international industry perspective: standards and certification

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International Industry Perspective: Standards and Certification Toronto 25 February 2009 Dr. Petter Arnesen, Vice President Feed & Environment Marine Harvest ASA

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International Industry Perspective: Standards and Certification. Toronto 25 February 2009 Dr. Petter Arnesen, Vice President Feed & Environment Marine Harvest ASA. Main points of presentation. Marine Harvest in brief Stakeholder focus on the sustainability of salmon farming - PowerPoint PPT Presentation

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Page 1: International Industry Perspective: Standards and Certification

International Industry Perspective: Standards and Certification

Toronto 25 February 2009

Dr. Petter Arnesen, Vice President Feed & Environment

Marine Harvest ASA

Page 2: International Industry Perspective: Standards and Certification

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Main points of presentation

• Marine Harvest in brief• Stakeholder focus on the

sustainability of salmon farming

• Image of the industry• Improvement areas• Environmental standards• Marine Harvest`s response to

the environmental challenge• Marine Harvest/WWF Norway

agreement

Page 3: International Industry Perspective: Standards and Certification

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Norge 7 %

Europa 54 %

Amerika 24 %

Andre 4 %Rest Asia 5 %

Japan 6 %

Norge 52 % Skottland 10 %

Canada 11 %

Chile 23 %Færøyene 2 %

Irland 2 %

Marine Harvest in brief

Key figures Marine Harvest

13.5 billion NOK in turnover 2008 (approx 2.5 billion CAD)

326,5 thousand tonnes harvested in 2008 (HOG)

7.500 employees Global market share 22 % Market leader in:

Norway Chile Canada (West Coast) Scotland Ireland Faeroe Islands

Markets (2007)

Production (2008)

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Chile

Scotland

Canada

Norway

FaroesBelgium

China*

Italy*

Ireland

Japan

South Korea*

Holland

Poland*

Singapore*

Spain* Taiwan*

USA

France

*Sales office

Present in 18 countries

Page 5: International Industry Perspective: Standards and Certification

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Increased environmental focus

• There is an increasing demand from consumer groups, supermarket chains, ENGOs, authorities, and investors to document that production practices follow sustainable principles

• Environmental impacts are frequently front page news. Industries that are unwilling to admit to ”their sins and clean up” are likely to lose their ”license from society to operate” and be out of business

• Several ENGO campaigns have been run against alleged unsustainable seafood. In 2006 Wal-Mart took the decision to only source sustainable seafood and the German Metro Group teamed up with WWF in 2007 in a similar initiative

• Governments in many countries can be expected to increase the use of financial incentives to move industries in a more sustainable direction - e.g. towards more local processing of fish

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A young industry with strong growth

Source: Kontali Analayse

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Sustainable production – a prerequisite for political goodwill and continued growth

• ”In my view, there is only one factor that will determine if the aquaculture industry will be able to continue its growth. And that is sustainability. Other factors such as consumer trends, economic development, etc. are also important. But without sustainability, the growth will be limited and short-lived.

• To obtain new areas for fish farming, society in general must give its approval for aquaculture to take precedence over other interests. We now see a growing sensitivity to environmental issues, which is reflected in the development of both national and local policies.

• Consumers around the world want to know how their food is produced, and how its production affects the environment. Seafood's reputation for being both tasty and healthy is justified. If we can assure consumers that farmed fish is also environmentally friendly, I am confident that seafood consumption will continue to grow.”

(Norw. Fisheries Minister Helga Pedersen, Sept. 2008)

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Image of the salmon industry

• Even though farmed salmon is recognised for it's health benefits (omega-3) and found on dinner tables in millions of homes and restaurants around the world, there is often more negative focus on our industry than positive. How can that be changed?

We have to become more open and improve our communication. Myths about salmon farming are long lived and have to be taken down. And we never want to see -------”is trying to hide” coming from journalists or our opponents when describing our industry

True commitment to sustainable and transparant production practices must be demonstrated throughout the value chain and in all countries

We must be willing to admit that as a young, fast growing global industry, we have several unsolved problems

• The industry`s opponents are several and some of them even give us performance scores........................................................ >>>>

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We cannot live with this!

Farmed Salmon:

Avoid!

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Or this!

Farmed Salmon:

Avoid!

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Or even this!

Farmed Salmon:

Ask Questions!

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Areas where we can and must improve

• Take our share of the responsibility for maintaining viable wild salmon populations> by preventing escapes> by controlling sea lice

• Demonstrate opposition to depleting the oceans of wild fish by securing that> marine feed ingredients are based only on fish species that originate from fisheries that have a total allowable catch (TAC) quota; are subject to scientific review and under governmental control; are not on the IUCN “Red List of Threatened species”

• Relationships with local communities where we operate• Become more proactive and less reactive in our handling of

problems• Improve our communication. Be open and honest about problems

but also “tell the good stories”

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it's about creating confidence in the value chain“Today everyone worries about everything”

Feed Brood fishFresh- water On-

growingHarvesting

Regulatory framework + third party certification

Primary processing

Regulatory framework + third party certification

Marketing Product Development

Sales

FARMING PROCESSING SALES

Retailer Consumer

Historically our industry has been production driven, not market drivenWe have mostly been reactive rather than proactive when faced with market problems

Page 14: International Industry Perspective: Standards and Certification

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Perceived benefits,

attributes and risk

Actual benefits, attributes and risk

Fish

Farmer

RetailerConsumer

Feed

Supplier

Processor/

Buyer

Feedstuff

Supplier

“The products of one level in the Value Chain are the raw materials for the level above”

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Standards

• A technical standard is an established norm or requirement. It is usually a formal document that establishes uniform engineering or technical criteria, methods, processes and practices

• Standards may focus on business-to-business relationships or target the final consumers’ attention in the supermarket via a specific label

• A environmental standard should offer consumers a choice between sustainable and unsustainable seafood and be an add-on to obligatory (legal) internal control systems/standards that are already in place

• We are not served with having to achieve a number of different environmental certifications. It is costly, resource demanding, and can create confusion. Even though we must accept that there in the future may be several ”competing” standards we should demand that they offer the possibility of harmonisation with other standards through benchmarking procedures. We must also be confident that they actually contribute to protecting the environment

(Wikipedia)

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What are the benefits of standards?

• Standards are a powerful tool for organizations of all sizes , supporting innovation and increasing productivity. Effective standarization promotes forceful competition and enhances profitability, enabling a business to take a leading role in shaping the industry itself

• Standards allow a company to:

>attract and assure customers

>demonstrate market leadership

>create competitive advantage

>develop and maintain best practice

(The British Standards Institution 2009)

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Examples of environmental standards

• GlobalGap• ISO 14001 and 9001• Code of Good Practice• SIGES• (SAD/WWF-ASC)• (GAA)

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An example of a forced standard (Norway)NYTEK – prevention of escapes1. NYTEK Shall Prevent the Escape of FishOne of the greatestenvironmental challenges thatthe fish farming industry hasfaced and faces is the escapeof farmed fish. There aremany causes of escape –ranging from poor operatingroutines, boat collisions andattacks by predators totechnical installation failures.The authorities and theindustry have worked ondetermining what technicalrequirements should be placedon floating fish farminginstallations to prevent escapeand how this should beregulated since the mid-1980s.

This work was difficult,because floating fish farminginstallations are one of themost complicated marineconstructions in existence.The solution to this problemwas the development of aNorwegian standard thatplaces technical requirementson the dimensioning, design,installation and operation offloating fish farminginstallations – NS 9415:2003.This standard, which is thefirst of its kind internationally,was developed by StandardsNorway in cooperation withrepresentatives from theindustry, research institutionsand authorities. StandardsNorway is currently workingon internationalization of thestandard through ISO.

(Reference: Norw. Directorate of Fisheries)

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Salmon escapes Norway 2001-2008 (x 1000)

Introduction of new standard (NS9415)

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Marine Harvest`s response to the environmental challenge

• As the biggest salmon farming company in the world we are expected to be a driver in several areas – also within environment & sustainability

• Environmental impacts are a key concern in all Marine Harvest activities, and we want to strengthen the focus on sustainable fish farming by implementing sound environmental standards

• Our commitment to the environment starts at the top of the organization:

“It is essential for Marine Harvest to face the environmental challenges that lie ahead, and that our approach towards this issue must be to focus on sustainability”

Åse Aulie Michelet, CEO

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Marine Harvest CSR report

• The Corporate Social Responsibility report is our annual tool showing how we conduct our business around the world

An example: reporting of fallowing periods

Page 22: International Industry Perspective: Standards and Certification

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The need for research

• In order to secure a viable future for our industry there is a need to continuously focus on the development and implementation of measurable and performance based environmental standards

based on research and scientific facts

• We therefore partner with research institutions• Seek influence on strategic public research agendas• Support the WWF coordinated ”Salmon Aquaculture Dialogue”

and production of State of Information Reports that review the status of existing research related to the impact of salmon farming and identify gaps or areas of disagreement in the research and suggest processes for addressing the gaps

• Sit on the steering committees or boards of various organsiations including the WWF coordinated Salmon Aquaculture Dialogue and GlobalGap

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Marine Harvest Strategic guiding principles

• Planet – Sustainable and environmentally responsible work• People – Opportunity based on merit; motivating work

environments • Product – Tasty, healthy and safe seafood for now and for the

future• Profit – Competitive profits from ethical and healthy products and

practices

Our mission:

Seafood for a Better Life

Page 24: International Industry Perspective: Standards and Certification

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Marine Harvest Group quality programme

Qmarine is the global quality programme which provides the MH Group with clearly defined principles and procedures for the quality and safety of products, animal welfare, and environmental and social responsibility

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Organised in six strategic areas; Food Safety, Food Quality, Fish Welfare, Social Responsibility, Environmental Responsibility and Quality Assurance:

Facilitate implementation of strategic decisions. Facilitate improvement in operational performances through

identification and implementation of best practices.Communication of Marine Harvests leading role and

responsibility in our operations.

Qmarine- purpose

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Qmarine – linked to company strategy & visionMH strategy, vision Qmarine

Global QM-database (MQM)

BU QM Databases

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Marine Harvest/ WWF Norway partnership

• In April 2008, Marine Harvest and WWF Norway entered into a historical partnership. The aim of the partnership is for the two organizations to work together to reduce the environmental impacts and ecological footprint on aquaculture. The partnership between WWF Norway and Marine Harvest is signed for three years and is unique in the history of both organizations. The intension of this partnership is to create an understanding on how Marine Harvest and WWF Norway can work together in driving environmental sustainability. Under this partnership, Marine Harvest and WWF Norway will identify and find areas to reduce the impact of Marine Harvest’s production on the environment and the industry as a whole while ensuring the economic sustainability of the production. The partnership builds upon an agreement where knowledge sharing is an important aspect for Marine Harvest

(Marine Harvest/WWF Norway Contract, 2008)

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What does WWF Norway expect from the industry by 2015?

• Respect for nature, implementation and respect for company internal environmental surveillance programmes

• Large farming free zones based on scientific advice • Vision of zero escapes fullfilled – significant reduction of escaped salmon in

the wild spawning populations in the rivers• Compulsory use of best available farming technology• Precautionary principle activily used by legislators when establishing the

regulatory framework for the industry• Reduced use of wild fish in feed and strong environmental requirements to

all feed raw materials• Complete traceability from raw material to finished product• At least 20% of the Norwegian industry with sustainability certification

(ASC)• Reduced energy use in the whole value chain• Transport of salmon to market moved from trucks to ship and/or railway

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Closing remarks

Salmon farming has expanded rapidly and is more controversial than agriculture because it is not done in a closed barn, but utilises the sea which belongs to all of us. Production practices are little known by people in general, even in the production countries themselves, and in order to gain broad public support the industry has to be open and transparent

For environmental certifications to serve their purpose they have to be a real tool in controlling the impacts of salmon farming and therby contribute to giving the industry the credibility and trust needed for continued growth and success

We must be the first to care about the environment because we depend on it for securing a viable future for our industry. Therefore we need to be in the drivers seat both with regards to defining and implementing regulatory framework and third party standards

Salmon farming is here to stay and our industry has a bright future!

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It is not always easy to make the right choice!

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Alice in Wonderland

When Alice in a state of confusion asked the Cheshire cat which way she must take, the cat replied with a question, like a true manager: Which way do you want to go?

Alice hadn't the faintest idea as to where she wanted to go. The cats`s reply has been termed as one of the most profound thoughts in management;

If you don‘t know where you want to go it doesn‘t matter which way you take: You therefore need to have a clear strategy!

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Thank you!