1. The best environmental choice in seafood Disclaimer If any interpretive issues arise in relation to the issues covered in these presentations, the text of the MSC Scheme Documents will prevail in all instances. The MSC is not responsible for any issues arising to any parties as a result of consulting these presentations. If you are unsure of any details on any of the subjects covered, please consult the relevant MSC scheme documents or contact the MSC at standards@msc.org.standards@msc.org MSC Executive October 2010

2. Agenda Item 12: Clarification Session Batch Reconciliation Yannis Boudouropoulos Senior Traceability Manager

3. Overview Intent Standard & Methodology Explanation Scenarios Wrap up Q&A

4. Intent Ensure the integrity of the supply chain Verify that any non-MSC certified product is not entering the Supply chain

5. Standard 3.6 Data shall be recorded to allow confirmation of the volumes and/or weights of certified and non-certified fish inputs and outputs over a specified production period. 6.3 The records shall be sufficient to allow the conversion rates for the manufacture of certified outputs from given certified inputs over any given period to be determined.

6. CoCCM 5.4.6 g)..... i.purchases of MSC certified fish ii.plus opening stocks of „MSC certified fish‟ (if applicable) iii.less sales of MSC certified product iv.less remaining stock of MSC-certified product v.less waste and other losses vi.equals closing stocks of MSC certified fish;

7. CoCCM Group Appendix C (cont’) 6.6. Input and output reconciliation 6.6.1. opening stocks of MSC certified fish 6.6.2. plus purchases of MSC certified fish 6.6.3. less sales of MSC certified fish sold as MSC certified fish 6.6.4. less sales of MSC certified fish not sold as MSC certified fish 6.6.5. less waste and other losses 6.6.6. equals closing stocks of MSC certified fish.

8. Explanation Client must be able to demonstrate that over a specific period of time: There are controls and systems in place which demonstrate that MSC-certified products are recorded when they enter, are stored and exit the client’s facility (ownership)

9. Selection of appropriate time interval How do we select an appropriate time interval? Depends on: » Product shelf life (canned, dried, frozen fresh) » Unit Volume (15kg fish block, 200g can) » Stock rotation (ex purchase once a year) » Client’s internal logistics programme

10. Non-Certified Outputs Cases where MSC-Certified products were sold as conventional product Product should be dealt internally as MSC certified Record should be kept for various reasons – Lost sales – Purchasing planning for next period

11. Acceptable Quantities For various operations and for productivity reasons – Waste is calculated as a percentage of the total volume – Conversion rates are calculated after an annual exercise – Margin of error is depending on the scale of the operation

12. Scenario 1: manufacturer Time interval: Batch of fresh mackerel (10t) Unit: tons of fish Tons of fish purchases of MSC certified fish 10.0t plus opening stocks of “MSC certified fish” 1.0t less sales of MSC certified product (converted to fish)6.5t- less remaining stock of MSC-certified product (converted to fish) 2.0t- less waste and other losses0.5t- Total2.0t vi.equals closing stocks of MSC certified fish2.0t

13. Scenario 2: Box Movers Time interval: Quarter Unit: 1,000 cans Thousands of cans Opening stocks of MSC certified fish 10 Plus purchases of MSC certified fish 3.0 Less sales of MSC certified fish sold as MSC certified fish 7.9 Less sales of MSC certified fish not sold as MSC certified fish 0.0 Less waste and other losses 0.1 Total5.0 Equals closing stocks of MSC certified fish. 5.0

14. Scenario 3: Restaurant Time interval: 1 week Unit: Portions Portions Opening stocks of MSC certified fish 3 Plus purchases of MSC certified fish 25 Less sales of MSC certified fish sold as MSC certified fish 20 Less sales of MSC certified fish not sold as MSC certified fish1.0 Less waste and other losses 2.0 Total5.0 Equals closing stocks of MSC certified fish. 5.0

15. Wrap up Batch Reconciliation is important for product integrity The intent is mentioned in the standard and the methodology Requirements give the structure where batch reconciliation should be based upon

16. Intent Ensure the integrity of the supply chain Verify that any non-MSC certified product is not entering the Supply chain

17. What’s next Batch Reconciliation Requirements are being reviewed Potential announcement in Jan 2011 Informal Consultation to be expected soon CoC Standard is currently under review – opportunity for your feedback

18. Q&A Questions?