how non-state authority is established, maintained and challenged in terms of struggles over authority, power and legitimacy within transnational regulatory space.151 Moreover, in contrast to Cashore and colleagues, who tend to emphasize the forces for establishing and stabilizing legitimate authority through certification and labelling initiatives, Hallstrom and Bostrom highlight five examples of destabilizing mechanisms that render the authority of multi-stakeholder standardization fragile, including (1) pre-existing power relations, (2) the ambiguous role of power resources, (3) different conditions of participation, (4) power asymmetries created by organizational processes, and (5) the increasing power of other actors, such as accreditation and on-the-ground certification bodies.152 Therefore, the most important question might be legitimacy of what and for whom? For example, neo-Gramscian studies of the role of businesses in global environmental governance emphasize that the growth of private regulation and 150 Hallstrom and Bostrom, 2010: 7. 151 Hallstrom and Bostrom, 2010: 3. 152 Hallstrom and Bostrom, 2010. 61 environmental standard-setting and certification schemes can be understood as a 1 SI mechanism for firms to protect their legitimacy as responsible environmental actors. From this perspective, environmental certification can be understood as a strategy of accommodation, combining material and discursive efforts to preserve business legitimacy and autonomy in the face of growing public environmental concerns that did not exist on a wide scale 50 years ago. 2.3.2 The Changing Nature and Role of the State The nature and extent of state agency has emerged as one of the most important theoretical issues in certification studies. The effort of non-state agents and institutions to establish forms of legitimate regulation and authority is significant in large part because the state has historically been considered the most important structure of legitimate authority in a global system of states. For Cashore, a distinguishing feature of NSMD governance systems is that they are 'transnational private governance systems that derive their policy-making authority not from the state, but from the manipulation of global markets and attention to consumer preferences.. .The state's traditional sovereign decision-making authority is not granted (or ceded) by the state to these new systems.'154 The emergence of social and environmental certifications standards is sometimes explained at a broad level by referring to a 'governance gap' that resulted from the constraints imposed by globalization on state regulation. Many analyses begin with a 153 Levy and Newell, 2002. 154 Cashore, 2002: 504. Although the role of the state, or lack of a role, is central to the NSMD analytical framework, Cashore and colleagues have recognized the important role of the state in the extension of the FSC and similar programs. 62 familiar narrative about how globalization essentially caused a retreat of the state from regulatory matters, both domestically and internationally. The 'gap' discourse asserts that globalization has reduced the ability and willingness of states to intervene in markets and, in turn, created a void in the supply of governance. Pattberg argues that new private rule systems like the FSC 'constitute a decisive institutional arrangement of global governance... [and signify]...the transformation of global sustainability regulation from public international to private multi-stakeholder approaches.'155 Invoking the concept developed by James Rosenau that has been very influential in IR, Allison argues that 'governance without government' in global oceans governance is associated with the shift towards a privatized approach to fishing management, including soft law, best- practice rules, codes of conduct and standards.156 Similar views about the 'decline of the state' have been espoused by critical theorists. The development and spread of social and environmental certification standards has sometimes been viewed as a rolling back of the state from regulation 1 and the inability of the state to control large capital.158 Drawing on literature on the sociology of agriculture and food, as well as the French Regulationists school of thought, Constance and Bonanno conceptualize the making of the MSC as providing a possible example of a supranational regulatory mechanism or transnational state that bypasses 155 Pattberg, 2007: 79 and 196. 156 Allison, 2001. 157 Mutersbaugh, 2005. 158 Gereffi et al., 2001: 65. 63 nation-states in the post-Fordist era of globalization.159 Constance and Bonanno theorize the relationship between globalization and the MSC as rooted in fundamental changes at the end of the 20th century that ushered in a new phase of capitalist development, characterized most clearly by the crisis of the Fordist nation-state and the fracturing of the 'spatiotemporal unity between the polity and the economy.'160 These arguments echo 'hyper' globalization, de-regulation, and 'decline of the state' discourses popular in the 1990s. In contrast to studies that imply a 'beyond the state' character of the FSC and similar certification programs, scholars have more recently increasingly recognized that there are a growing number of ways in which certification standards have become interconnected with governmental and inter-governmental-based political and legal systems, institutions and norms.161 For example, Hallstrom and Bostrom stress that the relationship of the FSC, MSC and ISO 26 000 certification standards to existing government and inter-government processes is crucial to their authority and legitimacy. Even though the raison d'etre of such standard-setting organizations is often portrayed as being about the failure and retreat of government and inter-govemment regulatory efforts, they suggest that each transnational certification standard is legitimized through ongoing harmonization processes with broad aspects of existing government and inter- government institutions. They argue, however, that a delicate 'balancing act of distance 159 Constance and Bonnano, 2000. 160 Bonanno and Constance, 2008: 12. 161 Meidinger, 2008b: 284; Gulbrandsen, 2010; Hallstrom and Bostrom, 2010; Gale and Haward, 2011; Bartley, 2011. and proximity to state actors' in transnational space is also one of five major destabilizing effects that render the FSC, MSC, and ISO 26 000 fragile forms of non- state authority.162 This balancing act illustrates an important paradox of legitimacy and authority for non-state standard-setting: they are justified by criticizing the lack of nation-state legitimacy but receive legitimacy by not conflicting with existing rules.163 Indeed, the principles and rules created by certification organizations often require compliance with existing policy and legal frameworks. The first principle in the FSC program, for example, is that forest management operations 'shall respect all applicable laws of the country in which they occur, and international treaties and agreements to which the country is a signatory.'164 Similarly, the third principle of the MSC's three core principles is that fisheries must be in compliance with local and international laws. This reinforces the argument made with respect to the broader literature on private transnational governance that new forms of regulation need to be understood in terms of their interactions with state-based regulatory regimes. Scholars have therefore increasingly acknowledged the need for analysts to 'bring the state back' into the study of transnational certification standards since the future paths of even non governmental transnational certification standards like the FSC and MSC will likely develop alongside and through reinvigorated state processes.165 162 Hallstrom and Bostrom, 2010: 166. 163 Hallstrom and Bostrom, 2010: 24. 164 Quoted in Meidinger, 2007. 165 Bartley et al., 2007; Auld et al., 2009: 190; McDermott et al., 2009; Gale and Haward, 2011. 65 What is more, the very notion of a public-private distinction is coming under increased empirical and conceptual scrutiny in literatures on transnational certification programs. As Vandergeest observes, the public-private distinction tends to miss the blurred boundaries between state and non-state actors and 'the idea that regulation is private, non-state and market-driven (NSMD) assumes a clear separation between state and market, or public and private—a distinction that is difficult to sustain when examining specific examples of environmental certification.'166 Moreover, empirical studies on state responses to private regulation in forestry suggest that to describe new cases as 'governance without government' and 'state retreat' is inaccurate.167 Indeed, as Bear and Eden note in their study of FSC and MSC certification, 'a shift from environmental government to environmental governance "beyond the state" still remains largely a normative aim, rather than a practical achievement.'168 2.2.3 Democracy and Social Justice Another recurring question in the broader literatures on private transnational governance in general and on certification and labelling systems in particular is how to reconcile non-state forms of governance like certification systems with existing concepts of democracy and social justice.169 The literature on certification and labelling is rather divided on the crucial question of the consequences of this form of governance not only 166 Vandergeest, 2007. 167 McDermott et al., 2009: 234. 168 Bear and Eden, 2010: 103. 169 Graz and Nolke 2008b: 2. Vogel, 2008: 267. 66 for the state but also for democracy, another concept historically tied to but increasingly transcending state politics. Organizational and procedural appraisals tend to be optimistic and highlight how certification institutions like the FSC constitute innovative governing arenas in which adaptation, inclusion, and learning occurs across a wide range of stakeholders.170 Meidinger argues that key aspects of forest certification look very similar to state and legal structures and measure well against criteria for democratic governance, particularly broad participation, deliberative procedures, responsiveness to state law and widely accepted norms.171 Indeed, the FSC and MSC have been praised for their democratic qualities, with proponents highlighting procedures of transparency, inclusiveness, participation, stakeholder representation and often conceptualizing these programs as multi-stakeholder governance.172 Organizational appraisals also tend to view processes of certification and labelling as enhancing democratic values because they are shaped by affected constituencies in the supply chain, especially consumers, a position well developed in the literatures on political consumerism and consumer sovereignty. From 170 Cashore, 2002. 171 Meidinger, 2011. 172 E.g. Murphy and Bendell, 1999: 58; Cummins, 2004. It is important to note that due to important institutional features, certification systems differ in their potential to encourage and limit democratic activity, however. The FSC, for example, is notably more inclusive than the MSC. While the FSC has is an open membership organization, the MSC is not and uses transparency and stakeholder consultation instrumentally (Auld and Gulbrandsen, 2010). This important dimension of the MSC is discussed further in the next chapter. 67 this perspective, labels provide citizen-consumers the opportunity to influence and improve production practices.173 Similarly, labelling products with information is seen by some scholars as a way that certification systems can re-embed markets with social and environmental norms in the way Polanyi conceived of the 'double movement' to re-embed self-regulating markets. Cashore and colleagues argue that NSMD governance provides an example of an effort to re-socialize markets in the sense used by IR theorist John Ruggie, that is, 'taking embedded liberalism global.'174 Indeed, Cashore and Bernstein argue that NSMD governance systems 'offer the strongest regulation and potential to socially embed global markets' because they 'encourage compliance by recognizing and tracking, along the market's supply chain, responsibly produced goods and services.'175 A number of scholars studying agrifood sectors have similarly viewed certification and eco-label systems as holding some potential to de-mystify commodity relations based solely on the price mechanism176 and to socially and environmentally re-embed markets to counter the anti-social and homogenizing effects of neo-liberalism.177 Parts of the fair trade movement, for example, can be seen as providing an alternative to conventional, corporate dominated global agrifood systems because they have created new networks of 173 Oosterveer, 2004: 359. 174 Auld et al., 2009: 189. 175 Bernstein and Cashore, 2007: 347. 176 Hartwick, 2000; Raynolds, 2000. 177 Raynolds, 2000; Friedmann and McNair, 2008. 68 exchange relations which transcend relations based purely on price competition. In such systems, marginal producers are encouraged to develop alternative relations with buyers, sometimes consisting of longer-term contracts, and are permitted to appropriate value added by certification and labels, thereby creating more equitable relations of exchange and production.178 Common benefits of certification and labelling for producers highlighted in the literature are the potential provision of market benefits, such as market access or price premiums, as well as improvement in management practices.179 Some regional certification and labelling projects which qualify products specific to diverse cultural and natural regions are also examples of social movements in which producers develop alternative, bottom-up connections to consumers.180 Geographic product labels in the agrifood sector were seen as counteracting the homogenizing forces of trade liberalization in the 1980s and 1990s because the 'globalization of artisinally-based principles counters the standardization of products which is normally considered the outcome of the internationalization of the agro-food industries... [and] assist small family «Q1 firms to resist industrialization and corporatization of production.' These examples demonstrate why product labelling has been seen as a way to subvert what Marx 178 Raynolds, 2000. 179 Hatanaka et al., 2005. 180 Friedmann and McNair, 2008. 181 Moran, 1993. 69 criticized as 'commodity fetishism' in capitalism and expose social (and ecological) conditions and relations of production.182 The effects of certification and labelling on democracy, equity and social justice are contradictory, however. At the organizational level of the FSC and MSC, for example, Hallstrom and Bostrom challenge the tendency in the literature to cast multi- stakeholder arrangements of partnership, participatory governance, and inclusiveness in a 'profoundly optimistic light.'183 In their examination of the FSC, MSC, and ISO 26 000, they discover that multi-stakeholder standard-setting is defined by the structurally privileged power of certain stakeholders, unequal resource capacities of different stakeholders to lobby for their agendas, and unequal power relations behind the scenes which frame debates and shape discourse. Along with such relations of power, material capabilities and interests, they highlight the ambiguous and understudied issue of representation, including the tension between representation and expertise, to challenge the widespread assumption in the literature that multi-stakeholder arrangements necessarily enhance democratic legitimacy.184 Other scholars have similarly found that third-party certification does not remove politics and interests from governance, but |or masks them with science and pushes them backstage. 182 Raynolds, 2000; Hudson and Hudson, 2003. 183 Hallstrom and Bostrom, 2010: 10. 184 Hallstrom and Bostrom, 2010. 185 E.g. Hatanaka, 2010. 70 Sociologists and geographers who conduct research in the agrifood sector also raise serious doubts about the ability of certification systems to promote democratic and social justice norms in market and production relations. Scholars from the 'Michigan State University School' of agrifood governance and technoscience conclude that the implications of third-party certification for democratic principles and practices remain ambiguous at best.186 Similarly, many scholars have questioned the idea that certification systems have made the regulation of markets more transparent, legitimate and accountable, mainly because international certification systems tend to marginalize small-scale producers in developing countries.187 The main issue is that small-scale producers often have to bear the costs associated with attaining and maintaining certification, which can be substantial. Even making fair trade certification only available to cooperatives is more likely to benefit well-off farmers.188 There is also the important problem of scale. By 2000, only a tiny proportion of coffee in the global market, 0.2-0.3 % and 0.8% by volume and value respectively, could be considered fair trade certified.189 186 See the 2010 special issue of Journal of Rural Social Sciences, Vol. 25(3) on 'the Michigan State University School' of Agrifood Governance and Technoscience (Konefal and Hatanaka, 2010). 187 For example, see Clapp, 1998; Clapp, 1999; Getz and Shreck, 2006; Gomez et al., 2005; Vandergeest, 2007; for an account of this argument with respect to the MSC, see Ponte, 2008. For a recent study which illustrates the questionable long-term effects of certification in organic and fair-trade coffee production, see a case study on Nicaragua (Beuchelt and Zeller, 2011). 188 Daviron and Ponte, 2005: 188-189. 189 Daviron and Ponte, 2005: 176. 71 Most importantly, while the fair trade movement provides an alternative and ethically attentive means of regulation, the 'mainstreaming' of fair trade certification into corporate strategies has presented a major challenge to the movement.190 Here, there are two inter-related key challenges that consist of (1) the inherent tension between the alternative conventions these efforts seek to promote and dominant industrial market forces, and (2) the bureaucratic industrial standards and monitoring procedures involved in certification systems, which may undermine the radical values of equity that NGO sponsors seek to promote.191 The challenges of mainstreaming and bureaucratization are well documented in organic certification192 and fair trade certification193 and are important in the extension of FSC and MSC certification. Mainstreaming and bureaucratization draw our attention to important power imbalances that shape certification processes. While the uptake of certification standards is touted as a voluntary process, large corporate players effectively outsource certification and auditing to suppliers as a 'low-cost conscience clearing,' which shifts the financial burden of upgrading to smaller producers.194 Susanne Friedberg sees this as the main contradiction masked by the 'fetishism' of clean, green ethical standards; that is, 'standards cost, and 190 E.g. Raynolds, 2009; Fridell, 2007; Fridell et al., 2008; Fridell, 2009. 191 Raynolds, 2009. 192 Mutersbaugh, 2002b. 193 Raynolds, 2002. 194 Daviron and Ponte, 2005: 161-162 and 257. 72 the retailers are not willing to pay.'195 As Fridell argues with respect to the fair trade movement, 'while fair trade can provide a symbolic challenge to commodity fetishism, in the end this challenge is strictly limited by the power of global market imperatives and the network's market-driven approach.'196 Within existing global market structures, the motivation for many producers to adopt certification standards is related more to the power of buyers in transnational commodity chains in which they are embedded than a desire to participate in and influence new governance systems under which they work. As Meidinger suggests, many producers and businesses subject themselves to supragovernmental regulatory standards not so much because they wish to live under them as because they feel that they must in order to avoid economic losses.. .Once Home Depot agreed to favour FSC products in its purchasing policies, its enormous market power leveraged the FSC system into place among large numbers of producers in (or wanting to be in) Home Depot's market chain.197 Since developing country producers often say they are complying with certification standards because Northern activists, consumers, and buyers demand it, they can be considered subjects, not democratic citizens, of governance.198 This is why charges of neo-imperialism and neo-colonialism have been marshalled against international certification standards. In a study of indigenous coffee producers in Mexico, for 195 Friedberg, 2003: 39. 196 Fridell, 2007: 79. 197 Meidinger, 2008a: 525. 198 Meidinger, 2008a: 526. 73 example, Mutersbaugh argues that the charge of 'ecological neocolonialism' must be taken seriously in this area of research. If certification shapes the logic and practice of economic management and governance for indigenous producers, Mutersbaugh asks, 'might this not also suggest that certification undercuts the autonomy of indigenous governance' or self-determination enshrined in Article 31 of the Draft Declaration on the Rights of Indigenous Peoples and Article 21 of the Universal Declaration of Human Rights?199 Private food standards have been characterized by similar structural patterns of participation and involvement stemming from the role and power of retailers and big buyers, a role which is linked with three important trends identified by Busch. First, firms have increasingly aligned themselves with instead of contesting social and environmental movements associated with, for example, fair trade and environmental sustainability. Second, food retail and processing firms have embraced private standards, usually with some form of third-party certification employed to verify adherence to those standards. Third, firms have embraced supply chain management as a strategy for increasing profits and market share.200 Without demands from retailers and supermarkets, then, it is unlikely that producers and public authorities would be promoting food certification in many countries.201 For similar reasons, Guthman sees voluntary food labels as a key manifestation of the 'roll-out' phase of neo-liberalization 199 Mutersbaugh, 2002a: 106-107 200 Busch, 2009. 201 Scott, Vandergeest, and Young, 2009. as conceptualized by Peck and Tickell.202 Guthman uses the concept of roll-out to illustrate how voluntary labels reinscribe neo-liberalism, thereby illustrating the contradictory and contested nature of market mechanism instruments as elements of social embedding. Without recognition of and transformations in the broader market structures in which particular commodities are embedded, labels tend to reinforce the fetishism of commodities in a 'back door way,' fetishizing the process of social change itself by suggesting that purchasing a commodity is sufficient to effect such change.203 We need to be cautious, then, when invoking Polanyi and concepts of embedding to explain mechanisms of governance so closely associated with self-regulation. Indeed, a central theme in The Great Transformation is that the idea of a self-adjusting market implied a stark Utopia which comprised an 'institution that could not exist for any length of time without annihilating the human and natural substance of society.'204 For Polanyi, the extension of the market imperative toward extending commodification would have annihilated human society 'but for the protective countermoves which blunted the action of this self-destructive mechanism.'205 If we take Polanyi's call for protective countermoves to mean concrete mechanisms of democratic provisionism,206 not some idealistic injection of abstract symbols onto existing commodity relations, certification 202 Guthman, 2007. 203 Guthman, 2004b: 235 and 245. 204 Polanyi, 1944: 4. 205 Polanyi, 1944: 76. 206 Latham, 1997. 75 and labelling has to show some direct provisionary benefit to affected ecologies, producers and communities, not just to affluent consumers and commercial interests in the North. While some fair trade initiatives that focus just on cooperatives or include long-term mutually beneficial contracts that guard against volatile world price changes illustrate ways to concretely instil social purpose into economic life, it remains to be seen how many certification and labels programs offer specific means to socially and environmentally embed global markets rather than reinforce the logic of disciplinary neo-liberalism. 2.4 The Commodification of Governance There is another important but largely overlooked reason why one needs to be cautious about the use of Polanyi and Polanyi-ish concepts when theorizing certification and labelling systems. Largely missing from the existing literatures on certification systems are analyses of the material foundations of new governance institutions, the material conditions of standard-setting institutions' reproduction, the social relations of certification extension mechanisms, and the social relations of certification and label 'uptake' by industry. This dissertation extends and deepens the existing literature by theorizing and analyzing these components of certification and labelling as partially commodified mechanisms of governance. More specifically, this dissertation explores the relationship between commodification207 and governance through an analysis of 207 I use the term commodification in a broad sense, similar to Marxist conceptions, as things that achieve exchange as well as use value and a price can be attributed to it. 76 professional labour markets, the business of third-party certification, and the proprietary and quasi-proprietary nature of labels and certificates. 2.4.1 Globalizing Professional Markets Theories of and debates about certification as examined above have not taken the role of professional experts in constructing and legitimating new forms of international governance seriously enough. Governance through voluntary standards is often conceived simply as a product of the independent expert assessment and conformity to pre-defined norms, principles and rules. People working at standard-setting organizations tend to be seen as enablers of governance rather than organic intellectuals possessing distinct interests and strategic purposes within governance domains. However, the proliferation of standard-setting and certification systems can be understood as part of the tremendous growth and internationalization of the market in expertise in the 1990s, connected principally to professional (often business) service sectors in the US and Europe.208 Such growth may signal a fundamental transformation in the relationship between work and governance. The internationalization of professional markets is captured well by what Brint identified in the early 1990s as the emergence of the 'age of experts,' an age characterized by relatively unconstrained consumer markets and corporate power that weakened norms of professionalism linking social/public good purposes and knowledge- 208 Dezalay, 1995. 77 based authority.209 An important component of the age of expertise includes business service professionals such as financial analysts, economists, accountants, corporate attorneys, advertising and corporate public relations specialists, labour relations specialists, computer scientists, and management consultants.210 Since individuals are paid to monitor, protect, and improve business performance, a concern with maintaining the health of firms' internal and external relations unites business services sectors. Professional firms therefore tend to mirror the organization and interests of the clients they serve.2" 'Mega firms' of lawyers and accountants emerged in the 1990s to play an • • » 010 increasingly important role in the construction of national and international regulation. Dezalay argues that the growth in intervention of 'merchant experts' such as lawyers into regulatory domains in the 1990s occurred on the basis of strategic choices determined by their specific interests.213 In international commercial arbitration, for example, the increasing role of professional experts reflected the creative efforts and investments of professionals in expanding their own influence and jurisdiction.214 Delazay and Garth further highlight four important insights into the relationship between professionals and 209 Brint, 1994: 17. Notably, Brint focuses on the role of professionals in 'public life.' Other insightful studies focus on the role of consultants in public sector reform, changes related to the ascendancy of business management ideas and the associated 'new managerialism' of the 1980s and 1990s (e.g. Saint- Martin, 2004). 210 For a study of the role of management consultants, see Greiner and Poulfelt, 2005. 2,1 Brint, 1994: 47-48. 212 Dezalay and Sugerman, 1995. 213 Dezalay, 1993: 203. 214 Dezalay, 1995. 78 the practice of regulation and governance: professional expertise is a social and historical construction, the product of a claim to a particular type of social competency rather than simply reflecting the production of objective technical knowledge; professional expertise is characterized by ongoing struggles between different professional groups; such struggles are played out in symbolic terms; and professional domains are shaped by economic logic since professionals are organized to serve paying customers and therefore are motivated by such material forces.215 According to Williams, however, Dezalay and Garth recognize but do not emphasize the commodification of expertise, 'or the degree to which these fields are constituted as markets and thus governed by the •j i z logics of access, exclusion, and scarcity.' The market for expertise in national and international regulation underwent a major boom in the 1990s, with multinational firms of expert consultants selling their services to the 'gargantuan enterprise of international "re-regulation."'217 Studies on the commodification of expertise in the global political economy are rare but growing. Power, for example, describes the 'audit explosion' and 'audit society,' which has particularly strong roots in the UK in the late 1980s.218 Sinclair has examined the interests and epistemic authority associated with Moody's Investor Service and Standard and Poor's bond-rating agencies as new professional forms of intelligence gathering and 215 Cited in Williams, 2006: 213. 216 Williams, 2006: 230. 217 Dazalay, 1995. 2,8 Power, 1999. 79 judgment determination in the global political economy.219 Cutler has assessed the growth of multinational security firms and their expert employees in the legitimation of the privatization of security in the global political economy of contemporary warfare, arguing that questions concerning the interests served by experts in private transnational governance should be central to its analysis.220 Cutler has also recently examined how transnational lawyers and financial experts have played important leadership roles in constructing the infrastructure for market civilization and establishing expert rule as 'common sense.'221 The internationalization of markets in expertise can be understood as part of a growing commercialization of the role of organic intellectuals in the domain of regulation and governance. This represents an expanded significance of what Gill refers to as 'globalizing elites,' a 'directive, strategic element within globalizing capitalism' which promotes increased market discipline.222 Our understanding of the merchant systems of regulatory support and managerial control can be advanced through a study of the third-party certification regimes. The key point is that governance systems that rely on standards, third-party certification, auditing, inspection, and monitoring services are in part the product of professional labour and what Williams calls 'professional markets,' 2,9 Sinclair, 2000. 220 Cutler, 2010. 221 Cutler, Forthcoming. 222 Gill, 1994: 179. 80 'yyx a concept more specific than the metaphor of professional networks. Professional markets refers to the contextual and contradictory nature of professional domains as political, economic and ideational sites through which governance 'is forged in the interests of profit and the expansion of professional sovereignty.'224 Professional markets can therefore be understood as a significant new social force and indeed a social movement, constituted through powerful ideas, institutions and material capabilities in the making of the global political economy. We therefore need to analyze new professional markets connected with standard-setting organizations and the active production of governance by such agents. Such analyses must also recognize competition and power struggles in the field of knowledge brokerage,225 including turf wars that can be expected among different professional know-hows.226 The legal implications of the professionalization of governance merit attention as well, as in professional liability issues common to fields such as civil engineering or medicine. The study of professional markets is therefore significant for broader literatures on regulation and governance but is particularly salient for a study of standards connected with third-party certification systems like the FSC and MSC. New auditable performance standards administered by these certification organizations require an array of auditors and mediators for interpreting and certifying compliance with standards. 223 Williams, 2006. 224 Williams, 2006: 214. 225 Dezalay and Sugerman, 1995. 226 Abbott, 1988: 11. Along with the proliferation of new standards in the global political economy, there has grown 'an auxiliary support army of technicians, auditors, monitors, and consultants' to implement and evaluate standards.'227 Although third-party certification mechanisms of governance are couched in terms of technocratic and independent expertise, they are executed by firms and therefore create new economic interests and are inevitably shaped by the imperatives and power of capital and profit. This poses fundamental challenges for credibility and accountability: third-party certification programs like the FSC and MSC are often seen as exceptionally credible and legitimate because of the organizational independence of third-party, 'expert' assessors from both the host standard-setting organization and the industry actors receiving certification, yet this independence partially evaporates where certification companies are paid by those applying for certification. 2.4.2 Third-Party Certification Markets It is widely agreed that first-party certification and labelling, for example retailers' in-house product labelling programs, are less credible than third-party or independent inspection and verification. What is often overlooked, however, is the fact that industry agents contract certification companies to get assessed against standards and in a sense 'purchase' certification. Third-party certification providers come in different sizes and forms, including non-profit NGOs and, less commonly, public 227 Timmermans and Epstein, 2010: 80. 82 organizations.228 While the FSC and MSC refer to third-party agents as 'certification bodies' in official documents, the vast majority, if not all, certification bodies accredited to carry out certification are for-profit firms. Alongside non-commodified social relations such as stakeholder collaboration, the most commonly conceptualized social relations of nominally participatory governance institutions like the FSC and MSC, there has grown new business and contractual relations which shape and define the extension and 'uptake' of certification. As third-party certifications became mainstreamed in the 1990s, they formed profitable areas for commerce and business competition,229 new bureaucratic rents, and new bureaucratic rent-seekers.230 Professionalized inspections, monitoring, and auditing services mediate the production and extension of third-party certification governance. As the demand for third-party certification and verification of social and environmental qualities of products grows in the global political economy of production and consumption systems, the number of certification bodies has also increased, with some representatives from established certification organizations expressing concern about the competency in particular sectors they service and about the potential decline in auditing practices that could result from new, highly competitive processes.231 This demonstrates 228 Hatanaka and Busch, 2008: 78. In 2007, for example, the Societe Generate de Surveillance, an inspection, testing, verification, and certification services company established in France in 1878, had 1, 000 offices and laboratories around the world and employed 48,000 people. 229 Mutersbaugh et al., 2005. 230 Guthman, 2002: 303. 231 Hatanaka and Busch, 2008: 84. 83 how third-party certification is not an objective governance mechanism, but a socially mediated institution that is embedded in wider economic processes and networks in which agents pursue specific agendas of profit enhancement, as well as promoting social J'X') or environmental agendas. The global certification industry therefore produces new mechanisms of accumulation. A key basis for these mechanisms is the requirement that industry actors voluntarily participate and incur the costs of certification. The most important contract in third-party certification is between the certification, inspection or auditing 'JIT body/company and the certified producer or their organizational representative. Despite being couched in terms of independence and expertise, third-party certification systems are nevertheless inexorably linked with the vested interest of certification, inspection and auditing firms, which receive income from the producers, organizations or firms they certify. These commodified governance relations are shaped by particular incentive structures which can be expected to produce tensions of interest at different levels, including the level of production. In a study of Oaxacan coffee producing villages engaged in a type of certification program in which producers are hired as local inspectors, Mutersbaugh found that certifying agencies and extension agents viewed contracts, wage relations, and payment as compatible with peasant inspector work while 232 Hatanaka and Busch, 2008: 84. 233 Mutersbaugh, 2004: 539. 84 village-based producers thought that this work ought to be performed as an unpaid social service.234 There are also institutionalized pressures for audit and inspection systems to n-ic produce reassurance and certainty rather than to produce critique for change. Ponte uses the MSC and European food safety management cases to argue that with the shift towards auditable, systemic and managerial certification systems, conformity to system performance and rules can become more important than achieving stated goals of 'sustainability.'236 The commodified relations of service provision mediating third-party certification systems may intensify these biases towards producing systemic compliance. As Klooster observes in the case of forest certification, certification companies compete with each other to attract business clients, creating the incentive to engage in a race to the bottom in assessment stringency since firms perceived to be flexible in applying standards criteria will be viewed as attractive to potential clients.237 By virtue of the voluntary basis of third-party certification standards, firms seeking certification also control the choice of auditor. Although different certification companies follow the same standards, methods and procedures, they nevertheless have a certain degree of autonomy as independent businesses have protections of confidentiality with clients. This raises further questions such as: whether or to what extent certification 234 Mutersbaugh, 2004: 542. 235 Power, 1999. 236 Ponte, 2010. 237 Klooster, 2010: 123. 85 companies compete at the level of service provision and contractual relations; what is the nature of such competition; are some certification companies gaining reputations for stringency or flexibility; and how do administrators of standards deal with the tension between the autonomy of 'certification marketers' and the 'standardness' of standards and their implementation? Since client satisfaction forms an important basis of business relationships, there is also a clear risk not only of a race to the bottom in stringency of interpretation against standards but also client capture. The relations between certification service providers and industry actors seeking certification and the balance of power between these agents merits close attention. The voluntary, commodified relations of third-party certification governance also privileges firms that are better able to buy services. Patterns of expansion can therefore be expected to reflect and reinforce existing uneven economic relations in global markets. The symbolic legitimacy and authority instilled in market relations through the work performed by professional experts and auditors is especially cherished by the corporate sector for this reason.238 Indeed, as Williams observes in a study of forensic accounting, professional labour is only valuable from a corporate perspective because it can be purchased. Here we are again reminded that these private legal orders are ultimately products of professional markets and, as such, resemble commodities subject to economic logics and market forces, notwithstanding the dedicated efforts of industry practitioners to prove otherwise. The dynamic of commodification not only provides corporate clients with preferred access to the 238 Williams, 2006: 223. 86 symbolic universe of forensic accounting as a legitimate model of expertise, but also the grounds for excluding adversaries and competitors. Commodification, in other words, provides those with the greatest economic resources and power better access to and control over governance processes. This is why small- scale producers have often been the first to criticize and resist the globalization of certification standards. Structurally, moreover, the dynamics and incentive structures created by commodification mean that professional markets get geared toward interests of largely corporate clientele. For example, in the global accounting industry, characterized by the 'big four' firms, the 2001 Enron scandal240 has been linked with the historical shift in emphasis from the provision of audit services to the sale of a commodity, the certified audit.241 Certification services are therefore contradictory, governed both by standard rules of professional and disinterested engagement and by confidentiality, non-transparency, and economic logics and power relations of market civilization. The key point is not that third-party certification systems are characterized purely by the partisan pursuit of professional or client interests, since their work is mediated by a wide variety of standards and rules, but that important relations of governance resemble markets and commodities that produce powerful new incentives structures that merit close scrutiny. 239 Williams, 2006: 224. 240 The Enron scandal refers to the interconnected financial fraud and audit controversy that culminated in the bankruptcy of the Enron Corporation, an American energy company, and the dismantling of Arthur Anderson, one of the largest auditing and accountancy firms in the world. 241 Macey and Sale, 2003: 1177. 87 Importantly, for the purposes of this dissertation, we might expect that the risk of client capture and power struggles among different 'authorities' and clients to be significantly greater as the quality, reliability and auditability of knowledge and data on which certification decisions are based decreases. Indeed, at the level of standard implementation and verification, terrestrial and marine certifications face very different auditing challenges. While forest and agricultural auditing can be completed through 'on-the-ground' (and visual) inspections, auditing for fish resources is far more challenging due to the natural characteristics of fisheries. Fisheries certification therefore relies almost exclusively on documented assurances of fisheries management and outcomes. Moreover, there is far less scientific uncertainty in forestry regarding the size and health of resources in specific places, while it can be extremely difficult to measure the biomass of fish species and the point at which resource exploitation becomes over- exploitation, especially since the management method of Maximum Sustainable Yield continues to be the management norm in world fisheries, including in fisheries receiving MSC certification. Fisheries are also more susceptible than terrestrial resources to allocation and quota (i.e. property) controversies, which are often exacerbated by disagreements over knowledge about the health of fish populations. Due to the inherent and uniquely high degree of uncertainty associated with fisheries science, we can expect that the potential for client capture and for conflict emerging between 'stakeholders' will be significantly greater in fisheries certification than in the more easily observable and auditable areas of forestry and agriculture management. 2.4.3 Labels and Certificates as Property 88 Professional merchants and third-party certification merchants are not the only parts of the FSC and MSC that are potentially commodified components of governance. An additional set of commodified relations produced through organizations like the FSC and MSC are the product labels and certificates to which firms and other organizations obtain user rights. Lengthy assessment periods, financial costs, labor intensive certification processes, and ongoing surveillance and verification creates significant obstacles for some producers to apply for and adopt certification and labelling standards, but, as Guthman observes, 'in exchange for demonstrating that these rarefied standards are met, certifying bodies confer a property right to the use of that label.'242 Product labels are not just tools for informing buyers but are forms of intellectual property. Labels in fact create property rights where they did not previously exist, constituting a form of enclosure that produces scarcity.243 Labelling therefore resembles commodification, a commodification of knowledge and information claims.244 As intellectual property, labelling is a means for commercial groups with rights to them to protect and distinguish products. As Guthman observes, not only do 'labels concede that the market is the locus of regulation, in keeping with neoliberalism's fetish of market mechanisms, they employ tools designed to create markets.'245 Labels reproduce the conditions for the things they are often supposed to resist, property rights that allow 242 Guthman 2007,461. 243 Guthman, 2007: 457. 244 Guthman, 2002: 302. 245 Guthman, 2007: 457. 89 commodities to be traded in global markets. Labels are defined by rules of exclusivity and commodify social and environmental values within the context of already existing commodity relations, which are in turn defined by imbalances of power, resources and capabilities.246 Like other commodities, labels are governed by global rule regimes like the new constitutionalism. The use of geographical indicators on products, for example, became an important part of the Uruguay round of GATT free trade agreements in the early 1990s.247 Other new property relations are created through the acquisition and use of labels and certificates. Entities that apply to certify forests (FSC) or fisheries (MSC) are defined as clients and, if they pass assessment, become 'certificate holders.' For the FSC and MSC, there are two types of certificates, though. First, as just explained, producers or other organizations who want to certify particular forests or fisheries can apply for certification. Second, businesses that wish to use the FSC or MSC eco-label on products they buy from certified forests or fisheries are required to apply for Chain of Custody certification. Only those who obtain authorization from the FSC or MSC can use trademarked eco-labels. Interested parties are required to enter into licensing agreements with host certification bodies to use trademarked labels and the absence of license agreements is considered non-conformity. Although the author is unaware of licensing fees in the case of the FSC, MSC Chain of Custody certificate holders face a licensing fee based on how much they use the MSC label on products. As explored in the next 246 Guthman, 2007: 473. 247 Moran, 1993. 90 chapter, eco-label licensing fees have become a significant source of revenue for the MSC organization in recent years. We know less about the legal status of the certificates acquired by firms and other industry organizations that successfully pass assessment against standards, but it appears that FSC and MSC certificates are also types of property. The acquisition of certificates creates new rights and responsibilities associated with certificate 'holdership,' including potential new business relations. For example, to pay for ongoing costs to maintain certification (e.g. to pay for annual audits and re-certification), organizations that acquire certification for a fishery may introduce new fees for fishers to access and pay for certification. 'Holding' certification may also affect property relations surrounding resource access, particularly for the more complicated and often 'shared' social property relations in common pool fisheries systems. Indeed, the certification literature has not theorized the nature and significance of fish as a common pool resource and the potential impacts of certification and labelling on resource access. Whereas industry agents typically apply to certify forests on lands they own or have government concession to, far more industry agents in fisheries are presented with the option of applying for certification of fish stocks that other commercial entities may also pursue and capture. What is needed therefore is research on the interactions between those who obtain certification and the particularities of fisheries systems. This dissertation shall address and shed light on the significance of such issues in chapter 5. 2.5 Conclusion 91 This chapter situated the emergence of the MSC within fundamental transformations in the global political economy and in global governance at the end of the 21st century. It first argued that historical structures of neo-liberal global governance and globalization, the new constitutionalism and disciplinary neo-liberalism of market civilization, constitute a global rule regime which facilitated the creation of voluntary, market-oriented, and privatized forms of environmental governance in the 1990s. Social and environmental certification and labelling initiatives administered by non-state institutions are one of the most often studied examples of the phenomenon referred to in political science as transnational private governance, the rapidly growing literature on which has arguably developed into a sub-field in IR studies. The more specific and interdisciplinary literature on certification and labelling programs in the global political economy has shed important light on what is at stake with such new forms of rule-making which challenge our conventional notions of authority and legitimacy, the nature and role of the state, and democracy and social justice. The dialogue and debate is defined by different social, organizational and normative emphases, and it may be more appropriate to assess these issues through posing questions such as legitimacy for whom, state intervention for whom, and democracy for whom? What has not been systematically analyzed, theorized and debated in the literature, however, is the extent to which governance through third-party certification and labelling standards not only provides the infrastructure for existing and new market structures—the usual way it is thought of in analyzes of neo-liberalism—but the institutions and processes themselves become (growing) sites of neo-liberal patterns 92 of commodification and accumulation through the use of (1) professional ('expert') labor markets, (2) third-party certification service providers, and (3) eco-labels and certificates as forms of intellectual property. Clearly, though, many other types of voluntary regulatory regimes, 'soft laws,' and 'best practice' frameworks such as codes of conduct will not entail such highly commodified relations. Therefore, we should be careful not to generalize the significance of this form of commodified governance but to make comparisons and linkages with other governance regimes. The potential for comparisons in similar systems is significant since third-party certification is often touted by governments, industry actors, and environmental groups as the most credible form of verification against social and environmental standards and is rapidly growing as an industry worldwide. More broadly, similarities and differences could be evaluated through studies in auditing and consultancy services and through studies in intellectual property rights. Such studies could broaden and deepen our understanding of material bases in the production, expansion, and re-production of governance regimes. The following chapters provide new analytical insight into undertheorized commodified components of global governance which may be compared and contrasted with other types of private and non-state governance, as well as with other third-party certification and labelling programs. Revealing the commodified aspects of global governance reminds us of the contradictory processes involved in efforts to re-embed social and ecological norms and principles in the global political economy through voluntary certification and eco-labelling programs. Such understudied dimensions of governance present us with new questions regarding legitimacy, accountability, and the 93 nature and scope of globalization and commodification. What requires examination not just the market sectors that are the object of regulation and governance but new markets of governance. CHAPTER 3: The Creation and Structure of the MSC System 3.1 Introduction This chapter analyzes the creation of the MSC, the organization of its governance structure, and the business relations surrounding its mechanisms of extension. The chapter proceeds in three core sections. The first section examines the creation of the MSC, focusing on the establishment of the Unilever-WWF partnership, the process through which the basic structure of the MSC was established, and the process through which the MSC's sustainable fishing standard was defined. This analysis reveals that the creation of the MSC was a process of international elite interaction among a relatively narrow network of organic intellectuals from civil and political society, with global consultancy firms playing a significant role in the development of the MSC in its formative phase. The second section examines the legal personality and internal administrative structure of the MSC. The most important component of the administrative structure of the MSC is its owner, the Board of Trustees, which is advised by a Technical Advisory Board, Stakeholder Council and International Secretariat. The third section examines the MSC's certification system. The MSC certification regime consists of a range of important agents and processes, including professional certification companies, fishery clients (certificate 'holders') who contract certification companies to assess 'their' fisheries, and the MSC's subsidiary trading company, which collects eco- label licensing revenues on behalf of the MSC. New business relations and accumulation 95 structures produced by and connected to the MSC demonstrate a growing commodification of some of the fisheries certification system's most important extension mechanisms. 3.2 Making the MSC 3.2.1 A 'More Suitable' Partnership The MSC was created through a historically significant partnership between a giant corporate food and personal care products distributor and the world's largest conservation organization. In 1996, Unilever was the world's largest seafood buyer, had global sales of US$900 million in fish products and supplied more than 20% of European and US frozen-fish markets.248 The collapse of the Grand Banks cod fishery off Newfoundland in the early 1990s played a key role in increasing Unilever's concern over fisheries sustainability, signalling to the company that overfishing could cut off cheap, plentiful and secure supplies of frozen seafood and therefore threaten profits and long- term financial returns to investors.249 The environmental organization WWF, which opened its first office in 1961 in Switzerland, has developed into one of the world's largest independent conservation organizations and currently has over 90 offices in 40 countries and runs more than 1300 projects in about 100 countries at any given time.250 The WWF, which helped steer the 248 Constance and Bonanno, 2000: 129. 249 Fowler and Heap, 2000: 136; Howes, 2008: 83. 250 WWF, n.d. 96 creation of the FSC forest certification organization in the early 1990s, struggled to find success in lobbying national and international fisheries bodies. In this context, the WWF's Marine Advisory Group decided to target the demand side of seafood buyers and end-consumers. WWF's Endangered Seas Campaign, which started in 1994, was created with the objective to create social and economic incentives for sustainable fisheries as a potential catalyst for government action. The fledgling Endangered Seas Campaign staff learned about the FSC informally at WWF headquarters, which had an open-plan office, and considered the model's use in fisheries. Jem Bendell, a member of the WWF's Forest team at the time, was then contracted to investigate the possible creation of a 'Marine' Stewardship Council.251 Initial dialogues between Unilever and WWF began in 1995 when Jackie McGlade, then a researcher at Warwick University, informed the two parties of their mutual interest in the global fisheries problem. To facilitate a dialogue, Unilever contracted its client Burson-Marsteller, a public relations agency and communications firm with offices in more than 80 countries. Unilever had already sought advice from Burson-Marsteller about its existing dialogue on sustainable fisheries with Greenpeace Germany. However, Burson-Marsteller's Simon Bryceson 'advised Unilever that WWF was a more suitable partner than Greenpeace on the grounds that WWF is a more 251 Fowler and Heap, 2000: 137. 97 "conservative" NGO with previous experience working with business through the FSC.'252 The initial dialogue between Unilever and WWF was characterized by significant caution, resistance and tension.253 Staff in both organizations referred to it as 'getting in bed with the enemy.' Within Unilever, there was considerable resistance among operational employees with more short-term, profit-driven perspectives.254 Initial tensions were overcome, however, with the help of key players from WWF and Unilever.255 In February 1996, the WWF and Unilever announced that they signed a joint statement to establish the MSC. They contributed more than US$1 million in start-up funds for the MSC, split evenly between the two partners.256 As part of the announcement, Unilever publically committed to source all fish from sustainable sources by 2005.257 An Interim Board was subsequently created with Roger Cooke, Senior Partner at the accounting and consulting firm Coopers & Lybrand (now PricewaterhouseCoopers), as its chair, and comprised of employees from WWF and 252 Fowler and Heap, 2000: 138. 253 Fowler and Heap, 2000. 254 Sutton and Wimpee, 2008: 407. 255 Fowler and Heap, 2000: 138-139. 256 May et al„ 2003. 257 MacMullen, 1998: 27. 98 Unilever. This Interim Board oversaw the MSC until February 1998 when the organization moved towards formal independence as a legal entity. In 1996, the WWF and Unilever also contracted an executive recruiting firm to conduct a worldwide search for their first senior Project Manager to lead the development of the MSC, for which it received 400 applications from fisheries professionals around the world.259 In January 1997, Carl-Christian Schmidt was introduced as the MSC's first Project Manager after getting two years leave from serving as the OECD's principal administrator for global fisheries issues. Prior to that post, Schmidt served as an administrator with the Royal Danish Ministry of Fisheries where he was responsible for commercial aspects of Europe's common fisheries policy and bilateral relations for Danish fish exports.260 In February 1997, a month after Schmidt was brought on board to develop the MSC program and a year after the WWF and Unilever first announced their plan to create the MSC, the MSC was formally established in London, England, as an independent, not-for-profit charity. In March 1998, the Interim Board of the MSC further integrated corporate friendly elements of political society into the new organization with the appointment of The Right Honourable John Gummer—a Conservative Member of Parliament in the UK who had previously served as the Minister of Agriculture, Fisheries and Food under 258 Fowler and Heap, 2000: 140. 259 Sutton and Whitfield, 1998. 260 Bonanno and Constance, 2008: 195. 99 Margaret Thatcher and as Secretary of State for the Environment under John Major—as the Chair of the Board for the MSC. According to WWF's Sutton and Wimpee, Gummer built a board of like-minded people, including seafood industry executives and former government ministers from Brazil, the US and other countries. The board then set about putting the MSC on the map, politically. They recognized that while the MSC had to remain independent of any particular political agenda, its purpose was nonetheless ultimately to affect the politics of fishing.261 3.2.2 Designing a New Institution After initiating their partnership, the WWF and Unilever commissioned the accounting and consultancy firm Coopers & Lybrand to assemble a team of experts to develop an organizational blueprint and implementation plan for the MSC. To learn about how to design the MSC, Coopers & Lybrand consultants interviewed different stakeholders and conducted comparative studies of other certification organizations, focusing particularly on the FSC.262 As part of this study, they attended the first General Assembly of the newly established FSC, which was designed as an open-membership organization. The design team was 'pretty horrified,' according to informants interviewed by Hallstrom and Bostrom: And they said essentially, as I understood it: 'whatever you do when you set up the MSC, don't make it democratic, like the FSC.' So the MSC was set up with much more hand picking of the board.. .and that the approach to standard development would be more scientific and technical rather than consultative... You wouldn't have a hundred random members, members of the 251 Sutton and Wimpee, 2008: 408. 262 Sutton and Whitfield, 1998. 100 FSC, debating and drafting standards and then voting on them. So the FSC was much more democratic in its structure than the MSC was. And intentionally so.263 Coopers & Lybrand subsequently advised the WWF and Unilever to adopt a basic structure consisting of: (1) a small office of around 20 people run by a Director who would report to a Board of Directors of 12-15 members from various environmental and fishing interests which in turn would be supported by various subcommittees; (2) a consultative forum of 25-30 people to provide wider representation which would challenge and advise the Board but not be formally accountable to it; and (3) set up the MSC as a foundation rather than a membership-based structure in order to avoid risks regarding what they considered burdensome and time-consuming administrative and decision-making procedures observed in the FSC's open membership structure. The MSC's Interim Board chair at the time, Roger Cooke of Coopers & Lybrand's, recalled that the firm advised '"Don't, from day one, adopt all of the paraphernalia of being a membership organization." Once the organization is running it could always be converted to membership, if that was wanted, whereas if it started out as a membership organization and proved to be a mistake, it's a hell of a lot more difficult to reverse that.'264 From the very beginning, then, the MSC effectively locked-out diverse interests to influence the formation of MSC certification. In the meantime, WWF and Unilever ramped up efforts to mobilize support for the MSC concept in political and civil society. As they worked through the design issues, 263 Quoted in Hallstrom and Bostrom, 2010: 64. 264 McHale, 1998. 101 the WWF and Unilever co-sponsored eight workshops in eight countries to promote the concept of the MSC.265 WWF employees also attended seafood shows and expos worldwide, and pitched the MSC idea at international conferences such as the Second World Fisheries Congress, annual meetings of the National Fisheries Institute (the largest seafood processors association in North America) in Seattle, the International Coalition of Fisheries Associations (an organization representing fishing industry associations from 12 countries) in Seoul, the Groundfish Forum (the major groundfish quota holders) in London, and the International Union for Conservation of Nature (IUCN) World Conservation Congress in Montreal. Staff briefed the SeaFish Industry Authority in the UK, the US Marine Fisheries Advisory Committee in Honolulu, and the Pacific Economic Cooperation Council's Symposium on International Trade and Fisheries in New Zealand. WWF and Unilever staff also pitched the MSC idea to the World Bank's Environment Division in Washington, DC, which considered creating a Market Transformation initiative based on the MSC initiative, to institutions such as the British Jfift House of Lords, and to international organizations like the FAO. 3.2.3 Defining Principles and Criteria for Sustainable Fishing The MSC Interim Board initiated a process to define the MSC's environmental standard for sustainable fishing in late 1996. To manage the process of defining principles and criteria for its standard, WWF and Unilever hired RESOLVE, a 265 Sutton and Wimpee, 2008. 266 Constance and Bonnano, 2000: 130; Hemes and Mikalsen, 2002: 22. 102 Washington, DC-based dispute resolution organization to lead a consensus-building process that would produce a standard for assessing applicant fisheries. RESOLVE facilitated and managed a three stage process consisting of a small group of fisheries experts developing a preliminary draft standard; eight two-day workshops around the world where the draft standard was presented to stakeholders; and a final meeting of the original experts and other stakeholders to refine a final draft standard. In addition to project leader Lee Langstaff from RESOLVE and WWF and Unilever sponsors, participants included individual fishers, commercial fishing industries, seafood buyers, processors and retailers, government authorities, government and academic scientists, economists, independent certifiers, conservation groups, and indigenous peoples.267 As such, the MSC's environmental standard for defining sustainable fishing was developed over 18 months through two key drafting sessions and a series of intermediate workshops around the world. The first key drafting session was convened in a three-day meeting in Bagshot, UK in September 1996. More than 20 individuals were invited for three days to draft a set of guidelines or 'Principles and Criteria' for defining sustainable fisheries.268 The initial draft drew on a broad range of existing international standards and documents, including the recently created UN FAO Code of Conduct for Responsible Fisheries, a voluntary, non-binding document, the UN Agreement on Highly Migratory Species and Straddling Stocks, and the Principles for the Conservation of 267 RESOLVE, 2003; Williams, 2004: 82. 268 OECD, 2005. 103 Wild Living Resources.269 Unlike the FSC, which was created largely in response to a lack of a global framework for regulating forestry, the MSC emerged in a context of, and was explicitly harmonized with, a dense network of existing frameworks in international political society.270 Following the creation of the Draft Principles and Criteria for Sustainable Fishing, the WWF, Unilever and RESOLVE organized eight regional consultative workshops where the draft principles and criteria were presented and debated. Workshops were held in Australia, New Zealand, Germany, the US, Canada, Scandinavia and South Africa.271 Input from invited stakeholders and observers resulted in a redrafting of the 'Principles and Criteria.'272 Consultations were more limited in developing countries and, as a result, another consulting team was subsequently hired to oversee consultations in developing countries.273 On 8 May 1997, for example, MSC Project Manager Carl-Christian Schmidt, several key people from WWF and Unilever, and Julia Novy, a consultant hired to help the MSC devise its strategy for developing countries, hosted a 'Less Developed Countries Workshop' in London. Of the 12 participants who attended the workshop, six were WWF, Unilever, and MSC staffers, 269 May et al., 2003: 18; Cummins, 2004: 87; OECD, 2005: 255. 270 Gulbrandsen, 2005: 13. 271 Fowler and Heap, 2000; Constance and Bonnano, 2000: 130. 272 McHale, 1998:21. 273 Fowler and Heap, 2000: 140. 104 five were from UK NGOs and consultancy firms with interest in the developing countries, while one participant was from Papua New Guinea.274 The second and final key drafting session was convened in December 1997 just outside Washington D.C. in Airlie, Virginia, where participants codified the first public draft of the Principles and Criteria for Sustainable Fishing?15 This workshop again gathered together various international experts and some of the world's leading fisheries scientists such as Dr. Sidney Holt and Dr. Daniel Pauly, both of whom would become outspoken critics of the MSC in the late 2000s. At the second drafting workshop, a final draft of the Principles and Criteria for Sustainable Fishing was presented to the MSC Board of Directors.276 After the final draft of the MSC's environmental standard was already presented to the MSC Board, MSC representatives carried out a number of workshops in Ecuador, Chile, Argentina, and Peru in part as a response to ongoing criticisms that the MSC had a limited recognition of developing country fisheries.277 The MSC's fisheries standard was constructed around three categories which focused on assessing the health of fish stocks, the impacts on marine environments, and the efficacy of existing fisheries management system: Healthy Target Stock: 'A fishery must be conducted in a manner that does not lead to over-fishing or depletion of the exploited populations and, for those populations 274 O'Riordan, 1998. 275 OECD, 2005: 255. 276 May etal., 2003: 18. 277 Auld, 2007. 105 that are depleted, the fishery must be conducted in a manner that demonstrably leads to their recovery.'278 Healthy Eco-systems: 'Fishing operations should allow for the maintenance of the structure, productivity, function and diversity of the ecosystem (including habitat and associated dependent and ecologically related species) on which the fishery depends.'279 Effective Management Regime: The fishery is subject to an effective management system that respects local, national and international laws and standards and incorporates institutional and operational frameworks that require use of the resource to be responsible and sustainable. The third principle is arguably the most important since it is intended 'to ensure that there is an institutional and operational framework for implementing Principles 1 and 2, appropriate to the size and scale of the fishery.'281 Although rarely emphasized in the literature on the MSC, the third set of criteria focuses on the often 'public' management frameworks of fisheries, including policy and legal frameworks and a wide array of procedural and substantive issues. Since governments have significant legal responsibility over controlling access to coastal fisheries around the world, governments 278 MSC, 2010b. 279 MSC, 2010b. 280 MSC, 2010b. 281 MSC, 2010b. 106 are effectively among the main actors being certified. As Hemes and Mikalsen observe, assessments are not just a matter of evaluating the behavior of private producers, but as much about passing judgment on government policies and management institutions...The truth is that in order to achieve its ultimate aim of sustainable fisheries, the MSC may indeed have to play politics. Fisheries are usually managed by governments; governments need to be persuaded that MSC certification is the way to achieve sustainability; and they must be willing (and able) to adjust management practices and institutions accordingly.283 The third set of criteria therefore establishes a concrete relation with international and national political society. As we shall see below, this provides professional certification firms and fishery clients important access to and influence over policy-making processes since certification is not simply a one-off evaluation but in virtually every case involves 'Conditions of Certification' which stipulate changes required to maintain certification; such conditions are then evaluated by certification bodies in annual surveillance audits. Moreover, although MSC principles and criteria are 'soft law,' they can over time acquire the status of governmental 'hard law' through formal and informal institutionalization. Unlike the FSC, which has a social category addressing the rights of indigenous peoples, the long-term socioeconomic wellbeing of workers and local communities, and equitable sharing of benefits as one of its three core principles and criteria, the MSC explicitly excluded such issues as a separate category. The resulting principles and 282 Meidinger, 2008b: 273. 283 Hemes and Mikalsen, 2002: 21-23. 107 criteria subsumes references to social issues under category 3, which requires that a 'fishery is subject to an effective management system that respects local, national and international laws and standards.' Management System sub-criteria requires that a fishery 'observe the legal and customary rights and long term interests of people dependent on fishing for food and livelihood, in a manner consistent with ecological sustainability.'284 Notably, the MSC's environmental standard also does not explicitly address the all-important question of allocation, quota distribution, and property rights in its principles and criteria, though there is an important reference that requires fisheries to 'provide economic and social incentives that contribute to sustainable fishing.'285 This assertion is often interpreted in the policy making circles to mean having individual transferable property rights as the basis for management and quota allocation. Indeed, there is evidence that early leaders viewed the MSC as a way of facilitating the allocation of property rights because it was seen as promoting the most economically efficient way to manage fisheries. In 1998, for example, the out-going Project Manager, Carl-Christian Schmidt, considered fishermen's resentment of the MSC as based on the assumption that they had a right to resources and questioned whether the existing fleet had an automatic right to security. Schmidt asserted that getting fish from the ocean to 284 MSC, 2010b. 285 MSC, 2010b. 108 the table had to be as economically efficient as possible and that the MSC provided a catalyst for conceptual change in what fishing is for.286 3.3 Governing the Marine Stewardship Council The MSC was formally created in the UK as a legal entity through a Memorandum and Articles of Association on 17 February 1997. The MSC was constituted as a company limited by guarantee, legally owned by a Board of Trustees, and registered as charity with the UK's Charity Commission.287 The Memorandum set out the MSC's overall purpose 'to conserve the marine and freshwater environments for the benefit of the public and to advance public education in the principles and practices of conservation...' 288 The MSC is therefore a national entity operating internationally. Initially, the MSC Board established an approvals committee, an informal Senior Advisors' Board, a Standards Council to manage the MSC's standards, and an Advisory Board consisting of stakeholders, who were to meet every two years but communicate more frequently on the internet.289 The MSC also initially established 'free-standing' national Working Groups in the UK, Germany, and the Netherlands to provide guidance on the MSC's activities and to provide a forum of interaction between industry 286 McHale, 1998: 28. 287 MSC, 2010g. 288 MSC, 2010g: 2. 289 Fowler and Heap, 2000: 141; Hallstrom and Bostrom, 2010: 67. 109 stakeholders in particular countries and the officers and Executive of the MSC.290 This governance model, however, received significant criticism for providing little opportunity for stakeholder involvement, for inefficiencies, and for high costs. In response, in 2000 the MSC commissioned what it called an independent panel to review the governance of the MSC, though the panel included eight people already embedded in the MSC network. A 10 month review and consultations process resulted in a slightly revamped governance structure of the MSC consisting of three main bodies shown in the figure below—a Board of Trustees, a Technical Advisory Board, and a Stakeholder Council.291 The range of interests represented in the MSC governance apparatuses tend to replicate the organizational interests of the founders: individuals from large-scale commercial organizations and large conservation organizations make up the majority of MSC 'governors.' 290 McHale, 1998: 19; Fowler and Heap, 2000: 140. 291 Hallstrom and Bostrom, 2010: 67. 110 Figure 3.1 MSC administrative structure MSC Governance Structure K,j .•! . • a-i TAR, Source: MSC, 201 la 3.3.1 Board of Trustees Legal ownership of the MSC resides with the Board of Trustees, which decides policy and is responsible for activities and liabilities.292 The Board of Trustees is required to consist of between 10 and 15 members who are expected to be balanced with representatives from different sectors and geographical regions.293 In November 1998, the Board consisted of a former EU Commissioner for the Environment and Fisheries, a former Brazilian Environment Minister and later Chair of the UN Commission on 292 MacMullen, 1998. 293 Hallstrom and Bostrom, 2010: 68. Ill Sustainable Development, and the chairman of John Laing pic, a UK firm specializing in public-private partnerships.294 In August 2011, the Board consisted of 13 individuals. The Chair was an American lawyer and businessman, a Senior Fellow for WWF-US, and former head of international policy for the US National Oceanic and Atmospheric Administration in the Clinton Administration. The Vice Chair was a Professor of Marine System Science at the University of Tasmania and a Commissioner for the Australian Fishery Management Authority. The rest of the Board of Trustees at this time can be divided into two groups, representatives of (mainly large) commercial companies and scientists with experience in political and civil society: -Director ofAmerican Seafoods, one of America's largest vertically integrated seafood companies. -President of the National Fisheries Institute, which represents the American fish and seafood industry. - Director of Corporate Affairs for Clearwater Seafoods Limited Partnership, North America's largest shellfish company and Canada's largest fishing company. -An executive quality specialist for Carrefour, one of the world's largest retailers. - A scientist with background in fish stock assessments, marine data and management systems who serves as Deputy Director of the Thiinen-Institute of Baltic Sea 294 MacMullen, 1998: 19. 112 Fisheries and who serves as the German member of the International Council for the Exploration of the Sea. -Director of WWF-Germany's Marine Programme. -Head of Marine Policy at the UK wildlife charity Royal Society for the Protection of Birds. - A scientist andfounder of Scomber consultancy with experience advising the Dutch national delegation to the International Whaling Commission and international Policy Officer at the Netherlands Society for Nature and Environment. - Former Assistant Director-General and head of the Fisheries and Aquaculture Department of the UN Food and Agriculture Organization. - Senior Vice President and Chief Scientist for Oceans with Conservation International. -Former Undersecretary of State in the Ministry of Fisheries and Director of Fisheries in Norway, and Chair of the Board of Directors of Vartdal Seafood AS, the marketing company for a major Norwegian factory trawler operation.295 The Board of Trustees is a self-recruiting group and its members are nominated and appointed for three-year terms.296 Trustees engage in risk management, focusing on 295 MSC, 201 Id. 296 Gulbrandsen, 2010: 121. 113 issues such as 'damage to reputation, certifier performance, client and stakeholder concerns, political issues, and financial risks, including maintaining necessary funding levels.'297 The Board also has a role in funding decisions and in appointing new members of the Board of Trustees, Technical Advisory Board, committees, and the secretariat. The Board of Trustees is therefore arguably the most important component of the MSC's internal governance structure. Gale and Haward suggest, moreover, that the MSC's 'managerial structure is designed to insulate the Board of Trustees from the political influence of civil society actors.'298 Two bodies that advise the MSC Board of Trustees consist of the Technical Advisory Board and the Stakeholder Council, both of which tend to be occupied by individuals who have similar backgrounds as individuals on the Board of Trustees. 3.3.2. Technical Advisory Board The Technical Advisory Board was established early in the history of the MSC (originally called the Standards Council) and is therefore one of its most institutionalized units. It consists mainly of individuals with scientific and standard-setting backgrounds, meets two or three times a year, is responsible for advising the Board of Trustees and Stakeholder Council on matters relating to MSC standards, and can make decisions on matters delegated by the Board of Trustees.299 Members are appointed by the Board of 297 MSC, 2010g: 2. 298 Quoted in Ponte, 2008: 163. 299 Hallstrom and Bostrom, 2010: 68. 114 Trustees based on their personal expertise in matters relating to the Principles and Criteria for Sustainable Fishing and the profile of the members of this technical unit is very similar to the profiles of the members of the Board of Trustees. At least half of the 16 experts listed on the MSC website in August 2008, for example, were marine scientists or marine researchers from natural science backgrounds, most others had fisheries management or seafood industry backgrounds, while a few had standard-setting expertise.300 The Technical Advisory Board has a significant role in defining policies and guidelines for Fishery Certification Methodology and Fishery Assessment Methodology. It is also responsible for producing new documents and guidelines in response to unforeseen problems and ongoing reforms through Technical Advisory Board Directives. The Technical Advisory Board also interacts more closely with the inner circle that is partly concentrated in the international secretariat based in London.301 For these reasons, the Technical Advisory Board has acquired a special status within the MSC machinery. 3.3.3 Stakeholder Council The Stakeholder Council consists of between 30 to 50 members. It has relatively little formal power but is mandated to send recommendations and opinions to the Board of Trustees and the Technical Advisory Board, which are, in turn, mandated to consider such views. The Stakeholder Council appoints half its own members and the other half 300 Hallstrom and Bostrom, 2010: 69. 301 Hallstrom and Bostrom, 2010. 115 of its members are appointed by the MSC Board of Trustees after consultation with the Secretariat.302 The Stakeholder Council, which meets once a year, was initially divided into eight categories, organized into two broad groups. Four categories were included in 'the public interest category,' composed of members of (1) scientific, academic, resource management interests, (2) general conservation NGOs and interests, (3) marine conservation NGOs and specialist interests, and (4) general interests and organizations. The second group consisted of 'the commercial and socioeconomic category,' consisting of (5) catch sector interests, (6) supply chain and processing interests, (7) retail, catering and distribution interests, and (8) developing country and fishing community interests. A third, separate 'developing country' category was added to this group as well. In practice, however, the two-chamber structure, that is a public interest group and commercial-socioeconomic group, appears to be the norm.303 The two chamber form is reinforced since the two co-chairs of the eight member Stakeholder Council Steering Group are drawn from each of the public interest and commercial categories and both co- chairs have a position on the Board of Trustees.304 Notably, the Stakeholder Council has found it difficult to recruit members to represent its public interest category, particularly 302 Hallstrom and Bostrom, 2010: 70. 303 Hallstrom and Bostrom, 2010: 69. 304 Hallstrom and Bostrom, 2010: 70. 116 •JAt small-scale fisheries, developing countries, and consumer associations. The Stakeholder Council is considered less influential than the Technical Advisory Board.306 The composition of the Stakeholder Council is similar to that of the Board of Trustees, with most individuals coming from developed countries and representing large- scale commercial interests or large conservation organizations. In August 2011, for example, the public interest category consisted of 16 individuals from generally large, well-organized conservation organizations or universities; and the commercial and socio economic category was made up of 18 individuals, almost all of whom represented large corporations or seafood industry associations from developed countries (see table below). 305 Hallstrom and Bostrom, 2010: 70 and 131. 306 Hallstrom and Bostr6m, 2010: 132. 117 Table 3.1 Stakeholder Council members, August 2011 Public interest category Commercial and socio-economic category Alfred Schumm, Co-Chair - WWF Germany Christine Penney, Co-Chair - Clearwater (October 2005) Seafoods, Canada (June 2007) Dr Luis Bourilldn - Community and Charles Alan Roy Bross - South African Deep- Biodiversity, Mexico Sea Trawling Industry Association (SADSTIA), Prof. Eyiwunmi Falaye - University of South Africa (December 2009) Ibadan, Nigeria Christina Burridge - BC Seafood Alliance, Nancy Gitonga - FishAfrica, Kenya Canada (December 2009) (December 2007) Peter Dill - Deutschesee, Germany (March Tom Grasso- Environmental Defense Fund 2008) (August 2010) Jim Gilmore - At-sea Processors Association, Kevin Hackwell - Forest and Bird, New US Zealand (August 2010) John Goodlad - Shetland Catch (August 2010) Dr. Martin Hall - Inter-American Tropical David Graham - Unilever (March 2008) Tuna Commission (August, 2010) Aldin Hilbrands- Ahold (August 2010) Gerry Leape - Pew Environment Group, US Annie Jarrett - Pro-Fish Pty Ltd, Australia and Dr Esther Luiten - North Sea Foundation, Australian fishing industry representative The Netherlands (October 2005) Morten Jensen - Aker Seafoods, Norway Eddie Hegerl - Marine Ecosystem Policy (March 2008) Advisors P/L, Australia (April 2006) Jens Peter Klausen - J.P. Klausen & Co. A/S, Dr. Patricia Majluf- Cayetano Heredia Denmark (January 2006) University, Peru (August, 2010) Guy Leyland - Western Australia Fishing Dr. Sian Morgan - Fishwise (August, 2010) Industry Council Inc (October 2005) Marc Nolting - Deutsche Gesellschaft fur Hans Jiirgen Matern - METRO GROUP Technische Zusammenarbeit (GTZ), International, Germany (April 2006) Philippines (April 2008) Mike Mitchell - Youngs Bluecrest, UK (March Dr Dierk Peters - WWF / Unilever 2008) Dr. Yorgos Stratoudakis - IPIMAR, Portugal Simon Rilatt - Trident (April 2009) (August 2010) Niels Wichmann - Danish Fishermen's Bill Wareham-David Suzuki Foundation Association (August, 2010) (August 2010) Margaret Wittenberg - Whole Foods Market, US Libby Woodhatch - Seafood Scotland, UK (May 2008) Source: www.msc.org 3.3.4 The International Secretariat and Chief Executive The Board of Trustees also has the authority to select a Chief Executive of the Secretariat. The MSC's Executive or International Secretariat carries out day-to-day 118 activities such as fundraising, accreditation, education, outreach and promotional activities, developing and licensing the MSC eco-label, and contributing to the interpretation and development of MSC standards and policies.307 The secretariat is accountable to the Board of Trustees and other MSC governing bodies and has gained 1AO increased policy-making influence as the MSC bureaucracy has grown. The main office was established in London, and regional offices were subsequently created in Seattle, Sydney, and local offices were created in Edinburgh, Berlin, The Hague, Cape Town and Tokyo. Regional offices were modeled on the main secretariat office in London, which has a policy department, a commercial outreach team, a fishery outreach team, a fundraising team, a communication function, and administrative staff.309 Staff engage heavily with fisheries, retailers, certification bodies/companies, and customers; the commercial and fisheries outreach teams are instructed to work aggressively to increase both supply of and demand for MSC certification.310 The MSC has had two Chief Executives thus far. Brendon May was the Chief Executive of the MSC from 1999-2004. After stepping down from the MSC in 2004, May worked as the managing director of Weber Shandwick's Planet 2050, the sustainability branch of the global public relations agency. May's successor, Rupert Howes, is often credited with reinvigorating the MSC program from the mid-2000s 307 Gulbrandsen, 2010: 122; Hallstrom and Bostrom, 2010: 71. 308 Gulbrandsen, 2010: 122; Hallstrom and Bostrom, 2010: 71. 309 Hallstrom and Bostrom, 2010: 71. 310 Hallstrom and Bostrom, 2010: 71. 119 onwards and paving the way for the significant growth experienced in the late 2000s. Howes joined the MSC in 2004 after serving as the Director of the Sustainable Economy Programme of the UK organization Forum for the Future. Prior to that, Howes was a senior research fellow at the Science Policy Research Unit, Sussex University, served as a research officer at the International Institute for Environment and Development, and spent 6 years with KPMG, one of the Big Four global auditing firms, where he qualified as a Chartered Account.311 3.4 The MSC Certification System The MSC bureaucracy, particularly the Technical Advisory Board, administers two certification standards—the MSC Environmental Standard for Sustainable Fishing, and the MSC Chain of Custody Standard for Seafood Traceability. The first standard refers to the Principles and Criteria for Sustainable Fishing and its three overarching assessment categories of (1) the health of fish stocks (2), the impacts on marine environments, and (3) the efficacy of the existing fisheries management system. The chain of custody standard involves an audit of products from certified fisheries from the point of landing to sale to verify products sold with the MSC eco-label are really from certified fisheries. The MSC does not carry out certifications, however. Instead, assessments are conducted by accredited third-party entities. 3.4.1 Professional Certification Companies 311 Global Philanthropy Forum, n.d. 120 The MSC is considered a third-party certification program not simply because it is formally independent of governments and the fishing industry, but because assessments against its environmental standards are carried out by accredited certification companies that are independent from the MSC. The MSC launched its Fisheries Certifiers Accreditation Scheme in 1998; the accreditation of independent certifiers thus initially fell under the direct authority of the MSC, and provided a source of financial income to the MSC.312 In the face of growing criticism of a conflict of interest, and following the publication of UN FAO Guidelines for the Ecolabelling of Fish and Fishery Products from Marine Capture Fisheries in 2005—which recommend separated standard-setting and accreditation functions as best practice for public and private systems—the MSC discontinued its accreditation activities. It subsequently outsourced accreditation functions to Accreditation Services International, a limited liability company registered under German law and owned by the FSC. Accredited certification organizations/companies are 'responsible for all the activities of the assessment team it contracts to conduct each fishery assessment against the MSC standard. This includes all aspects of the assessment process, including client and stakeholder interactions, report preparation and review, and reporting to the MSC.'314 The assessment team typically consists of several employees of the certification company and three independent experts (i.e. not employees of the 312 Fowler and Heap, 2000: 140. 313 ASI, n.d. 3,4 MSC Executive, 2005b. 121 certification organization) contracted for their expertise on the particular fishery vis-a-vis the MSC's three main principles of assessment. Although the assessment team can solicit information, it is not responsible for data gathering, which is instead the responsibility of the fishery client and stakeholders,315 which means the client has a considerable degree of influence over the information used in assessments. As Table 3.2 illustrates, as of April 2011, more than half of certified fisheries have been assessed by Moody Marine Ltd.. Moody Marine Ltd. is a subsidiary of Moody International, 'a worldwide technical services organisation dedicated to reducing clients' risks by providing technical inspection services, technical staffing services, consulting and training, and management system certification.016 The majority of UK fisheries have contracted Moody Marine Ltd. for commercial reasons. 315 MSC Executive, 2005b. 316 Moody International, n.d. 3,7 Potts etal., 2011:58. 122 Table 3.2 Accredited certifiers and number of fisheries certifications Number of Certification Company Fisheries Company Headquarters Certifications Moody Marine Ltd. UK 47 Food Certification International (FCI) Scotland 11 MR AG Americas USA 1 Det Norske Veritas Norway 11 MacAllister Elliott and Partners UK 4 Bureau Veritas Certification France 1 Scientific Certification Systems (SCS) USA 10 Organizacion Internacional Agropecuaria (OLA) Argentina 1 Global Trust Certifications Ltd. Ireland 2 TAVEL Certification Inc.318 Canada 1 89 (Total) Source: Compiled by author with data available at www.msc.org, April 2011 The small number of certification companies and their concentration in Northern Europe and North America presents an ongoing issue for the MSC. The first chain of custody certifier based in Asia did not emerge until September 2010, when a subsidiary of Tokyo's Amita Holdings, Amita Institute for Sustainable Economics Co., earned accreditation.319 Notably, all the companies accredited to assess fisheries are also accredited to carry out Chain of Custody certification for businesses who wish to sell products from certified fisheries with the MSC eco-label. As of August 2011,13 additional organizations were accredited to only certify businesses that meet the MSC Chain of Custody standard for seafood traceability. Fishers have also complained about a 318 Moody Marine Ltd. acquired Canadian firm TAVEL Certification Inc. in early 2010. 3,9 IntraFish, 2010e. 123 lack of choice regarding certification companies and a lack of competition between certification companies. 3.4.2 The Business Relations of Certification Businesses or organizations interested in fisheries assessment are encouraged by the MSC to seek cost quotes from more than one certification company before signing a contract. The MSC requires some specific provisions to be addressed in the contract, such as rights and responsibilities and a timeframe, but other content is confidential between the certification company and the client. For example, confidential Pre- assessment, public Full Assessment, and post-certification annual auditing work might be outlined in a single contract. Although certification companies are required to follow elaborate MSC guidelines, there is a recognition in MSC guidelines of the potential for conflicts of interest to shape certification processes: Like most other contracts with service providers, you and your certifier may agree to link payments to demonstrated performance through completed project steps. Similarly, your contract should outline any obligations you have to enable the certifier to complete the assessment project. Even though the certifier is providing you with a service, it is an independent body contracted to assess your fishery against the MSC environmental standard for sustainable fishing. The role of the certifier is not to serve your interests in seeing a fishery certified, but to provide an independent, objective, scientifically verifiable assessment. You should manage your interaction actively as a business relationship.320 Fisheries certification can be understood as a seven stage process which requires establishing new business relations between fishery clients and certification companies. The first three stages are generally confidential interactions between the fishery client 320 MSC, 2009b. 124 and a certification company, while another four stages are formal, 'public' processes. The first three stages consist of: (1) an initial discussion between the fishery client and certification company about the certification process and the certifiability of the fishery; (2) a confidential Pre-assessment, which is an initial analysis to determine the likelihood of the client passing a more detailed assessment and involves identifying areas of improvement and assisting the certifying body in planning; and (3) a review of the Pre- assessment report by the certification company and client. If the client and certification company representatives find that the report is favourable and the client decides to proceed to formal assessment against the MSC fisheries standard, four stages potentially follow: (4) the client contracts the certification company, which then nominates and contracts a team of external experts, to start the public Full Assessment involving gathering comprehensive data and stakeholder consultation beyond the client. The Full Assessment generally takes a year or more to complete. Costs vary significantly depending on the fishery but tend to be in the range of US$50, 000 - $250, 000; (5) client review, peer review, and (opportunity for) public review of the assessment report; (6) a 321 After a contract is signed between a fishery client and a certification company, the certification company starts the formal assessment processes following MSC guidelines, including notifying stakeholders, nominating and selecting an Assessment Team, drafting Performance Indicators and Guideposts, conducting stakeholder meetings, a scoring meeting, and preparing a Draft Report based on a review of the scoring and evidence. The certification company and its expert team interprets the MSC standard in the context of the fishery under assessment by creating a series of indicators (sub-criteria) and thresholds (scoring guideposts). Usually several months later, the Draft Report, including comments and criticisms raised by peer reviewers, is put on the MSC website and subjected to a 30 day period of comment. Subsequently, the certification company reviews the report of the assessment team, the reports of the Peer Review panel and all stakeholder comments and makes a Certification Determination. 125 certification decision which, if successful,322 awards the client an MSC certificate. If successful, (7) annual surveillance audits are carried out by the certification company to assess performance of the fishery in relation to any Conditions of Certification and to monitor ongoing compliance against the MSC fisheries standard. Certifications are valid for 5 years and a complete reassessment is required thereafter if the client wishes to retain certification. Only businesses certified to meet the MSC Chain of Custody standard are permitted to attach the MSC's trademarked eco-label to products. Businesses that use the MSC logo on seafood products are therefore required to enter into two distinct business relations with certification companies and the MSC. First, buyers are required to contract an accredited certification company to perform an assessment against the MSC's Chain of Custody standard. If successful, businesses receive a certificate with a unique code that must be displayed on consumer-ready products, which can be held for 3 years before reassessment. Second, businesses that use the MSC eco-label on packaging, menus or marketing documents must get permission and an eco-label license from a subsidiary company that the MSC owns and pay an annual fee or royalty or both to this company. In recent years, the generation of funds through eco-label usage has increased 322 The MSC also introduced an objections process in 2006. Objections, which are subject to the MSC's Objection Procedure and cost up to £ 5000, require the MSC to bring in an Independent Adjudicator, generally a lawyer paid by the MSC, to assess the merits of the objection. The first successful objection occurred 2011. Notably, the objections period of 21 days occurs after a Certification Determination and stakeholders have the opportunity to object to the merit of certification if the objecting party has previously provided input to the assessment team or to the procedures of certification if the objecting party has been prevented from earlier participation in the assessment process. 323 MacMullen, 1998: 23. 126 significantly, giving the MSC, as we shall see further below, the capacity to transform into a more self-sustaining economic entity. 3.4.3 Fisheries Clients, Certificate Holders MSC statistics reported that by March 2011, 104 fisheries were certified to the MSC, an additional 145 were under assessment, while another 40 to 50 were estimated to be engaged in confidential Pre-assessments with certification companies.324 These statistics, often reproduced in academic and media publications, are somewhat misleading, however. They actually refer to the number of'clients' certified, not necessarily distinct 'fisheries' because a number of different clients may pursue the same fish stocks. Client formation constitutes another crucial set of business relations produced through MSC certification, which in turn effectively create new organizational interests and power potentials. The MSC does not specify who may or may not be a client, aside from being an individual, organization or group of organizations that applies for a fishery to be assessed. The MSC only requires that 'the client must be a legally constituted body able to enter into binding contracts.'325 Entities that have acted as client or co-client have included producer organizations, fishers associations, co-operatives, fish processors' associations, exporters associations, private companies, non-governmental organizations, and governments. Over 60% of the client groups are producer organizations representing 324 MSC, 2011a. 325 MSC Executive, 2005b. 127 more than one private enterprise or private companies.326 In many of the early cases, MSC applications were organized by one individual who represented a number of organizational interests.327 The table below shows how many actors, but firms in particular, are involved in MSC certification as clients; thus we need to look closely at the social and economic relations underlying certification processes. Table 3.3 MSC fishery clients and fisheries CLIENT • «« -T- :: if." >- • f : "• .i'r; -. .. ,** * f*ik: 2000 Western Rock Lobster Council* Western Australian rock lobster Alaska Department of Fish and Game (client role transferred to Alaska Fisheries Development Foundation Inc. in 2010)* Alaska Salmon Colchester Borough Council*! Thames Blackwater herring 2001 NZ Deepwater Group Ltd. (Nelson Office)* New Zealand hoki South Wales Sea Fisheries Committee (SWSFA) Burry Inlet cockles South West Handline Fishermen's Association South West handline mackerel Shieldaig Export Limited*! Loch Torridon nephrops creel 2004 Government of South Georgia and the South Sandwich Islands (GSGSSI)* South Georgia Patagonian toothfish longline Federacion Regional de Sociedades Cooperativas de la Industria Pesquera (FEDCOOP) (Baja Mexican Baja California red rock lobster California Regional Federation of the Fishing co- 326 Mathew, 2011. 327 Cummins, 2004: 90. 128 operative Societies)* South African Deep-Sea Trawling Industry Association (SADSTIA)* South Africa hake trawl 2005 At-sea Processors Association (APA)* Bering Sea and Aleutian Islands Pollock At-sea Processors Association (APA)* Gulf of Alaska pollock Hastings Fishery Management Group Hastings fleet Dover sole trammel net Hastings Fishery Management Group Hastings fleet pelagic herring and mackerel 2006 Austral Fisheries Pty Ltd.* Australia mackeral icefish Fishing Vessel Owners' Association* US North Pacific halibut Pelagic Freezer-Trawler Association North Pelagic Freezer-Trawler Association (PFA)* Sea herring Fishing Vessel Owners' Association* US North Pacific sablefish WWF Sweden Marine Programme Lake Hjalmaren pikeperch fish-trap and gillnet Glaciar Pesquera S.A. and Wanchese Argentina S.A. Patagonian scallop Bering Sea and Aleutian Islands Alaska Bering Select Seafoods Company! (Pacific) cod - freezer longline 2007 South Wales Sea Fisheries Committee (SWSFA)* Burry Inlet cockles South West Handiine Fishermens' Association* South West handiine mackerel American Albacore Fishing Association, Inc. American Albacore Fishing Association (AAFA), WWF Pacific albacore tuna - north American Albacore Fishing Association, Inc. American Albacore Fishing Association (AAFA), WWF Pacific albacore tuna - south Alaska Fisheries Development Foundation Inc. Alaska Salmon North Eastern Inshore Fisheries and North Eastern Sea Fisheries Committee Conservation Authority sea bass 129 Oregon Trawl Commission Oregon pink shrimp 2008 Astrid Fiske AB Astrid Fiske North Sea herring Southern Fisherman's Association Lakes and Coorong, South Australia Norwegian Seafood Industry Norway North East arctic saithe Norwegian Seafood Industry Norway North Sea saithe Scottish Pelagic Sustainability Group Ltd. (SPSG) SPSG Ltd. Atlanto Scandian herring Association of Seafood Producers (ASP) Canada northern prawn Association Quebecoise de I'Industrie de la Peche, Produits Belle-Baie Ltee., L'Association Cooperative des Pecheurs de l'lle Ltee. Gulf of St. Lawrence northern shrimp Kyoto Danish Seine Fishery Federation snow Kyoto Danish Seine Fishery Federation (KDSFF) crab and flathead flounder Erzeugergemeinschaft der Hochsee und Kutterfischer GmbH Niedersachsenstrape Germany North Sea saithe trawl 2009 SPSG Ltd. Western component of North East Scottish Pelagic Sustainability Group Ltd. (SPSG) Atlantic mackerel Domstein Longliner Partners North East Domstein Longliners Ltd. Arctic cod Domstein Longliner Partners North East Domstein Longliners Partners Arctic haddock Association Quebecoise de L'lndustrie de la Peche, Produits Belle-Baie Ltee., L'Association Cooperative des Pecheurs de l'lle Ltee., Gulf of St. Lawrence northern shrimp trawl Association of Seafood Producers (ASP) fishery Esquiman Channel North East Atlantic mackerel pelagic trawl, Norges Sildesalgslag Purse-Seine and handline Norges Sildesalgslag Norway North Sea and Skagerrak herring Norges Sildesalgslag Norway spring spawning herring 130 Youngs Seafood Ltd. Stornoway nephrops trawl Danish Pelagic Producers Organisation North Danish Pelagic Producers Organisation (DPPO) Sea herring Ekofish Group-North Sea twin rigged otter Ekofish Group BV trawl plaice Danish Pelagic Producers Organisation Danish Pelagic Producers Organisation (DPPO) Atlanto Scandian herring Danish Pelagic Producers Organisation North Danish Pelagic Producers Organisation (DPPO) East Atlantic mackerel Hastings Fishery Management Group Hastings fleet Dover sole trawl and gill-net Pelagic Freezer-Trawler Association North Pelagic Freezer-Trawler Association (PFA) East Atlantic mackerel pelagic trawl Irish Pelagic RSW and Processors Sustainability Irish Pelagic Sustainability Group (IPSG) Group Ltd. (IPSG) western mackerel pelagic trawl New England Red Crab Harvesters Association Atlantic deep sea red crab Pacific Haibut Management Association Canada Pacific halibut (British Columbia) Polar Bear Enterprise, LLC (for JSC Gidrostroy) Iturup Island pink & chum salmon Pacific Whiting Conswervation Cooperative (PWCC), Oregon Trawl Commission, Association of Pacific Hake Fishermen (APHF) Pacific hake mid-water trawl Stichting van de Nederlands Visserij (Foundation Dutch Fisheries Organisation (DFO) gill net of the Dutch Fishery) sole Tosakatsuo Suisan Co., Ltd. Tosakatsuo Suisan skipjack tuna Ben Tre Peoples Committee Department of Fisheries Vietnam Ben Tre clam hand gathered SPSG Ltd. Western component of North East Scottish Pelagic Sustainability Group Ltd. (SPSG) Atlantic mackerel Domstein Longliner Partners North East Domstein Longliners Ltd. Arctic cod Domstein Longliner Partners North East Domstein Longliners Partners Arctic haddock Association Quebecoise de L'Industrie de la Gulf of St. Lawrence northern shrimp trawl 131 Peche, Produits Belle-Baie Ltee., L'Association fishery Esquiman Channel Cooperative des Pecheurs de l'lle Ltee., Association of Seafood Producers (ASP) North East Atlantic mackerel pelagic trawl, Norges Sildesalgslag Purse-Seine and handline Domstein Longliner Partners North East Domstein Longliner Partners")" Arctic haddock Domstein Longliner Partners North East Domstein Longliner Partners! Arctic cod 2010 Alaska Fisheries Development Foundation Inc. Bering Sea and Aleutian Islands Pacific cod Vislund Muslinge Industri A/S Denmark blue shell mussel Alaska Fisheries Development Foundation Inc. Gulf of Alaska Pacific cod ANOPCERCO, the National Association of Purse Seine Producer Organisations Portugal sardine purse seine American Western Fish Boats Owners Association (WFOA) Albacore tuna North Western Fish Boat Owners Association (WFOA) Pacific Canada Highly Migratory Species Foundation Canada Highly Migratory Species Foundation (CHMSF) British Columbia Albacore Tuna (CHMSF) North Pacific The Seafood Producers Association of Nova Scotia (SPANS) Eastern Canada offshore scallop Euronor Euronor Saithe Faroese Pelagic Organisation Atlanto- Felagio Notaskip - Faroese Pelagic Organisation Scandian herring Scottish Pelagic Sustainability Group Ltd. (SPSG) SPSG Ltd. North Sea herring Eksportutvalget for Fisk/Norwegian Seafood Export Council Norway North East Arctic Offshore cod Eksportutvalget for Fisk/Norwegian Seafood Export Council Norway North East Arctic Offshore haddock Sveriges Pelagiska Producent Organisation EK SPPO North Sea Herring 132 Aker Biomarine Aker Biomarine Antarctic krill Alaska Seafood Cooperative Bering Sea and Aleutian Islands flatfish Clearwater Seafoods Limited Partnership Eastern Canada offshore lobster Best Use Cooperative Gulf of Alaska flatfish Nova Scotia Swordfishermen's Associaton, Swordfish Harpoon Association, SHQ Swordfish North West Atlantic Canada harpoon Harpoon Quota Society swordfish Canadian Pacific Sustainability Fisheries Society British Columbia sockeye salmon Wild Canadian Sablefish Ltd. (WCS), Canadian Sablefish Association Canada sablefish Cornish Sardine Management Association Cornwall sardine, UK Irish Pelagic Sustainability Association (IPSA) Irish Pelagic Sustainability Association (IPSA) western mackerel Pelagic Freezer-Trawler Association Atlanto- Pelagic Freezer-Trawler Association (PFA) Scandian herring Association des Bollincheurs de Bretagne (Association of Purse Seine Fishers in Brittany) South Brittany sardine purse seine Osprey Trawlers Group Osprey Trawlers North Sea twin-rigged plaice Groundfish Enterprise Allocation Council Canada Scotia-Fundy haddock Ocean Choice International L.P. OCI Grand Bank yellowtail flounder trawl Scottish Fisheries Sustainable Accreditation Group (SFSAG) SFSAG North Sea haddock Seaview Logistics Ltd., Polar Ltd. South Georgia icefish pelagic trawl Ocean Trawlers Group / Three Towns Capital Barents Sea cod and haddock Bangor Mussel Producers Association North Menai Strait mussel Argos Georgia Ltd. Ross Sea toothfish longline Oregon Dungeness Crab Commission Oregon Dungeness crab Alaska Fisheries Development Foundation Inc. Bering Sea and Aleutian Islands Pacific cod Vislund Muslinge Industri A/S Denmark blue shell mussel 133 Alaska Fisheries Development Foundation Inc. Gulf of Alaska Pacific cod ANOPCERCO, the National Association of Purse Seine Producer Organisations Portugal sardine purse seine American Western Fish Boats Owners Association (WFOA) Albacore tuna North Western Fish Boat Owners Association (WFOA) Pacific Canada Highly Migratory Species Foundation Canada Highly Migratory Species Foundation (CHMSF) British Columbia Albacore Tuna (CHMSF) North Pacific The Seafood Producers Association of Nova Scotia (SPANS) Eastern Canada offshore scallop Euronor Euronor Saithe Faroese Pelagic Organisation Atlanto- Felagio Notaskip - Faroese Pelagic Organisation Scandian herring South African Deep-Sea Trawling Industry Association (SADSTIA) South Africa hake trawl 2011 Shieldaig Export Company Limited Loch Torridon nephrops creel Scapeche and Compagnie de Peche de St. Scapeche Malo saithe UK Fisheries Ltd. UK Fisheries/DFFU/Doggerbank Group saithe Danish Fisherman's Producer Organisation (DFPO) DFPO Denmark North Sea & Skagerrak saithe Danish Fisherman's Producer Organisation (DFPO) DFPO Denmark North Sea plaice Danish Fisherman's Producer Organisation (DFPO) DFPO Denmark Eastern Baltic Cod Department of Agriculture Fisheries and Forestry Isle of Man queen scallop trawl Tuna Management Association of New Zealand (TMA) New Zealand albacore tuna troll The Metlakatla Indian Community Annette Islands Reserve salmon 134 Atlantic cod and haddock longline, handline Saemark Seafood Ltd. and Danish seine Canadian Association of Prawn Producers (CAPP) Canada offshore northern and striped shrimp Fiskbranchens Riskfbrbunds Service AB Fiskbranschens Sweden Eastern Baltic cod Comite Regional de Peche de Basse Normandie, States of Jersey Department of Planning and Environment - Fisheries and Marine Resources, Normandie Fraicheur Mer Normandy and Jersey lobster Northsyde Processing Ltd., L'Association Cooperative des Pecheurs de l'lle Ltee, and Produits Belle Baie Ltee Scotian shelf shrimp Ovenstone Agencies (PTY) Ltd. Tristan da Cunha rock lobster Canadian Pacific Sustainable Fisheries Society British Columbia pink salmon Camara Nacional de la Industria Pesquera, Delegacion Sonora Gulf of California, Mexico - sardine Vereniging Producentenorganisatie van de Nederlandse mosselcultuur (Dutch PO mussel culture) Netherlands blue shell mussel Vereniging Zeeuwse Hangcultuurwekers Netherlands suspended culture mussel Spencer Gulf & West Coast Prawn Fishery Association, WWF Spencer Gulf King Prawn *Client has received recertification(s) fClient subsequently withdrew from certification or had certification withdrawn by MSC Source: Compiled by author with data from www.MSC.org, August 5,2011 The client's main formal role in the certification process is to ensure that the assessment team has unrestricted access to data and information about the fishery. Responsibilities include providing timely information and data to the assessment team, and informing the certification company about stakeholders and issues. The client also 135 has a responsibility in designing the stakeholder engagement process, 'must be capable of implementing conditions or recommendations of the certification,' and is responsible for remaining in compliance. Although the MSC does not specify who may or may not be a client, it does emphasize 'the importance...of the client having some influence over the management of the fishery, or the ability to be able to implement any conditions raised by the certification body after certification.' A crucial though understudied component of the MSC fishery assessment and certification process is the identification of areas for improvement and 'the imposition of Corrective Action Requests as conditions on the certificate.'330 For almost all (if not all) fisheries, Corrective Action Requests have been imposed by the certification assessment report. Corrective actions are crucial to ongoing evaluation and require measurable elements. In 2003, for example, over 40 corrective action requests had been imposed on the seven fisheries certified by that time.331 These mainly consisted of conditions requiring improvement on (1) information availability, (2) management frameworks and controls, (3) evidence of performance, and (4) evidence of monitoring and feedback response.332 The types of actions and the extent of their impact can vary significantly. A recommendation to incorporate a new quota reduction 328 MSC Executive, 2005b. 329 MSC 2010e. 330 Leadbitter, 2003. 331 Leadbitter, 2003. 332 Leadbitter, 2003. 136 system can have clear ecological and social affects in the fishery, while a recommendation to commission a research project to evaluate potential gear alternatives can have more indirect effects. Since governments are often the main management authority in fisheries, Conditions of Certification often require government action. Action Plans therefore often prompt new interactions between clients and governments.333 This illustrates how certification provides clients with a new channel of access to, and influence over, the policy making process and blurs the boundaries between public and private, state and non-state, sources of authority.334 Considering the close business relations that exist between fishery clients and certification companies, Conditions of Certification also arguably blur the boundary between auditor and auditee over time. For corrective actions requests, certification companies identify problems and seek solutions from their client, but are not supposed to make specific recommendations about actions for two important reasons. First, certification companies 'are not expected to impose particular management solutions that may be inappropriate or unworkable.'335 Second, 'being prescriptive strays into the arena of acting as a consultant and for a CB [certification body] to audit their own advice creates a conflict of interest.'336 In practice, however, formal (i.e. documented) and 333 Leadbitter, 2003. 334 Foley, 2011. 335 Leadbitter, 2003. 336 Leadbitter, 2003. 137 informal (i.e. verbal) recommendations and prescriptions are a normal, if not unavoidable, part of certification processes. Importantly, the status of client and the certification company involved in an ongoing certification are both subject to 'transfer.' The MSC introduced new rules clarifying client transfer in July 2008 during a major turning point in the Alaska salmon fishery certification. The Alaskan Department of Fish and Game, which served as client for the Alaska salmon fishery since 2000, announced that it would no longer act as one of the only government clients for MSC certification. The MSC indicated that it does not encourage the transfer of clients, but 'recognizes that there may be circumstances in "ITT which such movement is legitimate and appropriate or necessary.' The MSC's Technical Advisory Board also recently introduced rules for transferring certification contracts to another certification company, requiring the client and the certification body to clearly spell out: (1) the circumstances under which clients may wish or need to transfer the MSC certification contract; (2) the conditions of transfer; (3) the obligations of the client; (4) the obligations of the initial certification body; (5) the obligations of the succeeding certification body; (6) the requirements for switching certification bodies during assessment; (7) re-assessment requirements; and (8) requirements for MSC label codes used on packaging. 337 MSC, 201 Of. 338 MSC, 201 Of. 138 Another key institutional mechanism that speaks to the question of whether MSC certification constitutes a commodified form of global governance is the fact that clients that pass MSC's full assessment process are considered certificate 'holders,'339 a quasi- proprietary MSC designation which confers certain rights and responsibilities to the client or client group. The relationship between certificate ownership and resource ownership presents unique challenges in fisheries, however. Implementing voluntary certification and labelling initiatives requires boundary setting that is simultaneously inclusionary, exclusionary, and protective.340 While forestry clients applying for certification usually pay for certification of lands they own, or represent the owners of land, fisheries clients may apply to certify a fishery it does not exclusively 'own' or engage in. The inability to draw property barriers through fishery stocks and fleets means that defining who a client is and to whom certification applies and benefits is crucial in determining the nature and effects of fisheries certification. This is most clear in cases where fish species are pursued by multiple fleets from different jurisdictions as with 'straddling stocks,' fish species which migrate beyond the sovereign jurisdiction of a single nation-state. Indeed, defining the 'unit of certification,' which identifies both the social entity entitled to 'hold' certification and the natural object of certification, was one of the first major challenges that faced the MSC's founders. In MSC Workshops in the UK, for example, a key debate emerged around what was considered 'the North Sea question,' which referred to how major North Sea stocks are shared by fishing fleets 339 MSC Executive, 2005b. 340 Guthman, 2004a. 139 from different European countries and managed jointly through multilateral negotiations.341 In 2000, the MSC defined the 'unit of certification' as 'the fishery or fish stock (= biologically distinct unit) combined with the fishing method/gear and practice (= vessel(s) pursuing that stock). At its simplest, a single vessel could be the unit of certification, more likely, a number of vessels in the same fishery will probably be assessed.'342 Therefore, the 'unit of certification' includes assemblages of stocks, gear, and fishing practice, making the object of governance an ensemble of cartography, ecology, technology,343 commercial vessels and, inexorably, social relations. There exists an important tension, however, in exclusive entitlement of MSC certificates which illustrates the unique kind of commodification manifest in fisheries certification systems. On the one hand, the MSC requires 'that Principle 1 applies to the whole of the fish stock(s) exploited by the fishery seeking certification. So a fishery could only pass if the whole fish stock(s) meet this standard, and it would not pass if the standard was not met irrespective of who (eg, the fishery seeking certification or other fisheries) was responsible for the stock not meeting the standard.'344 This means that MSC clients may in some cases be at risk of non-certified vessels jeopardizing the performance of the certified fishery: 341 MacMullen, 1998: 26. 342 MSC, 2010d. 343 Eden and Bear, 2010: 94. 344 MSC, 201 Od. 140 Where the stock of the certified fishery is shared with other (perhaps uncertified) fisheries, these other activities may deplete the stock and hence have a detrimental impact on the certified fishery. In this situation, the certified fishery risks losing certification because of actions of those outside the certified fishery. The exact choice for the boundaries of the unit of certification can have profound consequences for both the success of the assessment, and the maintenance of the certificate. It is for these reasons that clients are advised to carefully consider the unit of certification, and where feasible, include all sources of extraction from the biological stock of the target species within the fishery to be assessed.345 On the other hand, the MSC requires that there 'is no implication that if one stock or fishery is certified then that certification applies to all other stocks of that species or to other fisheries taking that species.'346 In other words, all extractions from the fish stock must be considered sustainable, but only clients' produce can be technically certified as sustainable. While the MSC has gone to great lengths to be open to as many industry participants as possible, the early pattern of applications saw small groups of actors taking on the cost and risks associated with the process. As one MSC representative explained to the author during interviews, 'Some people think that if fishery "X" is certified, then anyone engaged in that fishery ought to get access [to the eco-label]. But the MSC does not work that way.'347 In the MSC program, 'clients are entitled to exclusive ownership of certification. We don't promote, or like this,' the official added, while also highlighting the problem of free-riders potentially benefiting from the certification.348 345 MSC Executive, 2005a. 346 MSC, 2010d. 347 Author interview, 2009. 348 Author interview, 2009. 141 Client formation therefore has significant potential to impact industry relations, depending on who is included or excluded in the client group. In 2008, for example, North Sea haddock and nephrops producers formed the Scottish Fisheries Sustainable Accreditation Group (SFSAG) to enter into MSC assessment, with the explicit purpose to extend the 'unit of certification' to cover as much of the Scottish catch fleet fishing these species as possible.349 In other cases, clients may seek to certify sub-components of fisheries to gain advantages over other subcomponents of the 'same' fishery. For example, large companies in the post-apartheid South African Hake fishing industry sought MSC certification in part to prevent the re-allocation of quotas away from the main, white-owned fishing companies and towards emerging small, black-owned fishing interests.350 The impacts of MSC certifications are therefore closely tied to how MSC clients are defined. The potential for intra-industry disputes appears to be greater when the client represents a narrow subset of a larger fishery, which is what happened in the certification of Canada's Northern shrimp fishery that we will explore in detail in chapter 5; this case study examines fishery client formation, power, and change which was shaped by the exclusivity of MSC certificates as quasi-property of clients, thereby providing crucial insight into how MSC certification is appropriated and used in specific political economies. The interaction between voluntary, industry-driven certifications within the unique context of fisheries resources also means that the same ocean space may have 349 SFSAG, n.d. 350 Ponte, 2008. 142 multiple overlapping certifications 'held' by different clients, potentially certified by different certification companies, pursuing the same species. This creates new challenges for the MSC. For example, the existence of separate certification for the same fish stock creates potential for divergence in 'Conditions of Certification.' In response, the MSC established clearer rules requiring the harmonization of overlapping certifications, effectively requiring new social relations of cooperation between certification companies, fisheries clients, and management authorities. Such new relations also create potential for conflict, as well. While political discourses surrounding certified fisheries are increasing, with certified clients often claiming legitimacy to accessing and managing resources over non-certificd actors,351 one might expect similar tensions to arise between certified clients pursuing the same stock. New social relations are therefore produced by commodified and competitive structures manifested in MSC certification client relations, including the strategic use of certification in not just international marketing but also resource access. Clients' 'ownership' over the MSC certificate in such regimes (1) creates a potentially significant source of power over other members of the client group, (2) provides a new path of access to and influence over the policy-making process, (3) and in situations where the client represents a sub-set of a larger fishery, creates an institutional-economic separation from other fishing entities that may or may not have certification of their own. Another example of new social relations produced through MSC certification involves the development of a new industry organization by some MSC fishery clients. 351 Potts etal., 2011:66-67. 143 In April 2009, twenty fisheries and companies already engaged in the MSC program launched the Association of Sustainable Fisheries to promote enhanced dialogue between the MSC and its client fisheries.352 The MSC fishery clients met informally at the European Seafood Exposition in Brussels from 2006-2008, made a call for membership in 2008, and met as an official body for the first time at the 2009 exposition. Some of the 16 members at the initial meeting included Clearwater Seafoods, which is part of the Northern shrimp certification examined in chapter 5, the Norwegian Seafood Export Council, the At-sea Processors Association, the Scottish Pelagic Sustainability Group, the British Columbia Salmon Marketing Council, the South African Deep-Sea Trawling Industry Association, and the Western Australia Fishing Industry Council. The National Fisheries Institute, a US seafood trade association that initially responded negatively to the MSC and attempted unsuccessfully to create an alternative industry-based certification program in the late 1990s, was designated as the ASF secretariat.353 The organizers created an executive committee of eight individuals, voted in by association members, which in turn elects a chairperson. A US$1, 000 fee was required for membership, members planned to meet annually at the European Seafood Exposition in Brussels, and proposed actions would require three-fourths membership approval. The founding objectives of the association included (1) providing a forum for certified fisheries to share information, (2) advocate practical, consistent, affordable, effective and credible certification processes, (3) participate in forums to provide policy advice in 352 Hedlund, 2009. 353 Seaman, 2009b. 144 ongoing review processes, (4) provide a forum for consideration of joint marketing and promotion of certified products, (5) advocate for the removal of trade barriers against products from certified fisheries, and (6) and act collectively on matters regarding certified fishery programs.354 3.4.4 Eco-label Licensing and MSC Revenue Growth In exchange for demonstrating that standards are met, certifying bodies like the MSC award a property right to certified entities to use their label. For the MSC, licensing the use of this intellectual property has become a major source of revenue. When the MSC was created, it was estimated that the organization would cost about 2 million pounds per year to run, with charitable donations and logo licensing fees generating revenue.355 There was some uncertainty over how the organization's financial structure might evolve, however. According to Coopers & Lybrand's Roger Cooke, who acted as the Interim chair of the MSC in its formative phase, 'one of the points we made very strongly [in advising WWF and Unilever] is that we don't know whether the revenue generating potential capacity of the logo, plus whatever grants and donations one could Ac / get a hold of, is going to sustain that sort of organization.' The consulting firm also stressed that pricing and charging for the eco-label would require the development of a 354 Seaman, 2009b. 355 McHale, 1998: 8 356 McHale, 1998. 145 formal business plan.357 Seed funding from the founding partners ended in June 1998 and the MSC became independent with funding from a number of charitable trusts.358 In 2000, the bulk of MSC's funding came from a handful of US sources, particularly the David and Lucille Packard and Oak Foundations.359 US tax returns and online records show that between 2000 and 2010, the San Francisco-based Packard Foundation granted US$68 million to support the MSC and to promote MSC-certified products.360 The MSC initially expected that as more and more fisheries received certification, revenue from logo licensing would cover a greater share of the cost of running the day-to-day 1 operations of the standard-setting organization. The MSC owns a subsidiary company called Marine Stewardship Council International Limited (MSCI), which licenses the use of the MSC's eco-label on behalf of the MSC.362 The MSC's eco-label must be directly accompanied by a ™363 and companies that use the logo are required to enter into a license agreement with MSCI, the trading body of the organization. There are two fees associated with the use of the MSC eco-label on products, an annual fee and a royalty fee. In 2011, the MSC charged 357 McHale, 1998. 358 Fowler and Heap, 2000: 141-142; May et al., 2003. 359 Seafood Business, 2009. 360 Krause, 2011. 361 Fowler and Heap, 2000: 142. 362 MSC, 201 Og. 363 MSCI, 2009. 146 an annual fee of US$250 for sales less than US$200, 000 in value, US$1,000 for sales between US$200, 000 and US$500, 000 in value, or US$2, 000 for sales more than US$500, 000.364 There is also a royalty fee for on-product use of the eco-label, which was set at 0.1% of product value in the early 2000s but has recently been increased by the MSC to 0.5%.365 In the early 2000s, the MSC's annual report did not account for income from logo licensing and accreditation fees separately. In 2002, there were only 6 fisheries certified and logo licensing and accreditation fees collected from certification companies only accounted for about US$22,000, or 1% of the MSC's total revenue. In 2003, the combined fees accounted for about US$99, 000 or 3% of the MSC's total revenue of US$3.4 million that year.366 In March 2004, the MSC notified retailers and other businesses using its blue eco-label that it intended to increase its minimum royalty fee367 from US$1, 000 to US$2, 000.368 In the letter to eco-label licensees, the MSC said the fee was required to ensure longer-term financial stability of the growing program, to assist in extending its global outreach, and to assist in providing value and credibility to consumers.369 By the 364 MSC, n.d.b. 365 OECD, 2005: 257. 366 Fiorillo, 2004a. 367 The minimum royalty fee is the amount paid by commercial entities for the first US$1 million of MSC- certified product sold annually. The royalty rate of 0.1% is triggered when sales go over the US$1 million mark, which stayed the same under the new rules. If a company sold US$2 million in MSC sales, it would pay US$3,000 in royalty fees—US$2, 000 on the first million and US$1,000 on the second million (MSC, n.d.b). 368 Fiorillo, 2004b. 369 Fiorillo, 2004a. 147 2005-2006 financial year, logo-licensing fees still represented only 7% of the MSC operating budget; charitable donations remained the main source of funding, accounting for 75% of revenue. Concerned about the continued dependency on charitable donations, the MSC decided to increase logo licensing fees in order to accumulate more funds and financial independence.370 In April 2008, the MSC increased the royalty fee from 0.1% to 0.5% of the wholesale cost of the product.371 A critical change in the revenue generation patterns can be observed in the late 2000s. The growth in revenues can be attributed to the rapid rise in the number of fisheries certified at this juncture, the associated growing number of chain of custody certifications and products sold with an MSC label, illustrated in Figure 3.2, as well as the increase in fees charged to licensees. 370 Auld, 2007. 371 Seaman, 2009a. 148 Figure 3.2 MSC labelled products by year MSC Labelled Products 10000 % 9000 3 £ 7000 v "35 6000 J3 5 5000 4000 o 3000 J 2000 5 1000 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Year Source: Graph compiled by author from data available at www.msc.org, April 2011 Importantly, since seafood is often sold in supply chains through a number of different intermediary traders, the MSC stands to receive eco-label revenue on the same product multiple times, allowing for exponential increases in income. Indeed, as the Table 3.4 illustrates, the MSC's overall logo licensing funding nearly doubled in 2009, while expenses rose about 70%. By the 2009-2010 fiscal year, total income was 9.804 million pounds, up 22% from 8.039 million the previous year.372 Logo licensing generated 42% of revenue during this year, up from 12% two years earlier. 372 MSC, 2010g: 5-6. 149 Table 3.4 MSC funding sources, 2005-2010 Year 2005/2006 2006/2007 2007/2008 2008/2009 2009/2010 Source Charitable Grants 75% 79% 77% 49% 52% Government Agencies 6% 6% 5% 2% 4% Companies 9% 4% 3% 4% 1% Eco-label Revenue 7% 8% 12% 38% 42% Other 3% 3% 3% 7% 1% 100% 100% 100% 100% 100% Source: Table compiled with data from www.msc.org, April 2011 Eco-label licensing fees have been an ongoing source of tension with some of the MSC's industry 'partners,' with some in the seafood sector claiming that the certification organization has become 'overly commercial.' For example, a managing director for a processor based in Aberdeen, Scotland complained that 'The MSC is turning into a commercial brand.. .If you don't pay them, they don't approve your product. Is that right and is that a responsible way for conservationists and scientists to behave?' In 2009, in the context of a global economic recession, a board member of the Alaska Seafood Marketing Institute sent a letter to the well known seafood media group IntraFish Media describing the MSC certification as extortion on a scale comparable to the mafia, shored up by major buyers such as Wal-Mart that have made commitments to source MSC- 373 Evans, 2006. 150 certified products.374 This is partly why the Alaskan seafood industry and the Alaskan state government has developed its own, Alaska-specific eco-label system and why the Alaska Seafood Marketing Institute decided not to take over as MSC fishery client when the Alaskan state government ended its role as client for the certification of Alaskan salmon in the late 2000s. Before it decided against assuming the role of MSC client for Alaskan salmon, the Alaska Seafood Marketing Institute even asked the MSC whether the certification organization could transfer the funds collected from logo licensing fees to Alaskan interests in order to pay for the re-certification of the fishery in 2009, estimated to cost US$250, 000.375 Such tensions surrounding costs are likely to increase as more fisheries receive certification and more buyers/sellers receive chain of custody certification. The MSC nevertheless continued to embrace the potential to become a more self- sustaining commercial entity though eco-label licensing revenues. As outlined in the MSC's 2007-2012 Strategic Plan, The MSC will remain dependent on grant funding into the next decade, though logo licensing revenues will grow with expanding market. However, as critical mass is achieved in Europe, North America and Japan, the MSC will increasingly benefit from the multiplicative effects of growing volumes of certified product, increased use of the logo, and the market presence to justify increasing the royalty rate. Over the long term, preliminary analysis suggests that the MSC could potentially migrate to a self-sustaining commercial model based largely on logo licensing revenue, as the MSC standard and brand become firmly entrenched in the marketplace.376 374 Seaman, 2009a. 375 Riutta, 2009. 376 MSC, 2007. 151 The document goes on to estimate potential logo licence rate scenarios in which the MSC could become self-sustaining, but cautions that increases in the royalty rate should not be implemented until the MSC eco-label becomes a 'must have' for retailers and branded processors. The global economic recession starting in 2008 reinforced the significance of logo licensing revenue. Referring to the impacts of the global economic recession, MSC CEO Rupert Howes indicated that while the charitable grants still rose nearly 23% in 2009, compensating for reductions in major donors with new funders and increases by some funders, 'There's a lot of pain out there, within the seafood industry, within the charitable sector. Everybody is looking at budgets. So we can't take anything for granted.'378 Howes added that 'This has been a strategy of the organization to increase and diversify our funding, and that's both within the grant funders-who are still hugely important to the MSC-but also through logo-license revenues. ..I think that's the basis of a sustainable business model.'379 Initial plans for the MSC's 2012-2017 Strategic Plan include preparing for a review of allocation of resources for 2011 and beyond, including potentially extending the MSC chain of custody and logo licensing to a broader set of actors.380 377 MSC, 2007. 378 Fiorillo, 2009b. 379 Fiorillo, 2009b. 380 IntraFish, 201 lb 152 As with the FSC and other certification organizations, there is an ongoing debate within the MSC around whether the organization should adopt a fast-growing, 1 mainstreaming approach versus top, high profile, small growth approaches. Others refer to a similar tension between high stringency/low uptake and low stringency/high uptake.382 According to Potts, the adoption of the fast-growing, mainstreaming approach is taking the MSC 'into new territory, particularly as controversial fisheries that are debatably "sustainable" are being certified to the logo.'383 At the present conjuncture, such debates are increasingly being shaped by an overriding incentive to secure, maintain, and grow revenues to administer the expanding bureaucracy of the MSC. Although the MSC organizational structure is subject to change and the growth of the organization may 'level off in the coming years, the present funding structure of the MSC suggests that we are studying an entity that cannot be understood as a charity as popularly understood. Because of the significance of logo licensing revenues administered by MSC's subsidiary trading company, the MSC appears to constitute a hybrid economic entity lying somewhere along what might be understood as a continuum between grant-dependent charities and for-profit enterprises. 3.5 Conclusion 381 Hallstrom and Bostrom, 2010: 157. 382 Gulbrandsen, 2010; Potts, 2011: 68. 383 Potts, 2011:69. 153 This chapter examined the creation of the MSC, the design of its governance regime, and its system of certification. Although Unilever and WWF are rightly credited in the literature with creating the MSC, a number of adjacent social forces played important roles in the formative phase of the organization. In particular, global consultancy and accounting firms contracted by Unilever and WWF carefully managed the creation of the MSC. Although the MSC is often conceptualized and promoted as a multi-stakeholder organization, democratic potential was purposefully limited on the advice of consultants who observed the FSC's relatively democratic procedures. Moreover, from the beginning a relatively narrow set of corporate-friendly organic intellectuals from civil and political society guided the evolution of the MSC's governance structure. The owners of the MSC, the Board of Trustees, are the most important actors in the MSC's governance structure, with power to appoint members of the Technical Advisory Board, the Stakeholder Council, and the Chief Executive. Individuals in these advisory bodies tend to come from organizations resembling the MSC's founders, with representatives of large commercial interests and large conservation organizations from North America and northern Europe making up the balance of members. The MSC administers and promotes its fishery and chain of custody certification standards, but does not carry out industry assessments. Instead, the MSC certification system relies on and produces new sets of business relations involving third-party certification companies, fishery clients who apply for certification, and the MSC's trading company which licenses the use of eco-labels along the supply chain. It is 154 therefore important to distinguish certification systems from ranking systems and recommendation lists, another major set of initiatives in the global seafood trade designed to provide seafood buyers and end-consumers with information about the sustainability of products.384 Certification systems are driven by fishery clients who contract certification companies to assess the characteristics of specific fisheries and who acquire a kind of property right to certificates and eco-labels to substantiate their claim. Certification firms also carry out Chain of Custody certification for businesses and other organizations along the supply chain who wish to attach the MSC eco-label to their product. Attaching eco-labels to products requires authorization from MSC's subsidiary company, MSCI, which licenses the use of the MSC eco-label and generates revenue for the MSC from the sale of products with the MSC eco-label. The rapid growth in eco-label license revenues since 2008 has transformed the MSC into a more self-sustaining economic entity despite significant growth in its administrative and human resource requirements. Such dimensions and dynamics appear to justify conceptualizing the MSC certification system as a highly commodified form of global governance. An important implication of this type of system is the production of a variety of market incentives, including incentives that can be interpreted as conflicts of interest. 384 Parkes et al., 2010. Well-known recommendation lists have been complied by NGOs such as the Marine Conservation Society, Greenpeace, WWF, Monterey Bay Aquarium's Seafood Watch, and the Sustainable Fisheries Partnership and national government bodies. 155 Certification companies, for example, have the incentive to fulfill, maintain and expand business contracts with fishery clients. Dr. Sidney Holt, who was involved in the 1997 workshops that defined the MSC's core Principles and Criteria for Sustainable Fishing, suggests that the problem with the MSC is that having fishery assessments conducted by commercial companies paid by fishery clients creates a conflict of interest because the lOf former have an incentive to present evidence in the best possible light. Dr. Daniel Pauly, who was also invited by the WWF and Unilever to help create the MSC standard in the late 1990s, criticized the MSC in his keynote address at the 2010 international Seafood Summit in Paris, saying 'I see the MSC as part of the sector. It is something the industry needs to make its products more palatable.. .It is reacting as a result of impulses from the industry. It doesn't have much to do with conservation anymore.' Both Pauly and Holt were authors of a well publicized article in the journal Nature which criticized 'generous interpretation' and scoring in some MSC-certified fishery assessments and the willingness of the MSC to authorize the certification of particular 'kinds' of fisheries, concluding that 'the incentives of the market have led the MSC certification scheme away from its original goal, towards promoting the certification of ever-larger-capital- intensive operations.'387 Moreover, given the client-centric nature of certification, the risk of client capture, a well-documented problem in the role of the accountants in the 385 Jolly, 2010. 386 Seaman, 2010. 387 Jacquet et al„ 2010: 29. 156 Enron scandal,388 presents an important challenge to the MSC system in the future. The commercialization of MSC certification processes challenges our conventional notions of legitimate authority and requires stretching the notion of'market-driven' governance beyond conceptualizations which refer simply to the seafood buyers (including end- consumers) and sellers, a topic that shall nevertheless be examined next to better understand the expansion of the MSC system. The next chapter examines responses to the MSC across key areas of civil and political society in the North Atlantic 'heartland' of the MSC, starting with a conceptualization of the MSC's core strategy to make its eco-label a 'must have' for retailers and big buyers. 388 Macey and Sale, 2003. 157 CHAPTER 4: Civil and Political Society Interactions with the MSC 4.1 Introduction If the MSC's goal is to 'harness market forces' to transform the crisis-ridden global fisheries towards sustainability, then we need to understand who is harnessing what market forces and for what purposes. Although voluntary standards are in theory demand driven, they are in reality shaped by a variety of social forces and structures of production linked with civil and political society within and beyond commodity chains. The first major driving force in the extension of MSC certification was the MSC itself. Despite the early criticism of the MSC, careful planning and corporate campaigns secured support and survival.389 With the MSC certification program set up by 1999, efforts shifted to extending a solid network of support within 'global' civil and political society, but principally in Europe and North America. From the start, the MSC engaged in outreach campaigns promoting the certification program to fishers, processors, retailers, foodservice providers, government agencies, and others. The purpose of this chapter is to document and explain some of the main dynamics of collaboration, consensus-building, and contestation shaping the extension of MSC certification, focusing on North Atlantic political economies in which MSC growth has been heavily concentrated. The chapter is divided into two main sections. The first 389 Constance and Bonanno, 2000: 134. 158 section examines some of the main market forces interacting with MSC certification. The seafood market includes a variety of agents, including fishers, processors, brokers/traders, distributors, wholesalers, exporters and importers, foodservice sectors, and retail sectors.390 Support for MSC certification within the seafood industry can grow in two main ways: passively as producers act voluntarily to seek certification in order to gain market benefits or actively as firms with buying power aggressively push for reforms among suppliers. This section argues that large-scale growth in the MSC has been built primarily through commodity chains that are oligopsonistic, a market form with a small number of buyers relative to many suppliers. Oligopsonistic buyers consist of Unilever in the early phase of the MSC's development and large retailers and food service firms through the 2000s. The extension of MSC certification through oligopsonistic market structures was not simply driven by market actors themselves, however, but was also heavily shaped by MSC and NGO strategic efforts to influence seafood sourcing requirements of big buyers and, in turn, their suppliers. A significant finding about this process is the apparent professionalization of NGOs, who effectively provide technical services to help big buyers transform buying practices and affect ->Q| change among suppliers. The second section examines state responses to the MSC in North Atlantic political economies. Although the second section considers state responses, it argues that 390 Roheim, 2003: 95-96. 391 It is unclear to the author the extent to which the work provided by NGOs in these strategic efforts is paid for by industry partners or by NGOs' normal operating budgets. 159 state and industry purposes and goals vis-a-vis the MSC are often so closely intertwined that it is more appropriate to view the state as having relative autonomy; 'state' responses to certification in many ways are a reflection of domestic industry responses, often the most powerful domestic industry interests.392 This does not mean that state- industry responses are coherent and without contradictions; indeed responses in countries are contradictory and dynamic. The two predominant responses to the MSC consist of facilitating the domestic uptake of MSC certification on the one hand and the creation of alternative, national eco-labels on the other hand. Both responses, however, arguably facilitate the redefinition of fisheries governance in more commodified ways. 4.2 Harnessing Oligopsony Power The MSC emerged in the UK when seafood commodity chains and market structures were rapidly consolidating in both processing (i.e. manufacturing) and retail sectors. In terms of the former, when the Anglo-Dutch company Unilever partnered with WWF to create the MSC in 1996, it was the third largest food business in the world, and owned more than 150 individual operating companies with 250 factories in 80 countries.393 During the mid-1990s, Unilever was the largest buyer of frozen fish, processed fish under brands such as Iglo and Birds Eye, and controlled a 25% share of the European and US frozen fish market.394 In terms of the latter, between 1988 and 392 This section on state responses in some ways builds on—but takes further because of the analysis of the creation of national eco-labelling programs-the approach of Gale and Haward, 2011. 393 McHale, 1998. 394 Constance and Bonanno, 2000: 129. 160 1995, the share of total fresh fish retail from the largest 5 supermarket chains in the UK increased from 32% to 61%. Moreover, between 1988 and 2003 the market share of fresh fish sold through supermarket chains rose from 16% to 86%, while the market share of fishmongers dropped to less than 17% of their 1988 share.395 Supermarkets have in turn required processors and wholesalers to meet strict health and safety regulations, and packaging and processing requirements, forcing many marketing intermediaries into mergers and consolidation to meet supermarket criteria.396 This concentration of buyers produces a market structure known in the economic literature as oligopsony, a situation characterized by a small number of buyers of a product or service in relation to a sometimes large number of sellers. The evolution and extension of the MSC has been heavily shaped by these market structures. Indeed, key aspects of the MSC's outreach strategy and NGO campaigning to generate market interest in certified seafood can also be understood as oligopsonistic, in the sense that principal targets are buyers who wield the greatest power over supply chains. From the perspective of the MSC and NGOs, targeting big buyers is an efficient way to expend limited resources in their attempts to encourage uptake of certification in the global seafood industry; it makes little sense to work with innumerable producers and suppliers to encourage uptake of certification when a small 395 Fofana and Jaffiy, 2008. 396 Clarke et al., 2002; Asche et al., 2002. 397 This situation is the opposite of oligopoly, a market structure in which there are many buyers with few sellers. 161 number of big buyers can dictate changes in the conditions of production and trade of seafood. There is a significant question here, then, about whether or to what extent the demand from big buyers to producers to meet certification requirements in buyer-driven commodity chains amounts to a form of indirect vertical integration.398 4.2.1 Retailers and Supermarkets: 'The New Game Plan' Based in London, England, it is not surprising that the MSC's early development acquired a UK-centric hue. UK citizens were not only instrumental in developing the MSC and its governance system but also in encouraging demand. UK retailers have led the way in the early 'buyer groups' that the MSC developed. Following the 1996 commitment by the oligopsonistic producer and buyer Unilever, the UK firm Sainsbury's became the first food retailer to announce its support for the MSC in April 1997.3" Safeway and Tesco subsequently joined Sainsbury's with MSC endorsements, bringing the three largest food retailers in the UK and major fish product suppliers to the European continent in line to support the MSC.400 The dominating sector in initial MSC Working Group deliberations in the UK was also retailers, followed by the UK processors who supply retailers.401 During the creation phase of the MSC, most retailers in the UK identified the need for a credible scheme for on-pack product assurance of 398 Bernstein and Campling ask the same question about the 'coordination' of lead firms in buyer-driven commodity chains (Bernstein and Campling, 2006: 437). 399 Constance and Bonnano, 2000. 400 Roheim, 2003. 401 MacMullen, 1998: 24. 162 conservation credentials, the need for long-term stability and continuity of supply, and the expectations that suppliers apply 'best practice' in production processes.402 In 2000, Sainsbury's, the UK's largest retailer, competed and beat out Tesco to become the first supermarket in Britain to sell products from the Thames-Blackwater Herring drift-net fishery, one of the first MSC-certified fisheries, and continued to build up its inventory of MSC-certified inventory.403 Migros, the first supermarket chain in continental Europe to support the MSC, launched several aggressive product promotions of the MSC in the early 2000s 404 The impetus for certification has not been simply one way or top-down, however. For example, the certification of the large Alaska salmon fishery, initially a test case largely paid for by the MSC, gave the MSC entry into the US market through Whole Foods Markets—the world's largest retailer of natural and organic foods—which committed to purchase large volumes. By 2003, the MSC had garnered support and informal commitments from retailers Tesco, Marks and Spencer, and Sainsbury's in the UK; Whole Foods Market, Shaw's, Legal Foods, and Trader Joe's in the US; Migros Cooperative and Coop Schweitz in Switzerland; Delhaize in Belgium; and Gottfried Friedrichs in Germany.405 In March 2003, Sainsbury's became the first retailer to commit to sourcing all its wild fish from sustainable sources, targeting 2010 for full implementation. It also funded a 402 MacMullen, 1998: 25. 403 Roheim, 2003: 98. 404 Knapp et al., 2007: 255. 405 Roheim, 2003: 98; Gulbrandsen, 2010: 136. 163 three-year research project to identify tuna fisheries that might be eligible for certification.406 By 2004, retailers operating in 10 different countries offered a total of 160 MSC-certified fish products.407 UK retailers' commitments to source MSC-certified seafood started to create substantial pull through the supply chain but the number of fisheries certified to supply growing demand for MSC labelled products grew slowly.408 Supply continued to fall short of demand for certified products, challenging retailers to meet sustainable seafood sourcing commitments. Unilever, for example, did not meet its goal of sourcing all fish for its frozen brands from MSC-certified sources by 2005.409 A major boost to the MSC program came in January 2006 when Walmart, the largest retailer in the world, committed to source all its wild seafood supplies in North America from MSC-certified sources by 2011. Walmart's UK subsidiary, ASDA, also committed to sourcing only MSC-certified seafood within three to five years 410 Walmart executives made the announcement about the new sourcing policy at corporate headquarters with representatives of the environmental community and about 30 of its seafood suppliers in attendance. Scott Burns, director of the WWF's Marine Conservation Program said, 406 Cummins, 2004: 92-93. 407 Cummins, 2004: 92. 408 Potts etal., 2011: 17. 409 Gulbrandsen, 2010: 137. 4,0 Gulbrandsen, 2010: 137. 164 So, now we'll all work together with their suppliers to figure out what the next steps are and make sure this happens...Some [fisheries] are very good candidates for certification... But some of the fisheries have remaining weaknesses that will need to be addressed before they are good candidates for certification. We are all interested in working with suppliers and with the fisheries in a cooperative way to address whatever those outstanding issues are.411 In addition to working with the WWF, Walmart entered collaborations with the MSC, the Sustainable Fisheries Partnership,412 and the US-based Environmental Defense Fund to encourage seafood suppliers to shape up for the new 'game plan.'413 European retailers also helped push fishing industry participants who were initially sceptical of the MSC into the eco-certification fold. Pressure from European retailers and worries about losing access to the European market prompted Norway's pelagic fishery traders to seek MSC certification for North Sea herring. In June 2007, the Norwegian Seafood Federation, which represents about 500 Norwegian seafood companies,414 and the Norwegian pelagic fish sales association Norges Sildesalgslag announced they were making steps towards acquiring eco-certification. The Sales 411 McGovern, 2006. 412 The Sustainable Fisheries Partnership was founded in 2006 as a non-profit organization in the US. Its staff, many of whom had worked previously with the MSC (including its founder and current Chief Executive Officer), 'provides strategic and technical guidance to seafood suppliers and producers, helps them convene together with other like-minded companies in Fishery Improvement Projects, and builds consensus around specific improvements in policies, marine conservation measures, and fishing and fish farming practices' (Sustainable Fisheries Partnership, 2011). At the time of writing, in addition to Walmart, the program had partners that included Tesco, Sainsbury's, Young's Seafood, McDonalds, Publix, Woolworths and other mainly large commercial players. 4.3 IntraFish, 201 Oh. 4.4 FHL, 2008. 165 Director for Norges Sildesalgslag identified German and Dutch retailers as particularly strict in their demands for eco-certified product.415 Canadian retailers made major commitments to MSC certification in the late 2000s. In 2008, Loblaw Companies Ltd., Canada's largest food distributor—accounting for nearly a third of the country's grocery market share—took initial steps to source eco- certified seafood by launching a line of MSC-certified products around the same time Greenpeace launched a national campaign at store locations which involved erecting signs with the message 'Caught red-handed selling Redlist fish.'416 In May 2009, the same month Greenpeace released its first supermarket ranking report in which all eight Canadian supermarkets failed, Loblaw Companies Ltd. committed to source all seafood sold at its retail locations from sustainable sources by the end of 2013. The company planned to subsequently (1) assess all seafood sources in partnership with WWF-Canada, (2) continue to work through the supply chain to prepare for audits to MSC standards, (3) develop a four-year implementation plan, (4) identify sources with no improvement potential to be stopped or phased out, (5) identify and recruit experts in fisheries and marine science to provide the company with advice, and (6) communicate policy decisions with suppliers, distributors, colleagues, customers, franchisees, the general public, and other stakeholders.417 Other major retail players in Canada followed suit the 4,5 Evans, 2007a. The impetus, however, is also related to competitors such as the Dutch herring fishery and Sweden's Astrid Fiske fishery, and Scottish North Sea herring fishery were all engaged in eco- certification processes. 416 IntraFish, 2008b. 417 IntraFish, 2009a. 166 following year. In 2010, Walmart Canada committed to source all wild caught fish from fisheries certified to the MSC or the minimum equivalent, to ensure aquaculture suppliers meet Best Aquaculture Practices418 or minimum equivalent, and to source canned tuna from members of the International Seafood Sustainability Foundation.419 In May 2010, Metro Inc. committed to buy only wild and farmed seafood from sustainable sources by June 2011 420 Meanwhile, the US retail and grocery sector continued to make significant moves towards new sustainable seafood sourcing policies at the turn of the decade. In May 2010, US retailer Publix, which already had been selling 47 MSC-certified products, introduced a plan to rank seafood suppliers on sustainability and drop any that did not meet new standards. According to a Publix spokesperson, the plan had been under development for several years but picked up speed in a meeting between Publix chief executive and over 70 seafood suppliers the previous summer: 'We told them, "you need to get on board".. .and if you're not, it's been nice doing business with you, but goodbye.'421 Like other retailers, Publix entered collaborations with environmental organizations, specifically Ocean Trust, Ocean Conservancy and the Sustainable Fisheries Partnership, to develop sustainable seafood sourcing policies. The retailer 418 Best Aquaculture Practices refers to a standard and certification system developed by the Global Aquaculture Alliance trade association. 419 IntraFish, 2010h. 420 IntraFish, 2010a. 421 IntraFish, 201 Of. 167 expected Sustainable Fisheries Partnership to help categorize suppliers into 'sustainable, 'needs improvement,' and 'needs major improvement.'422 Just months after Publix announced its sustainable seafood sourcing strategy, its parent company that operates US supermarket chains Hannaford, Sweebay, Bottom Dollar Food, Food Lion, Bloom, Harvey's, and Reid's unveiled a new seafood sourcing program that it developed in partnership with the Gulf of Maine Research Institute. The new sourcing program requires that suppliers demonstrate that their products come from well-managed fisheries through sustainable certifications such as the MSC for wild capture fisheries and Best Aquaculture Practices program of the Global Aquaculture Alliance for farmed seafood.423 Whole Foods Market, building on the partnership it had with MSC since 1999, launched the first national in-store color-coded sustainability-rating program for wild caught seafood in September 2010. The program was developed in partnership with the Blue Ocean Institute and Monterey Bay Aquarium, the vice president of which was Michael Sutton, the former WWF official who was instrumental in solidifying the partnership with Unilever in the mid-1990s that established the MSC.424 The UK's Sainsbury's continued to lead the retail sector in supporting the MSC in the late 2000s. By 2006, it had secured its position as the leading UK retailer of MSC- certified products in both volume and number of products, helping it rise to third on Greenpeace's list of the most sustainable UK seafood retailers behind Marks & Spencer 422 IntraFish, 201 Of. 423 IntraFish, 2010d. 424 IntraFish, 2010i. 168 and Waitrose.425 In late 2009, the MSC and Sainsbury's announced they were collaborating in the 'largest ever' consumer awareness campaign to promote the MSC's blue eco-label, the first example of a new method of promotion according to the MSC's UK country manager. Coordinated by the mega advertising firm Saatchi & Saatchi, the campaign involved MSC point-of-sale materials, posters, recipe cards, and shelf labels.426 The retailer's sales of MSC-certified products were expected to rise by more than 50% by 2011, up from US$93.3 million in 2010. Most of Sainsbury's core five species of cod, salmon, haddock, shrimp and tuna were sourced from MSC or other 'green' sources, but, like Unilever, fell just short of meeting its aim to have its entire core species sourced from MSC or similar standards by 2010. The retailer also continued engaging in the Aquaculture Stewardship Council (ASC) dialogues, an effort led by the WWF to create a certification system for aquaculture, with the aim to source farmed fish exclusively from ASC certified sources.427 Tesco, the UK's largest fish seller, continued to work with the MSC and expanded its seafood sourcing strategies, announcing in 2011 that it signed a 'partnership agreement' with Sustainable Fisheries Partnership to work on seafood sourcing strategies 428 Across the English Channel, retail giant Carrefour emerged to offer the widest range of MSC-certified seafood in France. In 2011, the supermarket embarked on its second major nationwide campaign called 'Les Jours 425 Stromsta, 2006. 426 Seaman, 2009c. 427 Tallaksen, 2011. 428 IntraFish, 2011c. 169 Bleus' in partnership with the MSC, Findus, and Laberie to promote sustainable seafood.429 Growing retailer interest in MSC was not driven simply from within 'the market' or in retailer-NGO collaborations but was also driven in part by the certification program's ongoing outreach campaigns. In the MSC's 2007-2012 Integrated Strategic Plan, for example, the organization committed to 'key visionary milestones' and various 'short-term action strategies.' The first broad strategic goal consisted of achieving 'critical mass' of 30-40% market penetration of certified product in the UK and Germany, 'securing at least 5 of the top 10 US retailers,' and developing their Asia- Pacific program 'with a focus on the Japanese market.'430 The second goal, building on the first, involved securing 'critical mass' in most major developed markets by the end of the 2010s, 'thereby further cementing the MSC's appeal to export oriented fisheries around the world.'431 The third goal involved 'securing a meaningful presence in all major producing and consuming countries' beyond 2020. The MSC does not passively remain on the sidelines to wait for consumers and industry players to 'voluntarily' adopt certification, but is engaged in a series of well-coordinated campaigns and partnerships to secure and expand support for certification, a strategy shaped by the oligopolistic market structures which the MSC targets. 429 IntraFish, 201 la. 430 MSC, 2007. 431 MSC, 2007. 170 4.2.2 Food Service Sector Another sector characterized by oligopsonistic market structures and which has recently become an important impetus for the growth of the MSC is the foodservice sector. In 2005, the MSC launched a project called Fish & Kids designed to bring sustainable seafood sourcing to schools and restaurants. The program was established with £300,000 in funding from the UK's Department of Environment, Food and Rural Affairs.432 The website for Fish & Kids, established with funding from Project AWARE, a charity formed by divers, is 'children-friendly.' Its 'Playroom' link introduces 'Cat in the Kitchen,' an interactive game featuring a cat named Murdoch who helps children learn how to cook. The program has developed a number of colourful online and printable educational materials. The MSC has also partnered with Brakes, a leading UK foodservice supplier, to supply primary schools in Surrey, UK, with MSC-certified products.433 The late 2000s marked a major breakthrough period for the MSC into oligopsonistic food service providers in Europe and North America. In 2008, Compass Group, the world's largest food-service provider, became the first contract caterer in the UK to achieve MSC Chain of Custody certification.434 The Compass Group includes a centralized buying system for 1,400 state schools and 1,500 private companies, National 432 MSC, n.d.a. 433 MSC, n.d.a. 434 Purvis, 2009. 171 Health Service trusts and universities. In April 2010, the UK's largest independent seafood supplier, UK wholesaler M&J Seafood,435 embarked on a series of road shows to highlight the importance of sustainable seafood, with speakers including guests from the MSC, Seafood Choice Alliance, the UK SeaFish Industry Authority, as well as from celebrity chefs such as Cyrus Todiwala and 'celebrity fishermen' such as Paul Joy from Hasting's Fisherman's Protection Society.436 In December 2010, the giant France-based foodservice multinational corporation Sodexo had all its restaurants and cafes in the UK certified to serve MSC-certified fish. This meant that more than a million people in the UK would be offered MSC-certified fish at nearly a thousand sites, including 350 company restaurants, tourist establishments, and national events, 375 schools and colleges, 54 hospitals, and 150 military sites.437 In early 2011, Sodexo launched a new seafood sourcing strategy for its North American operations as well, committing to purchase 100% of its wild capture fish from MSC- certified sources by 2015 438 Sodexo's North American operations include 6, 000 clients and 700 facilities such as hospitals, military sites, schools and corporations, with US$8 billion in annual revenue. A company spokesperson indicated that a full global sourcing strategy 'is definitely in the works.'439 In June 2011, Sodexo became the first foodservice 435 M&J Seafood is a division of the Brakes Group distribution company. 436 Carr, 2010. 437 IntraFish, 2010g. 438 SustainableBusiness.com, 2011. 439 Cherry, 2011. 172 company to sign a 'worldwide agreement' with the MSC for wild fish to promote MSC- certified products across the 80 countries and 34, 000 sites in which it operated, developing sourcing policies in collaboration with the WWF.440 The uptake of MSC certification by fast food restaurant chains has been limited, but is increasing as well. In June 2011, McDonald's Corp., the world's largest fast food restaurant chain, announced that its 7, 000 restaurants across 39 European countries were undergoing MSC Chain of Custody traceability certification.441 4.2.3 Producers The transformation in retailer and foodservice sourcing requirements puts significant pressure on seafood producers 'down the supply chain.' In the fish industry, the term producers typically refers to the secondary processing (i.e. 'manufacturing') of seafood production, which includes vertically integrated fisher-processor firms. Processing tends to either occur in processing facilities (or 'fish plants') located near ports or onboard properly equipped vessels at sea ('factory freezer' vessels, for example). When the MSC launched in the late 1990s, UK processors fell into two categories—(1) large processors who handled substantial volumes of frozen and wet fish and were more attuned to global conditions, and (2) mainly independent wet fish processors who were closer to the domestic fleet. Both were generally dependent on the UK wet fish and felt some loyalty to it, and both groups were aware of the need to meet 440 MSC, 201 lc. 441 MSC, 2011b. 173 buyer specifications.442 The largest seafood producer in the UK, Young's Bluecrest created an entirely new brand, Fish for Life, based around MSC-certified seafood sources in the early 2000s.443 As we have seen above, retailer and foodservice commitments to source MSC- certified seafood include explicit plans to work with or simply demand their suppliers to meet sustainability requirements. Several examples illustrate how this plays out within the industry. For instance, in January 2007 the vast majority of the Dutch producers group PO Wieringen, which owns 40 large fishing vessels, decided to apply for MSC certification for the brown shrimp (crangon crangori) it catches in the North Sea off the coasts of Denmark and Germany in response to increasing pressure from retailers.444 In November 2010, Canada's largest seafood processing company, High Liner Foods Inc., committed to sell only seafood from sustainable sources by the end of 2013. The company gave notice that only suppliers whose wild fish are certified by the MSC, or whose farmed fish are certified by the Global Aquaculture Alliance's Best Aquaculture Practices or the soon-to-be launched Aquaculture Certification Council, will be able to sell to High Liner Foods Inc.. A number of its suppliers were already certified but, according to the company's CEO, they 'put a timeline on there when they [the non- certified fisheries] need to be certified or committed to an improvement plan, which is not just words but a structured plan with multi-supplier involvement and NGO 442 MacMullen, 1998: 25-26. 443 Roheim, 2003. 444 Evans, 2007b. 174 involvement like the Sustainable Fisheries Partnership.'445 By 2013, suppliers would have to file reports with the fish buyer showing that they are meeting their sustainability objectives but the company did not expect to gain a meaningful price premium.446 4.2.4 Fishers Even though the MSC has been granting certification to fisheries for over a decade, there are surprisingly few studies on fishers' responses to and experiences with certification.447 In terms of economic benefits, there are some reports that certification has been used by fishers to maintain markets, to earn price premiums, and to bargain for reduced tariffs from importing countries. Our understanding of the financial benefits relative to costs is limited, however, since the costs of Pre-assessment, Full Assessment, and annual audits are kept confidential between certifiers and fishery clients.448 There is evidence that of the major market actors in the seafood trade, fishers have been the most sceptical of the MSC. One of the main criticisms of the MSC has been the way the MSC system privileges large market players and provides large buyers with new opportunities to control market relations. 445 DiPietro, 2010. 446 DiPietro, 2010. 447 In terms of the role of fishermen in the process of implementing certification, evidence suggests that the role of actual fishers is extremely limited, however, except perhaps for very small fisheries. In a study of the Maine lobster fishery, Goyert and colleagues revealed a troubling lack of involvement of the core 6000 license holders and little awareness and detailed knowledge about the MSC and its benefits among fishers (Goyert et al., 2010). Little direct involvement of license holders also characterizes the certification of Northern shrimp in Canada, as we shall explore in the next chapter. 448 Mathew, 2011. 175 For example, before the MSC was fully operational, the India-based International Collective in Support of Fishworkers (ICSF) published a series of commentaries in several issues of its magazine SAMUDRA Report focusing on the MSC's relevance to artisanal and small-scale fish workers, particularly in developing countries. In October 1998, SAMUDRA organized a dossier of articles initially published between 1996 and 1998 to explain the 'pros and cons' of the MSC. A central theme of criticism in the debate involved the juxtaposition of large-scale corporate driven processes and the effective exclusion of small-scale, artisanal and developing world fisheries' interests. Some authors noted that fishing communities in developed and developing countries harboured significant distrust of Unilever; they suggested that the idea of the MSC would have been taken far more seriously by fish workers' organizations had WWF consulted them earlier. From the perspective of small-scale and artisanal Asian fisheries, Kurian observed that 'on the face of it, the MSC initiative need not initially be against their interests...[but] the contradictions will soon arise pertain [sic] to the power that those who buy the fish from these fishworkers will be able to exercise in dictating terms of harvesting and levels of prices.'449 Critics expected that the MSC would provide companies like Unilever with a new channel of control over producers and could undermine small fishers' autonomy over the catch and sale of seafood. As Executive Secretary Sebastian Mathew explained, ICSF is also concerned about an approach that could curtail the autonomy of fishers in the artisanal and smallscale sector. Given the unequal distribution of 449 Kurian, 1998. 176 purchasing power and economic clout that are inherently unfavourable to developing countries, we have further reservations about the use of the Northern market to ensure better conservation and management of marine capture fisheries in the South.450 In the early years, then, the MSC received significant criticism for, among other things, being captured by Northern corporate interests in the global seafood trade, for not consulting fishers in the development of the MSC sustainable fisheries standard, for its bias in favour of developed country industrial fisheries and market actors, and for the high costs that privilege large commercial interests.451 These themes of criticism continued in the late 1990s and early 2000s. Initial reactions from fishermen's associations in the UK in the late 1990s were 'unequivocal' about the MSC: they labelled the program unaccountable, undemocratic, lacking transparency and driven by vested interests from retailers to environmentalists.452 The UK catch sector was 'virtually unrepresented' at the meetings of the UK Working Group, by far the most active national working group in the formative phase of the MSC's development.453 Some fishers questioned whether the people involved in administering the MSC had adequate experience with and competence for commercial fishing operations and the market. The catch sector also expressed concern over who would bear the cost of certification and the potential for the market to become 450 Mathew, 1998. 451 Ponte, 2008, 171. 452 MacMullen, 1998. 453 MacMullen, 1998: 24. 177 increasingly inequitable as costs and opportunities change relative to the activities of the MSC454 More mixed reactions could be observed as fisheries entered the MSC program in the early 2000s. Some of the motivations of the catch sector to adopt certification have included (1) seeking recognition of improvements, (2) justifying resource access, (3) compliance with buyer expectations, and (4) expectations of increased returns and new markets.455 In the early 2000s, some fisheries reported gaining price premiums, while others used the MSC as a bargaining tool in negotiations with domestic governments and gaining tariff reductions in export markets.456 A recent study by Potts and colleagues provides some insight into the mixed experiences of UK, particularly Scottish, fishers and industry representatives' with MSC processes.457 According to Potts, the fishing industry in the UK 'sees a commercial, social and political advantage in engaging in certification and is willing to invest in the process.'458 Motivations for supporting certification among fishers and industry representatives included promoting conservation, initiating improved management plans, achieving higher prices, maintaining existing markets, and accessing new markets. Sector competition was also a 454 MacMullen, 1998: 27. 455 Leadbitter et al„ 2006: 665. 456 Mathew, 2011. For a case study of the first developing country fishery to acquire MSC certification, a case which shows ways in which community-based fisheries can benefit from MSC certification, see Phillips et al., 2008. 457 Potts etal., 2011:56. 458 Potts etal., 2011:72. 178 key factor in the UK. As a person from a large-scale fishery said, 'It seems to me that if someone in your sector or your species gets accreditation then you should get it as well. There's just nothing else, it gives your competitor a lead on you if they supply the same market as you—so that in itself drives you on.'459 This dynamic, consistent with the MSC's basic goal, is similar to some of the forces driving growing interest in certifying lobster fisheries in Atlantic Canada. According to a union leader in Newfoundland and Labrador's lobster industry, 'No [lobster fishery in] other Atlantic [Canadian] province[s] has achieved certification yet, but we don't want to be left behind in the process. Once your competition goes in the direction of certification, you'd better be thinking about moving in that direction too or you could be shut out of your lucrative markets which, obviously, would have a negative impact on lobster prices.'460 Fisher involvement has been increasingly driven by concerns to maintain market access, which is often linked to the retail sector.461 For UK fishers, the realization of added value typically did not occur and industry insiders often agree that a price premium was unlikely. As one fisher put it, 'You may get some added value, yet for me it was never about added value.. .it was about keeping yourself in the marketplace. There was no, will we get a 10% mark-up, will we get a 20% mark-up, hey let's just keep ourselves in there.'462 Market access, branding notoriety, and product development in a 459 Potts et al., 2011:58. 460 Coons, 2010. 461 Potts etal., 2011:58. 462 Potts et al., 2011:59. 179 market system increasingly dominated by retailers appears to be the main, though not the only, driver for the fishing industry in the UK.463 Retailers' growing demand for certified seafood products has created an atmosphere of 'getting your house in order' among fishers.464 Industry sectors see little alternative as procurement policies of major buyers shift towards certified products 465 Similar fisher experiences can be observed in Canada. In 2007, the Government of Canada's fisheries management agency, Fisheries and Oceans Canada (DFO),466 and the Canadian Council of Professional Fish Harvesters co-sponsored a National Roundtable bringing together some 52 participants representing government, industry, and fishers organizations to discuss the federal government's new Ocean-to-Plate policy strategy, which encouraged the Canadian seafood industry to meet eco-certification and similar emerging market requirements. An overall consensus was reached on the importance of addressing eco-certification but fisher representatives expressed the most scepticism. Fishers perceived DFO as responding to the initiative of big box foreign retailers and the MSC and perhaps not responding creatively to the perceived threats to Canadian interests, particularly the impacts on the owner-operator sector that deals in high value products. Participants felt their interests were not the same as those of the corporate sector dealing with lower value/higher volume products, and that 463 Potts et al., 2011:59. 464 Potts etal., 2011: 60. 465 Potts etal., 2011: 72. 466 The department has been renamed Fisheries and Oceans Canada, though the acronym referring to the Department of Fisheries and Oceans, DFO, is still commonly used. 180 owner-operators were well positioned to capture niche markets with high value/low volume production caught by the independent owner-operators.467 Fishers also viewed the scenarios presented at the roundtable as indicating that 'retailers would be requiring the certification, processors would be reaping the benefits, and fishers might be footing the costs.'468 Fisher organizations expressed significant concern about lack of capacity to meet these new market demands and worried that the new requirements were simply another form of downloading on the industry. Fishers were also concerned that the Canadian Government's Oceans-to-Plate strategy and the role of certification in this strategy might be a disguised approach to institutionalizing transferable quotas and undermining policies protecting the independence of Canadian fishers (such as an owner-operator policy) against vertical integration 469 Similar sentiments about eco-certification and labelling requirements were expressed in Canada by the Maritime Fishermen's Union, Newfoundland and Labrador's main fishers union, the Guysborough County Inshore Fishermen's Association, and the Prince Edward Island Fisherman's Association. These organizations viewed international certification requirements as new pressures on the industry that were coming, as one informant put it, 'hard and fast,' adding new costs and burdens that may actually threaten the viability of struggling local enterprises.470 As the director of the Prince Edward Island Fishermen's 467 CCPFH, 2007. 468 CCPFH, 2007. 469 CCPFH, 2007. 470 Author interviews, 2009. Importantly, such concerns over costs have translated into demands from fishers for public support provincially and federally in Canada, so that the costs of certification do not fall on individual fishers. 181 Association put it, 'There's really mixed emotions about it...From a conservation view, it's seen as a good thing, but it's also seen as a costly exercise with no compensation. The retailers have stated point blank that there will be no price premium.'471 A tuna fisherman who worked out of North Lake, Prince Edward Island, was more blunt: 'It's a pain in the ass.. .It's a make-work project that will end up costing fishermen money; and we can't afford that.. .It's only going to make the lawyers, the accountants richer.'472 4.3 North Atlantic State Responses to the MSC There is a tendency in global value and commodity chain approaches to focus narrowly on sectoral analysis. But overly economistic supply and demand typologies of governance that characterize the early studies using the global value chain approach is arguably less useful for long-established food chains like fish that have been defined by multiple governmental and economic forces.473 Unlike the FSC, which emerged in a context of a lack of international conventions on forestry governance and in its early years explicitly shunned state participation (including excluding states from membership), the MSC emerged in the context of a dense network of national and international frameworks for fisheries governance.474 In this context, many governments have followed the development and spread of MSC certification with great interest. 471 Moore, 2009. 472 Moore, 2009. 473 Wilkinson, 2006. 474 Gulbrandsen, 2010. 182 Two overriding factors make governments and the fishing industry in seafood producing countries especially interested in MSC certification. First, MSC certification has the potential to directly affirm, strengthen or undermine the legitimacy of existing government management regimes. For instance, the MSC was initially seen more positively by some government actors like Australia and New Zealand who had been undertaking considerable changes to improve fisheries management anyway and who believed they were in a favourable position in terms of qualifying for certification.475 External standards can also provide a feedback mechanism for management organizations to improve management performance and enhance legitimacy.476 Governmental management bodies often use international standards as 'benchmarking" tools in the ongoing development of new policies or for affirming existing ones. Although the MSC treats governments as unprivileged stakeholders, government management bodies are unique and arguably privileged in actual certification assessments since they have legal responsibility over controlling access to coastal fisheries, often produce data required in fishery assessments, and therefore may also be called upon to implement changes necessary to meet or maintain certification. The MSC's assessment criteria focuses heavily on evaluating existing management frameworks, which means that national and regional fisheries management bodies are among the main actors being certified 477 As Hemes and Mikalsen observe, 475 OECD, 2005: 258. 476 Haward, 2009. 477 Meidinger, 2008b: 273. 183 assessments are not just a matter of evaluating the behaviour of private producers, but as much about passing judgment on government policies and management institutions...The truth is that in order to achieve its ultimate aim of sustainable fisheries, the MSC may indeed have to play politics. Fisheries are usually managed by governments; governments need to be persuaded that MSC certification is the way to achieve sustainability; and they must be willing (and able) to adjust management practices and institutions accordingly. Similarly, in a 2007 editorial, John Sackton, publisher of seafoodnews.com and a regular commentator invited to North American industry and government meetings, said that 'the success of fisheries certification falls squarely on traditional fisheries managers.'479 Second, and more obvious, government agencies have an interest in facilitating international market access for export-dependent domestic industries. While the first set of interests often manifest in the 'background' domain of fisheries management, the second set of interests manifests more explicitly in certification-market processes as we shall see below. This section argues that there were two prevailing types of state-industry responses to the MSC in the North Atlantic in the 2000s. On the one hand, some states and industry partners clearly, though initially reluctantly, facilitated and accommodated MSC certification. On the other hand, some states and domestic industry interests reacted more clearly against the MSC and created nationally-specific seafood eco-labelling programs. The creation of alternative certification and labeling programs in some countries was motivated in part by domestic social forces which viewed the MSC as not reflecting their interests. The politicization of seafood certification and eco-labeling in 478 Hemes and Mikalsen, 2002: 21 and 23. 479 Sackton, 2007. 184 the North Atlantic illustrates how certification dynamics are shaped by and become embedded in domestic and international political society. The analysis suggests that it is important to assess pre-existing state-industry-society relations in understanding and explaining how and why MSC certification is accommodated or challenged in different jurisdictions. This study therefore supports similar arguments about the significance of political economy differences between countries in interpreting state responses to forestry and fisheries certification in particular480 and to corporate social responsibility initiatives more generally.481 Moreover, the use of FAO norms and guidelines in the development of alternative certification systems in the late 2000s suggests that programs often simultaneous appeal to national and international sources of authority, further reinforcing the argument that drawing a clear line between 'public' and 'private' forms of governance and between 'domestic' and 'international' forms of governance is often difficult to sustain in specific cases. The development of alternative, territorial eco- labelling programs not only further illustrates the deep inter-relationships between political and civil society forces in the globalizing politics of certification but also reinforces this dissertation's argument that MSC certification facilitates the redefinition of fisheries governance in more commodified ways. National eco-label programs tend to share some of the characteristics of MSC certification, including using the commodity 480 E.g. Gale and Haward, 2011. 481 E.g. Gjolberg, 2010. 185 and commodity chain as a template of governance and using professional service companies as third-party auditors. 4.3.1 The Nordic Response and the FAO At the same time that the WWF and Unilever worked towards developing the MSC's Principles and Criteria for Sustainable Fisheries in the late 1990s, a major regionally constituted inter-national response to the MSC was mounted by Nordic countries. In 1998, the Nordic Council group of countries—Denmark/Faeroe Islands, Finland, Greenland, Iceland, Norway, and Sweden—responded warily to the MSC and pushed for an FAO response. The executive summary of a report commissioned for a spring 1998 meeting of The Nordic Council of Ministers states that the Nordic fisheries sector had been too passive with respect to external market trends and faced a situation in which the control over the sector's conditions is left to outside forces such as retailers and private certification initiatives like The Marine Stewardship Council. This leads to the fisheries sector losing momentum in vital areas, and it may prove difficult for the sector to regain the initiative...The threat against the fisheries sector lies in the danger of being subjected to administration by powers outside the control of the sector—a situation which is becoming reality with the formation of the private certification of sustainable fisheries by The Marine Stewardship Council. In Nordic countries in the late 1990s, there was profound scepticism of the MSC, 'which was perceived as something of a usurper: a self-appointed judge on the performance of 482 Cited in MacMullen, 1998. 186 >Q-5 governmental management regimes.' The Nordic Council of Ministers, which represents governments in the Nordic countries, initiated two key processes in response. First, on behalf of the Nordic Council, Norway submitted a proposal to the FAO Committee on Fisheries in early July 1998. The proliferation of non-governmental certification and labelling initiatives was debated in the FAO Fisheries Committee in 1997 and 1999 biannual meetings.484 The 1998 proposal requested the 'FAO to investigate the feasibility and practicability of developing non-discriminatory, globally applicable technical guidelines for the ecolabeling of fish and fish products which should take into account inter alia the specific characteristics of each state and region.'485 The FAO responded to the proposal by convening a Technical Consultation in Rome from 21-23 October 1998. The FAO Secretariat organized a meeting that was attended by 45 national delegations, representatives of three inter-governmental organizations, and seven international NGOs, including the WWF and the MSC. The Draft Report of the Technical Consultation noted that 'the approaches governments could pursue were either to leave these developments to the private initiatives or play a proactive role in setting up global guidelines for any eco-certification scheme applying to products from marine capture fisheries.'486 It was agreed that FAO would have no role in particular certification schemes and could only draft guidelines for an 'over-arching framework' 483 Stokke et al., 2004: 297. 484 Stokke et al., 2004: 296. 485 Cited in MacMullen, 1998. 486 MacMullen, 1998. 187 and 'globally applicable minimum criteria' under which specific eco-certification and labelling schemes could develop. It was agreed that the criteria for any eco-labelling scheme should be based on the FAO Code of Conduct for Responsible Fishing and it was stressed that if the FAO developed a set of guidelines, they should take into account ongoing related work by organizations such as the WTO, International Standards Organization, the World Conservation Union, and the MSC. It also stressed that there should be interaction and cooperation with such organizations in order to avoid duplication and ensure compatibility.487 Second, in response to the establishment of the MSC and the failure to get the FAO to react more definitively, the Nordic Council of Ministers established the Nordic Technical Working Group on Fisheries Labelling Criteria. The working group proposed an arrangement for the voluntary certification of sustainable fishing in the North-eastern Atlantic region which was adopted by the Nordic Ministers of Fisheries in August 2001.488 In 2003, Nordic interests in eco-labelling grew but the industry continued to harbour mistrust of the MSC and sought alternative options. In January 2004, representatives from Nordic countries agreed to examine the possibility of a Nordic initiative for eco-labelling.489 The Nordic Proposal explained that continued engagement with the FAO was important, 487 MacMullen, 1998: 32-33. 488 Stokke et al., 2004: 296. 489 NORA, 2005. 188 because the initiative behind this new ecolabel comes from the fishing industry itself, some may doubt its credibility; therefore, the participation of FAO is extremely important. Stressing adherence to FAO rules, which are based on internationally recognized rules concerning standards, certification, and accreditation, will minimise concerns related to credibility. The BRC [British Retail Consortium] standards are an example of how this can be done in a plausible manner.490 The effort to create a Nordic eco-label faltered in 2005, however, around the same time that the FAO committed to the earlier Nordic Council of Ministers initiative. Although no agreement emerged about what actions the FAO should take in response to the 1998 meeting, the FAO Committee on Fisheries considered the matter again in 2003, with expert consultation producing a set of proposed global guidelines for eco-labelling fish and fish products. At the initiative of the Nordic countries, the FAO's Committee of Fisheries, made up of governments and experts, drafted a set of guidelines for fish and fishery products during a series of FAO expert and technical meetings in 2005. In addition to noting that eco-labelling programs should be fully consistent with WTO rules, the guidelines emphasized that fisheries eco-labelling programs should include objective third-party fishery assessments using scientific evidence, transparent processes with extensive stakeholder consultation, opportunities for complaints, rules for adjudication, and standards based on the sustainability of target species, ecosystems, and management practices.491 Almost a decade after the WWF and Unilever teamed up to create a standard-setting organization, the FAO published these guidelines, which Gulbrandsen suggests represented an effort by governments to regain control over non- 490 NORA, 2005. 491 Sainsbury, 2010: 47. 189 state labelling programs.492 Since the guidelines partly correspond to the MSC's standards and because the MSC subsequently took steps to further harmonize its practices with the new guidelines, the publication of FAO guidelines can also be seen as entrenching and legitimizing the MSC's position.493 At the same time, although created partly out of concern for the multiplication of potentially divergent non-state eco-label standards, the FAO guidelines were also created in part to guide the establishment of new seafood eco-labelling initiatives. An important implication of the FAO guidelines was that they provided a template for individuals and organizations interested in creating new eco-labelling programs. In 2005, John Fiorillo of IntraFish explained that the FAO would likely create significant opportunities for potential certification entrepreneurs, saying quite sarcastically, I think it's time I start an eco-label program for seafood. Why not? The FAO just kicked out some guidelines for creating an eco-labeling program for seafood, so I have a playbook to which I can refer. What else do I need? Credibility. Who said credibility? Do I really need that? Maybe. Maybe not...With the news yesterday that the tortoise-like FAO has finally published guidelines for establishing eco- labeling programs for fish, it's logical to think that we might now see the emergence of new eco-labeling schemes, and perhaps even a scheme that competes with the undisputed leader in the green-labeling-for-seafood arena, the Marine Stewardship Council...One thing is for certain, it must be a great time to be an 'independent certifier.' The work must be pouring in.494 492 Gulbrandsen, 2009: 657. 493 Gulbrandsen, 2009: 657. 494 Evans, 2005. 190 A year later, Dr. Paolo Bray founded a non-profit organization called Friend of the Sea, an Italian-based certification program. The new initiative was reportedly related to the Southern African Sustainable Seafood Initiative, launched months earlier than the Bray- led program. It also claimed to be compliant with FAO guidelines.495 Importantly, founders of Friend of the Sea certification decided to certify products from both wild capture and farmed fisheries, and decided to provide certification at much lower costs than the MSC program. The new program aimed to use information already available to cut down on time and costs. This could be accomplished, for example, by measuring against existing FAO definitions of stock levels.496 Friend of the Sea charged US$1, 555 for certification when it started but raised fees to US$6, 220 two years later with demand growing. Relying on existing data allowed auditors to assess aquaculture producers in as little as a few days and assess complex wild capture fisheries in as little as a week and a half, while MSC certification typically took at least a year to complete during the 2000s.497 These features helped the Friend of the Sea Program burst onto the scene relatively quickly. In 2008, just two years after its first appearance, major retailers in central and southern Europe such as Carrefour, Coop, and Manor were offering consumers seafood with the Friend of the Sea eco-label 498 In less than three years, the Friend of the Sea program claimed to have over 10 million metric tonnes of wild- 495 Cherry, 2007. 496 Cherry, 2007. 497 Stromsta, 2008b. 498 Stromsta, 2008b. 191 capture, and 400, 000 metric tonnes of farmed, fish products certified around the world.499 As we shall see below, FAO guidelines not only provided a template for developing new non-governmental certification and eco-labelling initiatives; they also allowed governments and industry partners in different countries to develop their own seafood eco-labelling initiatives to verify and market the 'sustainability' of their domestic fisheries' produce. Ironically, just as the Nordic Council's push to get an FAO response had been fulfilled, big players in Norway's seafood industry moved to acquire MSC certification. In 2005, two of Europe's largest fisheries—Norway's North Sea and North East Arctic saithe fisheries-—became the first Norwegian fisheries to enter MSC assessment. The long-standing debate about eco-labels within Norway continued, however, as demonstrated in 2006 when the director of the Norwegian Seafood Federation, Geir Ove Ystmark, accused the MSC of hypocrisy for granting legitimacy to 'suspect' seafood buyers. Nevertheless, the successful certification of the two crucial whitefish fisheries, the world's first MSC-certified saithe fisheries, signalled a turning point in the MSC's presence in the Scandinavian seafood producing nation.500 Meanwhile, the Nordic Ministers Council continued their efforts to shape the direction of the sustainable seafood certification and labelling movement. In late 2009, the council sponsored a three-year network project to examine issues emerging from the 499 IntraFish, n.d. 500 Stromsta, 2008a. 192 growth and proliferation of eco-labels in the market. Organizers from the Norwegian research organization SINTEF Fisheries and Aquaculture explained that the aim of the first workshop, which included speakers such as Rupert Howes of the MSC, and executives of major retailers like Waitrose, Royal Ahold, Metro Group and the multinational food manufacturer and retailer Findus Group, was 'to make an overview of some relevant labels, and discuss if the label requirements in the future should have a more holistic approach.'501 4.3.2 Sweden As in other Nordic countries, Swedish authorities and fishing interests were initially very sceptical of the MSC. Representatives from the Swedish National Board of Fisheries were concerned mainly about the central role of, and dependence on, Unilever as the main sponsor of the program and viewed the program as exclusive and closed, partly because requests for information were denied as classified. As one official complained, 'I think that MSC is just another consulting firm with the only aim to earn money, completely following its own self-interest.'502 Like other Nordic countries, state and industry actors in Sweden initially balked at the MSC for a variety of reasons but engaged in informal discussions and debates about the significance of seafood eco- labelling more generally. 501 IntraFish, 2009c. 502 Bostrom, 2004: 376. 193 In 1998 and 1999, the Swedish fish industry association Fiskbranchens Riksforbund spearheaded discussions after domestic and international food retailers demanded verification that Swedish seafood products were coming from sustainable fisheries. Food retailers, processing companies, fishermen's associations, environmental organizations, and national fisheries management authorities in fisheries, agriculture and food sectors subsequently attended seminars to discuss sustainability and eco-labels. The seminars did not produce any clear conclusions except agreement that eco-labelling instruments were of growing relevance. However, several participants considered an influential Swedish eco-labelling organization and NGO, KRAV (Association for Control of Organic Production), as a candidate to possibly administer an eco-labelling process for seafood. Questions were raised about KRAV's focus on organic production and concerns were expressed about whether trade issues might be posed because the organization was Swedish. Many participants viewed the program as an adequate option, CA1 however, because it was well-established, credible and not entirely private. Indeed, KRAV has been described as a kind of hybrid organization with close links to civil society, market and state authorities.504 In June 2000, KRAV started coordinating the development of standards and in 2002 received support and funding from the European Union, the Swedish Ministry of Agriculture, the National Board of Fisheries, a number of Swedish country councils, and key players in the Swedish fishing industry for the project. A preliminary framework of 503 Bostrom, 2004: 377. 504 Bostrom, 2006. 194 principles and criteria for a standard was published and sent to stakeholders in December 2002, a final standard proposal was accepted by KRAV's Board two years later, and the label has been in operation since 2004.505 The KRAV standard for eco-labelling capture fish consists of five groups of rules that cover different parts of production from fishing to retailing, including (1) competence of the certification body, (2) stocks, (3) fishing vessels, (4) fishing methods, and (5) landing and processing, including traceability.506 4.3.3 Iceland Government and industry actors in Iceland also reacted cautiously to the MSC. Around the same time that the first Norwegian fisheries were finally certified to the MSC, key government and industry representatives in Iceland were preparing a 'made- in-Iceland' approach to eco-labelling, in large part in defiance of the MSC and the new Friends of the Sea program. The development of the Icelandic eco-label formally began in August 2007, when the Icelandic Minister of Fisheries, the Marine Research Institute, the Directorate of Fisheries and the Fisheries Association of Iceland released a 'Statement on Responsible Fisheries in Iceland.'507 The effort gained new urgency in 2008, when supermarkets in Switzerland stopped selling Icelandic cod because it was not verified through third-party 505 Bostrom, 2006. 506 Bostrom, 2004: 379. 507 Gudfinnsson et al., 2007. 195 certification.508 Soon after, the Ireland-based certification company Global Trust Certification Ltd., a firm accredited to carry out MSC certifications, was contracted to carry out certification of Icelandic fisheries. Kristjan Thorarinsson, a representative of the Icelandic Federation of Fishing Vessels, explained that the MSC and Friend of the Sea programs were competing with each other to build up a monopoly position within the industry, despite often having a superficial understanding of the particular fisheries they assess: 'cooperation with these organizations has not been interesting for the Icelandic seafood business for a variety of reasons, in particular the methods that these organizations use and the demands they make for accreditation to be approved.'509 Thorarinsson criticized Friend of the Sea's decision to not certify Icelandic cod and haddock fisheries, claiming that the refusal to certify was based solely on information from the website of the International Council for the Exploration of the Sea. At the same time, Thorarinsson admitted that the pressure of retailers was important: 'There has to be some response to this if we intend to maintain our rights to our own stocks and market products to the most productive outlets.'510 To meet such challenges, Icelandic interests signalled their intentions to create an Icelandic eco-label based on the 2005 FAO guidelines for seafood eco-label programs. Notably, at the same time that parts of the Icelandic industry and government representatives worked to create a third-party certified eco-label in the late 2000s, the 508 Glynn, 2010: 50 509 IntraFish, 2008a. 510 IntraFish, 2008a. 196 National Association of Small Boat Owners in Iceland initiated a pilot project for certifying five small boats that target cod, haddock and catfish. The organization, concerned that the MSC favoured large operators instead of small operators, partnered with the Swedish certification body KRAV to explore developing standards and establishing an eco-label for fish caught by the small boat fleet.511 This dynamic illustrates a structural tension between small and large-scale commercial interests who were more active in the subsequent development of the Icelandic eco-label program. Indeed, in March 2009, Icelandic government officials unveiled the 'Iceland Responsible Fisheries' eco-label during a press conference at the Boston Seafood Show, where officials discussed plans to begin certification of fisheries and implementation of a chain of custody traceability system. The press conference was hosted by the Iceland Ministry of Fisheries and Agriculture, the Trade Council of Iceland, the Icelandic Embassy in Washington, D.C., the Fisheries Association of Iceland, and the seafood company Icelandic USA.512 Several months later, it was announced that due largely to the demand of seafood buyers in key retail and foodservice markets, particularly in the UK, Germany and France, the new Icelandic eco-label was being distributed to domestic producers and would appear on the vast majority of Icelandic products 'within months' if the Fisheries Association of Iceland considered the species well-managed. It was announced that by the end of 2010, Icelandic fisheries would be formally assessed by a third-party certification body against guidelines being developed by the Ministry for Fisheries and 511 Bates, 2008. 512 Fiorillo, 2009a; SeafoodSource.com, 2009. 197 Agriculture, other government bodies, and the Fishing Association of Iceland. Asked about the compatibility of the Icelandic eco-label with the MSC, Fisheries Association of Iceland representative Finnur Gardarsson said I don't want to discuss other eco-label programs. This is a decision made by the Icelandic authorities and Icelandic stakeholders in the industry. This decision has been made and we believe our program will be as good as any other.. .It will be based on sound and good scientific advice... We just want to have third-party internationally recognized certification body to confirm our fisheries are sustainably harvested.513 Gardarsson also said that the Icelandic government did not expect a price premium to develop, expected that the new eco-label would open new markets for Icelandic seafood products, and indicated that the Fisheries Association of Iceland intended to pay for certification.514 A technical committee composed of the Ministry of Fisheries, Marine Research Institute, and industry stakeholders would oversee the draft consultation and subsequent assessment processes.515 On 6 June 2010, the Fisheries Association of Iceland announced that the 'Responsible Fisheries Management Specification for the Certification of Icelandic Fisheries' was available for public comment.516 Unlike the MSC certification program, which has over a dozen firms accredited to carry out third- party assessment, the Irish firm Global Trust Certification Ltd. was contracted to act as the sole third-party certification body to carry out independent assessments for the 5,3 Robinson, 2009. 514 Robinson, 2009. 515 Robinson, 2009. 516 IntraFish, 2010c. 198 Icelandic eco-label program.517 Officials expected Iceland's most important stocks, cod and haddock, to be the first to go through the new eco-label process and a website was subsequently launched as part of a generic marketing campaign. The development of an Icelandic eco-label does not mean that the MSC has been shut out of Iceland, however. On 27 April 2010, Saemark, one of Iceland's largest seafood exporters, became the first Icelandic 'fishery,' which includes 23 vessels and Saemark's four processing partners, to enter into MSC assessment.518 4.3.4 Netherlands In other countries, MSC certification has been more explicitly facilitated by governments. In 2008, the Dutch demersal fleet applied for MSC certification as part of a memorandum of understanding with the WWF, the North Sea Foundation and the Dutch fisheries minister, with additional funding committed by the European Fisheries Fund budget. In 2009, lawmakers representing the three parties that formed the Dutch coalition government voted to amend the government's 2010 budget to make an additional 500, 000 Euros (US$720,000) available for fishery assessment and certification. Member of Parliament Ad Kooppejan said that 'the 1 million Euros (US$1.4 million) we have already made available for fishery certification proved to be an enormous success.. .There were too many applications for the available funding and some applicants were eliminated by lottery... We thought it only appropriate that those 5,7 Jensen and Fiskaren, 2010. 518 MSC, 2010a. 199 fisheries that were turned down should get further support to be assessed in recognition of their commitment to independently verified sustainable fishing.'519 4.3.5 France The government of France appears to support both the MSC and the establishment of a new national eco-label initiative. A national debate on eco-labelling in France started in 2007 'under pressure from individual stakeholders and public institutions, including the European Union.' 520 In spring 2007, the French public agency responsible for promoting seafood products commissioned a study to define the most relevant criteria for a fishery eco-label. The study found that MSC certification most closely met FAO requirements but it also found that the French fishing industry saw a need for a national eco-label that would include criteria not solely focused on environmental issues. The national discussion on ecology launched by the French government in 2007 produced 238 proposed actions the following year. Number 89 recommended the 'ecolabelling of French fisheries,' a recommendation subsequently adopted by the government agency Ofimer. In March 2008, Ofimer announced that within three years, 10 fisheries would be assessed against a national standard in line with the FAO requirements for eco-labelling.521 The French parliament also passed a law outlining plans to establish an eco-label for French fisheries and their products. 519 IntraFish, 2009b. 520 Salladarre et al., 2010. 521 Salladarre et al., 2010. 200 Authorities did not immediately announce which ten fisheries would be chosen for MSC assessment, instead saying the announcements were part of a 310 million Euro (US$490 million) three-year government-funded plan to help France's seafood sector establish e The debate around eco-labelling fisheries in France continued in 2010. Options included no action, a national or European initiative, or a public list of minimum requirements.523 In July 2010, a second French law, the Loi Grenelle II, further outlined the proposed establishment of an eco-label for French fisheries and their products. Illustrating the strong social dimensions which characterize state-civil society relations in France, a government spokeswoman said that 'whereas the MSC covers three main themes—the state of the biomass, the environment and the fisheries' management—the French eco-label offers to go further. ..It will cover three additional criteria, namely the social aspect, the product's quality and the optimization of energy use onboard the ships.'524 Significantly, the new standard would be open to all wild-capture fisheries, French and non-French. To acquire the label, fisheries would apply to a certified auditor and receive certification from COFRAC (The French Accreditation Committee), a national certification committee which accredits state and non-state agencies.525 The French government also put Bureau Veritas Certification, a multinational company also 522 Evans, 2008. 523 Salladarre et al., 2010. 524 Tallaksen, 2010. 525 Tallaksen, 2010. 201 accredited to carry out MSC certifications, in charge of developing the framework and criteria for the new eco-label standard. After Bureau Veritas Certification completed a proposed framework, the proposal would then be submitted to a 'stakeholder committee representing the fisheries industry, consumers and non-governmental organizations (NGOs), in particular those representing the environment and natural resources.' Subsequently, the proposal would be sent out for public consultation in 2011.527 4.3.6 United Kingdom In the late 1990s, UK government departments did not have a public position on the MSC and industry and government actors in the UK reacted cautiously during this period.528 Fisheries scientists expressed a general acceptance that the basic values of the program were sound but thought that delivering them through the MSC would be no easier than through the existing management regime, especially in demersal529 fisheries such as those found in the North Sea.530 Despite the cautious reaction from some government and industry bodies, the MSC received support from conservative elites and government officials in the early years of the certification program. As mentioned in the previous chapter, former Conservative party minister John Gummer was appointed as the 526 Tallaksen, 2010. 527 Tallaksen, 2010. 528 Gale and Haward, 2011: 226. 529 Demersal fish refers to fish that live near or on the bottom of the ocean. Controversial bottom-trawling methods are often used to capture fish that live near the ocean 'floor.' 530 MacMullen, 1998: 27. 202 founding chairman of the MSC. In addition, Prince Charles was also a member of the i MSC board and has continued to be a high profile supporter of the program. Officials from the UK's Department for Environment, Food and Rural Affairs showed interest in the MSC and were able to disregard opposition of the main industry body, SeaFish, 'because they did not stand in a clientelistic relationship to the industry.' The government department was also lobbied by WWF-UK and the MSC, and a former OECD official who was executive director of the MSC in the early years was able to use his networks to secure UK government support.533 Government officials and allied industry agencies also took the opportunity to learn from and incorporate the MSC's new principles and criteria for sustainable fishing. SeaFish and the National Federation of Fishermen's Organisations developed benchmarking audits for vessels in the catch sector to measure and reward good practice. Moreover, as in other seafood producing countries with government management regimes, it was recognized that fisheries applying for certification needed catch and harvest data administered by management bodies.534 In the mid-2000s, the UK government shifted from an active but 'hands-off approach to a more explicitly supportive role, particularly in offering direct financial support to the MSC. The Department for Environment, Food and Rural Affairs provided a few thousand pounds of financial support following a request from the MSC chief 531 Gale and Haward, 2011: 225. 532 Gale and Haward, 2011: 253. 533 Gale and Haward, 2011: 253. 534 Gale and Haward, 2011: 226-227. 203 executive officer and helped fund the establishment of the MSC's Fish and Kids program, which reportedly reached more than 900,000 children by 2009. In July 2009, the Department for Environment, Food and Rural Affairs also provided 400, 000 pounds from its 'Greener Living Fund' to support the 'MSC on the Menu' program, a program in which the MSC works with the catering and restaurant sectors. The shift towards a more explicitly supportive relationship between the UK government and the MSC was further reflected in government commitments outlined in the MSC's 2004 Net Benefits report, in which UK authorities recommended that all domestic fisheries seek certification to the MSC or similar standard by 2015.536 While the UK government has provided substantial support for the MSC, it continues to work with the European Union and FAO on discussions about eco- labelling.537 Further government support is no doubt also tempered because, as Gale and Haward observe, strong support within the UK in not universal, with the catch sector in particular continuing to express concern about the costs and lack of benefits of certification. Significant resistance continues in key industry bodies which have not officially endorsed the MSC. Industry actors have also developed best practice initiatives and codes of conduct and, in the case of SeaFish, have helped promote alternative certification options such as ISO 14000 and a domestic vessel certification program. By 535 Gale and Haward, 2011: 227. 536 Gale and Haward, 2011: 231. 537 Gale and Haward: 2011: 232. 204 March 2010, only 12 UK fisheries had achieved MSC certification, many of them small- rio scale, and very localized with low annual catches. 4.3.7 Canada In 2001, Canada's federal agency responsible for fisheries management, DFO, entered into discussion with St. Mary's University Professor Anthony Charles to develop a framework for analyzing options, impacts and effects of eco-labelling in general and the MSC in particular. DFO subsequently contracted a Halifax-based consulting firm, Gardner Pinfold, to provide advice on how DFO should define its position on seafood cco-labelling.539 Around the same time, the British Columbia salmon fishery, which supplied Unilever at the time,540 became the first Canadian fishery to enter into MSC assessment process after competitor salmon fisheries in Alaska acquired MSC certification in 2000. It soon became clear that significant DFO support would be required in the assessment of this salmon fishery. As the Gardner Pinfold consulting report noted: In Canada, industry cannot attain eco-label certification without DFO's assistance. Costs associated with supporting certification information requirements will vary across fisheries. DFO's initial experience with BC [British Columbia] salmon is expected to be costly. It would be helpful for DFO to develop a standard approach to respond to requests for support from industry. Ignoring independent certification bodies, such as the MSC, is not an option.541 538 Gale and Haward, 2011: 228. 539 Gale and Haward, 2011: 197. 540 Gale and Haward, 2011: 195. 541 Quoted in Gale and Haward, 2011: 204. 205 Like government agencies in other jurisdictions, DFO also recognized that if a fishery fails MSC assessment, it can be viewed as a failure of national fisheries management.542 The Canadian Government took a more proactive role in supporting certification following the 2006 election of the federal Conservative Party of Canada, which subsequently launched a federal-provincial 'Fishing Industry Renewal' strategy (2007- 2011).543 Certification and eco-labelling emerged as a cornerstone of DFO's new Oceans to Plate policy strategy, announced in 2007 as part of the Fisheries Renewal policy initiative. DFO developed the Oceans to Plate management concept as a new economic development and industry (re)structuring strategy that integrated environmental sustainability and commercial viability goals to help fisheries 'adapt and prosper in the changing global marketplace for seafood.'544 Among other key roles, the Oceans to Plate approach was intended to help ensure that sustainable management systems were in place that would secure eco-certificates and to engage in assessment processes for certification 'when demanded' by industry.545 In a context in which the domestic seafood industry is heavily export-oriented, DFO increasingly viewed not being ready for eco-certification demands from international markets as rendering its management regime as a barrier to trade.546 In an 542 Gale and Haward, 2010: 198. 543 The program is often referred to as Fisheries Renewal in official documents. 544 Stringer et al„ 2009. 545 Bouffard, 2008. 546 Author interview, 2011. 206 important government study of 2006 Canadian seafood exports, DFO ranked risks of market loss in export markets without labelled, or eco-certified seafood. The market risk analysis found that a large segment of domestic fish production had recently become vulnerable to new and future eco-labelling and traceability requirements in other jurisdictions, particularly the US and EU.547 A draft analysis found that 'Perhaps as much as 50% or more of Canadian seafood export to the U.S. could be subject to risk of MSC-labelled requirement.'548 Significantly, the results indicated that 11% of Canada's seafood went to 'high-risk' markets and that 95% of seafood ended up in medium or high risk markets.549 Revealing the high level of urgency around the issue, the federal Minister for DFO was quoted in a national newspaper in 2009 as saying the federal government was doing everything possible to help industry get certified. The Minister explained that '[t]he cost of not doing it would be, well, we can't even talk about that.. .We can't not do it.'550 The Canadian government remained officially neutral with respect to promoting specific eco-certification programs during the late 2000s and did not officially endorse one organization over another. However, DFO increasingly engaged in a number of activities that promoted eco-certification in general and MSC certification in particular, including having officials regularly present at industry forums to recommend producers 547 DFO, 2008b. 548 Moore, 2009. 549 DFO, 2008b. 550 Moore, 2009. 207 get ready for meeting market demands like eco-certifications.551 DFO officials also indicated that they were more 'hands on' than countries like the US and perhaps somewhat less active than countries like New Zealand. During a meeting of the parliamentary Standing Committee on Fisheries and Oceans, a DFO official responsible for eco-certification contrasted the US and Canada's approach to helping industry in eco- certification assessments, saying that: [In the US] if producers wants to seek an eco-label, whether it's Marine Stewardship Council or otherwise, they will have to do their own legwork, look at information on NMFS's [National Marine Fisheries Service Policy] website, get their own information, hire their own consultants, and build their information and their stories, because it is a story that they're telling to the assessors. You won't have things like interviews with scientists and managers to get a better understanding of how the fishery is managed, what the science is, and how it applies to that particular fishery, whereas we will have that in Canada. We'll sit down with the assessors and provide that kind of information.552 The responsibility for attaining and maintaining fisheries certification in Canada is therefore increasingly linked with traditional fisheries managers. It is important to note, however, that some fishing groups have requested the government to develop a Canadian certification program.553 In rejecting a recommendation by the House of Commons Standing Committee on Fisheries and Oceans in 2009 to explore the idea of creating a Canadian certification system that would comply with international guidelines, the Government of Canada explained that 551 The Standing Committee on Fisheries and Oceans, 2010. 552 The Standing Committee on Fisheries and Oceans, 2010. 553 Author interview, 2009. 208 DFO is the regulator and manager of the wild capture fishery in Canada. To develop a government ecocertification standard would not be viewed by market actors as credible (i.e. government would be viewed to be certifying its own fishery management regime for sustainability) as would be an independent standard. Therefore, the role of DFO is to actively support any Canadian seafood industry that chooses to pursue third party ecocertification, rather than develop a government certification standard and program. DFO's support role is to respond to industry's decision to pursue ecocertification and is extensive and includes: providing timely and accurate information on the status of the fishery resource and its management regime; working with certifying bodies to ensure that they consider the unique aspects of the Canadian fishery; and working with industry to make changes to management practices in a fishery to meet conditions on a certification.554 In lieu of rejecting this recommendation, which was made in a review of a (low price) crisis in the Atlantic lobster fishery during the 2008-2009 global recession, DFO Minister Gail Shea announced that 'federal and provincial governments and industry will collaborate in a lobster development council to increase domestic and international market access and support the industry in reaching the eco-certification standards necessary to increase their global markets.'555 The Canadian Government therefore resisted efforts to create a Canadian eco-label program for wild capture fisheries and instead committed to facilitating domestic uptake up of external certification. 4.4 Conclusion The MSC is clearly designed and promoted as a 'market-driven' tool, but merely invoking the phrase 'market-driven' to explain the MSC's expansion obscures a complex set of agents and driving forces. This chapter provided some concrete insight into the specific forces shaping the evolution and extension of the MSC certification system. The 554 Government of Canada, 2009a. 555 Government of Canada, 2009b. 209 analysis concurs with other studies that suggest that the markets for eco-labelled seafood are not being created by consumer demand.556 By 2006, MSC employees were still saying that it was still too early to have quantitative evidence of consumer preferences for labelled products.557 Even in the UK, where the MSC has the deepest roots, a 2011 ceo study found that 70% of consumers were still unfamiliar with the MSC. Even though consumer awareness is growing, the expansion of the MSC in seafood markets has been to a great extent built by 'harnessing' the oligopsonistic buying power of retailers, who can put pressure on their many suppliers. The strategy of the MSC and environmental NGOs to build markets for eco-labelled seafood implicitly, if not explicitly, concede that the power of the consumer over production is minute in comparison to the power of big corporate buyers to reorder production-consumption systems. Because the relations and interests of seafood production are bound up in the state system, which legalizes and supports domestic industry, we also observe a growing politicization of certification and eco-labelling. State responses to the MSC are being shaped by interrelated external forces, such as retailer demand, and domestic producer interests. States appear to face a number of options with respect to MSC certification that are not mutually exclusive, including (1) do nothing, (2) promote multilateral responses, (3) develop alternative eco-label programs, and (4) facilitate domestic uptake. Alternative national eco-label programs, as created in Iceland for example, can be 556 Gulbrandsen, 2006; Roheim, 2008. 557 Leadbitter et al, 2006: 666. 558 Potts etal., 2011:49. 210 contrasted with the tendency of other states in the UK and Canada to promote and accommodate MSC requirements. Nevertheless, common to all state responses to certification (as well as the position of the MSC itself) appears to be (1) reference to compliance with FAO guidelines and (2) third-party verification. Even where governments support the MSC, there is often an acknowledgement that the MSC is consistent with FAO fishing requirements. Therefore, one might expect that the UN system will continue to provide the key 'meta-governance' reference point, even if the MSC continues to be implemented in particular fisheries and used as a benchmark for policymakers. At the same time, the proliferation of globally-oriented and national eco- labelling programs reinforces this dissertation's argument that MSC certification facilitates the redefinition of fisheries governance in more commodified ways. In all programs, the seafood commodity and commodity chain are central templates of governance (i.e. product eco-labelling) and professional third-party auditing companies are used to assess fisheries and verify compliance. 211 CHAPTER 5: The Local Political Economy of MSC Certification 5.1 Introduction This chapter examines the 'local' political economy of MSC certification, shifting the focus of attention towards two crucial questions at the level of production: certification of what and for whom? To meet the growing demand for seafood that is independently certified and labelled as sustainable, hundreds of fisheries have entered into MSC assessment, but we still know very little about the nature and effects of MSC certification in specific fisheries. Who is applying for MSC certification? Why and how is MSC certification being acquired in specific fisheries? And, returning to our central question, can we understand the uptake of MSC certification in particular fisheries as a commodification of governance? This chapter argues that MSC certification in particular fisheries can indeed be conceptualized as a commodification of governance. The key point is not to analyze certified 'fisheries' but instead the fishery client, the 'certificate holder' in MSC parlance. Specifically, this chapter examines MSC fisheries certification client formation, power and change through a case study of a significant fishery that emerged in the Province of Newfoundland and Labrador in the wake of the Canadian cod collapse, which was a major argument for the need to establish the MSC in the 1990s. In August 2008, Northern shrimp, a key prey of the infamous Northern cod, became the 212 first marine species managed by the Canadian government to meet the MSC environmental standard for 'sustainable and well-managed' wild capture fisheries. This chapter proceeds in three sections. The first section briefly overviews the historical development of the Canadian Northern shrimp fishery. This overview is important because the historical development of different sectors (offshore and inshore) in this fishery helps explain subsequent dynamics of MSC client formation and how power relations play out in certification. The historically and politically constituted separate sectors helps explain why MSC certification was more important to inshore sector processing companies, who supplied shrimp mainly to markets in the US, UK, and continental Europe. The first successful MSC fisheries certification client in Canada was the Association of Seafood Producers (ASP), an industry organization representing owners of fish processing facilities based in the Province of Newfoundland and Labrador only. The second section examines the assessment process of the ASP-led certification of the Northern shrimp fishery. It reveals the important role of federal government involvement in certification processes, which consists of participating in interviews with Moody Marine Ltd.'s assessment team, providing the assessment company with key documents and information about management and science related to the Northern shrimp fishery, and implementing management changes and data gathering activities necessary to help the ASP meet Conditions of Certification required to maintain certification. This section therefore also illustrates how certification provides fishery certification clients in particular with new channels of access to and influence over the 213 policy making process and blurs the boundaries between public and private, state and non-state sources of authority. The third section examines the dynamics and implications of certificate exclusivity in fisheries certification, which demonstrates how governance is commodified, struggled over, and used as a business tool in local industry competition and conflicts. The exclusivity of MSC certificates allowed for the emergence of certification client structures in the Northern shrimp fishery that reflect and reinforce a highly competitive and dynamic political economy of production. Even though the Northern shrimp fishery was certified, clients' exclusive control over who gets access to MSC certification allowed the certificate holder to initially exclude competing producers from being able to sell their products as MSC-certified even though their shrimp originated from the 'same,' putatively certified fishery. The exclusivity of MSC certificates also facilitated new industry changes in the composition of the initial processing organization that acted as client, which gained new members by sharing access to certification in 2009 and expelled a community-based fishing co-operative from the client group in 2010. The integrated fisher-processor co-op subsequently applied for its own certification for ocean areas already certified under the ASP-led certification and indicated its willingness to share access to its MSC certificate with any fishers who catch shrimp in areas covered in the application, including those who might normally sell shrimp to ASP processing companies. This new situation illustrates the unique and perhaps especially commodified characteristics of voluntary certification in common pool fisheries: rather than being simply a mechanism for sustainability or even 214 earning market benefits, certification allows clients, the certificate holders, to affect resource access and production relations. 5.2 The Canadian Northern Shrimp Fisheries Northern shrimp (Pandalus borealis) is a species of coldwater shrimp with significant populations in the northwest Atlantic Ocean. Known for its pink, sweet, and flavourful meat, Northern shrimp is a circumpolar, migratory shellfish with current southern physiological and ecological limits roughly in the Gulf of Maine and with greatest abundance north from 46°N (off the coast of Nova Scotia) to 75°N (off the coast of Baffin Island).559 Canada's East Coast commercial shrimp fishery has been historically constructed around two relatively new but distinct fishing fleets, often referred to as the offshore license fleet and the inshore license fleet. Figure 5.1 Pandalus borealis (Northern shrimp) Source: DFO, 2007 Unlike the iconic cod, the commercial fishing of shrimp by Canadians is a relatively recent development, with major efforts starting in the 1970s. Following federally funded 559 Koeller, 2000; DFO, 2007. 215 exploratory fishing programs off Canada's east coast in the late 1960s, longliner skippers from Newfoundland, New Brunswick and Quebec fitted otter trawls to their boats to catch shrimp in the Northern Gulf of St. Lawrence.560 Although Northern shrimp species are trawled by Canadian fishers in the Gulf of St. Lawrence and off the coast of Nova Scotia, the Northern shrimp fishery generally refers to two fishing fleets, offshore and inshore, that operate in national DFO management zones between the Grand Banks off Newfoundland and just south of the Arctic ocean off Baffin Island (corresponding to areas 0-7 in Figure 5.2). Major offshore commercial development of the shrimp fishery began after Canada acquired jurisdiction over the 200 mile Exclusive Economic Zone, which came into effect on 1 January 1977. Although the federal government decided to prevent the expansion of an offshore fleet of trawlers for Northern cod in anticipation of Canadian control over the 200 mile limit, it decided to 'Canadianize' the Nordic fleet of factory fishing vessels that caught shrimp off Canada's East Coasts before 1977. The Canadian Government 'Canadianized' Danish, Faroese and Norwegian fleets that trawled shrimp in the Davis Strait between Canada and Greenland through a domesticization process that took more than 15 years to complete.561 For about five months in 1977, DFO and Fisheries Products Limited conducted test fisheries which caught an average of eight tonnes per day. In early 1978, the federal government announced it planned to grant factory freezer trawler licenses for shrimp and invited Canadians to submit applications; DFO received about 40 applications for offshore 560 Sinclair, 1983. 561 Allain, 2010. 216 shrimp fishing licenses.562 In 1978 and 1979, DFO issued twelve limited entry offshore licenses to develop a commercial shrimp fishery, with interests in Newfoundland, Nova Scotia, New Brunswick and Quebec sharing a Total Allowable Catch (TAC) quota of 8,100 tonnes. Four additional licenses were issued in 1987 to northern Canadian commercial interests in Labrador, Quebec and Nunavut and the final offshore license was issued in 1991 to Newfoundland interests.563 The offshore sector is carried out by about a dozen factory freezer trawlers that are 49m-75m in length, that are purpose-built for trawling and processing shrimp, and operate year-round. 562 Barrow et al., 2001. 563 DFO, 2007. 217 Figure 5.2 Canadian Shrimp Fishing Areas 0-7 Davis Strait X Scotian Shelf Atlantic Ocean Source: Map adapted from DFO 2007 In the late 1970s, DFO established National Shrimp Fishing Areas (SFAs) to provide the basis for managing the Northern shrimp fisheries. Two important areas—the Flemish Cap and the Davis Strait—are subject to annual bilateral negotiation with members of North Atlantic Fisheries Organization (NAFO), a regional fisheries management organization responsible for setting quotas for migratory shrimp that straddle the Canadian and international jurisdiction. SFAs 0-16 fall within Canada's 200 mile Exclusive Economic Zone from the waters off Baffin Island south to Nova Scotia. The 218 management of Northern shrimp fisheries within Canada are further divided into the Maritime Region (the Eastern Scotian Shelf), the Laurentian Region (the Gulf of St. Lawrence), and the Newfoundland Region (from the northeast coast of Newfoundland north to Baffin Island). Each of these regions is managed under separate DFO Integrated Fishery Management Plans, which are developed with input from Advisory Committees composed of government and industry stakeholders. The main mechanisms used to prevent overexploitation of shrimp stocks are TACs, which DFO establishes on an annual basis and distributes to each sector. The offshore sector is managed under an Enterprise Allocation system established in the late 1980s, with each license holder receiving an equal allocation within each SFA and with inter-enterprise transfers permitted in the current season. The inshore sector operates under a competitive system; industry sets initial trip limits and catch caps and adjusts them through the season.564 The next major development of the Canadian Northern shrimp fishery, a development of most relevance for this chapter, occurred off the east coast of Newfoundland and Labrador with the extension of hundreds of additional licenses to the inshore fleet in the wake of the historic cod collapse. With successive extensions of the original moratorium and new closures announced for other areas through the 1990s, East Coast small-boat commercial fishers increasingly shifted fishing efforts towards lobster, snow crab, and Northern shrimp. Although lobster and crab fisheries were well- established on the east coast of Newfoundland and Labrador prior to the cod collapse, few fishers in this area caught shrimp. During the mid-1990s, however, scientists began 564 Barrow et al., 2001; DFO, 2007. 219 to observe a significant growth in the biomass of Northern shrimp relative to the biological regime observed in the 1970s, particularly in areas off the northeast coast of Newfoundland and Labrador. Scientists explained the long-term regime change in shrimp with reference to the decline in cod populations, one of Northern shrimp's main predators, and cooling ocean temperatures, though the relative importance of these and other environmental factors remains unclear.565 Increasing access to the significant biomass of Northern shrimp became a major issue in the late 1990s as former cod fishers, indigenous interests, and processing companies adjacent to shrimp grounds sought access. On 23 April 1997, then Federal Minister of DFO Fred Mifflin announced an increase in the total allowable catch of Northern shrimp from the quota of 37, 600 tonnes allowed the previous year to 59, 050 tonnes.566 In 1997 and 1998, DFO and NAFO announced further increases in allowable catches from the waters off Baffin Island south to area off the east coast of Newfoundland. Expanded catches in both the offshore and inshore sectors helped Canada become the world's largest producer of Northern shrimp in the late 2000s and shrimp consistently represented Canada's leading seafood export by volume during this time. Total annual catches peaked at 185, 947 tonnes in 2007 (See figure below).568 565 Lilly et al., 2000; Worm and Myers, 2003. 566 Barrow et a., 2001. 567 DFO, 2007. 568 DFO, 2008a; DFO, 2009; DFO, 2010a; DFO, 2011. 220 Figure 5.3 Canadian landings and TACs of Northern shrimp by fleet, 1997-2009 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008p 2009p [ m frtshore czm Offshore > TAC | Source: DFO, 2010b569 The increases in allowable catch generated substantial growth in Newfoundland and Labrador's inshore fishery in particular. Between 1997 and 2001, the number of vessels fishing shrimp in Newfoundland and Labrador increased from 46 on the west coast to about 380 licensed enterprises by 2005.570 The vast majority of vessels in the inshore fleet are in the 13.7m-19.8m range and operate in areas adjacent to eastern Newfoundland and Labrador during the summer months. Allocations were distributed to Newfoundland and Labrador fishers based on the principle of adjacency, that is, those nearest to the resource ought to benefit. DFO assured offshore sector interests, however, that their access to shrimp would not be undermined by the expanded inshore sector and granted new shrimp fishers in the inshore fleet temporary allocations when total quotas 569 2008p and 2009p refers to preliminary data. 570 Gardner Pinfold, 2006. 221 remained above 37,600 tonnes. DFO introduced a 'last in, first out' approach to assign future quota reductions in reverse order of gaining access, but made temporary licenses permanent or regular in 2007.571 Importantly, the rapid and steady expansion in inshore sector fishing fleet catches provided the basis for an expanded processing sector and the number of shore-based shrimp processing plants in Newfoundland and Labrador grew from three to 12 by 2001.572 The growth of the shrimp fishing and processing industry through the late 1990s and 2000s therefore provided substantial opportunities for Canadian fishers, processing workers, communities and companies in the aftermath of the 1992 and other groundfish moratoria. 5.3 Inshore Sector Production and Market Dynamics The historical background outlined above is important because MSC certification was first adopted by a Newfoundland and Labrador organization representing the owners of shore-based processing facilities. Three factors help explain MSC fisheries certification client formation and subsequent change in Newfoundland and Labrador's inshore shrimp industry. First, federal shrimp fishing licensees in the inshore sector, 75% C*7'l of which were held by Newfoundland and Labrador-based fishers in 2005, are generally held by fishers who own vessels and who often have licenses to catch other fish species, such as snow crab. The independence of fishers in this fleet is protected by the federal Fleet Separation Policy, which prevents processing companies from owning 571 DFO, 2007; Parsons, 2009: 410. 572 Gardner Pinfold, 2006: 15. 573 Gardner Pinfold, 2006. 222 fishing licenses in the inshore sector, and the federal Owner-Operator Policy, which requires inshore licenses to be personally fished by vessel owners. Both policies guard against vertical integration and corporate consolidation of catch and processing sectors, though 'trust agreements' or 'beneficial use' contracts between processors and fishers have to some extent eroded these policies and allowed some processors to acquire increased control over raw material supplies.574 Another important exception is the integrated fisher-processor enterprise of the Fogo Island Co-op, which was established before the introduction of these two federal policies in the 1970s. Second, Newfoundland and Labrador-based fishers operating in the inshore fleet are required under provincial government legislation to deliver their catch to processing plants for minimum processing requirements of cooking and peeling before export; this legislation is meant to maximize opportunities for employment in coastal communities. As mentioned above, the expansion in inshore fleet landings in the late 1990s provided the basis for an expanded processing sector in Newfoundland and Labrador, but concerns about overcapitalization and overcapacity emerged soon after. Importantly, investment in shrimp processing facilitates was driven in large part by crab processing firms seeking to protect their raw material supply of crab, since many of the new shrimp fishers were also crab fishers.575 Because inshore sector shrimp plants, like fishers, operate seasonally (mainly in the summer months) and can each absorb significantly more product, processors' overriding focus tends to be on acquiring and maintaining supplies of raw 574 Dean et al„ 2002; Cashin, 2005. 575 Gardner Pinfold, 2006: 48; Dean et al., 2002: 35. 223 material from independent fishers, often competing first on price and then on non-price issues such as quality requirements.576 According to DFO statistics, about 20-25 % of shrimp landed in Newfoundland and Labrador was processed in the province between 2006 and 2008,577 with the rest landed by the offshore sector that is exempt from provincial processing requirements. Relations between independent inshore fishers and processing firms are further defined in Newfoundland and Labrador by a collective bargaining process enshrined in the 1971 Fishing Industry Collective Bargaining Act, which provided fishers a right to regular collective bargaining for fish prices and regulates collective bargaining between fishers and processors. When the Act was created, the two parties were the Fish Food and Allied Workers (FFAW) union representing fishers and the Fisheries Association of Newfoundland and Labrador representing processing companies, though the latter disbanded in 2003 and was succeeded by the ASP in 2004. Failure to reach agreement on prices has periodically resulted in major work stoppages in the inshore sector, such as in the crab fishery in 1996 and 1997 and in the shrimp fishery in 2001.578 An amendment to the Act introduced in 2006 created a three member Standing Fish Price Setting Panel, appointed by the Government of Newfoundland and Labrador, to provide market information and arbitrate Final Offer Settlement negotiations.579 Collective bargaining breakdowns 576 Dunne, 2003: 77. 577 Dean-Simmons, 2009. 578 Cashin, 2005. 579 Gardner Pinfold, 2006: 34. 224 continued, however, including important shrimp and crab price disputes in each of the first two years of shrimp certification. Third, the main markets for cooked and peeled shrimp created demand for MSC- certified products. In 2005, for example, over 85% of the inshore sector's shrimp product was exported to the US and UK, mainly to large supermarket chains. Sales to the US were concentrated in the Pacific Northwest, either directly to retailers or to regional distributors who sell to retailers. Sales to the UK, the world's largest market for cooked and peeled cold water shrimp, were mostly direct to retail chains that have led corporate commitments to source MSC products in the early 2000s, such as Tesco, Marks and Spencer, and Sainsbury's.380 Through the 2000s, fishers and processors in the inshore shrimp sector were negatively impacted by changing global markets for shrimp, continued European Union tariffs on imports of cooked and peeled shrimp, high food safety standards and retailer specifications in Europe, competition with farmed tropical shrimp, changes in exchange rates, increasing fuel and fishing costs, and declining world shrimp prices.581 Following a price dispute/breakdown in collective bargaining between fishers and processors in 2001, the Government of Newfoundland and Labrador established the Inshore Shrimp Panel to undertake a structural review of inshore fisher and processing enterprises in the context of the global competitive environment. The report found that the strongest competition occurred between local processors instead of with international competitors who often 'play one company against another to put 580 Gardner Pinfold, 2006: 36-37. 581 Gray and Sinclair, 2005; Gardner Pinfold, 2006; Mather and Joensen, 2010; DFO, 2010b. 225 downward pressure on prices.'582 Together with a number of recommendations addressing domestic characteristics of the industry, the report recommended governments to continue to lobby for the removal of tariff barriers for processed shrimp exported to the European Union and to establish a marketing consortium to develop stronger and more coordinated links between local producers and to provide a united COI marketing front against larger international marketers. Similarly, in 2007, as part of the federal-provincial Fishing Industry Renewal Process, the Government of Newfoundland and Labrador's Department of Fisheries and Aquaculture established the Seafood Marketing Review Panel to explore the possible development of a Newfoundland and Labrador Seafood Marketing Council which could be modeled on marketing consortiums in other jurisdictions, such as the Alaska Seafood Marketing Institute and the Norwegian Seafood Export Council. The chairman of the report, a former marketing executive with a large Canadian seafood company, was surprised to find significant resistance to the idea among most processors, the de facto sales and marketing branch of the industry. The report also noted that the pending MSC certification 'could be leveraged strategically by targeting the environmentally super sensitive retailers in Europe, particularly those in the UK.. .[and] offers a real opportunity to differentiate our shrimp from the environmentally challenged warm water varieties.'584 However, the potential for MSC certification to form a basis for coordinated 582 Vardy et al„ 2002. 583 Vardy et al., 2002. 584 Roche, 2008. 226 marketing was initially undermined because the client for the pending certification, ASP, represented only about half of Newfoundland and Labrador's shrimp processors, resulting in further competition between local producers. 5.4 Implementing MSC Certification Like many other MSC certification cases to date, the fisheries certification client for Newfoundland and Labrador's inshore sector shrimp fishery is an industry association, ASP. MSC certification was on the ASP's radar soon after the organization was created in 2004. In 2004, one of ASP's Board Members who sold to buyers in the UK raised the issue of the MSC for the Northern shrimp fishery to other MSC Board Members, but the ASP was concerned about the difficulties the MSC was experiencing at the time and did not immediately pursue assessment.585 In 2005 or early 2006, the ASP contracted Moody Marine Ltd. to conduct a Pre-assessment of the Northern shrimp fishery. The Pre-assessment gave the industry organization confidence that they would be successful in obtaining certification.586 On the radio program Fisheries Broadcast, ASP's executive director explained why the ASP sought MSC certification for shrimp and not for other important fish species like snow crab: Well as you know, we've a, we've met with a, we've had a lot of challenges in this, in this shrimp fishery in the last number of years. We've attempted a few things to try and restructure it and renew it. There's an increasing supply of cold water shrimp in the world. We have competition from warm water shrimp. We have all the variables of low markets, the dollar, oil prices. This is a measure which will, in a perfect world, increase the value of our fishery. It will say to consumers at the retail level and to our buyers internationally that this fishery is a 585 Author interview, 2009. 586 CBC Fisheries Broadcast, 2006. 227 good fishery to buy from and the fishery is sustainable. And that will put value into the fishery. It'll take time. But that's what this label does. At the retail level, it drives, it drives us to increase the value of our product by ensuring it can be certified under the criteria.587 It is important to note, however, that references to adding value refer more to the benefits of securing market access than to direct price premium benefits; an ASP representative explained to the author that their interest in MSC certification was 'strictly a matter of fQO market access. We knew going into this that there would be no price premium.' 5.4.1 Assessment With the help of a CDN$50, 000 grant from the Government of Newfoundland and Labrador, the Full Assessment began on 25 October 2006 for the Northern shrimp fishery.589After signing a contract with ASP, Moody Marine Ltd. started the Full Assessment process, including notifying stakeholders, nominating and contracting an Assessment Team, drafting Performance Indicators and Guideposts, conducting stakeholder meetings, carrying out a scoring meeting, and preparing a Draft Report based on a review of scoring and evidence. The assessment team for the Northern shrimp certification was organized by project coordinator Paul Knapman and lead assessor Dr. Andrew Hough, both Moody Marine Ltd. employees. The rest of the assessment team, nominated and contracted by 587 CBC Fisheries Broadcast, 2006. 588 Author interview, 2009. 589 Bartlett, 2008. The application included SFAs 13-15 off Nova Scotia and SFA 8 in the Gulf of St. Lawrence. Because of an overlap with a subsequent application from a group of New Brunswick and Quebec processors for SFA 8, MSC requested that a separate harmonized assessment cover this Gulf of St. Lawrence area. The separate SFA 5-7 and SFA 13-15 reports were evaluated by the same assessment team, evaluated similar data and management frameworks, and produced the same scoring results, however. 228 Moody Marine Ltd., consisted of three independent experts with knowledge and experience corresponding to the three core principles of MSC assessment—stock health, ecosystem impacts, and effectiveness of the management system. The team consisted of Michaela Aschan, Professor in fisheries biology at the Norwegian College of Fishery Science, Dr. Colin Bannister, former Head of the Shellfish Resource Group at the UK government's Centre for Environment Fisheries and Aquaculture Science (EFAS) and a scientific member of the Canadian Government Review Panel for the Snow Crab fishery in the Gulf Region of Canada since 2004, and Howard Powles, a fishery consultant and former Director of Fisheries Science and of Biodiversity Science at DFO Headquarters in Ottawa.590 After compiling a set of detailed Performance Indicators and Scoring Guideposts to assess the fishery (with scoring posts of 60, 80 and 100 as measures of relative compliance), the assessment team engaged in the 'information gathering' stage of the assessment, which commenced in summer 2007. The information sources mainly included published and unpublished scientific reports, mostly by DFO scientists, and a 'site visit' to the 'fishery' when a number of individuals and organizations were interviewed or provided information for the evaluation. For SFAs 5-7, the main area of the fishery off Newfoundland and Labrador's east coast, 29 individuals listed in the Full Assessment report consist of four ASP representatives, five representatives from the offshore shrimp fishery (mainly from the Canadian Association of Prawn Producers, and 590 Aschan et al., 2008. 229 including one skipper), nine DFO officials, two Government of Newfoundland and Labrador representatives, three experts from Memorial University (two from The Marine Institute), three FFAW union representatives, and three environmental NGO representatives from the WWF and the Halifax-based Ecology Action Center. Stakeholder consultation included public notifications, which basically meant sending emails to each stakeholder and posting various stages of the assessment documents on the MSC website, and Moody Marine Ltd. consultations with 38 stakeholders it identified. Stakeholder feedback included written submission from DFO, WWF-Canada, The Humane Society of the United States, and the Ecological Action Centre. DFO and WWF submissions basically identified key areas of improvement, while submissions from the Humane Society of the United States and the Ecology Action Center were opposed to certification.591 After consultations, the assessment team began putting together their first draft report and Moody Marine Ltd. nominated peer reviewers, consisting of Dr. John Caddy, a consultant with experience in DFO and the FAO and who has more recently been developing a traffic light monitoring system for the Northern shrimp fishery; Dr. Sten Munch Petersen, Senior Scientific Advisor at the Danish Institute for Fisheries Research; and Ms Unnur Skuladottir, a senior scientist in fisheries biology at the Marine Research Institute in Reykjavik, Iceland, and a NAFO designated expert on the Northern shrimp.592 On 8 April 2008, the Draft report of the assessment, including peer review 591 Aschan et al, 2008: 33-34. 592 Moody Marine Ltd., 2007. comments, was posted on the MSC website for public comment. In the meantime, ASP processing companies had Chain of Custody audits conducted within their processing plants in May 2008. A risk assessment concluded that there was only a low risk associated with the potential for shrimp from outside the unit of certification being mixed with shrimp from within. After a 30 day period of comment, the Governing Board of Moody Marine Ltd. reviewed the Draft report of the assessment team, the reports of the Peer Review panel and stakeholder comments. The Board decided that the SFAs 5, 6, 7 and SFAs 13, 14, 15 should be certified according to the MSC's Principles and Criteria for Sustainable Fisheries, and released the Final report and Determination on the MSC website in early July. No objections were received within the 21-day objections period, and on 5 August 2008, the Northern shrimp fishery became the first Canadian fishery to meet the MSC's sustainable fisheries standard. Subject to annual surveillance audits, the ASP received the MSC-certified status for a five-year period.593 5.4.2 Scoring and Conditions of Certification In order for a fishery to be certified, two main scoring requirements must be met. First, for each Principle, a fishery must obtain an overall average of 80 or above (i.e. average of a series of Performance Indicator scores). Second, the fishery must score 60 or more on all of the Performance Indicators in each Principle category. Scores lower than 80, but 60 or higher, on particular Performance Indicators do not prevent a fishery 593 Aschan et al., 2008. 231 from attaining certification, but require that the certification body create a time-bound Condition of Certification to raise the scores in the future. For both units of certification (SFAs 5-7 and SFAs 13-15), overall score averages for each set of weighted Principle questions were the same: Principle 1: Sustainability of Exploited Stock, Overall: 92 (Pass) Principle 2: Maintenance of Ecosystem, Overall: 80 (Pass) Principle 3: Effective Management System, Overall: 80 (Pass)594 Although the fishery obtained an overall pass average of above 80 on the three main Principles, the fishery scored a 'conditional pass' score, that is between 60-79, on 18 of the 76 total Performance Indicator questions. These include Performance Indicators such as 'Are there appropriate reference points based on stock biomass and/or fishing mortality?' (score: 70), 'Are uncertainties and assumptions explored and reflected in management advice?' (score: 75), 'Is there adequate knowledge of the physical impacts on habitat due to use of fishing gear?' (score: 70), 'Does the fishery have unacceptable impacts on habitat structure?' (score: 65), and 'Do procedures include for a precautionary approach in the absence of sufficient information?'595 In weak areas such as these, MSC protocol requires the fisheries client to raise performance scores to at least an 80 level within a period set by the certification body and to develop an Action Plan for meeting the conditions. The Conditions of Certification for the ASP-led certification are associated with 5 key areas of weakness identified in the assessment: (1) reference 594 Aschan et al., 2008. 595 Aschan et al., 2008: 75. 232 points to identify the level of acceptable biomass fluctuations, (2) ecological impacts of the fishery, (3) impacts on protected, endangered species, (4) unobserved fishing mortality, and (5) measurable and explicit long-and short-term objectives.596 These Conditions of Certification provide the basis for improvement in fishery performance and provide one of the bases for subsequent surveillance audits. In areas that the fishery scored between 60 and 79, Moody Marine Ltd. drafted a set of outcome oriented and time-bounded Conditions of Certification to raise the level of low scores to at least the 80 level within a set period no longer than the 5-year term of certification. ASP then developed an Action Plan for meeting Conditions of Certification.597 The specific processes leading to the implementation of Conditions of Certification is a critically important area where we observe how the dynamics of governance change blur the boundaries between public and private, state and non-state regimes of authority.598 Much of the ASP Action Plan refers to actions and responses involving DFO. For Action Plan Condition 1, ASP received assurance from DFO that it would develop reference points for considering levels of shrimp abundance that are deemed acceptable or unacceptable. Moreover, 'key ongoing uncertainties and assumptions currently documented in the scientific advice, and reflected in the low 596 Aschan et al., 2008: 46. 597 Aschan et al„ 2008: 148. 598 It is important to note that some of the improvements related to Conditions of Certification are based on new information becoming available since the original certification report was completed. Some of this information is produced completely independently of MSC certification processes as part of ongoing scientific studies and research initiatives. Other information has been produced with a view towards meeting MSC certification requirements, however, as identified above. 233 exploitation rates in management decision, will be formalized in the IFMP [Integrated Fisheries Management Plan] within 2 years.'599 For Action Plan Condition 2, ASP indicated that the Regional Advisory Process, a DFO program to acquire peer review information on the status of fisheries, in consultation with the Northern Shrimp Advisory Committee, would evaluate, monitor, and address negative impacts on ecosystems. For Action Plan Condition 3, DFO agreed to update its Integrated Fisheries Management Plan for shrimp to reference the Recovery Plans for endangered and threatened species. For Action Plan Condition 4, 'it is agreed that the relevant RAP [Regional Advisory Process] assessment of northern shrimp will consider available studies on unobserved mortality and make a qualitative determination of the level of unobserved fishing mortality.' For Action Plan Condition 5, '[t]he client will work with DFO in consultation with NSAC [Northern Shrimp Advisory Committee] to discuss the development of measurable and explicit long and short term objectives and include these in the IFMP [Integrated Fisheries Management Plan].'600 The development of more explicit long-and short-term goals brings the MSC certification into the realm of contentious allocation disputes. While the introduction of harvest control strategies would provide mechanisms to determine when and at what point reductions in TACs should be made, other mechanisms would have to be clarified to determine how to distribute quota reductions between and among fleets. This is especially important considering the steady increase in allowable catches from the late 599 Aschan et al., 2008: 148. 600 Aschan et al., 2008. 1990s to the late 2000s. In one of the MSC's Net Benefits reports, ASP's executive director highlighted the importance of 'Conditions of Certification' in helping facilitate the implementation of policies to reduce fishing capacity if biological conditions changed: 'One [condition] was that our management plan should dictate what would happen if biomass declined, because shellfish fisheries are cyclical.. .If it did [decline], how would we reduce the number of fishing vessels fishing?'601 The reference to reducing fishing vessels is important because processors tend to promote the reduction of fishing vessels as the mechanism of reducing total catch, while the FFAW union and the Government of Newfoundland promotes distributing reductions equally among quota holders and prioritizing the principle of adjacency in allocation decisions. In an interview with the author, an ASP representative indicated that a major problem with reducing the number of fishing vessels has been the lack of political and DFO commitment to applying the 'last-in, first-out' principle. The representative indicated that MSC Condition 5 concerning establishing long-term strategies could make it easier to convince DFO to commit to the 'last-in, first-out' policy instead of political negotiation as the mechanism of reducing TACs.602 5.4.3 Surveillance Audits Certification company employees conduct annual surveillance audits for MSC certification. The first annual surveillance audit for the Northern shrimp fishery occurred in September 2009. Moody Marine Ltd.'s surveillance team met with three 601 MSC, 2009a. 602 Author interview, 2009. 235 representatives from ASP and three members of DFO-Newfoundland and Labrador Region staff. This surveillance meeting involved gathering information about the status of the stock, assessing the performance of the fishery, and evaluating measures to meet the Conditions of Certification and changes in management. None of the conditions were completely met and 'closed out' by the first surveillance audit, though clear progress towards meeting the conditions had been made. For example, in relation to Action Plan Condition 1 (on the development of precautionary approach frameworks for Canadian shrimp fisheries), the surveillance team observed that a National Working Group, including two industry experts, was established in May 2008 to develop reference points and precautionary approach guidelines, which was followed by a National workshop co-led by DFO in Ottawa in November 2008. The surveillance report noted that '[t]he client has significant support from the DFO to ensure that progress is made toward achieving this Condition. Progress is on target and it is anticipated that this Condition will be met within the second year of certification.'603 In relation to Action Plan Condition 3 on the potential impacts of the fishery on protected, endangered and threatened species, the assessment team noted that new wording in the draft DFO Integrated Fishery Management Plan appeared to be adequate to meet part of the condition and expected the condition to be met by the next surveillance audit. For Action Plan Condition 5, on measurable and explicit long and 603 Knapman et al., 2009. 236 short term objectives, DFO staff confirmed the imminent publication of a revised DFO Integrated Fishery Management Plan that would clarify short and long term objectives.604 The surveillance report also noted that during the first year of certification, there were no reported legislative changes, no changes in regulation, and no complaints brought to the attention of the assessment team during the 'site visit.' Changes in the management regime were noted with respect to DFO's new policy initiative, the Sustainable Fisheries Framework, which was part of its 3 year federal-provincial Fisheries Renewal program slated for completion in 2011. The surveillance team also noted briefly that ASP agreed with five other processing companies to share their certification, bringing all of the shrimp processing plants in Newfoundland and Labrador within the scope of the certification. Though no reason was given for this important development in the Moody Marine Ltd. surveillance report, interviews conducted by the author uncovered a fascinating and controversial series of events that will be discussed at length below. For the second surveillance audit, conducted on 31 August 2010, Moody Marine Ltd. employees met with two representatives from the client, ASP, and seven representatives from DFO-Newfoundland and Labrador Region. This surveillance report determined that Action Plan Condition 1 (on the development of precautionary reference points and decision rules) had been 'closed out,' with five performance questions re evaluated at or above a score of 80. The development of precautionary reference points 604 Knapman et al., 2009. 237 and decision rules can be observed in the substantially updated DFO Integrated Fishery Management Plan for Northern shrimp, published online in May 2010.605 Action Plan Condition 2 was considered behind schedule. Some notable actions include the client providing funding to the Marine Institute of Memorial University's School of Ocean Technology to gather information required to satisfy part of the condition involving mapping fishing effort data and habitat and ecological data. Moreover, the surveillance audits do not appear to be completely passive and the assessment team explicitly advised the client on how it might mobilize expertise to speed up the process of meeting Condition 2 by year 4: It may be useful to consider recruiting expertise from DFO, academia, NGOs or other agencies to the task of examining the information on distribution of fishing effort in relation to sensitive habitats or species, determining whether the impacts are potentially important, and considering what additional mitigation measures are necessary if impacts are considered unacceptable. DFO's developing Centre of Excellence on cold-water corals and sponges, based in DFO's Newfoundland and Labrador Region, might be a good source of such expertise.606 Action Plan Condition 3 (related to bycatch and impacts on endangered and threatened species) was also considered 'closed out.' The improvements were mainly attributed to textual changes in the DFO Integrated Fisheries Management Plan and written confirmation from a DFO scientist that the impact of this fishery on the two vulnerable species is minimal and unlikely to impact their recovery. Based on a review by Marine Institute scientists on the unobserved fishing mortality from the Newfoundland shrimp 605 It is not unusual that this document has been updated, since it is an 'evergreen document,' but many of the changes since 2007 were directed at incorporating the MSC Conditions of Certification as set out in Moody Marine Ltd.'s assessment and ASP's Action Plan. 606 Knapman et al., 2009: 16. 238 fishery, Action Plan Condition 4 was also deemed met. Action Plan Condition 5 ('measurable and explicit long and short term goals') was considered ahead of target. The surveillance team attributed this progress to the updated DFO Integrated Fisheries Management Plan for shrimp, which provides a set of objectives, strategies and management measures related to three principles: Conservation and Sustainable Harvest, Benefits to Stakeholders, and Co-Management of the Resource. Therefore, Conditions 1, 3, and 4 were 'closed out' by August 2010, Condition 2 was behind schedule, and Condition 5 was ahead of schedule and expected to be satisfied by year 3. The second annual surveillance audit also identified alarming trends in the biological regime of Northern shrimp stocks. In the first and second year of MSC certification, reports showed that the shrimp biological regime appeared to be diverging geographically, decreasing in some SFAs, increasing in others, and uncertain in still others. Most importantly, changes in shrimp stock in SFA 6, which had the largest share of TAC in the Northern shrimp fishery in the 2000s, had fallen 50% below the 1996- 2006 average. According to Moody Marine Ltd.'s surveillance report, '[t]he assessment team learned that out of concern for the stock and the MSC certification, NSAC [Northern Shrimp Advisory Committee] responded by negotiating the 2010 SFA6 TAC down to 61,632 tonnes, requiring the elimination of some licences on the last-in first-out (LIFO) principle.'607 The 2010 TAC therefore equalled about 20% of the fishable biomass, still higher than the 15% best practice, but represented a significant reduction in 607 Knapman et al., 2009: 10. 239 TAC and illustrated the move toward fully implementing DFO's provisional reference points. The annual surveillance audit noted that stock changes were occurring but for reasons that remain unclear.608 The removal of allowable catches through the elimination of licenses according to the last-in, first-out principle also demonstrated that ASP's preferred method of reducing catch was implemented (as opposed to the FFAW union and Government of Newfoundland and Labrador's preferred mechanisms). 5.5 Certificate Exclusivity A deeper political economy of certification is hidden behind the technical, documented processes of MSC certification. As mentioned above, ASP represents inshore sector processing enterprises in Newfoundland and Labrador only and was created in 2004 after its predecessor, the Fisheries Association of Newfoundland and Labrador, disbanded the previous year, partly because of internal problems. When it was created in 2004, ASP member companies represented about 90% of the volume of the crab production and about 90% of the volume of the inshore shrimp production in Newfoundland and Labrador.609 In 2005, however, two major Newfoundland-based fish processing companies resigned from the ASP in protest over a provincial government plan, advanced initially by the ASP's predecessor as a means to rationalize the industry, which would have created transferable Production Quotas for crab processing.610 The 608 Knapman et al., 2010. 609 ASP, 2004. 610 Vardy et al., 2002:71-72. 240 split fragmented the organizational representation in the processing sector, and the legacy of the divided interests persisted and influenced ASP's certification to the MSC. At the time of initial certification in August 2008, only seven of Newfoundland and Labrador's 12 shrimp processing plants were ASP's members.611 Moreover, all of the approximately 350 registered vessels operating in the Northern shrimp fishery were listed as eligible to sell their shrimp as MSC-certified, but only if sold through the 7 enterprises and their processing plants listed as part of the client group. To be eligible to bear the MSC eco-label, then, any shrimp from certified areas had to enter into Chain of f\ 19 Custody certifications which were held by ASP member processing plants. Processors outside the client group were therefore at a competitive disadvantage with respect to international buyers and were at risk of losing access to shrimp product if independent fishers decided to sell their catch to ASP processors because of MSC certification. Certification also provided the client with an opportunity to entice independent fishers to sell shrimp to their processors in the underutilized and highly competitive Newfoundland and Labrador processing sector, which operates in a public policy context which restricts vertical integration. Processors outside the ASP, particularly the two that resigned from the organization in 2005, noted the significance of the certification when some buyers 611 In 2007, ASP members consisted of the Barry Group Inc., Ocean Choice International L.P., Fogo Island Co-Op Society Ltd., Notre Dame Seafoods Inc., Nu Sea Products Inc. (Barry Group Inc.), Northern Shrimp Ltd (Ocean Choice International), St. Anthony Seafoods Limited Partnership (Clearwater). 612 Aschan et al., 2008. 241 serving international markets indicated they might pay them less for their shrimp and expressed an interest in buying only MSC-certified shrimp. Processors sought access but ASP, who controlled the MSC certificate, viewed the problem as a business dispute and since it had taken on the risks of certification, its processors should reap the rewards. Processors outside the ASP also contacted Moody Marine Ltd., claimed that the certification was in disrepute, demanded that the certification company suspend certification, and threatened legal action. Some fishers who wanted to sell to non-ASP (and therefore non-certified) processors expressed contempt for the certification because they fished in the same waters, under the same management system, and using the same catch methods as fellow fishers who sold their catch to ASP processors. This dimension of the conflict illustrates clearly the contradictions associated with the client-driven certification of sub-components of common pool fisheries: fishers thought that if'the Northern shrimp fishery' was certified, they should be able to sell shrimp as MSC- certified to processors of their choice.613 Processors in particular stepped up efforts to gain access to MSC certification in the offseason of fall and winter 2008-2009, lobbying Moody Marine Ltd., the MSC, and provincial and federal governments. Interests outside the ASP repeatedly raised the issue that the Government of Newfoundland and Labrador financed a significant portion of the initial certification and that all businesses should be able to access and benefit from such a heavily publically funded initiative. The main 613 Author interviews, 2009. 242 response producers outside the client continued to hear from the four main players was 'this is business.'614 The dispute became known as a certificate sharing controversy, since producers outside ASP sought to gain access to MSC certification. Importantly, the dispute trickled up through the hierarchy of the MSC as well. The MSC expressed concern to Moody Marine Ltd. about the dispute but the certification company responded that the assessment was finished and it was not their job to negotiate certification access and sharing arrangements. According to an MSC official, the emergence of the certificate sharing controversy represented an unexpected problem for the certification organization. The official explained that the certification of the Northern shrimp fishery and a few similar cases around the world brought significant attention to the question of 'who owns' MSC certificates and whether certification can be shared. The Northern shrimp dispute was discussed at the top levels of the MSC hierarchy, including the Technical Advisory Board. The representative also explained that while the MSC has gone to great lengths to be open to as many industry participants as possible, the early pattern of applications saw many small groups of actors acting as clients for certification. Implicitly referring to the problem of certification in common pool resources often accessed by multiple commercial interests, the official explained that 'some people think that if fishery "X" is certified, then anyone engaged in that fisheries ought to get access. But the MSC does not work that way.'615 Instead, the official said, in the MSC program, 614 Author interviews, 2009. 615 Author interview, 2009. clients are entitled to exclusive 'ownership' of certification. 'We don't promote, or like this,' the official admitted, while also highlighting the problem of free-riders potentially benefiting from certification. At the time, however, there were ambiguities in guidelines about certificate exclusivity and sharing. During the Northern shrimp certificate sharing dispute, the MSC's Technical Advisory Board introduced new rules requiring clients to clarify at the outset whether they are willing to share their certificate and explain the conditions under which sharing will occur. The new rules were established in TAB (Technical Advisory Board) Directive 010, 'Certificate Sharing (Exclusivity of Fishery Certificates),' which 'gives direction to certifiers so as to minimise the number of overlapping fishery assessments requiring harmonization' and 'to encourage the largest proportion of fishers to enter at the start of the full assessment process, but when only a select group of fishers within a fishery wants to undertake MSC assessment, to allow them to proceed so as not to delay certification.'616 The directive requires certification companies conducting assessments to clearly identify the unit of certification, client, client group, other eligible fishers, and a certificate sharing mechanism. MSC Policy Advisory 8, created in conjunction with the new Technical Advisory Board directive, requires clients to publish a 'certificate sharing mechanism' which defines the conditions (including potential costs or fee structures) under which other fishers may gain access to 616 MSC, 2010e. Importantly, this sort of dynamic illustrates how local industry structure, politics and history shape the making of putatively technical global standard-setting organization. 244 the fishery certificate in situations where other eligible fishers are identified and covered in assessment.617 5.5.1 Certificate Sharing The certificate sharing dispute intensified as the 2009 fishing season approached. Frustrated by the ASP's refusal to share access to certification, producers outside the client group planned to draw negative attention to ASP's certification at the upcoming Boston Seafood Show, which provides an opportunity for fish processors to meet big buyers before the annual fishing season begins. Rumoured plans to 'do something with seal carcasses' did not materialize but shouting across the display floor brought attention directly to the MSC representatives. The Government of Newfoundland and Labrador's Minister and Deputy Minister of the Department Fisheries and Aquaculture and other departmental officials also met at the Boston Seafood Show to discuss the certificate ft 1 8 sharing issue. Soon after the Boston Seafood Show, ASP agreed to share their MSC certificate with the rest of Newfoundland and Labrador's shrimp processors on the condition they join ASP and pay a portion of certification costs. According to a certification official closely involved in the Northern shrimp certification, an important factor in the ASP's acquiescence was a sense of solidarity stimulated by the crash, three days before the start of the Boston Seafood Show, of Cougar Helicopters Flight 91, which was transporting 6,7 MSC, 2010c. 618 Author interviews, 2009. 245 workers from St. John's to the offshore oil fields on the Grand Banks; all but one of the 18 people on board died.619 Five processing facilities subsequently had Chain of Custody certification conducted, meaning that all of the shrimp processing plants in Newfoundland and Labrador had access to MSC certification. As mentioned above, the first surveillance audit conducted by Moody Marine Ltd. did not report on this significant certification sharing dispute. The report simply indicated that shrimp product from the new list of ASP processing 'organizations only [are] authorized to enter into the MSC Chain of Custody certifications programmes.'621 Notably, once other processors were in, some reportedly wanted to 'pull up the ladder' and stop sharing the MSC certificate with anyone else, referring to Nova Scotia fishers and processors who produced shrimp from waters covered under the ASP certification.622 A few months later, the start of the first full shrimp season with MSC certification was postponed by a collective bargaining dispute between processors and fishers. Importantly, this dispute was made more feasible because Newfoundland and Labrador shrimp processors were united under ASP—the body representing processors in collective bargaining with the FFAW union—by MSC certification. On 21 May 2009, ASP sent a letter to the Standing Fish Price-Setting Panel requesting to revise its 30 619 Author interviews, 2009. 620 The five other processing companies to share their certification consisted of Cold North Seafoods Limited (Atlantic Cold Seafoods), Quinlan Brothers Limited, Gulf Shrimp Limited, Quin-Sea Fisheries Ltd., and Labrador Choice Seafoods. (Knapman et al., 2009). 621 Knapman et al., 2009. 622 Author interview, 2009. 246 March decision on shrimp prices and to lower the price paid to fishers from CDN$0.46 per pound to CDN$0.36, down from CDN$0.53 set the previous year.623 The ASP argued that market conditions declined in the Spring, but the panel responded that the request was not justified. All but two shrimp plants closed and refused to buy shrimp.624 The ASP's executive director stressed the impact of the global recession on the industry, saying 'it's not about us versus the harvesters or them versus us. It's us against the global economic crisis. And there are no obvious solutions right now.'625 Fishers, on the other hand, promised they would tie-up their boats if they were expected to sell shrimp for prices below what it took for them to break even.626 June passed with both sides refusing to change positions on price. With the inshore sector's shrimp season, concentrated in July and August, in jeopardy, the FFAW union organized several protests, including a sit-in at provincial government offices. The protest resulted in a meeting between union leaders and the Government of Newfoundland and Labrador's Deputy Premier and Fisheries Minister.627 A week later, the provincial government, ASP, and the FFAW union agreed on the minimum price of CDN$0.42 per pound for fishers' shrimp. Notably, along with the price agreement for shrimp, the parties agreed to sign a Memorandum of Understanding to prepare a blueprint for fundamentally restructuring and rationalizing the province's inshore fishery, focusing on the viability of fishing and 623 O'Neill et al., 2008; O'Neill et al„ 2009. 624 Northern Pen, 2009. 625 CBC, 2009a 626 CBC, 2009c 627 CBC, 2009b. 247 processing enterprises in both the crab and shrimp sector.628 In the meantime, the reduced work for processing plant employees resulting from the work stoppage in the inshore shrimp fishery reignited longstanding efforts by the FFAW union to lobby the Government of Newfoundland and Labrador to establish requirements that the offshore factory freezer fleet land a portion of their catch in province for processing. 5.5.2 Dispossessing Certification All of Newfoundland and Labrador's shrimp processors had access to the MSC certification for the 2009 season, but ASP facilitated a collective bargaining dispute that shortened the first full season with certification. While the collective bargaining dispute in 2009 resulted in a rapid drop in quantity and value of inshore sector shrimp production, a price dispute over uncertified snow crab in 2010 unexpectedly jeopardized the certification of the integrated fisher-processor enterprise of the Fogo Island Co-op, Newfoundland and Labrador's largest fishing co-op. With a fleet of about 30 long liners and three fish processing plants, the Fogo Island Co-op has been the anchor of Fogo Island's economic development since it was created by fishers in the late 1960s after fish merchants pulled out of the island. After diversifying its operations in the 1980s and 1990s, particularly around snow crab, the co op partnered with two Icelandic firms to build a state-of-the-art shrimp processing 628 Clift, 2011. 629 Dean-Simmons, 2009 630 The legal name of the co-op is the Fogo Island Co-operative Society Ltd., but it is often referred to as the Fogo Island Co-op. I use the latter for purposes of style. 248 facility in 2000.631 This meant that Fogo Island was one of only about six coastal communities632 in Newfoundland and Labrador with both a crab and shrimp processing plant.633 Like other Newfoundland and Labrador processors, the co-op's main shrimp products are shell-off cooked and peeled shrimp, with about 90% sold in Europe (Denmark, Germany and the UK) and 10% sold in the US in recent years.634 However, in contrast to other processing plants around Newfoundland and Labrador, which buy shrimp product from independent fishers represented by the FFAW union, the Fogo Island Co-op is owned by fishers and processing plant workers. The co-op is therefore an integrated fisher-processor, thus having a unique relationship to both the ASP processing organization and the FFAW union. Short shrimp supplies in 2009 caused by the collective bargaining dispute made it difficult for co-op leaders to assess whether the MSC certification had any substantive effect. It was clear to co-op sales representatives, though, that certification was important to international buyers. As one co-op executive explained, 'everyone was asking for it,' and it was increasingly understood that one needs to be MSC-certified.635 In particular, the official added, some of the co-op's buyers re-sell their shrimp product to retailers, 631 The co-op subsequently bought out the Icelandic firms' stake in the shrimp operation. 632 Fogo Island consists of about a dozen distinct coastal villages which in 2010 amalgamated to become the Municipality of Fogo Island. 633 KJEDC, 2008. 634 IntraFish, 2010b; Penton, 2010. 635 Author interview, 2010. 249 where certification 'is really important.'636 A collective bargaining dispute in 2010 that delayed the opening of the uncertified snow crab fishery elevated the significance of MSC certification for the co-op, however. In February 2010, ASP boycotted all collective bargaining price hearings, which continued with input only from the FFAW union. On 18 March 2010, the Standing Price- Setting Panel set the minimum price of at-the-dock snow crab at CDN$1.35 per pound.637 ASP subsequently refused to start purchasing crab from fishers and closed their crab processing plants, arguing that the price was too high and could possibly bankrupt some members in the context of economic losses from the rising Canadian dollar and the ongoing global financial crisis. The Fogo Island Co-op decided that the CDN$1.35 price was satisfactory, however. The co-op's sales manager, who had been a member of the ASP's Board of Directors for years, explained to fellow ASP board members in March about potentially defying the processing organization's position: 'I said; look boys, we're going to look at our financial position, we'll talk to our membership and if this [price] justifies us opening, then that is what we're doing.' The co-op's sales manager also asserted that the co-op could conduct a crab fishery at such a price because it was 'different,' owned by fishers, plant workers and management employees, 'not millionaires.'639 After the meeting, the sales manager stopped receiving 636 Author interview, 2010. 637 O'Neill etal., 2010. 638 The Navigator, 2010. 639 The Navigator, 2010. 250 the ASP's regular flow of emails, industry updates, and invitations to meetings. The co op, meanwhile, broke ranks with the ASP and started buying crab not only from its member vessels but also non-member vessels who might normally sell their catch to the ASP's processors.640 A few weeks into the dispute, the information flow from the ASP which abruptly stopped following the March meeting re-opened when the ASP invited the co-op's sales manager to a meeting on 14 April about the upcoming inshore shrimp fishery. After the meeting about the shrimp fishery, the ASP's executive director called the co-op's sales manager aside for a private meeting in which he warned that the co-op would be expelled from the ASP if it did not stop buying crab immediately. The co-op's sales manager later revealed that other issues discussed during the meeting might require legal opinion, likely referring to an associated threat to revoke the co-op's MSC certification for shrimp. Despite the threat of expulsion from ASP (and by implication from the MSC client group), the co-op continued to buy crab. In late April, the co-op's sales manager received an email from the ASP saying that the Board of Directors had decided to terminate the co-op's membership.641 On 29 April, ASP met again with the Standing Fish Price-Setting Panel and requested a CDN$1.19 per pound price for crab. The following day, which was almost a month after DFO authorized the start of the crab season, the price-setting panel, no doubt confident in its original decision because of the Fogo Island Co-op's success, upheld its initial minimum price of crab at CDN$1.35. 642 640 Penton, 2010. 641 The Navigator, 2010. 642 O'Neill et al„ 2010. 251 The ASP finally conceded, opened their crab plants, and Newfoundland and Labrador inshore crab fishers who did not sell to the Fogo Island Co-op rushed to get back on the water and start their most lucrative fishery. Co-op representatives indicated publically that they were not terribly concerned about being expelled from the ASP, but in an interview published in the Fogo Island Flame in April, the co-op's general manger revealed that the most important thing though is that they have threatened to take away our MSC certification on shrimp. If this happens this would surely jeopardize us being able to sell our shrimp in the European market. This certification was given to us when we were a member so we will challenge this legally.643 Representatives also later indicated that the MSC certification was not considered when breaking ranks with the ASP over crab price negotiations. They assumed that MSC certification could not be taken away from them because they paid into certification, were part of the successful assessment process, and had a Chain of Custody certificate document in their possession which was valid through 3 August 2011. One official said that they might have risked the MSC certification even had they known it could have been taken away considering the importance of the crab fishery to the co-op. Nevertheless, the co-op's shrimp operations were suddenly at risk. Buyers, particularly for the German market, 'the hottest and highest-paying market' for their shrimp, indicated they might look to other suppliers if the co-op lost MSC certification.644 643 Penton, 2010. 644 Author interviews, 2010. 252 The co-op explored legal opinions, started lobbying provincial and federal authorities, Moody Marine Ltd., and the MSC, questioning the legitimacy of the ASP's move. In the late summer, however, the co-op received an email from Moody Marine Ltd. saying that only ASP members were part of the MSC certification. With buyers indicating they might turn to other suppliers, the co-op began exploring how it might acquire its own MSC certification.645 On 31 August, in the midst of the 2010 inshore sector shrimp season, Moody Marine Ltd. auditors conducted their second annual Surveillance Report for the ASP's Northern shrimp certification. The report indicated that the Fogo Island Co-op was no longer a member of the ASP and 'as such the Cooperative [sic] can only gain access to MSC-certified shrimp from the Canadian Northern Prawn Fishery via an ASP member.'646 This presumably implied that the co-op would have to buy shrimp from ASP processors in order to sell shrimp as MSC-certified. 5.5.3 Repossessing Certification In September 2010, just weeks after learning it had lost access to the MSC certificate, the co-op applied for MSC certification of Northern shrimp for Canadian SFAs 5-7, areas already certified under the ASP certification. The co-op contracted the Ireland-based Global Trust Certification Ltd. to carry out the assessment, largely because the co-op had previously contracted the firm for work on other technical matters; Global Trust Ltd. expected that the assessment could be completed by September 2011. 645 Author interview, 2010. 646 Knapman et al., 2010. 253 Ultimately, the co-op did not lose business in 2010 after it lost the MSC designation because buyers later decided not to enforce the MSC requirement strictly, though the German market was expected to require it the following year. Although market access is the main reason the Fogo Island Co-op sought to acquire its own MSC certification, 'owning' certification may also create new opportunities for the co-op to increase access to raw material in the highly competitive and overcapitalized Newfoundland and Labrador processing sector. Maintaining adequate supplies of raw material for its processing plants has become a more disconcerting issue for the co-op in recent years, as more and more local fishers retire and few young people are willing or able to buy licenses and expensive647 vessels to take up the trade. Even some fishers living on Fogo Island have not historically sold their catch to the co-op and instead sold to larger corporate plants in other coastal communities; corporate competitors have been able to attract fishers by offering financial assistance for buying licenses and/or equipment as a condition of receiving their catch, while the co-op has not historically had the financial resources to attract fishers.648 In 2010, the year in which it lost and reapplied for MSC certification, the co op purchased shrimp from 24 fishers, 18 of which were members. The co-op processed 3, 929 tonnes of shrimp from SFA 6 and 7, which accounted for 7.7% of the inshore fleet's 10-year average total catch in these areas.649 In its MSC application, the co-op 647 A typical vessel in the inshore sector costs more than CANS 1.5 million. 648 KEDC, 2008. 649 Maguire et al., 2011. 254 indicated its willingness to share its certification with 'all [127] registered and licensed fishing trawlers' operating in the area under assessment, based upon an 'equitable sharing of costs with obtaining and maintaining the MSC fisheries certificate.'650 The application also indicated that access to the MSC certificate would be conditional upon fishers becoming co-op members and landing their catch at co-op facilities or designated ports elsewhere.651 Although this certificate sharing arrangement was in part accommodating pre-existing co-op purchasing patterns, the willingness to share certification means that independent fishers operating in SFAs 5-7 have an alternative to ASP processors without losing access to MSC certification. This new situation can be understood as two overlapping 'certification regimes' which will be competing to increase raw material from independent fishers, possibly offering different fees. The extent to which 'owning' MSC certification will shape competition over raw material between ASP processing companies and the Fogo Island Co-op remains to be seen and it may not have a substantial effect if at-the-dock price continues to be the main determinant for independent fishers' selling patterns. Nonetheless, client structures for MSC certification may institutionalize a split between the ASP and the Fogo Island Co op and therefore have produced new competitive structures in a processing sector desperate to secure consistent supplies of declining shrimp resources. Indeed, concerns have increased in the late 2000s and early 2010s that the oceanic conditions which helped produce an abundance of shellfish in the aftermath of the groundfish collapses are 650 Barnes, 2010. 651 Barnes, 2010. possibly reverting to a pre-1990s pattern which will further threaten the sustainability of Atlantic Canadian coastal communities that have come to depend on shrimp and other shellfish.652 Significant cuts in TAC in SFA 6 adjacent to Fogo Island in 2010 and 2011 may be just the beginning of long-term allocation and production changes. An important question arises as to whether and in what ways broader regional certification dynamics illustrated in Figure 5.4, including the recent certification of the offshore sector, might affect claims to quotas and the distribution of quota reductions considering the past history of increasing allowable catches for social and economic reasons. 652 Parsons, 2009: 410 256 Figure 5.4 MSC certifications in the Northern shrimp fishery by client and SFA in which shrimp is certified, 2011 sKr rrp Fishing Areas In Atlantic Canada Zone de ptetie de la cevette au Canada OAncdriairiSNMMM>(UP)(MMm) ».ftiwi'iilinn Quitionin d» t» Pidw. Piodmfc 0««» Dw Ufa., t AMoaabon Caapanfm dn Pcdwvrs d* lit Lit* (CarMM 2QM) • Nattaydt PneMing LM. {CatlM 3B11) • Fogp hhmdOmptathm Socwfr Ut (C»M»il 3Pt1> • Canadian *»fi>i*w»o Source: Adapted from DFO 2007 257 5.6 Conclusion What can we learn from the analysis of MSC certification in Northern shrimp fisheries? First, the dynamics of governance change analyzed above support the position that a clear separation between state and market, or public and private, disappears when examining the specific processes of certification.653 Government-produced data and government self-evaluations were critically important components in the Moody Marine Ltd. assessment of the Northern shrimp fishery. Former government officials with expertise in the governmental management were also relied upon by the certification company carrying out the assessment. In implementing Conditions of Certification and surveillance audits for the Northern shrimp fishery, we also observed significant interpenetration of certification processes and state-centered management. While the fisheries client is technically responsible for improvements or management changes required by Conditions of Certification, government authorities were heavily relied upon to implement changes in this case. Importantly, however, the fisheries client—the certificate holder—gained a new privileged channel of access to and influence over the policy-making process as government authorities have committed to facilitating the implementation and maintenance of certification. Indeed, a deeper political economy of fisheries certification revealed the nature and implications of certification as commodified governance. A key question is whether Canada's first successful MSC certification should be understood as the certification of 653 For similar arguments, see Vandergeest, 2007; Hall, 2010; Gale and Haward, 2011. 258 'the Northern shrimp fishery' because of exclusive and restrictive conditions of access to the benefits of certification (i.e. product eco-labelling) initially permitted by the certificate holder. All licensed independent fishers operating within the certified ocean areas were technically included in the initial assessment but their catch could only become eligible to bear the MSC eco-label in the market if sold through an ASP member's processing plant. Processors outside the certification client group challenged the legitimacy of the ASP's certification and helped compel the MSC to create more explicit rules surrounding certification exclusivity and sharing. Struggles over the certification of Northern shrimp therefore helped shape the evolution of global standards in ways that are framed as technical matters in official documents but are inherently about equity of common pool resources. ASP's subsequent compromise to share access to certification on the condition that processors outside the initial certification client group allowed the processing organization to consolidate representation over all shrimp processing plants in Newfoundland and Labrador, allowing it to subsequently put on a more united front in collective bargaining against the union representing independent fishers. The expulsion of the Fogo Island Co-op from ASP, and by implication from the MSC client group, over a crab price dispute the following fishing season further illustrates the commodified aspects of MSC certificates as quasi-property rights based on inclusion/exclusion. The ejection of the Fogo Island Co-op from the MSC client group suggests that clients' possession of the MSC certificate can provide a powerful disciplinary force for observing rules and regulations running the client group. The 259 unique characteristics of voluntary certification in common pool fisheries became especially apparent when the co-op subsequently applied to acquire its own MSC certification for the same areas covered under ASP's certification and expressed a willingness to share access to independent fishers who might normally sell shrimp to ASP processors. Although international market access is the overriding concern for producers seeking certification, certificate sharing provided both the ASP and the Fogo Island Co-op with opportunities to increase access to fish resources for underutilized plants in a public policy context that restricts vertical integration between processors and fishers. Therefore, rather than being just a tool for sustainability or even market benefits, MSC certification offers opportunities for firms to find new ways to control production. Changes in the composition of the MSC client in the Northern shrimp fishery suggests that it is crucial to look inside the 'black box' of clients and client groups, particularly regarding certificate sharing mechanisms. Since MSC rules require clients in the same 'fishery' to harmonize certification processes, overlapping certifications like the situation developing in the Northern shrimp fishery create imperatives of cooperation and new potential for conflict between MSC clients. Such relations signify new possible avenues of research into the nature, extent and impacts of the commodification of sustainability management through voluntary certification. 260 CHAPTER 6 Conclusions and Future Directions 6.1 Summary of Findings This dissertation has examined a specific institutional response to the global fisheries crisis and the civilizational model to which it is fundamentally connected. What sets this study apart from existing literatures on certification systems, and indeed from much of the literature on 'private' global governance, is the attempt to go beyond the analysis of formal institutional and procedural processes of governance to analyze and theorize the overlooked historical and material foundations of governance innovation, extension, and reproduction. The emergence of the MSC certification and labelling initiative in the 1990s was not an isolated innovation in governance unique to the fisheries sector, but was instead part of broader transformations in global governance occurring at this time that facilitated the production of 'trade-friendly' voluntary market-oriented approaches to regulation. New voluntary governance initiatives such as certification and labelling programs were theorized in this dissertation as forming a distinct realm of governance at the intersection of a global rule regime that Gill characterizes as the new constitutionalism of disciplinary neo-liberalism, which involves the redefinition, restructuring and disciplining of global governance according to neo-liberal principles of development. Along similar lines, Cutler argues that such transformations in global and local governance are associated with the increasing juridification of political, social, and 261 economic life as law to legitimate neo-liberal claims to authority, the increasing heterogeneity of and pluralism in forms of regulation and governance, and the enhanced significance of privatized governance arrangements.654 For the latter, Cutler raises an intriguing proposition about the extent to which processes of private governance assume the commodity form: today in the fields of international economic and business law the privatisation and marketisation of regulations governing labour relations, human rights, the environment, corporate ethics and a variety of other substantive areas is naturalised as the common sensical and, indeed, the best way to approach legal regulation. Neoliberal economic theories of law are marshaled to establish the inherent efficiency, the organic nature and hence the economic rationality of private marketised regulation. Private codes of conduct, non-binding statements of principle, and 'soft' legal regulations proliferate in both local and global politico-legal orders. Increasingly, economistic, marketised and commodified criteria for enforcement establish the legal standard. This is international law taking the commodity form under late capitalism.655 The empirical study of the MSC governance system appears to confirm the problematique of a commodity form theory of law but takes it further in that the mechanisms and institutions of governance in third-party certification and product labelling systems are, in themselves, marketized and commodified. The MSC exemplifies not only the broader proliferation of governance for commodities in contemporary capitalism, but also the growing commodification of governance. The central innovative finding of this dissertation is that the MSC system has become a growing site of commodification; alongside the various (non-commodified and well documented) technical standards and governance procedures associated with MSC 654 Cutler, 2002: 127-128. 655 Cutler, 2005: 537. 262 certification processes, complex and dynamic socio-economic relations, including new forms of accumulation, shape the evolution and extension of global standards for assessing the sustainability of fisheries. New commodified relations and accumulation structures of governance can be observed in professional labour markets, certification service providers, and eco-labels and certificates as intellectual property. Global consultancy and accounting firms played a crucial role in the creation of the MSC, particularly in advising against institutionalizing the kind of democratic procedures observed in the FSC's open membership organizational design. By taking this advice, the MSC effectively locked in a narrow set of social forces and associated organic intellectuals to administer the new program. Subsequent administrations tend to reflect the MSC's original stakeholders—developed country conservation organizations and large-scale commercial interests—a dynamic of 'path dependency' associated with concentrating the power of appointment in the self-elected Board of Trustees, the legal owners of the MSC. If the MSC organization is the vessel and steering wheel of this experiment in global fisheries governance, professional certification companies and the fishery clients who contract them to get assessed are the oars that row the boat. In part to avoid charges of a conflict of interest, the MSC's administrators do not implement MSC certification in particular fisheries; instead, the MSC adopts a method of certification considered 'best practice' in key international fora such as the FAO—independent, scientific-based verification by accredited third-party bodies. Independent certification is clearly more credible and more conducive to constructing legitimacy than firm-level self-inspection 263 and self-verification, but the burgeoning business relations of third-party certification create new challenges of credibility and legitimacy for the MSC. A key challenge is that in this type of verification system, the organizations accredited to carry out MSC assessments are almost always for-profit firms paid by fishery clients. With client satisfaction as a fundamental basis of business service relations, new incentives structures risk facilitating (1) a 'race to the bottom' in stringency when certification companies assess clients and (2) client capture—risks implied by scientists who have criticized 'generous interpretations' and scoring in some controversial MSC-certified fisheries. Importantly, these risks are arguably greater in capture fisheries than in terrestrial sectors such as timber and agricultural production because of the unique challenges and limitations of fisheries science and knowledge production. More research is needed to determine the specific nature and extent of such risks, however, especially since business relations surrounding certification are far less transparent than publically disclosed components of MSC fishery assessment procedures. Third-party certification systems therefore create new market agents and incentive structures, with certification companies competing to attract and meet the expectations of paying clients and fishery clients seeking to secure quick and cheap certification services. Structurally, these dynamics of commodification mean that certification companies' interests get geared towards the interests of their clientele, which tend to be corporate clientele who are better able to pay for their services. Therefore, another effect of commodified modes of verification in the relatively time- intensive and expensive MSC certification processes is the privileging of firms and 264 industry actors with the greatest economic resources. This helps explain why almost all of the MSC certifications in the 2000s were located in the waters of rich countries. The failure to meaningfully address the issue of high costs and knowledge-intensive requirements of certification in its formative phase is also a failure associated with the exclusion of developing country fishery interests who most forcefully expressed such concerns.656 It meant that MSC pilot projects and reforms to make certification more accessible to small-scale and data deficient fisheries in developing countries in the late 2000s have been criticized as 'too little too late' by some of the world's leading fisheries scientists.657 An unfortunate implication is that the concentration of MSC-certified fisheries in waters near Europe and North America gives the problematic impression that large-scale industrial fisheries from developed countries are more sustainable than the many small-scale and often low-impact fisheries from developing countries. Another major incentive structure associated with commodification that is increasingly shaping the MSC's development and extension is linked to the MSC's subsidiary trading company, which charges fees for the use of the MSC eco-label to help finance the standard-setting organization's growing operating costs. The rapid growth in the number of products from certified fisheries labelled with the trademarked logo has helped transform the MSC into a more self-sustaining economic entity, an entity that does not fit neatly into our conventional notions of grant-dependent charitable 656 Constance and Bonanno, 2000; Ponte, 2008. 657 Jacquet et al., 2008. Notably, the relatively rapid growth of the Friend of the Sea certification program can be in part attributed to its low-costs. 265 foundations or not-for-profit organizations—the MSC instead constitutes a hybrid economic entity. By the late 2000s, the MSC's leadership increasingly embraced the idea of increasing fees to businesses for the right to use its trademarked intellectual property. The strategy to refrain from increasing logo licensing fees until the MSC 'brand' became a 'must-have' for major retailers and processors illustrates how the MSC's interests are becoming embedded in, and dependent upon, large-scale commercial 'partners.' We can infer from the analysis in chapter 4 that the MSC's rapid increase in revenue from eco- label licensing in the late 2000s is closely linked with the voluminous commitments of oligopsonistic retailers and foodservice corporations to buy and sell MSC-certified and labelled products. Theorizing the MSC eco-label as a commodity is not just academic. Representatives from the MSC have also conceptualized the trademarked MSC eco-label as a kind of commodity that signifies the (valuable?) quality of sustainability; indeed, an MSC representative was recently quoted by a US news agency as saying the confusion and deception created by the overuse of the word 'sustainable' in the global seafood trade can be addressed with certification to the MSC, 'a known commodity worldwide. If you see the MSC logo, you can have confidence in that product. If you don't see it, how do you know what you're getting?'658 From this perspective, the MSC eco-label is a form of insurance which, like conventional private forms of insurance, is sold on the market. Considering the significance of its eco-label/commodity and the growing 658 Thomson, 2011. 266 revenues generated from its use, the MSC can hardly be considered a disinterested neutral observer in the globalizing uptake of its certification standard. An irony here is that the MSC has adopted a form of rent similar to state taxation; and with taxation come tax revolts. Since much of the uptake in the fishing industry is driven more by the demands of big buyers on their suppliers than by fishers' 'voluntary' interest in the program, we can expect the power relations inherent in fee and royalty arrangements to cause ongoing tensions between the MSC and its paying partners—a tension observed in the Alaskan salmon certification. At the level of production, MSC fishery certificates also resemble commodities in that they are effectively exclusively 'owned' by clients or client groups, which often create new fee structures to maintain ongoing administrative and surveillance costs of fishery certification. Clients' exclusive entitlement over certificates, while guarding against the free-rider problem from the MSC's perspective, also means that certification offers opportunities for firms to affect production relations in exclusionary ways. These dynamics relate to an important tension in MSC rules that define exclusive entitlement of certification when the object of certification may not necessarily be the exclusive property of the applicant/client—a situation related to the common pool eco-social characteristics of most capture fisheries. Although all extractions of fish stocks must be considered sustainable to become certified, clients gain exclusive rights to have their products certified as sustainable. The case of the Newfoundland and Labrador shrimp industry (chapter 5) showed that even though the entire 'fishery' was certified as sustainable, shrimp products could only become eligible to bear the MSC eco-label in the 267 market if sold through processing firms who were part of the client group. Fishers and processors involved in the 'same' fishery who were outside the client group activated a series of contentious negotiations and the processor association that acted as client subsequently agreed to share access on the condition that other processors became members of its organization and paid a portion of the ongoing costs of maintaining certification. The expulsion of the Fogo Island Co-op from the MSC client group the following fishing season over a price dispute about an uncertified crab fishery further illustrates the powerful disciplinary potential of 'holding' certification. The subsequent move by the co-op to acquire its own MSC certification for shrimp stocks and fishing areas already certified as sustainable also demonstrates the commodified nature of voluntary certification in common pool resources. Therefore, the inability to draw property boundaries through fish stocks means that defining who a client is and to whom certification applies is crucial in determining the nature and effects of certification. Significantly, ownership over the MSC certificate turns out to be a sort of de facto ownership of fisheries resources where before there did not exist these kinds of rights. Overall, then, the dissertation illustrates how fisheries certification not only aids markets but itself becomes a growing site of commodification. Theorizing the growing commodity relations of MSC certification does not mean that certification is an inherently corrupt process that can be purchased on a whim or traded as conventional commodities but, rather, helps explain how the MSC's system of governance is bound up in and inexorably shaped by broader commercial incentives and power structures of market civilization. The various commodified relations and new economic incentive 268 structures surrounding certification also reveal overlooked challenges of legitimacy for the MSC because they complicate questions about who the MSC is for and benefiting. We can expect more scientists and environmentalists to question the credibility of having fisheries assessed by for-profit companies paid by those seeking certification, while more players in the seafood trade will likely question the credibility of the MSC because of its power to charge fees. An interviewee from Atlantic Canada's shrimp fishery who was generally supportive of the MSC referred to the whole process as another 'money racket'659 for the fishing industry. A key lesson of this dissertation, then, is that scientific-based global standards of evaluation and verification are not only bound up in wider assemblages of social power relations but also facilitate the expansion of new markets of governance. Another important lesson of this study is that the MSC system is relatively dynamic. The MSC may indeed take steps in the future towards adopting a less commodified approach. It could, for example, scale back its strategy to finance a large proportion of program costs through logo licensing fees, though the important practical problem of how to pay for the growing organization will provide a strong incentive to maintain this source of funding. It is perhaps less likely that the MSC will consider changing the practice of having third-party certification companies carry out assessment for paying clients, since this process is institutionalized in international forums such as the FAO as 'best practice' and is subject to oversight by organizations such as 659 The use of the phrase 'money racket' in this context refers not to the criminal-legal meaning of racketeering, but instead to a critical view of exchange relations in such processes. 269 Accreditation Standards International and the International Social and Environmental Accreditation and Labeling (ISEAL) Alliance—a global association of voluntary social and environmental standard-setting organizations created in 2002 by the FSC, the International Federation of Organic Agriculture Movements, Fairtrade Labeling Organizations International (FLO), and the MSC to guide and strengthen the impact of their standards. What we are confronted with here is the classic accountability dilemma of who will police the police. The emergence of meta-certification organizations like the ISEAL Alliance reminds us that there are many types of voluntary certification systems, as well as many different types of 'soft laws,5 codes of conduct, and 'best practice' frameworks which may or may not entail institutions and relations as commodified as those observed in the MSC system. The case study of the MSC is not meant to be precisely representative of other mechanisms of voluntary global governance, but it will improve our ability to make comparisons with different governance regimes that rely on professional experts in general and third-party certification and labelling in particular. Researchers have already made some important findings by comparing and contrasting different certification systems. For instance, while forestry, fisheries and coffee certification share features such as third-party certification and product labelling, they often entail different rules for membership, policy scope, and administrative structures.660 The two-program competition that significantly defined the evolution of forestry certification does not appear as significant in coffee or fisheries certification. And whereas the FSC relies 660 Auld, 2009; Auld et al., 2009; Gulbrandsen, 2010; Gale and Haward, 2011. 270 mostly on foundation and government grants to finance its program, some of the FLO's national labelling initiatives receive nearly 50% of their revenue from logo licensing fees.661 This study suggests that our understanding of certification and labelling regimes could be significantly advanced through further research on the socio-economic relations behind and beyond the host organizations. For example, a number of multinational certification companies are accredited to carry out assessments in different sectors. Examining the role and significance of third-party certification companies in the evolution and extension of globally aspiring standards is a particularly important issue that requires further research. 6.2 Beyond Voluntarism: Towards a New Democratic Law of the Sea? This dissertation exudes a critical tone because the methods of critical political economy elicited research questions about the MSC that have not been systematically addressed in the academic literature, questions about the material and socio-economic relations defining the evolution and extension of the world's most prominent fisheries certification and labelling system. The purpose of this study was not to portray the MSC as inherently antithetical to its own laudable purposes. Yet we may appreciate and admire the MSC for its contributions (such as raising awareness about the global fisheries crisis, developing a thorough standard against which to measure and improve the performance of fisheries, and encouraging industry and governments to adopt the program's principles of sustainability) and still raise questions about the kind of governance system it is producing. What lessons about addressing the overlapping 661 Auld, 2009: 478-479. 271 ecological, social, political, and ethical problems that constitute the global fisheries crisis can we learn from the MSC experience thus far? What does a critical political economy analysis of the MSC's formation, extension, and reproduction tell us about the prospects for developing collective responses to the global fisheries crisis? First, market vs. state dichotomies only obscure our understanding of fisheries systems and fisheries governance. From a fisheries management perspective, the MSC standard does not radically differ from existing national and international management approaches. In many ways, the MSC standard legitimizes existing modes of fisheries (including large-scale industrial fisheries) and fisheries management approaches within a reformist agenda more than triggering fundamental changes in practices. The MSC's standard was initially defined by incorporating existing international frameworks and norms and the MSC presents itself as seeking to complement, rather than provide an alternative to, state-led fisheries management. Moreover, the successful implementation of MSC certification in particular fisheries, as clearly shown in the case of Newfoundland and Labrador shrimp fisheries, relies on state-centered management bodies which have legal authority over coastal fisheries. This also means that certification is likely to be more effective in places where national governments and Regional Fisheries Management Organizations have strong management systems already in place and where existing authorities have sufficient resources to fulfill implementation requirements; this demonstrates another reason why the MSC is struggling to generate certification uptake in developing countries, which tend to have modest resources and capacity for developing comprehensive fisheries management systems. Thus, whereas 272 conventional analyses tend to reify the promises and pitfalls of the market-driven characteristics of MSC certification and labelling initiatives, crucial practical links between existing international frameworks, state-led management systems, markets, and civil society define important aspects of the program and its object of governance. Indeed, the politicization of certification and eco-labelling in the Nordic countries examined in chapter 4 demonstrates how fisheries production and management systems are bound up in domestic, as well as international, political and civil society. The creation of alternative, national eco-labels in places like Iceland was motivated in part because domestic social forces viewed the MSC as not reflecting their interests. Dissatisfaction with the MSC also prompted social and political actors in other jurisdictions to create eco-labels meant to be more appropriate to specific local conditions. In addition to our Nordic examples, sub-national and national certification and eco-label systems have been launched in the late 2000s through industry-government collaboration in important seafood jurisdictions such as Alaska and Japan, the latter constituting an especially important development since Japan is the world's second largest consumer of seafood and the top importer of seafood products.662 Second, this study supports the argument that the political potential of certification and labelling as regulatory instruments are often exaggerated, oversimplified, and sometimes misleading.663 As Skladany and Vandergeest put it, a central problem is that certification and labelling systems 'tend to transform complex 662 Hall, 2011. 663 Klintman, 2006. 273 environmental and social justice issues into simplified., .choices that connect with the middle class global food elite who can afford it.'664 Indeed, consumer power tends to be romanticized and exaggerated with respect to labelling. As chapter 4 shows, the extension of MSC certification is mainly driven by big corporate buyers, social forces most connected to patterns of affluent social reproduction involving the most energy- intensive consumerist lifestyles. There is an implicit, if not explicit, recognition in the MSC's outreach strategy that the power of consumers is miniscule compared to the power of giant retailers, supermarkets, and foodservice companies who buy and sell huge quantities of food in North America and Europe. Third, voluntary approaches to governance are inherently limited. As Clapp argues in a study of voluntary measures governing genetically modified organisms, If the ultimate goal is to ensure that firms marketing products.. .pursue the precautionary principle and internalize environmental costs as a means by which to promote environmental responsibility, stringent external regulatory oversight with substantial legal and financial consequences for non-compliance is likely to be more effective than the current voluntary measures.665 Notably, voluntary certification standards are often defended as tools to contribute to improvements and complement other approaches, not to provide panaceas. True as this may be, is there not an implicit recognition in such positions that the really important frameworks of governance are beyond voluntary mechanisms? Voluntary approaches may be attractive to industry and governments because they do not raise the spectre of 664 Skladany and Vandergeest, 2004 665 Clapp, 2008: 357. 274 violating new constitutionalist 'free trade' laws, but if the regulations advocated by voluntary programs were truly indispensable, then would proponents not advocate making them legally mandatory? Scarcely, since proponents of voluntary programs tend to accept deeply held notions about the primacy of market discipline. Indeed, the MSC and similar voluntary sustainability standard-setting programs are caught in a contradiction of business ethics that predominates in the era of market civilization: the advocacy of maximum incorporation of sustainability standards contradicts their normative origins, yet the fee trade and business 'free choice' approach effectively legitimates the freedom to be unsustainable.666 Moreover, in the abstract, voluntarism symbolizes consent, but within the current reality of the global political economy, voluntarism tends to become a new expression of power, control, and discipline in market relations. In practice, the implementation of costly and technically demanding voluntary standards gets shaped by uneven socio-economic structures and thus tends to benefit the most economically powerful more than the marginalized. On paper, the MSC's environmental standard for sustainable fishing is a commendable model but left to the disciplines of the market will continue to be identified more with big buyers in oligopsonistic seafood market structures than with fishers and coastal communities around the world struggling to maintain their livelihoods. Fourth, and extending from the three points explained above, the distributive consequences of voluntary governance have not been theorized. We can expect that the 666 The same contradiction marks the ascendancy of market-friendly paradigms and voluntary forms of governance in the human rights-corporate responsibility domain. See, for example, Baxi, 2005. 275 distributive consequences are especially important to consider in voluntary certification and labelling standards that are highly commodified like the MSC. From a political economy perspective, the MSC tends to reflect rather than challenge the uneven relations of power and distribution of resources in global and local seafood trading. This potentiality was highlighted by representatives of small-scale fishers, particularly from developing countries, since the idea of the MSC was first announced by the WWF and Unilever in the 1990s. This study therefore concurs with studies of global leadership and global governance which argue that addressing global crises in a meaningful way will require more effective, inclusive, and legitimate approaches than neo-liberal forms.667 Forms of global governance, including those intended to make fisheries 'sustainable,' should be judged not only in terms of whether they address specific economic and ecological challenges and imperatives, narrowly understood, but also in terms of whether they effectively and justly address the general crisis of social reproduction and livelihood that compound such problems.668 Scholars studying the 'wicked problem' of fisheries also argue that solutions that address power relations, collective action dilemmas, and the fundamental question of 'sustainability for whom' are required for stewardship, equity and long-term sustainability.669 From this perspective, a just and equitable system of global fisheries governance requires the inclusion of the broadest possible coalition of interests, not a system that clearly 667 Gill, 2011. 668 Bakker and Gill, 2003; Gill, 2010. 669 Khan and Neis, 2010. privileges European and North American interests. The struggle to gain significant uptake in developing country fisheries in the 2000s confirms that the narrow set of interests involved in setting up the MSC have translated into a narrow set of interests represented in its early patterns of extension. A more meaningful response to the global fisheries crisis would require a far more inclusive and legitimate form of global governance than the highly commodified MSC system can be expected to produce. The difficult question is who will determine the nature of such a governance system and how do we ensure developing country interests and other frequently marginalized groups are included as leaders, not subjects, of such efforts? An alternative approach may be developed by thinking innovatively about developing a new democratic Law of the Sea—perhaps through the existing UN Law of the Sea—to more effectively and legitimately address the ongoing ecological, socio economic, political, livelihood, and ethical crises that continue to plague ocean systems. The existing Law of the Sea established in the UN Convention on the Law of the Sea in 1982 was a major legal achievement that redefined the global political oceanscape and created significant new opportunities for marine management. Results have been mixed, however. While coastal states have clearly been able to establish new management systems over their Exclusive Economic Zones, global fish stocks continue to decline in most areas and new problems such as global warming and ocean acidification have created an urgency to develop more effective collective responses. With 2012 marking the 30th anniversary of the establishment of the UN Law of the Sea and the 20th anniversary of both the Rio Earth Summit and the first Canadian cod moratorium, the 277 time may be ripe for mobilizing broad-based interest in evaluating the need for, and possible form of, a new Law of the Sea. A revamped Law of the Sea could be developed on the basis of an inclusive and equitable system that gives meaningful opportunities for the less powerful to participate directly. To do so, it could be developed as a distributive system of global governance. In contrast to industry self-governing and centralized-hierarchical governing, a distributive approach to global governance draws in a far wider range of actors than those that are the most powerful. A distributive system of global ocean and fisheries governance would require far more inclusive forms of global governance than the voluntary and highly commodified approach adopted by the MSC. It would have to serve the interests of different communities and publics around the world, especially the poorest ones. The development of a new Law of the Sea need not imply a strict, comprehensive, and instant implementation agenda since it would have to recognize and equitably address unequal capacity among different actors. This reminds us of the significant practical challenge of how to pay for such a system on an equitable basis as governments and populations struggle to pay for and resist fiscal austerity programs sweeping across the state system in the early 2010s. Perhaps the most important initial challenge, however, is how to mobilize on a democratic basis organic intellectuals and human resources from the broadest range of interests at local and global levels to lead 670 The concept of distributive global governance is drawn from Latham, 2006. 278 the construction of more effective and equitable models of global fisheries governance in the 21st century. A distributive approach to global ocean governance could more effectively and equitably explore the possible creation of new rights and responsibilities for oceans and coastal peoples. It could include social entities other than territorially sovereign states, such as large and small NGOs, urban and rural community groups, and different kinds of social movements. Broad sets of social interests could then explore new possibilities for ecological and social rights, sovereignties, and constitutionalisms that could meaningfully confront the dominance of neo-liberal political and economic rights, sovereignties and constitutionalisms; such alternative sovereignties and constitutionalisms are needed to more effectively address the ontological complexity that fisheries and oceans problems really pose. A distributive approach could also expand the realm of social and ecological marine ethics alongside the business ethics that prevail in the era of market civilization. Ultimately, global governance, in both voluntary and legal forms, is a contested domain where power, agency, and resistance are located across transnational, regional, national, and local levels. The prospects for globally aspiring governance to form the basis of legitimate, equitable, and effective rule-making in large part depend on the power dynamics and outcomes involved in contestations and negotiations in which a variety of agents across different scales pursue diverse and sometimes conflicting interests. While studies of global governance in political science literatures tend to focus 279 on 'high' politics at the organizational or state system level, it is at the 'low' level of ecology, people and production that governance will be judged in the final instance. 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