Trace Register Response to the Presidential Task Force

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1 Trace Register Response to the Presidential Task Force Submitted by Trace Register, LLC ABSTRACT This paper responds to recommendations and questions of the Presidential Task Force on Combating Illegal, Unreported, and Unregulated Fishing and Seafood Fraud. It explains how electronic traceability and analytics can be used to help accomplish the stated objectives. Trace Register traceability software is currently used in 24 countries and among thirty percent of major food retailers in the United States, making it the world s leading digital traceability provider to the global seafood industry. Trace Register provided the digital traceability and analytic software used by the federally funded Gulf Seafood Trace (GST) program. By Dr. Dag Heggelund, Ph.D., CTO & Phil Werdal, CEO (206) , ext. 111 Edited by Jill Pratt Corporate Headquarters Trace Register, LLC 119 First Avenue South, Suite 440 Seattle, Washington United States of America Trace Register, LLC 2015

2 Table of Contents Introduction... 3 Task Force Recommendations and Questions... 3 Trace Register Response... 4 Maintaining Data Confidentiality... 4 Monitoring and Verifying Data in Near Real Time... 4 Consumer Participation... 4 Seafood Traceability... 5 Traceability Information... 5 Product Identification (PI)... 5 Product Data (PD)... 6 Data Volumes... 6 Data Confidentiality... 6 Operational Standards for Traceability Data Exchange... 6 Host Address... 6 Communication Protocol... 6 Payload... 7 Standardized Nomenclature (Ontology)... 7 Security (Authorization)... 7 Digital Certificates Data Sharing and Confidentiality... 7 Certificate Owner... 8 Requirement Rules... 8 Completeness... 8 Consistency... 8 Validity... 9 Data Visibility Requests (DVR)... 9 Digital Seafood Certificate Examples... 9 Digital Certificate Program for Coastal Fisheries Digital Certificate Program for High Seas Fisheries Digital Certificate Program for Aquaculture Seafood

3 Trace Register Response to the Presidential Task Force Introduction This is Trace Register s response to recommendations and questions of the Presidential Task Force on Combating Illegal, Unreported, and Unregulated Fishing and Seafood Fraud (hereafter called illegal seafood ). It explains how Trace Register s electronic traceability and analytics can help accomplish the recommendations of the Task Force. Task Force Recommendations and Questions The following are the primary recommendations and questions that Trace Register has provided guidance on. Direct the Task Force to establish a regular forum with harvesters, importers, dealers, retailers, processors and nongovernmental organizations to enhance collaboration in combating IUU fishing and seafood fraud and to improve understanding of the levels and nature of IUU fishing and seafood fraud and related criminal activities. 1 Create a risk-based traceability program to track seafood from harvest to entry into U.S. commerce. 2 Direct the Task Force, with input from U.S. industry and other stakeholders, to identify and develop within six months a list of the types of information and operational standards needed for an effective seafood traceability program to combat seafood fraud and IUU seafood in U.S. commerce. 3 Accounting for those listed above, what types of information and operational standards should be included in a traceability program? 4 What are the specific characteristics and workings of the global seafood supply chain that should be taken into account when requiring information? 5 1National Marine Fisheries Service, National Oceanic and Atmospheric Administration, Commerce. Recommendations of the Presidential Task Force on Combating Illegal, Unreported and Unregulated Fishing and Seafood Fraud. Federal Register, December 2014, p. 17. (RIN 0648-XD652). 2 Ibid. 3 Ibid., Ibid. 5 Ibid., 21. 3

4 Trace Register Response Electronic traceability is a prerequisite for preventing and reducing the entry of illegal seafood into U.S. commerce. It facilitates information sharing and cooperation among public and private organizations, encouraging them to work toward common goals. It informs all participants in the supply chain and helps differentiate legal from illegal seafood. The seafood industry is not the first industry to face the issue of illegal (i.e., counterfeit) products. Examples of other industries include the diamond, electronics, aerospace, defense, and pharmaceutical industries. While most of the inspection, testing and certification methods used by other industries verify the integrity of authentic products, they are not designed to detect counterfeit products. Learning from other industries, a program could be implemented to use traceability and digital certificates to verify that seafood is legal in U.S. commerce. Maintaining Data Confidentiality The seafood industry is highly competitive, and companies work hard to differentiate their products and gain advantages within the marketplace. Data is used to communicate these advantages, many of which are considered trade secrets. These trade secrets can help companies achieve higher prices and margins, key incentives that in turn drive innovation and improvements. For a traceability program to receive widespread support from the seafood industry, it must enable companies to maintain the confidentiality of their data, while still verifying their seafood as legal. Monitoring and Verifying Data in Near Real Time The amount of data attached to seafood flowing through U.S. supply chains is massive and challenging to manage. Assuring the data is trustworthy before using that data to verify seafood is legal must be accomplished in near real time. This is to identify products that should be analyzed further. Data monitoring and verification will assure digital certificates have integrity and will also provide the government with a way to measure the progress and success of the program. Monitoring and verifying seafood data can be undertaken by a wide array of third party stakeholders, both public and private, in addition to government regulators. Industry groups, third party verification companies, and other organizations that have been evaluated and approved could also provide verification services. They could share digital certificates through traceability systems throughout the supply chain. A larger number of participants monitoring and verifying seafood will provide a greater impact on reducing illegal seafood in the marketplace. Consumer Participation U.S. per capita seafood consumption declined sixteen percent between 2005 and It is reasonable to assume some of this was due to the many news reports about IUU fishing and seafood fraud. People are hungry for information about where their seafood comes from, that it is safe to eat and also legal. The verification and assurances made possible with digital certificates should also be extended to the U.S. consumer. Informing consumers has a 4

5 secondary benefit as it can help maximize the power of the marketplace to influence change, and can provide financial rewards for greater industry compliance. Seafood Traceability Delivering a robust Digital Traceability solution requires a sound understanding of domains such as B2B data integration, supply chain management, logistics, business processes, traceability, data management, production operations and the product itself. Creating standardized processes to automatically exchange this information is a challenge. When the requirements of business analytics are added, complexity increases further. Business analytics is the key factor from the supply chain members point of view, that turns traceability from a cost of doing business into a technology, that delivers improved productivity and increased profits, thus enhancing supply chain participation. Traceability Information In addition to product and packaging, product data has become the third dimension of tradable items. Product Data is commonly linked to the physical product through unique product identification codes. The link between product identity and external product data forms the backbone of most commercial traceability systems. The key to establishing integrated traceability is the exchange and linking of Product Data and Product Identification among trading partners in the supply chain. Key aspects that must be considered in establishing a traceability system for a supply chain: Product Identification Product Data Data Volumes Data Confidentiality Product Identification (PI) Product Identification links a physical product to the associated Product Data. The required Product Data dictates the granularity of the Product Identification. If the required Product Data is constant after production, then the required Product Identification can be lot based. If the Product Data can vary after production, then a finer granularity of Product Identification, down to the case level, is required. When differentiating legal seafood from illegal seafood the key question is: can a legally produced seafood product become illegal after production? The answer is clearly yes and can happen in a number of ways, thereby requiring a Product Identification Level equal to the tradable unit. 5

6 Product Data (PD) The Product Data is a function of the required regulatory or business needs. Different regulatory agencies and business groups have different data needs. In Trace Register s experience, the data requirements to meet the needs of these groups range from 30 to 70 attributes per product. Just as products possess quality, so does data. Low quality data often leads to low quality decisions. One dimension of data quality is the degree the data is trusted. If the data is not trusted, then data is less likely to be acted upon. A key requirement of a traceability system is its ability to ensure the Data Quality of the Product Data. Data Volumes The Product Data volumes generated by traceability systems are large. Using the Product Data to proactively take action requires analyzing the data for quality issues and analyzing the Product Data for potential defects. In our experience, this can result in evaluating more than 100,000 data checks per day for a single customer. These large data volumes cannot be managed nor used by manual processes; a digital traceability supply chain is required. Data Confidentiality Some Product Data can be highly sensitive for business operations. Designing a traceability system that requires full transparency is impractical and detrimental to business operations. (See section below on Digital Certificates Data Sharing and Confidentiality). Operational Standards for Traceability Data Exchange There are several aspects of a traceability system. A common grouping is the division between internal and external traceability. This response focuses on the requirements of external traceability, i.e. business-to-business (B2B) exchange of traceability data. There are six key parts of an interoperable digital traceability solution: The mechanism for obtaining the machine address of the receiving party The communication protocol between the different systems The definition of the payload (the traceability document itself) The definition of the attributes and values contained in the payload Security (Authorization) Host Address Obtaining the receiving party s URL is necessary when exchanging traceability data between two trading partners. Instead of developing a new standard, the committee should consider extending the standard DNS records with a specific DNS records type that refers to the Traceability Exchange Service, similar to the current MX record (Mail Exchange Record) type. Communication Protocol There are numerous choices of protocols that can be adopted for Traceability Exchange. Trace Register recommends that the committee consider some of the existing protocols based around HTTPS extensions. The protocol should include a message header along with a message 6

7 payload. The protocol needs to support delivery of encrypted content along with certificatebased authentication of both sender and receiver. The message header should include information regarding the unique identity of the payload. Most commercial systems support amendments and updates to Traceable Data along with support for acknowledgement of reception. Payload XML has become one standard format for business-to-business data exchange that TR would recommend. However, large payload (>1 GB) may be easily generated by traceability systems tracing to the case level. For this reason, the proposed protocol should support compressed payloads. Standardized Nomenclature (Ontology) Standardized nomenclature and attribute definitions are key to data exchange. This commonly creates the biggest challenge for generic B2B data exchange. Key elements that must be addressed are: Units of measurement Allowable values for enumerated attributes (fishing methods, gear, etc.) Time and time zone standards Product identity Since traceability covers many domains, and therefore many ontologies, the traceability ontology can often have unique challenges. In addition to the ontology, the overall taxonomy of the payload should also be standardized. As part of the UN, FAO standards are globally used and standards such as (http://www.fao.org/statistics/standards/en/) and ASFIS List of Species for Fishery Statistics Purposes (www.fao.org/fishery/collection/asfis/en) should be considered. Security (Authorization) It is a key requirement that both the sender and the receiver can establish their identities. A trusted relationship must be established and the implemented solution should be designed around this principal. The main reason behind this recommendation is the elimination of spam traceability documents and insuring that both parties have agreed to exchange the information. Digital Certificates Data Sharing and Confidentiality A Digital Certificate represents a confirmation that the Product Data meets a set of requirements. These requirements are expressed as a set of rules that are run on products and where the rule results determine if the product can keep the digital certificate. 7

8 Digital Certificates have: A Certificate Owner A set of requirement rules A set of Data Visibility Requests (DVR) Certificate Owner A Certificate Owner is a third party stakeholder in the supply chain. The Certificate Owner can issue the Digital Certificate to members of supply chain based on a set of requirements. When the supply chain member attaches a Digital certificate to the Product Data, the supply chain member represents that the Physical Product meets the requirements established by the Certificate Owner. The supply chain member further agrees that the traceability system will evaluate the associated rules and share the results of these rules with the Certificate Owner. If the Product does not meet the requirements of the Certificate, then the Certificate is removed from the Product Data. Both the product owner and the Certificate owner are informed that the certificate was removed. Requirement Rules The Requirement Rules will be determined by the Certificate Owner and will vary by product. Each set of rules has an associated set of criterion that determine if the rules apply to a specific product. The rules execute in the context of the product owner s account and traceability system. The rules have access to all product attributes; however, unless the attributes are part of the DVR (see below), only the rule results are shared with the certificate owner. The type of rules consists of three groups: Completeness Consistency Validity Completeness A completeness rule evaluates if a specific data attribute is present in the Product Data. For example: Does the Product Data have a specific digital certificate Does the Product Data have a link to an official Trip Ticket Does the Product Data contain traceable links all the way to the source Consistency A consistency rule evaluates if a specific Product Data attribute is the same through the supply chain. For Example: Is the scientific name the same for all applicable links in the supply chain? 8

9 Validity A validity rule determines if a specific Data Attribute is valid. This may require comparison of Common Name to Scientific Name, Product Name and Product Form. Other examples are comparison of Product Data attributes to external lists such as legally licensed vessels, or lists of IUU vessel lists, etc. Data Visibility Requests (DVR) Rules are run in the product owner s traceability account and the rule results are shared with the Certificate Owner. However, unless covered by a DVR, data used to run rules is not shared with the Certificate Owner. An accepted Data Visibility Request (DVR) allows the Certificate Owner to have access to specific data attributes in addition to the rule results. Digital Seafood Certificate Examples The following are three examples of digital certificates that could be used in the global seafood industry. 9

10 Digital Certificate Program for Coastal Fisheries Certificate Owner: State Regulatory Agency Data Capture Catch is delivered to shore where first receiver submits all landing data via Electronic Trip Ticket system to management authorities and a subset of data to Program traceability system At each step of the supply chain where product is trans-shipped, transformed and aggregated, relevant data is provided to the program traceability system Data Required for Program Product Identifiers Common, Scientific and FDA market name of species Trip Ticket number Boat License number Fishing Area(s) Fishing start and end dates Offload location (Note: Other data attributes would also be captured and used for commercial purposes.) Seafood Data Verification Rule Sets Run to Verify Seafood 1. Valid Product Identifiers are used 2. Links to a valid Trip Ticket 3. Harvested by a licensed fishing vessel 4. Harvested in approved area 5. Species harvested was during open fishing season 6. Material balance is calculated to verify it is not over-referenced (there is not more outgoing product than could be produced from incoming product) Digital Certificates Applied to all seafood verified according to program rule sets Re-verified by re-running rules one through six every time product moves a step in the supply chain Removed from products that do not pass program rule sets Optional whether or not Certificate is made available to consumers 10

11 Digital Certificate Program for High Seas Fisheries Certificate Owner: Regional Fisheries Management Organization (RFMO) Data Capture When catch is offloaded, fishing vessel and first receiver electronically report all catch to RFMO, along with a subset of data to Program traceability system At each step of the supply chain where product is trans-shipped, transformed and aggregated, relevant data is provided to the program traceability system Data Required for Program Product Identifiers Trip Start and End Dates Common, Scientific and FDA market name of species Vessel name Vessel RFMO certification number Fishing Vessel/Reefer Gross tonnage Vessel Flag Management Entity Management Zone Documentation is complete (e.g. Shipment has a valid Fisheries Certificate of Origin NOAA 370 or other documents, see: (Note: Other data attributes would also be captured and used for commercial purposes.) Seafood Data Verification Rule Sets Run to Verify Seafood 1. Valid Product Identifiers are used 2. Links to a valid Sailing Permit 3. Harvested/Trans-shipped by a RFMO licensed fishing vessel/reefer 4. Fishing vessel/reefer has valid IMO number and is not on IUU lists 5. Fishing Vessel is of approved gross tonnage 6. Harvested in approved area 7. Species was harvested during open fishing season 8. Required documentation is complete 9. Material balance is calculated to verify it is not over-referenced (there is not more outgoing product than could be produced from incoming product) Digital Certificates Applied to all verified seafood products according to program rule sets Re-verified by re-running rules one through nine every time product moves a step in the supply chain Removed from products that do not pass program rule sets Optional whether or not Certificate is made available to consumers 11

12 Digital Certificate Program for Aquaculture Seafood Certificate Owner: Aquaculture Certifying Body Data Capture Harvest is delivered to processing plant where data concerning pond and product is submitted via Electronic Aquaculture harvest system to Program traceability system At each step of the supply chain where product is trans-shipped, transformed and aggregated, relevant data is provided to the program traceability system Data Attributes Required for Program Product Identifiers Farm Certificates Farm location Farming country (Note: Other data attributes would also be captured and used for commercial purposes.) Aquaculture Data Verification Rule Sets Run to Verify Seafood 1. Has correct product identifiers 2. Links to a certified farm 3. Material balance is calculated to verify it is not over-referenced (there is not more outgoing product than could be produced from incoming product) Digital Certificates Applied to all seafood products verified according to program rule sets Re-verified by re-running rules one through five every time product moves a step in the supply chain Removed from products that do not pass program rule sets Optional whether or not Certificate is made available to consumers 12

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