Open Blue 2016 Sustainability Report by Open Blue

REPORT

2016

HEALTHY OCEANS & HEALTHY FISH: A BETTER WAY TO FEED THE PLANET

For over a decade, Open Blue has been systematically revolutionizing the mariculture industry by moving it into the open ocean, far away from sensitive near shore ecosystems and farming native fish in an optimal warm-water habitat. We are global leaders in deep sea mariculture, and are known for our pioneering research, game-changing technologies and quest for scalable solutions, developed in collaboration with the worldâ&#x20AC;&#x2122;s leading scientific laboratories and universities. Weâ&#x20AC;&#x2122;re driven by a desire to find a better way to feed the planet, and by our core belief that when we look after the health of the ocean and our fish, we provide better food for humans.

SUSTAINABILITY REPORT | 2016

• Our approach......................................................page 2 • 2016 highlights...................................................page 6 • Open Blue at a glance.......................................page 8 • About open ocean mariculture................... page 10 • Our leadership approach ............................. page 12 • Three-pillars of sustainability:..................... page 14 • E N V I R O N M E N T A L C A R E ..................... page 14 • F U L L A C C O U N T A B I L I T Y ..................... page 22 • S O C I A L R E S P O N S I B I LT Y . .................. page 26 • Open Blue stories & Employee profiles . .. page 32

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Our approach WEâ&#x20AC;&#x2122;RE TRANFORMATIONAL LEADERS IN OPEN OCEAN SEAFOOD Open Blue operates at the cutting edge of the mariculture industry, and we take our role as a global leader, a cultivator and purveyor of open ocean seafood seriously. We have created a new paradigm in the industry; one that allows fish to thrive in their natural, warm-water environment, so that we can guarantee great tasting and healthy fish. We focus relentlessly on excellence and innovation in everything we do â&#x20AC;&#x201C; from our state-of-the-art hatchery and processing operations, to our network of partnerships and alliances and full traceability of our product. Our Cobia are carefully cultivated in large, stress-free pens in the pristine ocean waters of the Caribbean Sea, far offshore from sensitive ecosystems. The results of our new approach to mariculture speak for themselves: our Cobia are unparalleled in quality, taste and health benefits, and exceed the highest standards in the mariculture industry.

SUSTAINABILITY REPORT | 2016

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ABOUT THIS REPORT At Open Blue, sustainability is woven into every aspect of our operations. It is our prime business driver, built on our commitment to the “Seventh Generation Principle”, and our deep understanding that the well-being of the earth, the oceans, our staff and partners and our customers are entirely interrelated. The Seventh Generation Principle is based on an ancient Iroquois philosophy that the decisions we make today should result in a sustainable world seven generations into the future. Our goal is to create an industry that solves a multitude of problems, most significantly how to feed a growing global population in harmony with the planet. Every day we strive to find better ways to raise, feed and harvest our Open Blue Cobia through the minimization or elimination of the impact of waste, disease, escapees and mortality to enhance human health and that of the ocean environment and our fish. We are proud of the everyday and leading-edge ways that we are getting closer to this goal, and this 2016 Sustainability Report documents our latest achievements. We currently track our progress using a three-pillared approach, and are working to integrate our financial performance indicators into these with sustainability and social responsibility indicators. E N V I R O N M E N TA L C A R E

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F U L L A C C O U N TA B I L I T Y

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SOCIAL RESPONSIBILITY

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E N V I R O N M E N TA L C A R E

F U L L A C C O U N TA B I L I T Y

SOCIAL RESPONSIBILITY

Growing our fish in harmony with the ocean.

Measuring and managing our progress.

Caring for our people, customers and communities.

We believe the future of sustainable aquaculture is in the open ocean – far offshore from sensitive ecosystems. Our native, warm-water Cobia fish are raised eight miles off the Caribbean coastline in stress-free, low-density, fully submerged pens, and swim in high-energy currents never seeing the same water twice.

We exceed the highest standards in the mariculture industry, and comply with all regulations and third-party certifications. Every day we look for more ocean-friendly, fish-friendly and human-friendly ways to do business. Our commitment to structured, continuous improvement keeps us at the forefront of our industry.

We are proud to produce a pure, healthy, great tasting white fish – super high in Omega-3s and free of contaminants, hormones, colorants and pesticides. We are equally proud of our positive workplace culture and community scholarship and betterment projects in the communities where we operate.

KEY REPORTING INDICATORS

Fish health

Accountable actions

Our workers

• Continue to work towards achieving the “Five Freedoms” of animal welfare

• Comply with all laws and government regulations

• Enhance health and safety

• Improve feed conversion ration (FCR)

• Conduct regular financial audits

• Improve feed and diet (non GMO ingredients, alternative marine ingredients like algae)

• Manage risk proactively with agreed processes in place for reporting

• Improve Cobia-specific vaccines and eliminate antibiotic use • Decrease mortality • Eliminate shark attacks and net integrity issues • Enhance genetic improvement program (survival, shorter grow out) Ocean health • Monitor benthic and water discharge and design adequate fallow strategies • Monitor algae and plankton • Monitor wild fish populations

• Improve Great Place to Work ranking • Facilitate career planning paths

• Achieve business profitability through planned action and timelines

Our communities

Measured progress

• Expand scholarship program beyond elementary levels

• Comply with all certification standards and audit requirements

• Identify new Open Blue Costa Arriba Fund community projects

• Pursue new third-party recognitions

• Continue to build relationships with community members and elected officials

• Quantify benefits of open ocean mariculture

• Build research partnerships with universities, students and NGOs Our customers • Provide a consistent and trusted supply of fish • Back Omega-3 levels with nutritional testing • Ensure full safety and traceability of fish

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“We see a future where native fish are grown in open-ocean areas across the globe, feeding our planet’s growing population especially in warm climate areas where populations are increasing at the fastest rate.”

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2016 Highlights E N V I R O N M E N TA L C A R E

F U L L A C C O U N TA B I L I T Y

SOCIAL RESPONSIBILITY

Fish and ocean health

Accountable actions and measured progress

Caring for our workers, communities and customers

non-GMO diet • 100% success • 1for00% our fish rate with continued 00% sourcing of • 1fish meal and oil from non- IUCN Red List of Threatened Species fisheries 00% traceability • 1through the lifecycle of our fish (ongoing) 8% average survival • 8rates per year generations of • 3new cobia specific vaccines developed and tested 00% fish • 1vaccinated before entering sea pens

certifications: Global Gap and Friend of the Sea. 00% success • 1rate with new certifications for 2017: 3-star Best Aquaculture Practice, British Retail Consortium (BRC) and ISO 9001 2015 largest supplier • #of1fresh Cobia to the US and Europe

Highest levels • of Omega-3 in a whitefish 14.5+ million in • $services and supplies contracted from over 850 Panamanian companies 8 educational • 4scholarships awarded every year community • 5projects funded diver/ • sharkReduced interactions 100% shark resistant (Kikko) netting installed on all pens

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• FCR or food conversion rate is the measure of the efficiency of

conversion of feed to fish (e.g. an FCR of 2.8:1 means that 2.8 kg of feed is needed to produce one kilogram of fish live weight)

• bFCR or biological FCR is the kgs of feed used to produce 1 kg of fish • eFCR or economic FCR includes a broader account of feed required including the effects of mortalities

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Open Blue at a glance VISION

current and future generations • Feed in harmony with the ocean. ADVANTAGE

• We are the largest deep water open ocean

mariculture operation, and our farming system is the most scalable platform in the world

• We farm a healthy native fish found in warm

water climates, where the world population is expected to increase most quickly

• We are tracking, resolving and reporting on

the challenges that are typically associated with mainstream aquaculture including: water quality, fish density, carrying capacity, interactions with predators, escapes, humane slaughter, mortality figures, parasites, traceability, GMO feed and freshwater use

Open Blue SeaStation™

8 nm

Nombre de Dios

Viento Frio Palenque

Miramar

SUSTAINABILITY REPORT | 2016

OPERATIONS

GLOBAL PARTNERS

• Our twenty specially designed 6400 m3

• InnovaSea Inc. - Industry leader in

• We have custom designed vaccinations

• University of Miami, Rosenstiel School

submerged sea enclosures create a habitat ideally suited for native Cobia. We are testing a 14,500 m3 sea enclosure for future production goals. and feed for Cobia, and dramatically reduced the use of antibiotics to maximize nutrition intake, growth, health and taste

• Our advanced under water feeding

methods prevent excess build-up and allow for equal disbursement

• Our new broodstock facilities in the

hatchery will allow expansion of our selective breeding program with a goal of increased survival and shorter grow out time

EMPLOYEES

• 204 Operations staff • 17 Sales staff LOCAL PARTNERS

• We inject over $14.5 million annually into the local economy through our partnerships with over 850 Panamanian suppliers

• Our mariculture research and

environmental monitoring partners include Government of Panama, University of Panama and University of Miami

• Through our Open Blue Costa Arriba Community Fund, we work with communities and elected officials to improve conditions, with a focus on education and health

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submersible open ocean farm equipment and technology. Joint development agreement to create the next generation farming platform for Open Blue of Marine and Atmospheric Science Program - Leader in tropical marine fish aquaculture research in Western hemisphere. Supported founding of Open Blue and early research. Species technology partner— developing science around Cobia and other tropical marine species

COMPANY

• Founded in 2007; began selling Open Blue Cobia in 2010

• Company registered in the United States of America and Panama

• Headquarters in Miami, Florida and Albrook Panama City, Panama

• Sales offices in Halifax, Canada and Miami, Florida

• Other Panama locations: Miramar (base for offshore operations), Viento Frio (hatchery) and Llano Bonito (processing facility)

About open ocean mariculture Our goal is to transform how the world grows protein, and we believe open ocean mariculture – done right – is the answer. “Feeding an expected global population of 9 billion by 2050 is a daunting challenge that is engaging researchers, technical experts, and leaders the world over.” - Juergen Voegele Director Agriculture and Environmental Services Department World Bank

We chose to invest in deep water open ocean tropical mariculture after a comprehensive review of available technologies, suitable species and marine conditions. During our decade-long investigative phase, we worked with researchers and scientists to understand:

• The early stage development of offshore

technologies available for deep water open ocean mariculture • The unique location requirements to measure, monitor and manage any potential impact on the environment • The appropriate species for this type of mariculture location Our interest in deep water open ocean systems developed in response to challenges for aquaculture operations located in near shore conditions. Along with the University of Miami and later our technology partner InnovaSea, we established ourselves as early pioneers in deep water open ocean mariculture and in the following years have developed significant knowledge about deep water mariculture. By moving farms into the open ocean we are moving fish into large water masses and the most stable environment on earth. Through proper site selection, technology selection, species selection and best management practices we provide the fish with a growing environment that is many times more superior than nearshore or onshore locations. This will ultimately result in faster growth and improved feed utilization leading to lower feed conversion and improved overall fish performance.

SeaStation™ TECHNOLOGY DESIGN AND DEVELOPMENT We currently farm cobia (Rachycentron canadum) using InnovaSea’s advanced technology in 20 submerged 6,400 m³ pens, 8 miles off the Caribbean coast of Panama. SeaStation™ submersible mariculture system is specifically designed to withstand and retain its shape and size under challenging deep water open ocean conditions such as strong currents, high wind speeds and high wave heights. Other design factors included cost, worker safety and suitability for the species of fish being raised. Paradoxically, the pens need to be durable and yet lightweight so they can be installed, lifted and cleaned in these challenging conditions. We continue to work with our technology partner InnovaSea to make improvements to our design and related technological solutions for monitoring, information transfer and energy. SITE SELECTION Careful siting of deep water open ocean mariculture sites mean that farms are located in areas of the ocean with suitable benthic conditions and minimal existing habitat. This way other marine life is not displaced as a result of the farm operations. Our farm siting decision was influenced by a comprehensive literature review working with the University of Miami along with a collection of field data to determine baseline information. We recognize that baseline data is critical in order to properly assess any changes in the marine environment as a result of the farm structures, farm activities, climate events and other unforeseen influences such as pollution.

SUSTAINABILITY REPORT | 2016

Additional study details:

• Samples were taken in the study area to assess

turbidity, total solids, ammonia nitrogen, organic nitrogen, phosphorus, nitrates and nitrites as well checking for the presence of total and fecal coliforms

• Special care has been taken to protect any sea turtle nesting areas on the beaches onshore near the farm and hatchery location

FISH SELECTION Cobia is a high quality, fast growing tropical marine white fish, and is native to Panama Caribbean waters. Growing a native species eliminates concerns about introduction of a species which could affect the ecosystem in ways such as colonization, displacement of native fish and potential cross breeding. Cobia is long prized for its exceptional taste, high nutrition and versatility in raw or cooked applications. Cobia have higher levels of Omega-3s than salmon for a healthy food choice for customers. Cobia grow quickly in the SeaStation™ system reaching 5.5kg in 13 months. This rapid grow out cycle means reduced impact throughout the ocean phase of their life cycle, further reducing potential impact.

OMEGA

The data we collected in our Panama study included oceanographic parameters such as dissolved oxygen, temperature, salinity, pH at three levels of depth and three locations. Our study indicated that fish farm activity was not expected to negatively impact the environment since the scale of the marine setting has the mechanisms to absorb any variation of the activity projected on it. Our literature review on fish stocks of the Caribbean supports this conclusion.

3 2 1 0

g/100g

We started broadly surveying sites from Mexico to Brazil in 2006, and then narrowed our focus to Panama in 2007, and then narrowed again to study an area located offshore to the Caribbean coast of Panama, at a depth of between 50 to 65 metres.

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Farmed Atlantic Salmon

Farmed Barramundi

Farmed Yellowtail

Chilean Sea Bass

Open Blue Cobia

Rib Eye Steak

Chicken Breast

“Open Blue Cobia Omega-3 claims comply with the 2016 US Food and Drug Administration industry guidelines.” Sources: Super seafood, Australian Seafood Cooperative Rearch Centre, 2014; Eurofins Cobia Analysis Report; Seafood Source

“By 2030, mariculture is projected to be one of the fastest growing methods of producing food in the world, and will be responsible for almost two-thirds of the fish we eat.” – International Food Policy Research Institute

THE OPEN BLUE ADVANTAGE We have unique, innovative scalable infrastructure and years of proprietary research in place to lead the open ocean paradigm shift:

• Broodstock selective breeding program • Fish health management and vaccine development

• Diets, optimal formulations at different stages of growth, alternative ingredients in feed

• Work with InnovaSea to develop technologicial solutions for submersible feeding, inspection, cleaning and harvesting

Our leadership approach At Open Blue, we are blessed with talent and an exceptional team to help steer the company into the next phase of our development, as well as significant bench depth in all key areas including Hatchery, Farm, Processing and Sales and Marketing.

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Care & Respect

Customer Focus

Farm Operations Fish health

Logistics

Hatchery

Research & Development

Processing & Production Management

Corporate Responsibility & Public Affairs Finance & IT Sales Human Resources

Marketing

Excellence Management

Integrity

Responsible Leadership

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E N V I R O N M E N TA L C A R E

PILLAR 1

Fish & ocean health

2016 highlights • 100% non-GMO diet for our fish • 100% sourcing of fish meal and oil from non- IUCN Red List of Threatened Species fisheries

• 100% traceability through the lifecycle of our fish (ongoing) • 4.5% decrease in total mortality - down to 21.4% in 2016 from 30% in 2015

• 3 full trials of new Cobia-specific vaccines completed

• 100% fish vaccinated before entering ocean sea pens

• Diet now consists of : 30% fish meal and

6% fish oil (9% additional lipid content from alternative sources)

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2017 targets/goals • Expanded benthic monitoring to add semi-annual testing for sulfide and redox - standards used to measure impact on ocean floor

• Increased fish trials and a comparison study of three different diets, with additional palatability testing

• Expanded feed research including exploration of alternative marine ingredients like algae

• Expanded wild fish monitoring to assess parasites and health of wild stocks in farm area

• Increased understanding of shark populations on Caribbean cost - project with ENGO MarAlliance

• Strengthen network of skilled specialists and marine resources within Panama to increase environmental stewardship – through Government of Panama’s SENACYT secretariat

Growing our fish in harmony with the ocean.

SUSTAINABILITY REPORT | 2016

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Fish health For us, fish health starts in the hatchery by selecting the strongest eggs, larvae and juveniles to put out to sea. With cobia being a new species for mariculture we are learning about how best to care for our fish throughout their life cycle. We consider that vaccination is part of a comprehensive fish health management program which includes careful attention to choosing viable eggs, special diets throughout the cobia life cycle and pristine growing conditions.

We are committed to farming techniques that provide our fish with the most effective, least invasive treatments available. Cobia are a relatively hardy species. Like all farmed species, however, parasites and pathogens must be pro-actively managed to ensure that the fish are reared in a healthy and humane fashion.

KEY INDICATOR • Continue to work towards achieving the “Five Freedoms” of animal welfare

Humane harvesting

REPORTING OUT We have committed to abiding by practices that are consistent with the ‘Five Freedoms’ as defined by the World Organization for Animal Health (OIE):

• Freedom from hunger, thirst and malnutrition • Freedom from fear and distress • Freedom from physical and thermal discomfort • Freedom from pain, injury and disease • Freedom to express normal patterns of behaviour At present, our focus is on the elimination of and responsible use of antibiotics in line with the OIEs guidance and humane harvesting methods.

Our state-of-the-art open ocean harvest technology enables harvest at source. We use a technique viewed by fish welfare experts as a humane slaughter method which involves stunning prior to bleeding. Our primary mode of stunning is a percussive stunner. This stunner operates on fish that have been pumped out of a harvest cage and delivered to a sluice table where a chute system holds the animal in place so it can be stunned and then bled. The fish pump system utilized to deliver fish to the harvest vessel is constructed of large diameter flex tubes designed to prevent injury to the fish while in transit between the cage and the harvest vessel. The animals are not transferred to a separate enclosure prior to harvest, but instead are moved into a portion of their existing enclosure. Stunning is highly effective and the animal is bled before it can regain consciousness. A supervisor is always on hand to monitor the effectiveness of stunning and bleeding procedures.

E N V I R O N M E N TA L C A R E

KEY INDICATORS • Improve feed conversion rate (FCR)

• Improve feed and diet (non-GMO ingredients, alternative marine ingredients like algae)

REPORTING OUT We do not use anti-inﬂammatory, hormone, and/or growth promotion treatments on our fish. At Open Blue, we’re working on a number of different ways to continuously improve our feeds. In all the research we do, our goal is to develop feeds that meet the nutritional requirements of cobia while still allowing our animals to thrive. Part of this process of refining feed formulations involves finding new sources of protein to replace some of the fishmeal and fish oil in our feeds. We believe it is possible to source responsibly produced proteins, either plant-based, derived from fish processing by-products, or responsibly produced land animal proteins that will provide necessary nutrients to our fish without compromising their health or well-being and maintaining health benefits for our consumers. We are working with the feed suppliers to develop the most efficient, most digestible, healthiest feed available. We are currently continuing to assess this knowledge through in-house research, and collaborative research with our feed suppliers. In 2017 we fully expect to have a complete comparison of three different diets and some additional palatability testing. It is intended that these new diets will assist us to meet our goals of protecting our fish health, reducing our reliance on capture fisheries and ensuring the great taste and nutrition our customers expect. The feeding process is carefully controlled using underwater cameras, diver inspection and sophisticated computer modeling to ensure the right amount of feed is given to the quantity and biomass of fish.

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KEY INDICATOR • Decrease mortality REPORTING OUT Our total mortality is attributed to several potential causes with pufferfish (Tetraodontidae) contributing to the largest part of this. KEY INDICATOR • Improve Cobia-specific vaccines and eliminate antibiotic use

• Total mortality down in 2016 (20.5%) from 2015

(30.0%). Forecast mortality by puffers in 2016 (7.5%) is higher than in 2015 (5.6%) due to severity of bloom at the beginning of 2016

REPORTING OUT

• Mortality by causes other than puffers (e.g. disease)

In 2014 we began testing available commercial vaccines and began the development of a vaccine specific for Cobia. We learned that commercial vaccine development for warm-water fish was still quite limited but our strong interest in pursuing this made options viable. Our Cobia-specific vaccines are now in the third generation of development and we are completing our understanding with efficacy trials currently underway.

significantly reduced from 2015 (24.4%) to 2016 (13.2%)

• We anticipate the reduction in mortality as the result

of the effect of vaccines. To validate this, challenge tests are underway with results expected in Q4 2017. Research results will be used as the basis to improve effectiveness of current vaccines

If medication is used, it is mixed in the feed to insure maximum uptake by the fish and no waste to the surrounding environment. Fresh water and hydrogen peroxide baths are among the non-antibiotic techniques used by Open Blue to maintain fish health. We do not use anti-inﬂammatory, hormone, and/or growth promotion treatments on our fish.

Mortality disposal Mortalities carefully handled and properly stored are ingredients for other purposes such as animal or pet feeds. Our mortality and processing plant byproduct ingredients go to a rendering plant in Panama for this purpose which reduces issues of odor and disposal capacity.

grams AB/MT biomass 8

1800

4500

1600

1400

4000 3500 3000

2500

2000

1500

Mortality %

5000

1200 1000 800 600

400

500

200

Mortality

• Undergoing vaccine efficacy tests in Aquatech Center in Canada. Results expected Q2 2017

-1

-1 1

17 20

-9

AB/Prod 12-month

• Very significant downtrend continues during 2017

-7

16 20

-5

16 20

-3

16 20

-1

16 20

-1 1

16 20

-9

15 20

-7

15 20

-5

15 20

-3

15 20

-1

15 20

-1 1

15 20

-9

14 20

-7

14 20

-5

14 20

-3

14 20

-1

1000

g of AB/MT of biomass production

Antibiotic Use

AB/Prod

2015

2016

12mo YTD 2017

E N V I R O N M E N TA L C A R E

KEY INDICATOR • Eliminate shark attacks and net integrity issues REPORTING OUT

External parasites All wild and raised fish, the world over, are affected by common external parasites which pose no threat to consumers. The strong ocean currents in the deep water pens mitigate many potential problems faced in aquaculture. We track the health of our Open Blue Cobia very closely throughout their lifecycle. We monitor for a range of fish health signals, and one of the things we watch for are any parasites on the fish. We sample all sea pens once per week. The trigger level for treatment is 2 parasites per fish. Fish treatments vary but generally we use a bath treatment approximately twice per grow out cycle. We treat our fish with hydrogen peroxide (H2O2) using a tarp structure to bathe the fish. Hydrogen peroxide is an effective treatment for parasites. It breaks down quickly into water and oxygen. It does not accumulate in sediment. There is no withdrawal period for the fish following the treatment. It is listed by the third-party certification group the Aquaculture Stewardship Council as the only parasite treatment with a 0 rating for persistence and toxicity in the environment

The containment mesh of the SeaStations™ is made of rigid netting with a tensile strength of 45kN/m that cannot be severed by sharks or obstruct marine mammals. As a result of the replacement of all of the SeaStation™ netting completed in January 2016, shark attacks and the resulting holes are now resolved.

KEY INDICATOR • Enhance genetic improvement program (survival, shorter grow out) REPORTING OUT Let us begin by stating clearly that our Cobia are not genetically modified. The overall purpose of our genetic improvement program is to develop broodstock selection criteria to reduce the feed conversation ratio (FCR) and increase economic and environmental profitability. Resistance to parasites, offsetting deleterious effects of puffer fish, disease resistance and improvements in feed conversion ratios are all seen as important and necessary evolutions in learning how best to grow this emerging species. Fish that are hardy and robust will have the ability to offset some of these inevitable challenges. Evaluating new genetic stocks of Cobia to improve health and productivity is seen as a key measure of Open Blue’s commitment to excellence. With our current broodstock population this will assist us to establish a genetically diverse broodstock program that will provide ongoing selection for survivability traits, maturation and production efficiency.

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Ocean health Increasing our knowledge base on the marine environment provides perspectives on other measurements that may be useful.

• Expanded baseline data collection project will provide potential signals of changes in marine environment. Sampling and analysis of wild fish near farm locations will expand this data and prove useful in the future

• Algae monitoring in place since 2014. Data sets will be analyzed to provide perspectives on potential ocean changes

KEY INDICATOR

• Monitor benthic and water discharge and design adequate fallow strategies

REPORTING OUT Open Blue has developed a world-class benthic monitoring program to measure any changes in the surrounding waters and ocean floor sediment. We monitor total organic carbon to measure the health of the seafloor under the structures. We do not see any significant impact to the seafloor and this is by design, because our enclosures are located in very deep water and we employ strict feed management practices. There is a minimally traceable increase in the level of organic carbon downstream. In 2017, we are expanding the program to add semi-annual testing for sulfide and redox - standards used to measure impact on the ocean floor.

• Expanded knowledge of benthic monitoring using

sulphide and redox in addition to carbon will align our findings with best practice and provide additional insights into potential impacts on the ocean floor

• Project with ENGO MarAlliance to identify shark populations on Caribbean coast

• Identification of potential skilled specialists within

Panama through Senacyt to build a strong network of marine resources to increase environmental stewardship

Benthic monitoring allows us to:

• Assess our impacts on ocean ecosystems: Excess

nutrient input (feed/excreta) can alter sediment chemistry, disrupt community ecology, and may even interfere with farming operations

• Comply with Panamanian Law and Third-Party

Certification Requirements: Panamanian law requires semi-annual sediment sampling. BAP and ASC have similar, although more robust requirements

• Improve our Feeding Efficiency: Monitoring the

content of organic matter in sediment can provide some insight into the utilization of feed and timing of feed release. This information can be used to further optimize feeding practices

E N V I R O N M E N TA L C A R E

KEY INDICATOR • Monitor algae and plankton

KEY INDICATOR • Monitor wild fish populations

REPORTING OUT

Algae occur naturally in marine waters. At Open Blue we monitor algae and plankton to assess any changes in ocean conditions.

In order to learn more about potential interactions between farmed and wild fish near the SeaStations™, an extensive research program was designed and implemented in 2015. It consists of several phases - see below.

Research on wild fish update February 2017 1. Meets vision “in harmony with the ocean”

2. Satisfies ASC requirement

• Understand changes

• 5.1.2. A demonstrated commitment to collaborate

• Manage any effects

with NGOs, academics and governments on areas of mutually agreed research to measure possible impacts of pests or parasites on wild stocks

Phase One 2015 » complete

Phase Three 2017 » 2019

• Baseline study review

• Sampling and testing of wild fish—involve divers

• Fish Health Plan developed

• Review white paper findings with staff and

• Record keeping • Vaccine development • ENGO meetings (WWF, MarAlliance, MarViva) • University meeting Phase Two 2016 » underway

• Conduct literature review to identify wild fish in area, common pathogens and parasites

• Develop intern program • Form steering committee

steering committee

Phase Four ongoing & starts 2017

• Tools for better understanding • Implementation of findings • Adjustments in planning for fish health

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F U L L A C C O U N TA B I L I T Y

PILLAR 2

Compliance & certifications We exceed the highest standards in the mariculture industry, and comply with all regulations and third-party certifications. Every day we look for more ocean-friendly, fish-friendly and human-friendly ways to do business. Our commitment to structured, continuous improvement keeps us at the forefront of our industry.

2016 highlights

2017 targets/goals

• 100% success rate with continued

• Full Aquaculture Stewardship Council (ASC)

• 100% success rate with new certifications

• Retain 5 certification standards earned in 2016/2017

certifications: Global Gap and Friend of the Sea

for 2017: 3-star Best Aquaculture Practice, British Retail Consortium (BRC) and ISO 9001 2015

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compliance by Q3 (ASC released Cobia-specific standards in late 2016)

• Recycling plan across all operations

Measuring and managing our progress.

SUSTAINABILITY REPORT | 2016

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Accountable actions KEY INDICATOR • Comply with all laws and government regulations REPORTING OUT Doing business in Panama In Panama, there are regulations, laws and guidelines that govern how we operate our business. The main laws are based on a foundation of codes of conduct which detail explicitly the rules the company must follow. The Panamanian government is responsible for ensuring that our business is conducted in a way that protects the environment, our workers and the consumer.

There are also compliance elements required for the hatchery and processing plant specifically around norms related to discharges and of course there are required permits for operating boats, worker safety and import and export permits for products goods and services. Through our regulatory affairs and certification department we conduct internal inspections to ensure that we are meeting regulatory and certification requirements and where necessary take appropriate steps to correct our activities.

• Ministerio de Ambiente which oversees permitting,

Reporting to government includes monitoring of the sediments, monitoring of coral reefs, monitoring of the wastewater from the hatchery, ambient noise, incidence of lightning, monitoring and protection of sea turtles, health permit for operation, certified food handlers certificate as well as regular reporting on any environmental impact studies associated with our operations.

• Autoridad Nacional de los Recursos Acuáticos which

KEY INDICATORS • Conduct regular financial audits - Ongoing

The government issues the concessions for the farm location sites and regulates the activities there. They do this primarily through three agencies:

discharges, Environmental Impact Assessment (done prior to farm being situated) and offshore concessions

oversees the offshore operations

• Ministerio de Desarrollo Agropecuario which provides oversight for health certifications and treatments

F U L L A C C O U N TA B I L I T Y

Measured progress KEY INDICATOR â&#x20AC;˘ Comply with all certification standards and audit requirements

Certification road map The recently completed audits in Q 4 2016 for Global Gap, Best Aquaculture Practice and Friend of the Sea conducted by internationally recognized auditing firm SAI Global represents a significant step forward for certification alignment within the aquaculture sector. As well our company has successfully completed two other audits in Q1 2017: BRC and ISO 9001.

REPORTING OUT Third-party oversight In addition to the government regulations and oversight, Open Blue has achieved several standards subject to third-party audit.

Each of these standards provides an important focus for different customers so instead of limiting their options, Open Blue determined that by working through a spirit of collaboration they would be able to achieve a comprehensive audit that meets all customer requirements.

ISO 9001: 2015 GLOBAL GAP THREE STAR BAP FRIEND OF THE SEA BRC GLOBAL STANDARDS Kosher Halal

Open Blue was pleased to see the release of ASC standards for Cobia announced by the Aquaculture Stewardship Council in November 2016. We expect to complete full ASC compliance by Fall 2017.

Standard map for Open Blue 4 Disciplines of Execution Overall Goals for Open Blue ISO 9001 P Foundation for Quality Management Systems (QMS) P GG P BAP P FOS

Great Place to Work

P BRC

ASC

Executive Team Engagement - Review and Approval

Monterey Bay Aquarium

SUSTAINABILITY REPORT | 2016

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KEY INDICATOR • Pursue new third-party recognitions

KEY INDICATOR • Quantify benefits of open ocean mariculture

REPORTING OUT

Pending certifications

Conducted indepth research review of benefits of open ocean mariculture. Final report titled “Technology and the Environment. Investing in deep water open ocean mariculture – a sustainable choice for the future.” (June 2016)

• Aquaculture Stewardship Council (ASC) • Monterey Bay positive ranking • Human Resources Great Place to Work - rise in score

SOCIAL RESPONSIBILITY

PILLAR 3

Well being & community

2016 highlights •

Highest levels of Omega-3 in a whitefish

• $14.5+ million in services and supplies

contracted from over 850 Panamanian companies

• 5 community projects funded •

Reduced diver/shark interactions with 100% replacement of all nets with shark resistant Kikko netting

• 48 educational scholarships awarded

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Caring for our people, customers and communities.

SUSTAINABILITY REPORT | 2016

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Our employees At Open Blue we have a dynamic work team blending worldwide expertise with a passion for hard work and the importance of families that is a strong part of the Panamanian character where we do most of our business. We support diversity and inclusion and hiring locally is a key factor for our operations in Panama. Our

workers have a wide range of education and expertise from veterinary science to marine biology to engineering.

KEY INDICATOR • Enhance health and safety

KEY INDICATORS • Improve Great Place to Work ranking

REPORTING OUT

• Facilitate career planning paths

A significant step forward in Health and Safety was taken in 2015 with a new hire to lead this function. Brigades have been established at each location with regular inspections, follow ups, safety training for all employees. Incident and accident reporting has been established. In Q1 2017 a paramedic was hired to work in Costa Arriba. This expanded support provides additional assurance to our staff.

REPORTING OUT

We employ 221 individuals that work in the hatchery, site base and offshore operation, processing facility, and sales and administration office.

We are growing – both in size and learning – as we continue our commitment to enhance day-to-day workplace culture, increase productivity and improve operations. We understand that great workplaces are built through the day-to-day relationships employees experience. Since 2014, Open Blue has been actively working to better support all of our employees – from the front line to the senior leadership team. Using Great Place to Work standards and methodologies, we have been making steady progress in key areas. Two of the objectives where we have seen significant improvement are improving career planning paths for employees, and reducing the turnover of staff. When we began this process, we received a ranking of 71 which was lower than the Panamanian average of 73. In 2016 the overall ranking dipped slightly to 68. Additional work continues to strengthen our teams and provide more opportunities for collaborative exchange. Adding regular town hall meetings and family days are just two of the ways we have learned to create ongoing opportunities to provide tangible opportunities for improved dialogue across Open Blue.

SOCIAL RESPONSIBILITY

Our communities The local communities in the Costa Arriba region where we operate are important to our company. Our local employees live in these communities and the continued health and well-being of the community members is important to us. We contribute to the communities in the areas where we work in several ways â&#x20AC;&#x201C; most significantly through employment and purchasing of local goods and supplies. In 2016, over 850 Panamanian companies provided

us with a range of different services and supplies that totaled more than $14,500,000. We utilize a wide variety of contractors and service providers from Panama including in Costa Arriba Colon province where our farm and hatchery facilities are located. Waste disposal, concrete construction, and vessel maintenance, for example, are all jobs that have been outsourced to Panamanian firms.

SUSTAINABILITY REPORT | 2016

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KEY INDICATOR • Identify new Open Blue Costa Arriba Fund community projects

KEY INDICATOR • Expand scholarship program beyond elementary levels

REPORTING OUT

Education and health are our priorities: Open Blue invests in community projects, such as education (identified as a top priority by the community), and clean drinking water projects (a critical resource lacking in the community). Each year we fund 48 scholarships and assist with bus maintenance to ensure that students have access to education.

We are exploring expanding our annual scholarship program to high school and post-secondary levels.

In 2016, Open Blue collaborated with the Panamanian government to connect local primary schools in Costa Arriba with the Ministry of Education and encouraged increased educational investment. We plan to extend our scholarship program to the secondary and university levels. Open Blue has also drilled community wells to increase access to clean drinking water. Other community projects throughout the past five years included assistance with emergency medical needs and natural disaster relief. In 2016 we committed to supplying Cobia to the Panama Food Bank. We are original supporters of local beach cleanups as part of annual Oceans Day activities.

KEY INDICATOR • Continue to build relationships with community members and elected officials REPORTING OUT We hold community meetings every year to find out from citizens what their needs are, answer any questions and provide information about our company’s future plans. We then incorporate this information into our planning and resource allocation decision making process. In addition we meet regularly with elected officials to resolve any questions or issues that they wish to raise with us.

SOCIAL RESPONSIBILITY

Our customers At the heart of our endeavor is delighting our customers with every Open Blue experience through their selection of Open Blue Cobia to nourish themselves; to help them achieve their own sustainability goals and to encourage them to pass the word along to others to join in our journey.

Our open-ocean harvested Open Blue Cobia is the most versatile year-round white fish on the market. With a rich buttery flavour and perfect texture, it is delicious cooked or raw, making it ideal for sashimi, filets and steaks.

KEY INDICATOR • Provide a consistent and trusted supply of fish

KEY INDICATOR • Back Omega-3 levels with nutritional testing

REPORTING OUT

Our third-party certifications (page 24) back up our own findings that we produce a pure, healthy, great tasting white fish – super high in Omega-3s and free of contaminants, hormones, colorants and pesticides.

Independent, third-party research shows Open Blue Cobia as having the highest Omega-3 fatty acid content among all other tested species, including farmed Atlantic salmon. It was also compared to other premium species such as farmed yellowtail kingfish, Chilean sea bass, farmed barramundi and land protein sources and in all cases Open Blue Cobia outperformed by very significant amounts. It is particularly high in EPA and DHA (total of 3.3 g / 100 g), the fatty acids that promote heart health, cognitive development and have anti-aging properties.

Open Blue Cobia was recently crowned “Best New Foodservice Product 2017” at the Seafood Expo North America for its frozen, individually vacuum packed cobia filet. Healthy and delicious, the Open Blue Cobia frozen fillet is prized by chefs for its tremendous versatility in the kitchen. Easy to prepare and sashimi-grade quality Open Blue Cobia is equally good served raw for sushi, sashimi, poke or ceviche preparations as it is pan-fried, grilled or steamed for use in either Asian or Western style dishes.

Our customer base is broad and diverse, and includes top end chefs and retail operations around the globe.

These results can be traced back to Open Blue Cobia’s natural and nutritious diet, and the low-stress, high energy environment where it grows. Our innovative platform creates healthy fish that is naturally high in Omega-3. Sources: Super Seafood, Australian Seafood Cooperative research Center 2014; Eurofins Cobia Analysis Report; Seafood Source.

SUSTAINABILITY REPORT | 2016

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Employee profiles

Javier Visuetti, Government and Community Relations Manager

Abed Camarena, Regulatory Affairs Officer

Carolle Rohim, Certification Manager

Trained as a microbiologist Javier began his career in aquaculture working in the shrimp business. Javier graduated from the University of Panama with a degree in Microbiology and Parasitology. He has worked for twenty years in aquaculture in fin fish and shellfish and joined Open Blue in 2009 managing the companyâ&#x20AC;&#x2122;s hatchery and spent time working with the production team offshore. Javier brings a strong social commitment to the communities where Open Blue works and leads a focused team to ensure overall regulatory compliance and strong community partnerships especially in the Costa Arriba region.

Abedâ&#x20AC;&#x2122;s role is environmental affairs officer. In this capacity he works to identify areas of opportunity for Open Blue to exceed legal requirements for world class environmental management. One area of emerging interest in panama is recycling. As options began to open up for collection of recyclables, Abed took a special interest in supporting the company to adopt a company wide four site plan to manage recycling activities. The recycling centre in Ciudad del Saber is the drop off point for cardboard, plastics, paper, cans and glass. Abed worked with all members of the Open Blue team to install recycling containers, set up and initiated a schedule of pick up and delivery and continuous improvement of the program. Plans for the future include quantifying the amount of recycled material and working with Ciudad del Saber to celebrate National Recycling Day in Panama.

Going from one standard -Global Gap achieved in 2014, Carolle has worked with the Open Blue team to achieve five standards across the company, with more on the radar moving forward. Achieving standards is an important benchmark for Open Blue to demonstrate through third-party audits that we are meeting or exceeding standards of excellence which are then objectively assessed. Carolle started with Open Blue as a Quality manager at the processing facility. Using the excellent practices she put in place there, she joined the Office of Sustainability in 2016 and moved forward to train and develop internal audit teams throughout the company. Building good auditor relationships is also a key success factor and Carolle has handled that role with diplomacy and skill.

SUSTAINABILITY REPORT | 2016

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Open Blue SeaStationsâ&#x201E;˘ is a pioneer and leader in deep water open-ocean raised fish. We produce fresh and frozen whole, filleted and portioned Cobia (Rachycentron canadum) of Panamanian origin. Our fish are grown in submersible enclosures in the largest deep water open ocean mariculture site in the world, 8 miles off the Caribbean coastline of Panama. Our fish have plenty of room to grow in these large, deep water pens and we produce a thriving source of premium fish. Our offshore operations are the culmination of a decade of cutting-edge investigative research on deep ocean mariculture, in collaboration with the worldâ&#x20AC;&#x2122;s leading scientific laboratories and universities.

QUESTIONS? Mary Ellen Walling, Chief Sustainability Officer info@openblue.com

openblue.com