Ecuador’s Nirsa: The Triumphs & Challenges Of Pursuing MSC

Long-rooted Ecuadorian tuna fishing and processing firm, Nirsa, believes that heightened regulations and the rising awareness of the importance of sustainability, while positive, are also creating lower EPO catch and higher raw material prices. As the company works on developing itself sustainably, with the ultimate goal of MSC, it must be willing to accept both the benefits and challenges that come with that, one of its top executives expresses.

Andres Aguirre, International Sales Manager at Nirsa (Negocios Industriales Real), and part of the company’s founding family, spoke to Atuna about the hurdles, developments and future aims of the firm and the Ecuadorian tuna sector overall, at a bustling Seafood Expo Global. In a quiet corner at the Nirsa stand, Aguirre stressed that since the establishment of the company, the main aim has been to “become sustainable”.

Nirsa operates an extensive fleet of 11 tuna purse seiners in the Eastern Pacific Ocean, and manages a processing facility in Posorja, Ecuador, focused on tuna, sardines, shrimp and more. In the South American market it is well known for its canned tuna brand, Atún Real, the leading brand in Ecuador.

The family owned company, which was founded in 1957, is also one of the five fleet owners involved in Tunacons. This is a fairly recently forged alliance representing around 25 percent of the EPO purse seine fleet, mostly Ecuadorian firms, in their pursuit for MSC.

The establishment of Tunacons, by Nirsa, three other Ecuadorian fishing companies (Grupo Jadran, Eurofish, Servigrup), and Tri Marine, was motivated by improving sustainability and an overall aim of gaining MSC certification, Aguirre explained proudly. The parties under the alliance are currently involved in a Fisheries Improvement Project (FIP) covering their FAD and free-school purse seine catch of skipjack, yellowfin and bigeye.

The Tunacons members have ambitious aims; to enter MSC assessment early next year and be certified within 12 months. What makes this project stand out is that to date no drifting FAD purse seine fishery has been approved by MSC. The FIP is only one full year through its process, but still works to its tight target deadlines, while most FIPs have a five year timeframe and rarely even make it to MSC.

In addition to the ultimate MSC pursuit, Aguirre added there was another important motive behind the development of Tunacons; to give these companies a stronger, joint platform, to work together with the government on several conservation issues. “Our government works very well with the industry – in that regard they are excellent,” he told Atuna, but believes there is still much more that can be done.

The next step for Nirsa, and for Tunacons, is to use the joint company platform created to push the government to make stronger proposals regarding FADs at IATTC meetings. During MSC assessment it is not just taken into account what the Ecuadorian fleet or these specific companies are doing in terms of sustainability, but the stock health and regulations in the EPO will also play a part. “All countries need to agree” on sustainability measures, Aguirre stressed, but if Ecuador can already make the right regulations on a national basis, that is a big step forward, he said. He thinks this will significantly help the companies with their MSC goal.

Discussions with Aguirre came on the heels of the Ecuadorian government announcing the planned launch of its own logo for tuna products produced in the nation; ‘Ecuador Premium’ – designed to promote the origin, quality and sustainability of Ecuadorian goods. The assessment and audit process of Ecuador Premium is not yet fully clear, but the government states the new scheme will not aim to compete with MSC, despite also describing itself as a sustainability certification.

Aguirre believes the aim of the government is to create more of a “brand” rather than a certification as such – to promote quality and sustainability, as well as where the product comes from: Ecuador. Government officials have made many changes to the tuna sector, introducing new regulations, “which are very good”, he says. “We are well regulated in terms of sustainability and they want to show that through a brand”.

But for Nirsa, while it is too early to assess what function this government brand will serve, it will never replace MSC, Aguirre stresses. He explains that there is high recognition of the MSC certification and indicates it would be difficult to replicate with something new.

If the company, as well as the other Tunacons members were to gain MSC, Aguirre believes it would have great benefits for business, particularly in the EU market, which is the biggest tuna export destination for Ecuadorian firms. The tuna industry already benefits from duty free trade on origin catch with the EU, and Nirsa sees good demand for the MSC certification from buyers in this market. As well as this, US customers are showing more recognition for MSC, according to him.

Ultimately, more value can be gained on MSC certified product, and the competitive edge the Ecuadorian processing industry already has in some markets is expected to only be enhanced with MSC raw material availability.

However, whether MSC certified or not, supply of raw material for Ecuadorian canners largely depends on regional catches, especially when it comes to origin catch for EU duty free trade. Origin catch counts as tuna caught by Ecuadorian flag, but it can also be imported from Colombian and Peruvian vessels. So far this year, big challenges have been faced in securing sufficient and consistent origin supply.

Catches in the first few months of 2018 in the EPO have been significantly lower than the previous year; with skipjack landings down around 35 percent YoY. This limits the amount of origin raw material Ecuadorian processors can get their hands on to qualify as duty free in the EU market.

Aguirre confirms that this has led to increased imports by Ecuadorian canners from fleets in the Western Central Pacific, to cover their orders. Origin catch is prioritized for EU trade, he says, while catch from other fleets can go to other markets within South America and to the US.

While raw material has always been imported by Ecuador’s processors, Latin American canners overall have showed increased demand for WCPO catch in recent years. Fleets like South Korea and Taiwan have therefore diverted more of their landings away from their biggest discharge location of Bangkok and sent higher tonnages on carriers to ports like Manta and Mazatlán.

The more this is done, the bigger impact it has on global skipjack prices. Aguirre confirms that canners in Ecuador bid higher on WCPO catch, to secure supply, rather than it heading to Bangkok. In turn Bangkok canners need to bid even higher on raw material from the WCPO to ensure its movement on carriers to the Thai capital and not seeing it diverted to EPO ports.

While Aguirre stresses the difficulty in predicting prices, in his view this emphasized buying behavior gives indication that global skipjack prices will remain steady or increase throughout the rest of the year. He does not expect any decline to come, and believes historic prices that have hit below the USD 1,000 per ton mark could be a thing of the past.

This is not only a result of the rising demand seen from Ecuadorian canners, but of more fishing regulations globally, he explains. In the IATTC, the purse seine fishery closure period has been extended from 62 to 72 days, which means 10 days less of fishing for each vessel in the region. This, as well as FAD measures implemented in other ocean regions, creates less catch and supply to major discharging locations.

FAD sets have been one of the major targets of these RFMO conservation measures, and continue to be one of the biggest challenges for Nirsa and all Tunacons member firms, when it comes to their sustainable development. After year one in their EPO FIP, the fishery is up to scratch on most criteria, but for FAD management a red rating remains.

At the Seafood Expo Global, Tunacons showed some of the developments the companies have been making in terms of FAD use, and rather than reductions, they focus on the material and design of the device itself. Bio-degradable FADs and non-entangling FADs are being tried out by the fleets in an attempt to lessen their environmental impact.

Nirsa is fully behind this goal, implementing these different FAD types into its own operations, believing they have less impact on ocean resources overall. While they are designed to create less ecosystem damage, to date there is little evidence that non-entangling or bio-degradable FADs actually reduce the volume of bycatch, especially when it comes to juvenile tuna and sharks.

In the long-term, however, Aguirre believes these new FAD designs will help the fleet to gain MSC, and protect vital EPO stocks. In the short term, though, he explains there is a negative impact on catch efficiency. “The only way of developing them is by using them” he says, adding that at the moment “they don’t work so well”. This is because their productive life is shorter.

“As you learn, you are not catching as much as you should” Aguirre continues, but eventually he thinks the new FAD designs will reach the same efficiency as “normal” FADs, while having less negative impact on the environment.

On asking Aguirre why he thinks the Ecuadorian fleet under Tunacons would be one of the first to be certified MSC for drifting FAD operations, he claims that their “timing is right”. If you look to 10 years ago, “there have been big developments, big changes in FADs. There are now better FADs, better technology of buoys for species detection, and this will result in less bycatch,” he thinks. “We are not the best in the world, and the industry as a whole has improved in this regard, we are just doing the right things at the right time.”

If successful, these companies have potential to create a major shift in the flow of MSC raw material, the major locations of production, and eventually create much more availability of MSC tuna from the EPO region to the end market. In the bigger picture, they could show for the first time that FAD fishing on a large scale can be certified sustainable to the highest standards, and may initiate an influx of FAD fisheries entering the MSC program.