SIMP, Fraud, Slavery in the Shrimp Industry: A Case for Fishcoin
On January 1 this year the Seafood Import Monitoring Program (SIMP) came into effect for 15 of the 17 species and species groups. The Program, also known as the Seafood Traceability Rule, establishes permitting, data reporting and recordkeeping requirements for the importation of certain priority fish and fish products that have been identified as being particularly vulnerable to Illegal Unreported & Unregulated (IUU) fishing and/or seafood fraud. The programme requires up to 17 and 13 Key Data Elements (KDEs) for wild caught and farmed seafood respectively. The KDEs include the name and country of registration of the fishing vessel, evidence of authorization to fish or farm (license or permit), type of fishing gear, species name, landing date etc.
Two species groups, the abalone and shrimp species, were exempt from compliance "until further notice". However, in her article entitled "Fearing fraud, US pushes for imported shrimp to be tracked", journalist Katrina Megget, reported on 11 US senators from across the political divide seeking to have shrimp included in the Program. “We are concerned about the indefinite stay on shrimp imports compliance with SIMP implemented by the National Marine Fisheries Service,” the senators wrote. “More than 65 per cent of seafood imports covered by SIMP are shrimp. With full implementation, the American people would have better, timelier access to health and safety information for this widely consumed product.”
So how rampant is fraud in the shrimp industry? Well in a report by Oceana found that America’s “favorite seafood” was misrepresented 30 percent of the time when they DNA tested 143 shrimp products from 111 grocery stores and restaurants. Hence the demand for traceability.
However traceability is not easy nor cheap. Intra-company and one-up, one-down traceability is a requirement of food safety certification, which is a requirement to supply major retailers in developed markets. Below is an example of traceability through a secondary processor I audited in Thailand, and it highlights how one needs to trace back and test ingredients (in this case eighteen for shrimp toast including sauces, salts as well as the prawns), and other inputs like the boxes, the plastic packaging etc. To cover nefarious intent, whereby someone deliberately adulterates a product, it is necessary to record which truck and which driver delivered the ingredients.
The above can be achieved through paper and people or traceability systems -with the latter mostly used in developed nations as they are expensive, proprietary, and heterogenous. However, whether through pencils or keyboards, it gets more difficult as you go further up stream in farmed shrimp supply chains — which by volume are 80% of the shrimp market in countries like the US.
To have full traceability you need to know not only which farms the shrimp came from but which hatcheries supplied the farm and, in the case of black tiger shrimp, which fishers supplied the hatcheries. You also need to know which feed was used to grow the shrimp, which feed mill the feed was manufactured at, and where all the ingredients came from — and a lot of the feed is made up of fishmeal and fish oil from fish caught by fishing trawlers. However, investigations into the Thai shrimp farming and shrimp feed industry in 2014 revealed rampant slavery, over-fishing and environmental destruction, and reports continue to this day.
However there are good actors in farmed shrimp supply chains and it is critical that we identify and verify who they are, and reward them. To do this we need a whole chain, interoperable traceability system. We at Eachmile have been working very closely with shrimp supply chains in both developed and developing nations. For example in Indonesia we have been tracking back to the fishers of black tiger shrimp broodstock, through to the hatcheries, the farms, the processor, and to the hotels and resaurants. We not only collaborate with all supply chain stakeholders but also NGOs, governments, and technology providers like FishTrax and SourceMap. On your mobile phone you can scan the QR code below to see the story of one batch of prawns sold the Grand Hyatt in Singapore.
Although we have developed solutions that have reduced or removed the economic and technological barriers to accessing technology and to reporting harvests (see mFish), we realised we needed a way to incentivise the input of data into a secure and trusted platform that blockchain provides. This is why we have embarked on the Fishcoin initiative where fishers, farmers, first receivers, processors at the start of supply chains can receive tokens for entering data, the Key Data Elements, as product is sold and moves between these actors. The tokens accumulate in each actor’s digital wallets each time data and tokens are exchanged, and they can be exchanged for fiat currency or mobile air time. Importers will then be able to purchase these tokens on these exchanges and they can filter back down again. We recognise that we cannot stop slavery through tokens and traceability alone but we can at least get visibility on who these actors are — and that is the first step in verification and certification. It is also the first step in the transition toward a more fair and honest global society.
