No one is above the Law: Tuna Wars, Tuna Truce and ‘sustainability-fixing’

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‘No one is above the law’, the prosecutor argued. So just last week the jury of the US Court for the Northern District of California found the former CEO of Bumble Bee, Mr. Chris Lischewski, guilty on the felony charge of price-fixing. Next April the judge might sentence Mr. Lischewski to a penalty up to 10 years prison and a fine of 10 million dollars.

The case shocked the tuna industry. Bumble Bee is one of the lead firms in the tuna world. For years Mr. Lischewski reigned as a tsar in the global tuna community. His fingerprints are all over the International Seafood Sustainability Foundation (ISSF), the industry lobby club on sustainability he helped to found.


It is not just a weird coincidence that Tuna Wars s is published, while the case on price-conspiracy against the three iconic tuna canning brands _ Bumble Bee, Starkist and Chicken of the Sea _ is in court. The Big Three, as they are known, have been involved in several Tuna Wars in the past decades. They like to work together. Read the book. They used to join in allied forces if it was convenient to confront their common commercial enemies. Their strategies were controversial from the start. In the end, is was just a matter of time that together they stood trial.


This court case on price-conspiracy is. if anything, a big Tuna War.

This court case on price-conspiracy is. if anything, a big Tuna War


What is it about? The three big US brands have been fixing the price of canned tuna from 2010 until end of 2013. Price-fixing is prohibited and considered a criminal offence in the US. Several retailers filed complaints after they got the impression they were being cheated on the price of tuna. The case hit the tuna-world as an earthquake. Multi-million dollar claims of retailers can shipwreck the companies. Bumble Bee is actually practically bankrupt and for sale. Those responsible for the price-fixing can be convicted to substantial jailtime.


As said, the conspiracy in this trial is about the price, but it has a strong link with sustainability. The Big Three used to meet each other a lot. For instance, in regular meetings of the ISSF, the organization the three of them jointly founded. Mr. Chris Lischewski was for years the chair of ISSF. Last year, ISSF issued a ‘conservation measure’ (2.4), which states that its member (according to the ISSF 75 % of the global market of canned tuna) should purchase tuna primarily from other traders and processors that are ISSF participating companies. Everybody knew Chris Lischewski, a colorful character with his long platinum blond waving hair and rather strong presence. And Chris knew everybody. The witness list of the trial reads like an invitation to a Bangkok tuna gala for the international tuna jet set.


But in fact, it is an invitation to a battlefield.

The Witness list of the trial reads like the invitation to a Bangkok tuna gala


The tuna war moved in court, including evidence that showed war-like language in the e-mail traffic between Mr. Lischewski and two of his subordinates at Bumble Bee _ who, by the way, pleaded guilty. Aggressive price cuts were described as ‘attacks’, according to a reporter of the online magazine Undercurrent News. The executives on other moments ‘would wave the white flag’ and agree to a ‘truce’ or a ‘peace’.
Prosecutor Leslie Wulff showed no surprise that Mr. Lischewski was using the war idiom, she told the jury. As a part-owner of Bumble Bee, he could have received a ‘big payout’ (that is: tens of millions of dollars) if Bumble Bees ambitious earning targets were met. These ‘payouts’ are the way the British private equity fund Lion Capital, owner of Bumble Bee since 2010, reward their executives. It is part of the standard practice of these investment companies: buying a company, doing some magical clean up stuff (usually: squeezing the costs out of it so the figures in the books look nice), selling it and cashing in the profit. Not seldom, this is an incentive for questionable practices.


Squeezing the costs proved not to be an easy job in a tuna market where the price of raw material and wholesale was bringing the margins further down, and the competition between the canners fierce. ‘So, the defendant took matters into his own hands. He ended the price war and entered a truce with his competitors’, Mrs. Wulff was quoted in Undercurrent News. Now the consumers payed the price.


Mr. Lischewski lawyer took an opposite view: the war language just showed an aggressive competition. War. Enemies. On the other hand, Mr. Lischewski just refrained from aggressively lowering Bumble Bees prices against Starkist, according to the defense. ‘These people in this industry use the language of war’, the lawyer is quoted in Undercurrent. Indeed, they did.


Tuna war alliances have a long history with the Big Three
Maybe using the war language is just a bad habit. The fact of the matter is that tuna war alliances have a long history with the Big Three tuna canners that dominate the American market. Just take the three ‘Dolphin Wars’ that figure in the book Tuna Wars. In these wars it was all about working together against common enemies. Together the three canners used (and helped to create) the Dolphin Safe certificate as a way of lifting a sustainable façade for their tuna fishery practices. Then they used the very same label to close their US market for the Mexican competitors. And finally, the Dolphin Safe label worked out fine to keep other, more reliable certified tuna like the MSC certified PNA free school skipjack, at a comfortable distance. Here too, the consumer payed the price, this time by buying tuna that in many cases is much less sustainable than it appeared to be.

The price-fixing case is just one of the battles in the tuna wars where the Big Three coalition was involved


So, the price-fixing case is just one of the battles in a range of tuna wars since the nineties where the Big Three coalition was involved. It confronts us with some dilemmas on our path to the supply of more sustainable tuna. Market-driven environmental governance is impossible without cooperation with or partnerships within the private sector.

But in a market where relatively few companies are dominating the scene, and in particular where price-fighting and small margins are key characteristics, lead firms will be tempted to conspire against the public in order to safeguard their market-shares and profits. And sustainability claims might convert into just another marketing tool to reach for these goals. In the end, both the consumer and the tuna will pay the price for it.


That has to be prevented. In the case of price-fixing the American laws are pretty tough. Angry consumers now started a parallel case against the Big Three for misguiding their buyers with the ‘Dolphin Safe’ label. Together with the price-fixing case, this case might be a good starting point for setting a standard against ‘sustainability-fixing’: conspiring in abusing sustainability claims against consumer and environmental interests in order to safeguard market-shares and profits.

That would prevent many future Tuna Wars.

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TUNA WARS, Book now released

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TUNA WARS, the book of everything you wanted to know about Tuna, is now available…. As e-book and in hardcover. You can buy Tuna Wars using this link.

Tuna Wars is published amidst eye-catching developments in some of the ongoing epic tuna wars that figure in the book. The Dolphin Safe certification as well as the presumed price fixing conspiracy are the central issues to be judged in the current US court in cases against the Big Three American tuna canners, Bumble Bee, Starkist and Chicken of the Sea.

These wars will shake up the Tuna World. The federal judge ordered Starkist to pay a criminal fine of $100 million. More civil claims will add to the burden. ‘Charlie the Tuna’  Bumble Bee, the brand that has supplied tuna for generations of Americans, is about to collapse under the weight of the depending massive claims of retailers. Sorry Charlie! 

The Big Three are also being sued by consumers alleging that the Dolphin Safe label, probably the most widely used sustainability label on canned tuna worldwide, has been used in a way that very much resembles consumer fraud. Tuna Wars readers will come to understand the background of these battles and the impact and role that sustainability claims have in the wicked world of tuna. 

Meanwhile in Madrid, the Climate top is heading for a bumpy road towards goals that seem difficult to be accomplished. This poses new challenges for managing our global fish stocks, not in the least the tuna populations. Tuna Wars will provide the reader with updates on how we try govern our global stocks. Sometimes with remarkable success like in the case of bluefin tuna. But with policies and instruments that still need a lot of care and future development to become effective.  

Wherever tuna is hauled ashore, the sound of battles is never far away. Read more in Tuna Wars.

Tuna Wars: published by Springer editorial.

 

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The end of Dolphin Safe in Tuna Wars?

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It may have taken several decades, but we now might be looking at the beginning of the wreckage of the Dolphin Safe label. This week American consumers started a class-action lawsuit for fraud and racketeering against the Big Three US tuna brands, Bumble Bee, Starkist and Chicken of the Sea. (http://disq.us/t/3epuvpx) The consumers feel deceived, we read in the complaint.  ‘The “Dolphin-Safe” label signifies that no dolphins were killed or seriously injured as a result of the catching of the tuna contained in their products. But the suppliers’ tuna fishing practices “kill or harm substantial numbers of dolphins each year.”  

Many in the tuna industry and the sustainable seafood movement with some knowledge about sustainable fisheries have been waiting for this moment. The Dolphin Safe label is already for years the elephant in the room of sustainable fisheries that most people prefer to deny. From a well-respected, successful certification in the nineties, that helped to eradicate the massive Dolphin slaughter in the Yellowfin tuna fisheries in the Eastern Pacific, the Dolphin Safe label evolved into a practically useless tool in making look all tuna fisheries more sustainable. It even is far from robust enough to guarantee its own claims for a totally dolphin harmless tuna fisheries.

This is serious business. The Dolphin Safe label can be found on tuna cans all over the world. It is probably the most widespread label, used by all the big tuna industry that is united in the International Seafood Sustainability Foundation (ISSF). If a court decides that Dolphin Safe proves to be a kind of compulsory greenwashing scheme, a tool mainly supporting market interests, this would have devastating effects on the credibility of sustainability certification in general. Why, the public will rightly ask, was this label allowed for such a long time on so many cans? How can we trust that other certifications are any better?

The success for using ‘Dolphin Safe’ comes to no surprise: it hardly cost any effort for the big brands, fisheries and traders in terms of measures to make their tuna business look more sustainable. The history of Dolphin Safe has its murky sides too: who did not want to ‘collaborate’ with the label and its organisation (Earth Island Institute) could face problems in the tuna business. So, it was better to let yourself squeezed into the scheme instead of making life difficult. Meanwhile the strong ‘Flipper’ related Dolphin Safe image managed to survive with fluffy journalism that supported its noble cause but was not able to unravel the powerplay behind the screens. Notable exceptions, like the 2015 K. William Watson article in Forbes (‘Dolphin Safe’ labels on Canned Tuna are a Fraud’) never got the attention they deserved.

In my book ‘Tuna Wars’, that will be published soon by Springer Nature, I write about the three ‘Flipper Wars’ that have raged in the tuna world. The Dolphin Safe label was an effective weapon for the tuna industry in these wars. The Big Three effectively used the label as a barrier for competitive Mexican imports entering their home market. Meanwhile, Dolphin Safe expanded from its origins in the Eastern Pacific to the Western and Central Pacific, the Indian Ocean and the Atlantic, where the setting of nets on Dolphins never was an issue as such and the claims of the scheme (not one single dolphin killed or harmed!) where practically impossible and unmonitored. Meanwhile the big players used Dolphin Safe to hinder the entrance in the tuna fisheries of the much more robust certification of the MSC.  

Fraud and racketeering have still to be proved in court for sure. The case is messy. The consumer plaintiffs are very much underlining the objective of no harm to any dolphins whatever as the highest standard for sustainable tuna fisheries. They are right that the Big Three created a false representation of such a full proof dolphin safe fishery with the Dolphin Safe label. But they are wrong in suggesting that the MSC certification is also making a false statement when it comes to dolphins that are caught in tuna fisheries. This is missing the point: MSC is about sustainable tuna fisheries, not sustainable dolphin fisheries. It works with multiple standards that go far beyond the single issue of dolphin safety. From this point of view, also the idea that pole and line and handline are the only sustainable gears (as the plaintiffs argue) is far away from reality and practically useless.

It is now for the court to decide. Let us hope that at least its verdict facilitates a start to mop up the mess, and open ways for further development of credible sustainable tuna certification.