Canadian Mussel Industry Benchmarking (including oyster audit) Toward an Internationally Recognized Canadian Standard and Certification Program

Table of contents

• Project Overview
• Project Overview
• The Benchmark Audits
• Applicability to Oysters
• Audit Results Overview
• Next Steps for Standards and Certification Preparedness

Project Overview:

The purpose of this project is to assist the Canadian mussel industry understand its level of preparedness for standards and certification programming. The objective was to conduct consultations and analysis at the firm and industry level of the Canadian Mussel Sector in preparation for standard and certification program development. In order to gain an understanding of where the industry generally stands in relationship to established and emerging standards and certification programs, intensive farm and processing level benchmarking audits were conducted.

Specifically, this report will summarize the recent benchmark analysis findings for Canadian mussel producers. The report will provide a general, high-level overview of the current level of preparedness for the Canadian industry to establish and meet the demands of emerging international certification programs.

The project was developed and overseen by the Canadian Aquaculture Industry Alliance (CAIA). CAIA is a national industry association, that represents the Canadian aquaculture operators, feed companies and suppliers, as well as provincial finfish and shellfish aquaculture associations. CAIA is a collective which provides focus for important national initiatives and serves to identify industry issues for effective government planning and services to meet the needs of members. CAIA’s contract administration partner for the project was Global Trust Certification Ltd. (Global Trust). Global Trust is an accredited Seafood Certification and Inspection and Standards Services Provider based in Ireland.

The project was supported by the Department of Fisheries and Oceans (DFO) under the Aquaculture Innovation and Market Access Program (AIMAP)program. The formal project title was: Canadian Aquaculture Standards Forum (CASF), Canadian Mussel Industry Benchmarking Toward an Internationally Recognized Canadian Standard and Certification Program.

Project Overview:

The project commenced with general consultations and analysis at the firm, industry and Provincial levels regarding established practices, with the overall goal of ensuring the Canadian Mussel Sector is able to adapt to relevant international standards.

In addition to establishing a strong baseline for benchmarking audit points, the general assessment - conducted by Global Trust - helped key stakeholders understand the purpose of the project and, more importantly, elevated awareness and understanding for all stakeholders regarding the nature and possible implications of emerging mussel standard options. It was also of interest to Global Trust whether there might be significant differences within Canada, if the idea of a national standard was ever considered.

Primary operational feedback was gathered by Global Trust through on-site benchmarking (gap analysis) audits. Six (6) Canadian operations were selected for these audits which were based on known key parameters of internationally recognized standards and codes of practice. The original intention of this project was to audit 6 mussels farms, but it was later decided to use 5 east coast mussel farms and one west coast oyster farm. The results expressed in this document mainly apply to mussel operations, although some general similarities may apply to oyster operations (but this can only be speculative based on the single audit). 
  
The audits focused upon ‘quality and best practices,’ as well as sustainability aspects of industry assessed across environmental, social and economic parameters. The six companies received specific feedback regarding their current performance. For the purposes of this report, however, no individual company information will be used. Instead, Global Trust has drawn on its overall findings (generally informed by the specific audits) in its assessment and understanding of the current state of preparedness of the Canadian industry for the adoption of internationally recognized standards.

Why should Canadian mussel growers be concerned with Standards and Certification?
Recent global developments clearly suggest that Certification programs associated with established Standards are becoming an increasingly important tool for industry to objectively demonstrate their commitment and adherence to production reliability and sustainability.

Supply chains and their influencing stakeholders, e.g., ENGO’s, regulators, consumer groups and the public at large, are actively promoting standards and certification for food producers to demonstrate that their production activities are safe and environmentally sustainable. Environmental performance is also under scrutiny at both the local level (local impact reduction) and at a global level (green-house gas emissions). These broad global trends are fundamentally changing the direction of all businesses - not just seafood - toward “objective demonstration” of sustainable practices.

Note: For a full discussion regarding the evolution and development of standard and certification programs, please see CAIA’s November 2009 paper titled Global Market Report On Aquaculture Standards and Certification (available on CAIA’s website).

Throughout the project it was confirmed that these market pressures are very real and now directly affecting Canadian mussel producers. There is clear evidence that leading Canadian and US buyers, e.g., especially retailers, are now expecting (and demanding) that farmed shellfish products meet an internationally recognized standard.

Without any doubt, and on important levels including nutrition, Canadian mussels are likely the most undervalued sustainable seafood choice in North America. Although our benchmarking study has not focused upon the dollars-and-cents, return-on-investment aspects of the mussel industry, it is apparent that consumer value for price is high.

While ‘sustainability’ is difficult to define and in our opinion can’t be isolated to one or two factors, our studies have focused upon a cross-section of on-farm and external factors which, operating together, promote and create an environmentally and socially sustainable food production industry. Furthermore, our objective findings regarding on-farm practices and the external operating environment merely strengthen and reconfirm conclusions of others regarding the environmentally benign nature of this form of aquaculture.

Even though mussel and other shellfish farming is generally accepted as being ‘sustainable’ this is not enough for the industry to escape current and future requirements to objectively demonstrate the dependability of all aspects of their operations, e.g., food safety, traceability, quality, etc. 

The Benchmark Audits

Global Trust performed on-site benchmark audits at established Canadian operations involving grow-out and processing operations. The benchmark audit processes and protocols were based on known and usual standard requirements for mussels and, generally, bivalves. For example, key benchmark criteria was chosen based on established European standards, private label organic standards, and anticipated environmental and social aspects of emerging standards that could be easily assessed. 

The specific intention was to provide an informative ‘audit experience’ typical of standards assessment for certification purposes. The broader intention of these visits, and associated consultations, was to measure the performance of the Canadian mussel industry with respect to criteria deemed important to industry, markets and stakeholders. In that regard, Global Trust gathered valuable information on additional criteria and performance markers, e.g., environmental, economic and social; this allows an informed evaluation of all possible standards choices and certification frameworks.

Global Trust developed and tracked performance indicator markers and sub-markers focused in following key performance areas:

1. Regulatory Systems, Compliance, Management & Training
2. Environmental Management & Social Responsibility
3. Quality Management & Product Quality (Food Safety)
4. Operational Management

Under each of these key performance areas series of specific questions were audited. Individual company performance under each category was then estimated using Global Trust’s proprietary Aquaculture Standards Audit Scorecard (ASA Scorecard). Generally, the scoring system measures performance from “0” (under-achieving) to “3” (world-class).

For example, here is an analysis of Global Trust’s structured audit and scoring approach under Environmental performance. Under Environmental performance the following major marker categories were:

• General Environmental Management Systems
• Containment of dangerous substances
• Regulatory (environmental) Performance
• Waste Management Control and Planning
• Energy Management and Conservation
• Local Ecosystem Conservation
• Local Amenity

A series of specific questions are established for each marker and a series of associated sub-markers. Basically, sub-markers are converted to auditable questions which can be assessed through standard auditing techniques, i.e., objectively measureable.

The ASA Scorecard results are visually reflected in radar plotted graphs. Companies can use this visual feedback to compare their current relative performance to world class standards. The analysis is not meant to be definitive, but it does offer rapid categorizations and understandings. The scoring feedback is intended to be intuitive, self-explanatory and instructive. It can be used by individual companies and - to the extent broad generalizations are possible - by industry to assess their relative strengths and weaknesses (and plan accordingly).     

Global Trust assessed performance under the following major markers under each performance category:
 
Regulatory Compliance Regulatory Systems, Compliance, Management & Training

• Legal Permits and Licenses
• Correct siting and marking of farms
• Legal Provision for Navigable Waters
• Food Safety Compliance (and CSSP)
• Legal training requirements

Social Responsibilities [Grouped under Environmental Performance]

• Corporate Responsibility
• Worker Health and Safety
• Worker Rights
• Other resource users
• First Nations (where applicable)

Quality Management / Product Quality (Food Safety)

• Quality Management
• Food Safety Policy and Systems
• Product Safety Control
• Product Quality Specifications
• Previous/Existing certification
• Pre-harvest quality and harvest management

Operational Management

• Operational Management
• Spat collection
• Float/line Management
• Traceability
• Spat collection and setting

Applicability to Oysters

Finally, it must be noted that the same audit criteria - performance categories, markers, and associated questions - used for the mussel audits was also used for the oyster audit conducted under this program. While it is impossible to generalize results across the oyster industry based on one limited audit, it is noteworthy that the company in question scored very highly across all categories. The management and staff operate a very well run operation and produce excellent end product. Like the mussel companies, areas for improvement relate to implementation of operation-specific systems and documentation, e.g., written procedures, policies, training records, managerial statements, etc. Once the recommended improvements are implemented, the company in question will be well positioned to attain certification under available global standards.

Audit Results Overview

While the audits were not organizational wide and were typically only limited to one full day visit, there was ample consistency of findings to enable strong general conclusions to be drawn. The major conclusion is that the potential to meet required provisions of known bivalve standards is within scope, abilities, and competencies of most Canadian operators. Overall, there would appear to be only relatively minor differences between audited companies.

Note: Theses audits were largely focused at the management systems level and did not, for example, include detailed reviews into matters such as site benthic analysis or carrying capacity assessments, etc. for comparison against known or emerging standards.

On an industry-wide basis, the audit feedback has been captured and subdivided to allow the following categorizations of Industry Performance:

1. High Performance
2. Medium Performance
3. Mixed Performance
4. Medium/Lower Performance

Generally, the Canadian industry shows High Performance, and would consistently meet the requirements of most international standards, in the following areas: 

• Regulatory Compliance
• Permitting
• Approvals
• Siting (compliance)
• Navigational compliance (NWPA)
• CFIA – (CSSP) food safety
• Introductions and Transfers regulations / health management plans
• Product Quality Management
• Stocking density on lines
• Traceability - management of lines, inventory
• Product Quality Monitoring – consistent evidence of high quality product, meat content, pieces per kg

It must be noted that these High Performance areas are vitally important, e.g., product quality, and underscore the value and quality proposition offered by the Canadian product.  

The Canadian industry shows Medium Performance, and may not consistently meet the requirements of some international standards, in the following areas:

• Aspects of Environmental Performance
• Waste management Controls
  
  
  • Effluent treatment
  • Some composting
  • Re-cycling (where possible)
  • Waste reduction – low discards
    
    
• Local environment conservation
  
  
  • Knowledge of habitat
  • Sensitive features
  • Predator control- non destructive

It must be noted that not all standards will focus on matters such as waste management controls or local environment conservation, therefore, the Medium performance rating will be of concern for environmentally oriented standards. Meanwhile, it is noteworthy that key standards appear to be evolving toward the inclusion of audit markers which will allow company demonstration of environmental awareness and responsibility. Therefore, awareness and improvement in these areas of Medium performance will be of interest to companies interested in staying ahead of these ‘eco’ indicators.

We have also identified a category of Mixed Performance. From the perspective of meeting established international standards there are few if any concerns, mainly because Canadian social, employment and economic standards are generally high. Typically, the Canadian companies have a strong record, but from an audit perspective (paper trails) there may be little or no actual evidence of their good practices. For those types of reasons there are mixed results in the following areas:

• Corporate responsibility - more related to lack of formal documentation - arguments for and against inclusion, and at what level?
• Working environment
  • Health and safety
  • Worker welfare/rights
  • Employment contracts
• Social/community performance
  • Policy/transparency/communication
• First Nations

Again, Canadian performance in these areas is generally very good, but audit evidence may be weak. This is not a key area for most international standards, therefore, may not be a priority area for review. Some companies, however, may benefit from and wish to document and formally display their social and economic achievements, especially for local purposes, and this may be included in some standards.    

Finally, and of immediate concern, the Canadian industry generally shows Medium/Lower Performance, and may not consistently meet the requirements of international standards, in the following areas:

• Documented Environmental, Quality and Energy Management Systems
• Quality Policies
• Environmental risk assessments
• Documented operational procedures
• Documented quality system (except for strong Regulatory compliance – HACCP/Pre-requisites)
• Records for quality available
• Documented worker policies, work contracts

The operational audit feedback consistently highlighted management system deficiencies in the area of environmental, quality, and energy management. Implementation of these programs is either a direct requirement or highly recommended for major existing and proposed international standards. As standards evolve, and they typically do, it is almost a certainty that evidence of these management systems will be a fundamental requirement.  

Therefore, in preparation for certification – no matter what standard(s) is eventually chosen – it will be important for Canadian companies to establish appropriate internal management systems.

The following chart illustrates the relative areas of high, medium, mixed and low performance of the audited mussel companies (companies noted as A, B, C, D and E). There is strong consistency of performance across the identifiable categories. Based on this feedback, it may be a safe assumption that these findings reflect the industry at large. It might be further assumed that the smaller operators will also show documentation and management system areas for improvement.        

Next Steps for Standards and Certification Preparedness

This audit program has confirmed that the Canadian industry demonstrates High Performance in many fundamentally important areas. For example, there is consistent evidence of high quality end product, a strong record of food safety with few toxin concerns, and strong regulatory compliance. There is good to excellent farm control - stocking practices and traceability - leading to consistent harvest outputs.
     
In terms of priority next steps, the audit program has also demonstrated general deficiencies related to management systems covering environmental, quality, and energy management activities. Improvements in these areas is very important because these types of programs are either directly required or highly recommended for major international standards. Therefore, to assist our companies prepare for certification – no matter what standard(s) is eventually chosen – it will be important to help them set up appropriate internal management systems.

In that regard, CAIA has successfully received AIMAP program support for 2010-2011 programming that will allow these fundamental internal management systems to be put in place. The intentions will be to streamline implementation through a process of system template development which will meet the needs of large and small producers. The 2010-2011 project will include trial implementation throughout a single operation, logbook development, and a series of follow-up explanatory industry workshops.

In addition to voluntary preparation for certification programming, there is growing recognition that adoption of related management system processes has good internal management benefits for companies that may choose to take advantage of the proposed value-added services.