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Betting on Blockchain to Put Truly Sustainable Seafood on Dinner Plates

We cut through the hype about the technology behind Bitcoin that is emerging as a powerful new tool to build tamper-proof transparency and trust into seafood supply chains. If it works, blockchain could help combat illegal fishing, worker abuse and seafood fraud.

Written by Jessica Leber Published on Read time Approx. 10 minutes
Restaurants are at the tail end of a long and complex seafood supply chain.Fairfax Media/Fairfax Media via Getty Images

Red Lobster aired an unusual Super Bowl ad in February. It contained not one image of dinner plates full of mouth-watering crab, shrimp or lobster, but plenty of shots of happy, hard-working and rule-abiding fishers on small boats. With the words “Traceable. Sustainable. Responsible” flashing on the screen, the ad debuted the restaurant chain’s “Seafood with Standards” program.

The company’s new initiative is one of a growing number of efforts by major retailers to ensure that the seafood they sell is not connected to forced labor, illegal fishing or seafood fraud – a response to investigative reports that have revealed a global pattern of wrongdoing in the $151 billion seafood industry. Companies like Red Lobster are often at the end of the long and complex supply chains that deliver 90 percent of the seafood consumed in the U.S. But they are the ones that get a black eye when their brands are publicly associated with unsavory or illegal practices.

When it comes to sustainable seafood claims, “It’s one thing to say it. It’s another thing to prove it,” said Bubba Cook, Western Central Pacific tuna program manager at environmental group WWF-New Zealand. Despite many seafood traceability systems developed in the last decade, he noted that trust and reliability in sourcing data is still a massive challenge – even when there are good intentions from companies like Red Lobster.

This is where blockchain – a much-hyped technology best known for powering the multibillion-dollar boom in cryptocurrencies like bitcoin – is emerging as a potential solution. For seafood brands, consumers and environmental watchdogs, blockchain is a tool that can deliver that missing factor – the ability to trust what suppliers say about the origin of seafood. But it’s far from a silver bullet. The technology can consume significant amounts of energy and blockchain can’t shed light on human rights abuses or secure more sustainable seafood unless the players within a supply chain already have agreed to cooperate and share accurate information.

“You have the tools, but you don’t always have the incentive for providing that data,” said Jayson Berryhill, a partner at Eachmile Technologies, a firm that implements technologies in global food-supply chains and is helping create a blockchain project called Fishcoin.

Blockchain is an internet protocol for tracking the movement of digital data, recording when it changes hands from one party to another. Traditional electronic records can be more easily copied or falsified, which is why trusted brokers such as banks or credit card networks have always been needed to verify electronic transactions.

Schematic of how a blockchain seafood traceability system would work, based on the partnership between WWF, Viant, ConsenSys, TracSeable Solutions and Sea Quest Fiji. (Courtesy of WWF)

With blockchain, data is encrypted and transactions are time-stamped and recorded simultaneously by many, unrelated computers in a decentralized global network. Every computer performs energy-intensive calculations to form a consensus about each transaction, eliminating any one party’s ability to commit fraud or subsequently alter the data.

It is the digital equivalent of having 100 strangers witness you hand a friend a briefcase of cash and everyone agreeing to what happened and never being allowed to change their mind, even a moment afterward. Put another way, blockchain is billed as a way to crowdsource “trust” while removing the intermediary from digital transactions. (Public blockchains should not be confused with private blockchains, which are now being used internally by some corporations but are controlled by a central actor and lack public transparency.)

Although blockchain has its roots in the first cryptocurrency, bitcoin, it has many potential uses for other kinds of data exchanges and, in recent years, has attracted interest from practically every sector of the economy. One of the most disruptive applications has been to efficiently and reliably trace the records of products moving through complex supply chains. For instance, Walmart has partnered with IBM to use blockchain technology to track pork coming from China and mangoes from Mexico. Among other benefits, the technology could be used to more quickly identify the source of food-borne illnesses.

Blockchain technology has sparked interest from the seafood industry, where supply chains can be far more complex than those for mangoes. “It provides that transparent and traceable platform that gives us the best opportunity we’ve had yet to be able to show provenance and the characteristics associated with that provenance, whether it’s a sustainability certification or a slave-free trade certification,” said Cook.

In 2016, Provenance, a London-based blockchain startup with a mission to help brands increase supply chain transparency, worked with the International Pole and Line Foundation to run a pilot project that allowed skipjack and yellowfin tuna from Indonesia to be traced from capture to the factory. When fishers hooked a tuna, they sent a text message to first register the catch, issuing a new “asset” on the blockchain that was transferred as the fish moved through the supply chain. And in recent months, seafood industry veterans at Eachmile Technologies have assembled a team of partners and advisors to launch Fishcoin, a cryptocurrency token that can be issued to reward fishers and others who provide data about the safety, quality or circumstances surrounding the sourcing of seafood.

Bigger companies are also looking at blockchain. Thai Union Group, one of the world’s largest canned tuna manufacturers, which has in the past been accused of buying seafood from boats that use forced labor, is now looking at different ways it can better track its supply chain. The company recently ran a small pilot project with 50 Thai fishers that had them, for the first time, logging their catch electronically. Darian McBain, the company’s global director for sustainability, told Oceans Deeply that using blockchain could be one of several potential next steps for the project.

The head of a freshly-caught yellowfin tuna fish on a filleting table at a refrigerated processing factory. (In Pictures Ltd./Corbis via Getty Images)

The general idea behind blockchain’s use in seafood is that once data about a fish such as weight, species, the location of its capture, its storage temperature – is entered, it would follow the fish’s movements through the supply chain like a passport. Usually, it is relatively easy for a processor to mix and match products or for data to be doctored – but a blockchain connects the data from each shipper and processor and can’t be tampered with without others knowing, making traceability data much more trustworthy. Of course, whenever a human is involved in recording data, it’s still possible to game the system – say, by entering illegally caught fish into the blockchain or misidentifying the species of a fish.

What blockchain will do, Cook said, is make seafood fraud more detectable. For example, if a fish is found to weigh more than the blockchain data states, something fishy may be going on. Other information – such as where the fish was caught – can be checked against other systems, such as a vessel’s satellite data.

That is what WWF hopes will happen in a pilot project it is working on with tuna processing company Sea Quest Fiji along with partners ConsenSys, Viant and TraSeable Solutions. Currently, the company’s tuna is tracked with paper records or not at all, according to Cook. But with the project, fishers will register their catch on the blockchain by scanning radio-frequency identification tags attached to each tuna caught.

Once the tuna reaches a processing plant and is packaged in pieces, each batch gets the same QR code – a kind of scannable barcode – that stores the fish data. If you have a 20lb fish brought onto a vessel, there should be no more than 20lb of product sold under that ID. The project is now set up through the company’s supply chain in Fiji, Cook said. The team is looking for a retail partner to deliver the first blockchain-tracked fish to an export market.

The WWF project, as Cook acknowledges, is a “very small bite” – one company with eight vessels delivering to one processing facility and well-defined markets.

“These aren’t the fisheries that really need massive amounts of help,” said Alistair Douglas, a seafood industry veteran and founder and partner of Eachmile Technologies. “Their supply chains are quite short, and they are relatively well managed and they are well regulated. The bigger challenges are the more fragmented fisheries, down to the artisanal fishers who don’t even have a license or a boat registration.”

Fishers pulling in their fishing nets at a port in Jakarta, Indonesia. (ADEK BERRY/AFP/GettyImages)

Thus Fishcoin. Eachmile and its partners plan to hold what is called an initial coin offering (ICO) and are hoping to create a decentralized structure in which Fishcoin tokens could be bought by companies at the top of the supply chain and ultimately passed to artisanal fishers or fish farmers as an incentive for providing data to buyers. While a fisher in Indonesia, for example, would certainly have no use for Fishcoin, the idea is to make it easy for them to redeem the tokens on an exchange for valuable pre-paid cellphone minutes. That way they’d be rewarded for both supplying fish and accurate data.

From the perspective of the fisher, “I give you the seafood. You give me my money, but then I transfer you a record – a catch log, for example,” said Eachmile’s Berryhill. “As soon as I transfer it to you, and you accept custody over this data, and in so doing a smart contract executes and I get tokens. Let’s say those tokens are worth 10 cents, and by accepting that and providing that value, you’ve provided evidence of value for the data that I’ve given you.”

The team intends to hold an initial coin offering in the coming months. Berryhill and Douglas say the plan is to use the ICO to raise money to build and demonstrate the technology with seafood supply chains they already work with. The goal is to create and use open-source tools that any in the industry could adopt.

Cook said he believes Fishcoin could have a significant impact if it works as intended and delivers transparency and traceability. However, he is still skeptical, given that the cryptocurrency application of blockchain technology is by far the most volatile and risky, as evidenced by recent cases of cryptocurrency theft and wild swings in the value of cryptocurrencies. “All the best intentions won’t matter if the security of the token is questioned,” Cook said. “I’m hopeful, but cautious.”

Berryhill compared the current speculation around cryptocurrency and blockchain technologies to the 1990s dot-com boom, but said well-designed projects would survive an inevitable bust.

“Many recognize the importance of blockchain and its implications for business and society, and this has led to widespread irrational exuberance on the part of investors in this space,” he said. “We agree with this sentiment in many respects, and we believe there is a bubble. At the same time, we also believe that quality and strategy will stand the test of time.”

Another challenge for all blockchain traceability projects is that it’s hard to live up to the ideal of full decentralization and public transparency. Companies in many industries balk at the idea that their competitive data would be public, so to encourage participation, Fishcoin will be a mix of both public and more private systems. “We believe decentralization is critical to wide-scale industry adoption and a private blockchain goes against this principle,” Berryhill said. “Our plan is to be on the public Ethereum blockchain because we want to remove reliance on a single actor. However, not all data will be stored on the blockchain and not all will be public.”

Fishing boats in Fiji. (Phil Walter/Getty Images)

Over time, blockchain may become more useful than it is today as it develops alongside other emerging technologies to remove the human from the data-entry part of the equation. That may include sensors that automatically scan fish tags or transmit weight and temperature data. Satellite systems could track commercial fishing boats and near-field communication devices could automatically scan QR codes.

In the end, the biggest problems with blockchain are about the bigger picture and reflect the same issues that have plagued fisheries and aquaculture for a long time, according to Francisco Blaha, a fisheries expert and consultant who has worked extensively on regulatory compliance and traceability projects in the Pacific Ocean.

“Blockchain offer great advances over other technologies to set up a catch documentation scheme, but that is not the problem,” Blaha said in an email. He noted that a responsible actor like Sea Quest Fiji is positioning itself as an ethical company, which is why it would volunteer for a pilot project. But there’s a company down the road, literally, he said, that “has a very profitable and established market in Asia that does not require any form of ethical assurances … so where is their incentive to use the system?”

More than focusing on what technology is used, what is needed to stop illegal fishing and improve labor and food-safety conditions is a formal and global incentive system that rewards ethical and legal operators and punishes others, he said.

“Until there is a global commitment to value chain transparency tools like catch documentation schemes (based on any technology), we are just tinkering along the sides, by providing transparency to the value chain of responsible operators who in reality did not need them in the first place,” Blaha said.

News Deeply community editor Ian Evans contributed to reporting this article.

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