Overview

The goal of this report is to summarise the work and results of the 6-month long pilot conducted by Provenance. Mobile, blockchain technology and smart tagging were used to track fish caught by fishermen with verified social sustainability claims. The goal was to aid robust proof of compliance to standards at origin and along the chain, prevent the “double-spend” of certificates and explore how these new technologies could form the basis for an open system for traceability powering consumer-facing transparency for food and other physical goods. The pilot was successful in tracking responsibly-caught fish and key social claims down the chain to export. Provenance's ambition was not to demonstrate yet another digital interface, but a solution to the grave need for data interoperability: for tracking items and claims securely, end-to-end, in a highly robust, yet accessible format without the need for a centralised data management system. It was found that blockchains meet these needs and offer an exciting paradigm shift necessary for traceability in such vast complex supply chains as the SE Asia fishing industry.

Introduction: Blockchains for supply chain transparency

The global system of trade and commerce that sits behind our purchases is rarely something we think about, yet it spans the earth and impacts the wellbeing of people and environments. Provenance was established to enable trusted transparency of key social and environmental indicators along even the most complex chains of custody, to incentivize ethical labour practice and environmental preservation, aid standards compliance and eradicate fraudulent reporting.

We use blockchain technology, along with mobile and smart tags, to track physical products and verified attributes from origin to point of sale (POS). The first system to use blockchain was a peer-to-peer (p2p) payment system that became (in)famous under the name of Bitcoin. On 22nd May 2010, Laszlo Hanyecz paid a fellow Bitcoin user 10,000 BTC for two Papa John’s pizzas – money transfer that took place on the internet without the need for an institution (e.g. Visa, Paypal) to process the transaction. Six years later on 22nd May 2016, Provenance used the same p2p technology to track a tuna fish caught in Maluku, Indonesia from landing to factory and beyond - demonstrating how blockchain technology can enable supply chain transparency and traceability.

*Skipjack tuna being gathered by a supplier in Ambon before freezing, storage and transportation for manufacture into canned tuna for the EU market.*

Indonesia is the largest tuna-producing country, ideal for assessing opportunities to drastically increase transparency in fish and seafood supply chains. Conducting research and deploying our prototype in the region allowed us to understand the problems, assess technology opportunities and iterate both the design and implementation of our application for building an important part of an impactful and sustainable software system for end-to-end (e2e) traceability.

Provenance focused deployment in two main supply chains:

*Supply chain for Yellowfin tuna loins (some of which were Fair Trade certified) from fisherman in Asilulu to Harta Samudra in Ambon.*

*Skipjack tuna supply chain for tuna caught by The Teluk Mas Pole and Line wooden boats in Ambon for production at a local cannery.*

A broken system: When your fish supper supports slavery

Human rights abuses, overfishing, fraud, illegal, unreported, and unregulated (IUU) fish: a number of practices in the seafood industry are compromising the wellbeing of environments, wildlife and people all over the world. According to The Guardian, “slaves forced to work for no pay for years at a time under threat of extreme violence are being used in Asia in the production of seafood sold by major US, British and European retailers.”

In Indonesia, more than 60 million people live within coastal communities and tuna fisheries are a major source of employment and foreign exchange. Particularly in the North of Indonesia, however, tuna fishing is complicated by Philippine tuna fishing vessels, with most of the fish catches by Philippine purse seiners unrecorded.

30,000 people employed in Pole and Line would be replaced with 150 people if changed to purse seine fishing - the effect on jobs and livelihoods from a change in fishing technique is astounding. John Burton, Chair of the International Pole and Line Foundation

Pole and line fishing in Asilulu, Maluku

At the same time, businesses operating responsibly are not rewarded for their efforts. Pole and line and handline fishing are recognised as more socially and environmentally sustainable (Gillet, 2014) - with a far lower risk of slavery and illegal fishing practices (Gillet, 2015). Small-scale pole and line and handline fishermen, however, face many challenges in today’s system: overfishing causes decline of their catches, leading to more money spent on fuel and time spent out on the ocean. They also face increasing competition from larger vessels that may be fishing illegally, possibly with forced labour onboard (Gillet, 2015; USAID, 2016).

With 50% of the fish for human consumption coming from small-scale fisheries, the livelihoods of these fishermen are crucial to the fate of their communities and to a sustainable fishing industry. Food and Agriculture Organization of the United Nations

*Memorandum transmitting a report by the Marine Fisheries Advisory Committee on sustainable seafood certification by the NOAA Fisheries Service, to develop a framework for an NOAA certification mark.*

A justified market premium or preferred market access is essential to support these socially and environmentally responsible practices. There is a rallying call from customers, governments, NGOs and businesses towards the end of the supply chain for information about the origin and social standards of fish and seafood products - to prove their compliance to regulation (e.g. no slavery) and voluntary social and environmental standards to warrant premiums or preferential access. To do so, it is also essential to know each link in lengthy supply chains – the chain of custody of a product from capture to customer, which is what we refer to as traceability. With current systems however, effective interoperability of data along the supply chain poses a large technical challenge.

Sustainable and socially responsible seafood is impossible to achieve without establishing strong traceability mechanisms. Greenpeace

A centralized system, with a governing third party was, until recently, the only conceivable way to achieve data and transaction transparency. The truth is that no single organization can be responsible for making data throughout a whole supply chain transparent. Third parties like NGOs or industry associations, rarely manage even one of these two aspects of transparency, and even if they could, they would become a single point of weakness. This would make them and their operations a vulnerable target for bribery, social engineering, or targeted hacking. Adoption of such a transaction platform among various third parties would add further difficulties, as the shared costs for set-up and operation would be difficult to apportion and agree on, and benefits to each party are not usually made transparent.

Blockchains present a global, inclusive solution for traceability

What if we could share the same truth between all stakeholders - fishermen, factories, certifiers and consumers, without giving any of them a backdoor to the system? Blockchains offer precisely this opportunity. This project explored new methods for enabling traceability - a secure flow of information enabling the full chain of custody to be accessed, including key social attributes such as fishing method, vessel type and compliance data.

Building on the blockchain enables a global p2p network to form: an open platform that can deliver neutrality, reliability and security, particularly in grassroots trade.

It makes it possible to avoid double-spending of certificates and claims, which is otherwise impossible without a trusted third party
It acts as the base layer of truth that everyone throughout the chain can refer to in a trusted way
It allows the definition of unbreakable rules called smart contracts that will be enforced by the protocol itself

This project tested our beta chain-of-custody application to estimate and optimize its impact for slavery-free, sustainable practices in the fishing industry. Read more about the technology and its background in our whitepaper.

Existing systems and the technology opportunity

We met with the heads of eight fishing organisations, their General Managers and Quality Assurance (QA) officers, working to revive Indonesia’s declining pole and line and handline fisheries, increasing accountability and trustworthy data on social standards at origin. They are all members of AP2HI, the Indonesian Association of Pole and Line and Handline Fisheries.

Our interviews spanned all stakeholders: fishermen, boat captains, engineers, quality assurance experts, suppliers, supply chain auditors of international retailers, factory workers, managers and company owners – giving us a full picture of each company and the industry. Companies we visited include: PT Samudra Mandiri Sentosa, PT Sinar Pure Foods, PT Chen Woo, PT Nutrindo Fresfood International, PT Intimas Surya, PT Hatindo Makmur, PT Harta Samudra and PT Aneka Sumber Tata Bahari.

Collecting and analysing data, we mapped the factories and supply chains of the companies, seeking intervention opportunities for improving data transfer. We compared the data collection methods of three companies, as well as their level of vertical integration, key stakeholders and technology capability.

Digital labelling — *Clockwise from top left: Methods used across current traceability systems include digital labelling, excel lists, can printing and iPad data collection.*

Excel lists — *Clockwise from top left: Methods used across current traceability systems include digital labelling, excel lists, can printing and iPad data collection.*

All eight companies we visited during the research phase used pen and paper to account for material flowing in and out of factories, with some Excel reporting for government purposes, sent via email once completed. PT Harta Samudra was the only company with some form of digital accounting for fish products using the ThisFish Tally-O system by Ecotrust Canada. They were also the only company able to handle Fair Trade fish. To comply with Fair Trade, their supplier used plastic tags on tuna loins to identify the fisherman that caught the fish, before shipping to the factory.

*Ambon fishing village supplier forms and tags. In the current system, pen and paper account for material flowing in and out of different nodes in the supply chain.*

*Ambon fishing village supplier forms and tags. In the current system, pen and paper account for material flowing in and out of different nodes in the supply chain.*

There are many initiatives big and small (e.g. mFish, Trace Register, ThisFish and many more) looking to digitise data capture along the supply chain but few have presented a convincing approach for making that data truly interoperable without monopoly. Every fisherman, supplier and factory worker we met had a mobile phone. 3G and wifi was patchy but accessible from most of the towns and villages we visited.

*Pole and line fishermen in Ambon, Maluku equipped with cellular and smart phones illustrate an opportunity to digitise information right where fish is caught.*

There is certainly an opportunity to help digitise information. Rather than duplicate work done by ThisFish and others referenced above - we seek to build on it and use this pilot as an opportunity to demonstrate how the blockchain can be used to make data interoperable along the whole chain, and between very different actors and systems, linking that data to retailer and consumer experiences for galvanising a change in buyer behaviour while reinforcing regulation and voluntary standards.

As an alternative to current methods, the Provenance application is designed to work through a simple smartphone interface - either through the Provenance application itself or by linking Provenance with existing interfaces and systems for data capture along the supply chain. The application links identity, location, material attributes, certifications and audit information with a specific item or batch ID. The data is stored in an immutable, decentralized, globally-auditable format which protects identities by default, allowing for secure data verification.

Pilot phase 1: Registration and data collection from the "first mile"

Skipjack tuna fisherman on the Teluk Mas Pole and Line wooden boat.

Provenance worked with local fishermen from two different supply chains to help them collect catch data and track it through to suppliers. The respective fishermen sent simple SMS messages to register their catch, thus issuing a new asset on the blockchain with each SMS. Accompanied by permanent, unique IDs, the assets were then transferred from fisherman to supplier along with the catch, in both physical transactions and in the digital register on the blockchain. At this point, the items originally owned by the fishermen become linked to the suppliers. The identities of the fishermen are saved forever in the list of previous owners held on the blockchain.

The social and environmental conditions for the fishermen at the point of capture are verified through trusted local NGOs, whose audit systems validate their compliance to an external standard, resulting in their eligibility to participate in the Provenance-validated chain of custody.

*An NGO contributes to creating the asset at the fisherman level, with certification cascaded down the chain.*

Using a blockchain explorer like morden.ether.camp allows us to check the raw content of the digital asset that represents the item on the blockchain. It ensures the history and any details about the item have been recorded on the blockchain. The system we built is thus completely standalone and, more than building it on top of the Provenance platform, we rather peg a stakeholder object to a Provenance user in order to take advantage of both.

Key steps for yellowfin tuna:

*2. Item attribute confirmation by NGO. Attributes tested include Fair Trade USA, Pole and Line Foundation Association Member, GPS (working with Seatracker data).*

*4. Fisherman transfers the item to supplier.*

*6. Checking item on blockchain explorer.*

Pilot phase 2: Linking the blockchain with existing systems

Many supply chain management systems already exist, although most are expensive, large-scale enterprise resource planning (ERP) systems that run on internal hardware or in private cloud environments. These data silos discourage interoperability and open standards, rarely cover a product's full supply chain, and are often unable to capture the first mile from the original source.

There are some exceptions. Among them, Tally-O allows organisations to track the origin of their fish within their processing facilities. The data is then encoded and printed on the label and imported again in the next facility that also uses Tally-O.

*Open standards allow Provenance and other providers to create common interfaces for ERP software.*

Interoperability

Standards allow unconnected systems to communicate using the same language, structures and identifiers. GS1, for example, manages a closed set of global standards for most supply chain concepts such as barcodes and shipping container codes. There are, however, very few standards for identifying individual instances of products or their history. We are working to develop this as a community-owned, open standard.

A unique ID in our system takes the form of an address on the blockchain. More than a simple identifier, fetching the data stored at that address on the blockchain allows any entity to access details about that particular item. It is thus interoperable by default – as long as each entity along the chain commits its transaction to the blockchain in some fashion, the platform or system they use to access the blockchain is irrelevant.

Single Source of Truth

To ensure trust in a system, there should be a single source of truth (SSOT) for each piece of information. We propose that in this system, the blockchain should be the SSOT for verifying an actor’s identity, as well as the validity of any certification or attribute they claim to have. It should also be the SSOT for the full ownership history of each item from first mile to end consumer (i.e. its chain of custody) as well as the validity of any certification or attribute associated with it.

Integration details

1. Accepting items / ingredients / materials

Today, only paper records and tags accompany the sale and purchase of items such as skipjack tuna. By digitising the supply chain at the first mile, these items will be sold along with a digital record. The record will be held on the blockchain, accessible to anyone with the unique identifier attached to the item as a QR Code, RFID tag or using any other hardware technology.

2. Registering new or transformed items

*Provenance integrates with existing systems.*

When raw materials are processed and turned into new products, the corresponding assets on the blockchain need to be updated or transformed accordingly. For example, a whole fish whose catch was registered to the blockchain initially will leave the factory in multiple cans, which will each need their subsequent sale tracked separately. We will implement the concept of process as a contract on the blockchain to handle this. To counteract malicious processing, open-source conditions will be defined, publicly enforced by the contract.

Tally-O uses mass balancing to account for the amounts of ingredients used in the transformation. For example, the calculation for a can of Fair Trade skipjack tuna might be 200g of certified skipjack tuna and 10ml of olive oil. The details of this calculation will be sent to the process contract once the transformation has taken place, and the identifier then encoded in a label that will be passed with the transformed product down the chain.

3. Accepting transformed items

Just as inputs were transferred on the blockchain when physically arriving at the factory, outputs are transferred to the next actor in the chain when leaving the facility. Tally-O is connected to scanners that enable shipping management. Scanning labels containing a reference to the digital asset issued at the transformation step triggers the transfer of that asset to the next actor in the chain.

In short, the blockchain provides an audit layer sitting on top of an existing ERP or other data management system - like Tally-O. This allows data to be shared and mass balancing of certified product to be conducted between two separate factories. Even more, it allows that data to be joined with data collected from the first mile in a trustworthy way - providing a true end-to-end record without the need to change existing interfaces to data capture.

Pilot phase 3: The consumer experience and building an interface for trust

Records stored in the blockchain are made accessible to consumers where products are sold or served.

The final part of this pilot explored how the information from origin and the supply chain can be reached and trusted by shoppers towards the end of the chain. The decline of local manufacturing has created a ‘structural hole’ or information gap rarely bridged, except by press reports and investigations by NGOs (Phillips, 2010), resulting in disconnected consumers and highly exploitative market dynamics. Although there are over 10 million digitally-savvy online “ethical shoppers” in the UK, expected to spend £76 billion by 2016, consumers often make buying decisions based on perceived product, “brand” and price. In fact, 30% of UK consumers report that they are very concerned about environmental and social issues, but are struggling to translate this into purchases.

A workshop and prototyping session with local Brighton supermarket HiSbe Food CIC revealed the ease of integrating Provenance into retail environments. The Provenance team worked with company founders Amy and Ruth Anslow at the Digital Catapult Center in Brighton.

To effectively integrate Provenance into physical retail environments, we conducted a workshop and in-store prototyping session with local Brighton supermarket Hisbe Food CIC. The workshop provided significant insights on consumer behavior, influencing ideas for how Provenance technology could best manifest in a supermarket scenario. The resulting strategy: to replace the clutter of traditional printed communication with Provenance online stories and journeys, accessible via in-store tablets and NFC-enabled smart stickers. On the tablets, shoppers can view stories for each product range, seeing the producers and suppliers involved in farming or processing. Through smart stickers and packaging, shoppers can hover their smartphones over a product to track its provenance right on their screens. This system empowers a new era of more conscientious, trusting consumers willing to pay more for products with proven origins.

The ease of plugging Provenance into retail environments offers numerous possibilities for marketing transparency and traceability. Here, we illustrate a few basic applications to point-of-sale and packaging, as well as executions in a restaurant scenario.

*1. NFC-enabled smart stickers carry the Provenance marque along with item or batch IDs.*

*2. Touching a smartphone over the stickers shows the product’s journey from sea to supermarket.*

The stickers attach to a wide variety of packaging, functioning on both dry and chilled sections. — *3. The stickers attach to a wide variety of packaging, functioning on both dry and chilled sections*

*4. Item tracking extends to dining environments, indicating available information on ingredients.*

*5. Bespoke items such as smart menus can be designed and developed by Provenance for premium brands.*

Key choices and challenges for Provenance: Towards an open registry for material products, their attributes and ownership

Provenance aims to define open traceability standards for the material world. We do not seek to be yet another solution added to the list of data silos. Instead, we strive to build a system from the grassroots that can use existing interfaces and apps wherever possible - simply providing the first layer of shared truth for the material world.

Public vs. private blockchains

Most well-known blockchains like Bitcoin and Ethereum are public. This means that anyone can join the network without any restriction to read, write or take part in the consensus. Consortium blockchains then emerged to take advantage of the distributed consensus when it comes to maintaining a shared, consistent source of truth within a business process, company or industry at low maintenance cost. They give a controlled number of validators the responsibility to reach a consensus.

We know that building on a consortium blockchain would be an easier path: they are currently more scalable, cheaper to operate and provide better privacy options. But we believe that the incremental complexity of using public chains is worth the effort:

Equality: Since anyone can take part, this makes sure we can take consumer input and onboard new stakeholders without changing consensus mechanisms.
Consensus: Trust in consortium chains rest on an assumption that the small number of validators involved can not collude. They could still however decide to censor certain information if they share some common interest in doing so. Public chains make that impossible, and so censorship can only happen outside of the chain, leaving the core data untouched.
Network effect: We see blockchain as an empowering technology and want to use it in an open way, taking advantage of other projects such as identity frameworks. Learnings from the early days of the internet also weigh in favor of the public approach.
Commons: Our goal is to define standards for supply chain data without linking to a proprietary system. We are building a public utility to keep track of our material world.

This task is obviously bigger than us, and one that will have the most impact if it is developed as an open source project. We will welcome industry experts to take part in building the standard and extend our current protocol.

Connecting digital and physical

For this pilot, we linked products to digital assets using QR codes and NFC stickers. 2D barcodes can store the address of a digital asset on the blockchain and can be generated in batches. However, it is easy to copy these tags at any stage of the supply chain, which would undermine the validity of the physical product associated to the blockchain, without indicating it in the digital register. NFC tags can be programmed to store cryptographically secure data - but they aren’t currently practical for use upstream in the supply chain.

We are exploring ways to avoid duplication and identified two main approaches:

High tech: advances in NFC technology now enable tags to hold a secret securely. This makes copying advanced NFC tags increasingly difficult and double spending for the item more expensive. Prooftag uses bubbles to generate unique tags that can’t be copied. Other technologies are emerging: for example, nano spirals are being engineered using electron-beam lithography and are even harder to clone. These approaches are suited for high-value goods for which authenticity is a critical issue. We are currently extending our work from this pilot with hardware partners to develop the optimum secure solution for high-value food products.
Low tech: for some low-value products, secure tagging technology might not be necessary. Particularly when the financial incentive to substitute goods is low or the system makes it difficult. If goods are digitally transferred and confirmed as received using a public blockchain it would be impossible to sell the asset twice for a premium for a certain claim. However, ensuring just the right amount of something is in existence, and registered when creating an item on the blockchain, requires linking with ERP systems and POS systems, some auditing or other data sources, to confirm quotas (as with this pilot). To verify further down the chain of ownership, customers would need easy methods to also confirm the purchase. This can be done through Provenance.

Conclusions and next steps

Provenance envisions a future where any material, ingredient or product can have an identity, life, and history on the internet in a shared, interoperable format. This project highlighted the grave need for a common backend to support the growth of a new digital ecosystem for traceability - uniting the myriad of initiatives with a shared language and public infrastructure.

More than an interface

We came across several great projects in the data-collection space including vessel tracking, vessel registration, self-reporting of catch and effort, independent port sampling programs, Fair Trade data capture, fish tagging, internal traceability systems and apps for fishermen and suppliers all happening in the areas we researched in Indonesia. Needless to say data capture was rife both by software and hardware.

Sharing data securely between different parties is a clear barrier for achieving the level of trusted traceability needed to prove slavery-free fish. Currently, the main solution being posed is for one of the traceability providers to gain huge monopoly - this is neither secure, just or sustainable. The atrocities in the fishing supply chain mainly occur at catch, before the final destination of the fish is known. This means an incentive structure and data system would have to be shared by a number of companies to cover the data capture needed - but this must be a system that supports each fisherman as much as it helps the brands that add their names to the packaging.

A system for the lone fisherman and the gigantic retailer to come together

Shaming people into being virtuous doesn’t change behaviour. Incentive schemes, whereby people who have done the most good for humanity are rewarded 20 years into the future would create the expectation that doing long-term good is valuable. Jaan Tallinn, founder of Skype

The blockchain won’t solve traceability alone and indeed much of our pilot was spent looking at how information could even be digitised, let alone shared or secured. However, it does provide an ideal base layer upon which architectures for robust traceability systems can be built and participated in without ownership by the biggest or richest actor. It could also open up a powerful driver within this system - access to a premium payment for a fish that is of known origin and proven to be compliant with standards. That premium may manifest itself through access to markets, however the sooner we demand and require proven compliance of standards and traceability back to the source for the food we eat, the sooner we can fuel an engine for change.

*Blockchain providing the base layer of truth across the supply chain.*

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If you have any questions, comments, would like more information or a demo of Provenance technology, please emails us at hello@provenance.org. This report is also available in PDF format on request. Find related content on our Provenance News site, as well as up-and-coming webinars, resources and updates via our newsletter.

Published 15 July 2016

Key definitions

Blockchain

An information system that is shared between many computers and in which new information cannot be removed or changed after it has been written. In real life, it allows any set of parties to agree on some information and be certain that it will still be in the system in the future. They don't need to trust one another, nor do they need to trust a third party. Blockchains do not belong to anyone, however they can be trusted.

Consortium chain

A blockchain on which consensus is found between a closed, predefined set of validators. Users trust this set of validators to reach consensus only on valid data.

Data verification

The ability to corroborate product or company-level information along the supply chain with data provided by trusted third parties and other stakeholders.

Downstream

Any later stage of the production process involving processing, packaging and the sale of the finished product to the end consumer. In this pilot, downstream is the direction of the supply chain away from the fishermen and towards the end consumer.

Enterprise resource planning (ERP)

Business management software that is used internally to gather and observe information relating to business processes i.e purchasing, marketing, sales and inventory management

Electronic product code (EPC)

A unique identifier that is used in RFID tags to distinguish products in the supply chain.

First Mile

The first stage of the supply chain. In this pilot the first mile is the fishermen.

Grassroots

The origin or basis of something.

GS1

This is an international not-for-profit organisation, which assists anyone involved in making, moving and trading goods to standardise and automate their supply chains.

Interoperability

When different information technology systems or software programs can communicate seamlessly, to exchange and use data.

Near field communication (NFC)

A set of communication protocols enabling two electronic devices to establish communication by bringing them within at least 4 cm of each other.

Public chain

A blockchain anyone can join as a paid validator at any time. Users trust the protocol itself assuming that unrelated people cannot collude and reach consensus on invalid data.

Purse seine fishing

A large fishing net is used to encircle and capture a school of fish.

Quick response code (QR)

A printed code that a smartphone camera can read, to display a specific webpage.

Radio frequency identification (RFID)

This technology uses small tags that store and transmit electronic product codes (EPCs). The tags can be attached to products and unlike bar codes, the tags do not need to be in the reader’s line of sight.

Single source of truth (SSOT)

The practice of having a piece of data stored in exactly one place - any usage of that piece of data refers to this single source instead of storing it somewhere else as a duplicate. For example, registering your name on Facebook and Twitter does not comply with the SSOT approach.

Skipjack tuna

Katsuwonus (or Euthynnus) pelamis, family Scombridae. A small tuna with dark horizontal stripes, widely distributed throughout tropical and temperate seas. Also called bonito or oceanic bonito.

Supply chain visibility

The ability to know relevant information about the companies supplying products i.e their location, what they do, how they do it and if they abide by the law. Supply chain visibility focuses on the company or facility level, not on the product.

Traceability

The ability to accurately identify and trace the history, distribution, location and application of products, parts and materials, to ensure the reliability of claims in the areas of human rights, the environment, and labour (including health and safety).

Upstream

Any stage of the production process occurring before another supply chain process. In this pilot, upstream is the direction of the process towards the fishermen and away from the end consumer.