Investigation examining MSC suspension of Zoneco Group scallop certification continues

Published on
July 13, 2020

A resolution has yet to be found for the suspension of Marine Stewardship Council (MSC) certification of Zoneco Group Co’s scallop fishery.

A dispute between the seafood company and the third-party accreditor overseeing the certification saw China’s first MSC fishery certification suspended earlier this year. In January of 2020, the first notice for suspension of fisheries certificate came due to a contractual issue between the certifying agency Acoura – a unit of U.K. based Lloyd's Register Quality Assurance (LRQA) – and Zoneco (also known as Zhangzidao), the MSC noted in a statement to SeafoodSource.

“Suspension of the fishery has been announced in March and the investigation is still in process,” MSC wrote.

Acoura suspended the fishery due to contractual issues between Acoura/Lloyds and Zoneco relating to allegations and investigations into financial fraud, according to the MSC. Zoneco was the subject of some internal turmoil in March as the company announced heavy losses in profitability and key shareholders sought to oust management.

The MSC will “remain the observer of the process and provide any necessary guidance to fishery clients and assessor” moving forward to reconcile the issues.

“The fishery has up to 90 days from the Notice of Suspension to produce a corrective action plan to rectify the situation, and it will remain suspended until the cause for suspension has been resolved,” MSC noted. The certifier – Acoura – “can withdraw the fishery if an action plan isn’t submitted or if it doesn’t consider the plan to be robust enough,” notes MSC.

“If the fishery can demonstrate that it has addressed the reason for suspension, the suspension will be lifted. If the fishery fails to produce an action plan or rectify the situation in the time allowed, the certificate will be withdrawn,” the statement adds. 

Zhangzidao was handed a CNY 600,000 (USD 84,000, EUR 78,000) fine by the China Securities Regulatory Commission last month over the disclosure of information about its "disappearing" scallop stocks. The regulator also fined several managers at Shenzhen-listed Zoneco, which CSRC accused of misrepresenting its 2016 and 2017 annual reports with inaccurate harvest data.

Zhangzidao gained global kudos when it became the first fishery in China to obtain MSC certification. Its scallop fishery obtained MSC certification in 2015 (many Chinese processors have MSC chain of custody certification) and at the time was audited by Intertek Moody – which subsequently conducted required surveillance audits on the fishery for the first two years until Acoura took over. The MSC certification was announced only months after Zoneco reported a major loss in yesso scallop (Patinopecten yessoensis) stocks in late 2014, due to what Zoneco described as sudden and dramatic changes in water temperature.

Yet the certification agency was alerted in 2012 to potential problems with the yesso scallop’s sustainability in local waters – and its impact on the local ecosystem – in a January 2012 letter sent by the environmental group WWF – which has a large office in China – to Intertek Moody’s.

“Moody seemingly considers the distribution of the Japanese scallop to Zhangzidao as an expansion in their natural habitat. Yet the Sea of Japan, where the Japanese scallop is natively distributed, and the Yellow Sea, where the Japanese scallop has been introduced, are two different eco-regions,” the letter states. The letter also points to large variances in the depth and temperature of water in the Yellow Sea (44 meters) compared to the Sea of Japan (1,752 meters).

The letter explained how Zhangzidao is situated right at the edge of the Yellow Sea Cold Water Mass (in the Yellow Sea where water temperature in summer easily exceeds 28°C) which allows for cooler temperatures suitable to farming Patinopecten yessoensis (the species has an optimal growth temperature of 4-8 °C and the tolerance range is from - 2 °C to 26 °C). The WWF letter also pointed to potential loss of habitat and genetic pollution to a native scallop species Chlamys farreri in the Yellow Sea by the introduced Patinopecten yessoensis species.

MSC, however, accepts the species is introduced.

Yesso scallop was introduced to China from Japan in 1982. With over 40 years’ industry development, Yesso scallop is now widely distributed in China Yellow Sea area as an important economic shellfish,” the MSC wrote in its statement to SeafoodSource. “Zoneco fishery has met MSC standards under the enhanced fishery and introduced species category.”

Since certification, MSC said “fishery experts and from both two companies have done assessment strictly in line with MSC sustainable fishery standards, and all the assessment documents and audit process released on the for public consultation before any final decisions taken.”.

In its statement to SeafoodSource, MSC said it has long term goals to “support China sustainable fishery development as part of a strategic priority.”

MSC explained it has “worked together with different stakeholders for offshore, inland and ocean sustainable fishery projects; for example species such as tuna, crayfish, clam fish, anchovy and so on. At present, several tuna fisheries received MSC fishery certificates and some pre- assessment are under development. China Clam Fishery has move to the certification process and others are under improvement programs or pre-assessment. Those efforts for sustainable fishery program will be continued and more achievements would be expected.”

SeafoodSource has contacted Acoura and Zoneco for comment. 

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