Japanese companies changing their approach to sustainability – Interview with Kazuo Hanaoka, CEO of Seafood Legacy

Japan's seafood industry is changing rapidly. For example, in 2020 the Fisheries Act made significant changes to guidelines on fisheries management. Meanwhile, Japanese producers and fishers are working to ensure a responsible supply for both a domestic market, where interest in sustainable seafood is growing, and for export markets, which continue to grow in contrast to declining domestic consumption.

This interview is the final in a four-part interview series from Western seafood media Seafood Source focusing on expanding the impact of sustainable practices and responsible management in Japanese seafood production. The interview is with Kazuo Hanaoka, CEO and Founder of Seafood Legacy.

Featured on Seafood SourceHere (English)

Seafood Source:Seafood Legacy has been working to improve seafood sustainability in Japan for nearly a decade. What are the drivers of the movement in Japan and how are they evolving?

Hanaoka:In 2015, there was no concept of sustainability in the fishing and marine products industry in Japan, and most companies were skeptical of sustainability. However, 2015 was a good time to start an organization working on responsible seafood handling, as there were two external factors: the introduction of the UN's Sustainable Development Goals and the decision to hold the Tokyo Olympics in the summer of 2020. These two factors brought sustainability to the attention of both policymakers and companies in Japan in a positive way. Also, companies felt that sustainability was not being forced upon them.

Before I founded Seafood Legacy, I worked for an international NGO, and in my experience, Japanese NGOs operated independently and did not cooperate or collaborate like the Western social sector, which seemed much more mature. From this experience, Seafood Legacy took on the role of consolidating the efforts of domestic and international NGOs on seafood issues in Japan from the beginning. This work has made the whole NGO community in Japan stronger. There is now a much more shared goal, identifying the different roles that each NGO can play and determining how to work together.

Currently, new external factors are affecting Japan's seafood industry, especially since the pandemic. Many of the major seafood companies, such as Nissui and Maruha Nichiro, are responding positively to new trends for sustainable and responsible practices.

We see Japanese society as being like a school of sardines. There is no strong leader or clear destination, but everyone wants to be with everyone else; they don't want to be isolated. Companies want to unite when the future is not bright because they feel there is a risk in being isolated. Our approach at Seafood Legacy is not to identify one big company that will be the market leader, but to move a group of companies, or the wider seafood industry, forward. It takes more time to move the industry together, but this is the best way to drive change in Japan.

Seafood Source:What are some of the issues of growing concern in Japan in the area of ​​seafood sustainability?

Hanaoka:Japan is the third largest seafood import market after the EU and the US. Half of Japan's consumption comes from imports. Imports are mainly consumed in supermarkets and major restaurants, while domestic products are more commonly consumed at local fishmongers and traditional seafood restaurants.

Seafood Legacy believes its greatest opportunity for change lies in working with a group of influential companies that import into the Japanese market to drive market change and address some of the biggest challenges in the global seafood industry. The top fish imported to Japan are salmon, tuna and bonito, shrimp, and squid. By focusing on these species and IUU (illegal, unreported and unregulated) fishing, we will enable the Japanese market to further contribute to the global effort to eliminate IUU and forced labor.

It is great that the Japanese government started implementing strict import controls about a year and a half ago, but the import controls are still very basic, with only four species covered. This is far from what we want to achieve in working with EU and US authorities to tackle IUU and other issues.

Several major Japanese retailers have told us they want all popular products sold in their stores to be subject to the import restrictions. It is unusual for a Japanese company in the seafood industry to make a public request to the government in its own name. These corporate efforts are part of a strong movement in Japan that we are promoting.

In addition to IUU, interest in labor rights issues is also growing rapidly. We are now receiving probably more inquiries about labor rights from major retailers than environmental issues. Companies want to understand the basics about labor rights: what the issues are, and what companies should do. Seafood Legacy has partnered with NGO FishWise and other organizations to build a program to help Japanese companies with their human rights due diligence efforts and understand the social risks of seafood production.

Of course, climate change and small-scale fishers are important issues, but Seafood Legacy's current strategic priorities are threefold: the thriving of our marine resources, IUU and traceability, and labor and human rights issues.

Seafood Source:While many NGOs focus solely on corporate engagement, Seafood Legacy focuses on three pillars: market transformation, financial industry transformation, and policy reform. How does Seafood Legacy address financial industry transformation and policy reform?

Hanaoka:Financial industry transformation means getting major domestic financial institutions to educate and engage with seafood companies' ESG efforts. What we want is to change the system. At Seafood Legacy, we see market transformation, financial industry transformation, and policy reform as the three wheels of the tricycle that is the seafood system in Japan and the world.

It is difficult for companies to lead alone, so financial and regulatory pressure will drive market change and move the whole sector forward. I think these three pillars will enable the industry to move forward in a way that suits Japanese society. There is a saying that the nail that sticks out gets hammered down. In order to advance sustainability in Japan in this situation, it is essential to move forward without the nail sticking out too much.

Seafood Source:It seems like Seafood Legacy is expanding its activities to other countries - is that because you think the model is valid globally, or is it because the issues you're working on in Japan are relevant to fisheries management in other countries?

Hanaoka: I think the answer is both. Seafood Legacy wants to drive market transformation in Japan, not just for Japan, but as a way to contribute to sustainability and responsibility in the world. So I think it makes sense to give economic incentives to producers to make the most of Japan's purchasing power. This is one way to drive change.

But at the same time, we've been working on transforming the market in Japan for nine years. Even if Japan becomes 9% sustainable, and the EU and the US become 100% sustainable as well, we don't think we have a solution that can be scaled globally unless other markets follow suit. It's important to expand this market transformation to other growing seafood markets, many of which are in East and Southeast Asia.

We now have a lot of experience learning what works and what doesn't, and we can share that with other markets and accelerate their activities. Seafood Legacy can leverage Japan's buying power to influence global practices. We can effect change outside of Japan, using the Seafood Legacy model to suit Asian markets and corporate cultures.

Seafood Source:What programs and companies are actually contributing to improving sustainability in Japan?

Hanaoka: Japan's three largest food companies, Maruha Nichiro, Nissui, and Kyokuyo, used to be worried about being criticized for talking about their sustainability efforts, but now they are communicating that they are working together and proactively sharing their sustainability efforts. These companies are now having a positive impact on the entire industry.

Also, large and influential companies like Mitsubishi, Nichirei and Marubeni are showing what can be done with their products and programs. Aeon, Seven & i Holdings and the Japanese Consumers' Co-operative Union are representative of retailers leading the movement. Other retailers, as well as restaurants, processors, importers, distributors and other companies in their global supply chains are following this sustainability trend.

It's incredible to look back at all the work that's been done at Seafood Legacy over the past decade and how many companies have embraced advancing responsible practices. We're going to focus on the incredible collaborative solutions that have been in place over the last decade, and what we can do to co-design the roadmap to 10.

*Finally, we would like to express our sincere gratitude to Ned Daly, Contributing Editor at Seafood Source, for his cooperation in planning this series.