2011 RIDLEY AQUA-FEED PRAWN & BARRAMUNDI CONFERENCE

1. 2011 RIDLEY AQUA-FEEDPRAWN & BARRAMUNDICONFERENCE • SGS & Sustainability Auditing – what’s in store down the accreditation path

2. Presentation Agenda • SGS Group – Who are SGS? • SGS Auditing Services Australia • Global perspective on Seafood industry • CoC standards – BAP/MSC/GlobalG.A.P. • Timeframes & Cost • Questions

3. ABOUT US • World’s leading inspection, verification, testing and certification company • Experts at: • Providing competitive advantage • Driving sustainability • Delivering trust • 64,000 employees, including: • Scientists, engineers, doctors, chemists, auditors and inspectors • 1,000 offices and laboratories globally

4. We aim to be the most competitive and the most productive service organisation in the world. Our core competencies in inspection, verification, testing and certification are being continuously improved to be best-in-class. They are at the heart of what we are. Our chosen markets will be solely determined by our ability to be the most competitive and to consistently deliver unequalled service to our customers all over the world. OUR VISION

5. Passion Integrity Entrepreneurship Innovative spirit OUR VALUES

6. Founded in 1878 as a grain inspection company Expanded beyond agriculture in early and mid 20th century to: Minerals Oil, gas and chemicals Consumer goods Industrial sector Listed in 1981 Growth and diversification continued throughout last half of the century Current structure of ten business units initiated in 2001 OUR HISTORY

7. Agricultural Services Automotive Services Consumer Testing Services Environmental Services Life Science Services Minerals Services Oil, Gas & Chemicals Services Systems and Services Certification Technical Staffing Services GIS Our Business Segments Industrial Services

8. SGS Auditing Services Australia

9. THE Australian Group • In Australia • 52 Offices and Labs across the country • Perth HO / Melbourne HO for Certification • 1850 staff across Oceania • 10 staff auditors + a network of 70+ sub-contractors • 2010 Sales A$240 Million • SGS is recognized as the global benchmark for the highest standards of expertise, quality and integrity

10. Market leader in accredited and un-accredited programs Auditing services employs 50+ staff across 10 offices Melbourne HO for Auditing Services Centralised Admin including GM and KAM’s Staff auditors in each state Over 100+ accredited sub-contractors employed by SGS All sub-contractors sign off on the code-of-integrity, sub-contractor and confidentiality agreements SGS Auditing Services

11. SGS Auditing Services • Accredited Programs • GlobalG.A.P.– 600 Certificates across the globe • SQF 1000/2000– 700+ Certificates Globally • ISO 9001 (Quality Management Systems) – 650 Certificates • ISO 14001 (Environmental Management Systems) – 200 Certificates • AS/NZS 4801 and OHSAS 18001 (OH&S) – 150 Certificates

12. SGS Auditing Services • SGS Australia is the leader in Food programs with • 60% markets share in Australia across these programs • WQA (Woolworths) Domestic and international – 800+ clients • Coles – 580+ clients • SQF 1000/2000 – Global program controlled by SGS Australia. Issued 700+ certificates globally • And now emerging in our Local Market • Marine Stewardship Council – CoC (delivered Globally) • GlobalG.A.P. – Aquaculture CoC (delivered Globally) • B.A.P – Best Aquaculture Practice (US & SEAP)

13. WE BUILD TRUST THROUGHOUT SUPPLY CHAINS

14. TO PLATE

15. Multiple SOLUTIONS throughout THE FOOD CHAIN

16. What’s coming in the Future? The Need…. Promote sustainable and well managed fisheries and give confidence to the consumers the product they are buy is looking after the environment and has long term viability of the Seafood Industry! The Answer…. Effective Management Systems that shall manage and ensure the sustainable and environmentally responsible sourcing of Seafood!

17. What’s coming in the Future? • Consumers are increasingly concerned about overfishing and the environmental consequences • One way to address this and gain the confidence of the public is to be certified to a recognized standard • Chain of Custody schemes are most popular providing a third party verified system of traceability of seafood only sourced from sustainable fishing • Many of the large retailers around the world are now asking of their suppliers to be certified to one of these schemes to meet the demand of their customers!

18. What’s coming in the Future?CoC – Chain of Custody • Traceability systems (Chain of Custody) contribute to the search for the cause of nonconformity and the ability to withdraw and/or recall products if necessary. The objective of these requirements is to ensure that any product sold as a Scheme certified is produced from material that originates from certified Scheme farms. • Chain of Custody controls must therefore be implemented at all critical control points in the process under assessment. Critical control points are those where there is a significant risk of certified materials becoming mixed with uncertified materials, under either normal or abnormal operating conditions. • The choice of a traceability system is influenced by regulations, product characteristics and customer expectations. A traceability system on its own is insufficient to achieve food safety, it must be incorporated with a Food Safety management System.

19. What’s coming in the Future?The Choices • MSC – Marine Stewardship Council • BAP – GAA Best Aquaculture Practices • Friends of the Sea • GlobalG.A.P. – IFA Aquaculture, CoC, GRASP • SQF 1000/BRC (processing only)

20. What’s coming in the Future? The Choices MSC – Marine Stewardship Council • The Marine Stewardship Council (MSC) is an independent, global, non-profit organisation with offices in the UK, USA, Australia, Japan and the Netherlands. • In a bid to reverse the continued decline in the world's fisheries, the MSC is seeking to harness consumer purchasing power to generate change and promote environmentally responsible stewardship of the world's most important renewable food source. • The MSC has developed an environmental standard for sustainable and well-managed fisheries. It uses a product label to reward environmentally responsible fishery management and practices. Consumers, concerned about overfishing and its environmental and social consequences will increasingly be able to choose seafood products which have been independently assessed against the MSC Standard and labelled to prove it. This will assure them that the product has not contributed to the environmental problem of overfishing.

21. What’s coming in the Future? The Choices MSC – Marine Stewardship Council • Though operating independently since 1999, the MSC was first established by Unilever, the world's largest buyer of seafood, and WWF, the international conservation organisation, in 1997. It is this exciting and unique green-business partnership that has been praised by world leaders MSC Fishery certification • The MSC Principles and Criteria for Sustainable Fishing were developed following an international consultation with stakeholders around the world. MSC Chain of Custody Certification • Chain of Custody is the traceability element of the MSC certification programme. If a fishery is assessed to the MSC Standard for Sustainable Fishing, use of the MSC eco-label on seafood products is permitted only where there has been independent verification that the product originated from a certified fishery. An independent certification against the Chain of Custody (CoC) Standard provides this verification.

22. What’s coming in the Future? The Choices BAP – Best Aquaculture Practices • The mission of the Global Aquaculture Alliance is to further environmentally responsible aquaculture to meet world food needs • To promote responsible practices across the aquaculture industry, the Global Aquaculture Alliance coordinates the development of Best Aquaculture Practices (BAP) certification standards for hatcheries, farms, processing facilities and feed mills. • The BAP program drives continued improvements via high standards that deliver significant benefits industrywide

23. What’s coming in the Future? The Choices BAP – Best Aquaculture Practices Guiding Principles The Global Aquaculture Alliance exists to advance environmental and social responsibility throughout the raising, processing and distributing of aquaculture products. GAA therefore expects its members and affiliates to adhere to the following.Guiding Principles for Responsible AquacultureCompanies and individuals engaged in aquaculture, singularly and collectively: • Shall coordinate and collaborate with national, regional and local governments in the development and implementation of policies, regulations and procedures necessary and practicable to achieve environmental, economic and social sustainability of aquaculture operations.

24. What’s coming in the Future? The Choices BAP – Best Aquaculture Practices Guiding Principles for Responsible Aquaculture • Shall utilize only those sites for aquaculture facilities whose characteristics are compatible with long-term sustainable operation with acceptable ecological effects, particularly avoiding unnecessary destruction of mangroves and other environmentally significant flora and fauna. 3. Shall design and operate aquaculture facilities in a manner that conserves water resources, including underground sources of fresh water. 4. Shall design and operate aquaculture facilities in a manner that minimizes the effects of effluents on surface and ground water quality and sustains ecological diversity. 5. Shall strive for continuing improvements in feed use and shall use therapeutic agents judiciously in accordance with appropriate regulations and only when needed based on common sense and best scientific judgment.

25. What’s coming in the Future? The Choices BAP – Best Aquaculture Practices Guiding Principles for Responsible Aquaculture 6. Shall take all reasonable measures necessary to avoid disease outbreaks among culture species, between local farm sites and across geographic areas. 7. Shall take all reasonable steps to ascertain that permissible introductions of exotic species are done in a responsible and acceptable manner and in accordance with appropriate regulations. 8. Shall cooperate with others in the industry in research and technological and educational activities intended to improve the environmental compatibility of aquaculture. 9. Shall strive to benefit local economies and community life through diversification of the local economy, promotion of employment, contributions to the tax base and infrastructure, and respect for artisanal fisheries, forestry and agriculture.

26. What’s coming in the Future? The Choices GlobalG.A.P. – IFA, CoC, GRASP GFSI (Global Food Safety Initiative) recognised Scheme • IFA – Integrated Farm Assurance: covers hatcheries and farmed product. • CoC – Chain of Custody: from farm to processor verification of GlobalG.A.P. certified product is maintained through all or part of its production and utilization chain. All GLOBALG.A.P certified products that changes legal ownership and are subject to handling activities/processing must be compliant with the GLOBALG.A.P Chain of Custody (CoC) requirements to be sold with the GLOBALG.A.P claim. • Chain of Custody audits and internal-assessments must be done when processing and relevant handling activities expected for GLOBALG.A.P certified products take place. • GLOBALG.A.P certified products and/or related operational records DO need to be present during the audit.

27. What’s coming in the Future? The Choices GlobalG.A.P. – IFA, CoC, GRASP GFSI (Global Food Safety Initiative) recognised Scheme • GRASP – GlobalG.A.P. Risk Assessment on Social Practice, this is a voluntary module with 12 control and compliance criteria for individual producers and one extra point for producer groups. It reviews the basic indicators for potential Social Risks on farm. There must be a National Interpretation Guidelines in place, which is currently not in Australia. • GlobalG.A.P. certified aquaculture farms are required to have the feed accessed from GlobalG.A.P. certified Compound Feed Manufactures

28. What’s coming in the Future? The Choices SQF 1000 – Harvest and Intensive Farming of Fish (including Shellfish) SQF 2000 - Seafood Processing GFSI (Global Food Safety Initiative) recognised Scheme • This scope applies to the harvest and wild capture and intensive farming of freshwater and marine fishes and shellfish. • SQF offers within its code both Food Safety management System and Quality Management System and combined then into a SQF 2000 code 9 for processing it can cover the whole process

29. What’s coming in the Future? The Drawbacks • There is an increased cost to your business • Each scheme has a payment scale (licence fee) to use their Logo • Cost of Certification audit by a third party auditing body that is approved to deliver the scheme audit • Annual re-certification to the requirements of the scheme to maintain your right to use the Logo • Printing of new packaging etc • Environmental cost with the coming of a Carbon Tax

30. What’s coming in the Future? The Benefits • As a member of a recognised scheme you can promote your company as committed to sustainable sourcing • A Certified CoC scheme demonstrates corporate social responsibility by your company, another great marketing tool • Display the scheme logo with your product for a visual confirmation of your companies commitment to sustainable sourcing • Opens doors for market access to more retailers • Schemes contain lists of certified suppliers on their official websites, this will help attract new business • It is independently verified through third party auditing • In this day and age where people are more aware of their surrounding environment and the constant talk in the media and by governments can your business survive into the future without it?

31. John Buchanan Program Manager SGS Australia Pty Ltd +61 (0) 438 910 290 Kiran Bhagat National Business Manager SGS Australia Pty Ltd +61 (0) 407 034 428 Please visit our website:www.sgs.com/foodsafety Thank you