Here we consider the basic CDS architecture and the ways in which traceability is designed and implemented in existing multilateral CDS. This is important in that it is the basis for appraisal of where and how country traceability solutions can support and enhance the performance of a CDS.
The figure above shows the so-called “ABC graph”, which I adapted from the one sourced from Gilles' FAO TP596 Design options for the development of tuna catch documentation schemes and shows the following elements:
- segments of the supply chain: national segments above the horizontal line and CDS traceability segments below;
- possible stops in the national supply chain;
- possible stops in the CDS-governed supply chain;
- regulatory frameworks governing the segments; and
- three notional countries – A, B and C – that model product flow along an international supply chain and through trade.
The figure models a simple fishing, transhipment and landing operation at the harvesting end of the supply chain. More complex events such as multiple transshipments and landings and mixed unloadings are omitted for the sake of simplicity.
The basic operation of the document system through catch and trade certificates is shown at the stops in the supply chain where the documents are issued and validated by the competent authorities.
The supply chain runs from left to right, from fishing operation, transhipment and landing to products entering country A and being processed before being traded on to country B and subsequently to country C and so on.
The part of the graph below the horizontal line represents the international dimension of the CDS, managed directly by CDS-related mechanisms. All harvesting operations before landing, export, import, re-export, import and re-export are subject to the regulatory mechanism of the CDS; all transactions are recorded by the CDS and stored in its central registry in the form of certificate copies or electronic data.
The CDS directly covers only the following international segments: i) all events up to landing and the issue of a catch certificate establishing the legality of the catch; and ii) every trade event that occurs when the product moves between countries, each of which involves the issue of trade certificates and the creation of links with source certificates. In this way system-bound traceability and accountability is maintained.
The upper part of the figure represents the national traceability segments of the supply chain, where traceability is limited to the national territory through which product moves. These segments are not directly covered by the CDS but by national traceability laws and regulations, with a few exceptions.
No existing CDS traces product movements through national distribution chains: the only CDS records generated in the supply chain after landing and first sale relate to the entry of product into national supply chains and its subsequent exit – in other words the entry of product into and out of international trade.
The first and last transaction records in the national supply chain – entry and exit – overlap with the transactions recorded by the CDS and are hence captured in both national and CDS records.
With regard to national supply chain segments, none of the current multilateral or unilateral CDS have their own mechanisms to trace movements of products through the national segments. This is regarded as best practice because: i) the mechanism works for the CDS currently in operation; ii) the alternative option of covering national segments though a CDS-bound traceability mechanism would introduce so much complexity that the system could fail; and iii) many countries would reject the idea of mandatory recording and tracing of national transactions under multilateral CDS.
Hence countries are dealt with as “black boxes” by the CDS. The CDS creates certificates recording of what enters and what exits a country, but it is blind to transactions inside a national supply chain.
The CDS is nonetheless capable of stablishing important indicators for any country such as: i) imported species, products and volume; ii) exported species, products and volume; and iii) the balance between them.
To be relevant to the CDS these balances must take processing yields into account because the form and volume of products change during processing. Failure to accountfor processing yields provides an opportunity for non-originating product to enter thecertified supply stream.
A well-designed CDS will automatically detect a discrepancy when trade certificates are prepared for products to be exported. What the CDS cannot do is identify the individual operator who has caused the discrepancy – unless the exporter is the only importer of products covered by a given certificate and the same products have not changed hands in the national supply chain. The latter – a national transaction – is typically not recorded at the CDS level.
If national transactions were recorded and links were enforced by a CDS, certificate fraud could be detected at the level of the individual operator. In the absence of this mechanism in current CDS and limited enthusiasm among RFMO members to consider it for the future, it is for national competent authorities to maintain the integrity of national supply chains under a CDS. Although a CDS can identify fraud-related discrepancies with respect to individual certificates, state authorities are responsible for investigating any such discrepancies and identifying and sanctioning individual perpetrators.