Charoen Pokphand Foods (CPF) is a leading agro-industrial and food conglomerate in the Asia-Pacific region. Our major products include livestock (swine, broilers, layers, and ducks) and aquaculture (shrimp and fish). We have a strong vertical integration linking feed, farm, food and retail. CPF is a global conglomerate and has international presence in many countries around the world.

Shrimp is CPF’s major aquaculture product. Hence, our shrimp is farmed rather than captured.

Fishmeal is an important source of protein for shrimp and hence an important ingredient for our feed. CPF buys fishmeal from third-party fishmeal factories. Fishmeal factories, in turn, buy raw fish from third-party fishermen. CPF does not own fishmeal factories or fishing boats.

Over the years, there have been two growing sustainability concerns with shrimp supply chain, namely human trafficking and environmental impacts. Solving these two issues can sometime result in conflicting agendas. This summary outlines CPF’s approach and experience in dealing with the two issues.

Human trafficking

The shrimp supply chain in Thailand has recently been the subject of international concerns on the issue of human trafficking. A few years ago, there was an article in The Guardian, which sparked a lot of interest on the issue. There have since been several international lawsuits targeting local exporters of shrimp. The main concern is human trafficking or slavery on third-party fishing boats.

CPF’s approach was to co-develop Seafood Task Force (formerly the Shrimp Sustainable Supply Chain Task Force), which brought together international stakeholders that include buyers, sellers, fishermen, factories and international NGOs. The Seafood Task Force develops rules requiring members to perform a lot more actions than required by local laws to best ensure that our supply chain is free from human trafficking. The Seafood Task Force also places a strong emphasis on traceability and audits by third-party auditors.

The Seafood Task Force focuses on by-catch fishmeal, which is prepared from small fish with no other economic value caught along with larger, economically valuable fish, and is normally captured within Thailand’s waters. Hence, the by-catch is sourced from local environment that we can more easily monitor.

Environmental issues

While human trafficking is an international concern, environmental issues are an important agenda of local NGOs representing communities of fisherfolk (four to five million people). Representatives of this group have publicly demanded through various means that CPF stops buying by-catch.

The local NGOs cite studies that show CPF is a major buyer of by-catch which leads to overfishing and that drastic reductions in the fish supply severely impacts livelihood of fisherfolk.

CPF’s first approach was to present our progress with Seafood Task Force to local NGOs. We also explained that we developed our rules, traceability and audits hand-in-hand with international NGOs who are part of Seafood Task Force. We also explained that the gear the third-party fishermen use are in full compliance with local laws.

Local NGOs fully rejected our first approach. We found that local NGOs do not necessarily share same views of international NGOs. Local NGOs were sceptical that since the Seafood Task Force did not involve them from the beginning. Their concern is not on the science of traceability and audits but simply on the types of gear being used. They feel that the local laws on fishing gear are not in accordance with international standards, and until such laws are revised, they wanted CPF to simply stop buying by-catch.

CPF’s second approach was to halt purchases of by-catch and to switch to by-product that meets The Marine Ingredients Organisation (IFFO) standard. CPF announced that it will not purchase by-catch until a standard is established that is accepted by local NGOs. We are also trying to develop a by-product strategy for the Seafood Task Force.

Aftermath

It has been over one year since CPF’s second approach to environmental issues. We have not been attacked by local NGOs ever since we switched to by-product. However, we found that the total market volume of by-catch remains the same. New buyers replaced CPF. These buyers buy by-catch and export to countries with lesser concerns on sustainability issues. Hence, our exit from the by-catch market may not have solved the overfishing problem as the local NGOs hoped.

There also exists only a single IFFO by-product seller in Thailand. There currently exists no economic incentives for more factories to qualify for IFFO. Hence, the sustainability of by-product in Thailand is questionable.

We feel that the local NGOs are now more understanding of the interactions between the issues. CPF is now taking a lead in building new multi stakeholder platforms (which now include local NGOs) to redefine a sustainable fishmeal supply chain, and which include new legal frameworks, academic research and agreeable business practices.

Challenges

The most difficult challenge in our approaches and experience is in building trust and understanding between the stakeholders, including governments and regulators, fisherfolk, commercial fishermen, suppliers and buyers. However, we feel that CPF is now a pioneer in our programs.