Asia Research & Engagement’s (ARE) briefing provides an insight into the major categories of seafood sustainability risks. Seafood supply chains face a plethora of issues spanning social and environmental spheres. Furthermore, it also presents the responses from leading retailers and hotels from the Asia-Pacific, the EU, and North America, and a close evaluation of their policy disclosures.

The report outlines the major economic and reputational risks in seafood sourcing including:

• Overfishing and destructive fishing methods have been responsible for falling ocean stocks. Due to a lack of fishery management, marine resources have already fallen 70% to 95% from 1950 levels. Moreover, the findings illustrate that major fish and invertebrate groups will experience further declines of between 9%-59% by 2045 and that 60% of species covered will generate less catch.
• Countries such as Thailand have human rights issues prevalent in fishing. Thai men are subjected to forced labour on fishing boats; some remain at sea for several years, are paid no wages or very little, work as much as 18-20 hours per day, or are threatened or physically beaten.
• A significant component of the seafood industry operates outside or in contravention of the law, thus making it problematic to monitor species levels and implement adequate fisheries management plans. For example, nearly 40% of catches in the South China Sea were unreported in 2010.
• Suppliers failing to manage disease risks in aquaculture can result in significant problems for supply over a large area. Moreover, the findings show that pollution, over-use of chemicals, disease, feed sustainability, and release of hybrid species all pose current risks to aquaculture.
• Asia’s economic growth has been paired with an increase in industrial and agricultural pollution, and has resulted in a higher risk of contaminants prevalent in seafood offerings.

In addressing these issues, international retailers have developed a range of tools to mitigate sourcing risks, such as the following steps:

• Setting out types of fish the company will not sell
• Specifying preferred fishing methods
• Outlining acceptable types of certification
• Implementing mechanisms and standards for labelling and traceability
• Implementing initiatives to improve supply chain standards

In the European and US markets, leading food retailers took steps to address seafood sourcing risk, disclosing sophisticated supplier policies that outlined specific actions the companies had taken to address seafood supply issues. For example, Coles, Wesfarmers’ supermarket division, uploaded a video on their website on their website outlining its pledge to sustainable seafood. Comparatively, the Asia-Pacific retailers tended to have a weaker commitment, providing either a fairly vague policy or no policy at all. However, there has been an improvement in the rates of seafood sourcing disclosure when considering that a 2011 survey found that only one of the same ten companies provided disclosure.

The research provides a footprint of international retailers, hotels, and restaurants taking steps in order to address these economic and reputational risks. However, there is a clear incentive for these entities operating in seafood supply to focus on their supply chain risks and take the efforts necessary to manage them, yielding a better managed industry that benefits all stakeholders.

1. Investors and companies have an interest in disseminating practice across the Asian seafood sector.
2. Even with an increase in prices, the study believes that 55% of the species covered will generate less landed catch value.
3. The EU issued a yellow card to Thailand in 2015 and reaffirmed this in 2016 due to the 'inadequate fisheries legal framework and poor monitoring, control, and traceability systems'.
4. Shark fin, which is prominent in Asia for being used for soup, is being increasingly shifted away from consumers. This practice is seen perceived as particularly damaging for the oceans, and has subsequently resulted in actions such as banning it at official functions where it's sometimes valued as traditional.
5. Different hotels have varying commitments to sustainability across their operations. Notably, Hong Kong and Shanghai Hotels mentioned undertaking sustainability assessments of over 800 seafood items.
6. In many cases the companies have not disclosed information on seafood supply risk management. Where disclosure was available, the steps taken were generally far weaker than the global peers.
7. Aquaculture disease management is an investment risk - Early Mortality Syndrome has had significant effects on Thai shrimp production. The disease hit farms in 2011, with ongoing effects over the next years. Production fell from 540,000 tonnes in 2012 to 250,000 tonnes in 2013. Furthermore, there are concerns with poor disease management, such as some companies' response to Early Mortality Syndrome through the use of prophylactic antibiotic. This response could negatively impact human health by creating drug-resistant bacteria.