Cornucopia’s Take: The Office of the Inspector General released their audit of the National Organic Program (NOP) in September. They found that the NOP’s controls over U.S. ports of entry are inadequate and equivalency agreements with other countries lack transparency. Cornucopia has filed a rulemaking petition with the USDA to strengthen import oversight.
Audit: USDA’s organic import controls ‘inadequate, lack transparency’
Sustainable Food News
Agency’s Office of Inspector General’s audit makes 9 recommendations to Nat’l Organic Program
A just-released audit by the USDA’s Office of Inspector General (OIG) is calling the National Organic Program‘s (NOP) controls over organic products fumigated at U.S. ports of entry “inadequate,” and its process for determining another country’s equivalency of organic standards as “not transparent.”
The audit of the NOP, which is housed within the USDA’s Agricultural Marketing Service (AMS), was aimed at assessing controls over the approval and oversight of NOP’s international trade arrangements and agreements for the import of organic products into the U.S. market.
More specifically, the OIG, which regularly conducts independent audits and investigations of the USDA’s programs and operations, reviewed whether exporting countries’ organic standards are equivalent to USDA’s organic standards, and if organic imports comply with the standard.
Imported food and agricultural products that are to be sold or labeled as organic in the U.S. market may be certified by NOP-accredited certifying agents either under an equivalency arrangement or under a recognition agreement.
An equivalency arrangement is used for foreign countries whose organic standards are at least equivalent to NOP standards. A recognition agreement is used for foreign countries that do not have organic standards in place or whose organic standards are not equivalent to NOP standards.
In 2005, AMS implemented NOP instructions for accepting, processing, and making final determinations on equivalency arrangement and recognition agreement requests from foreign countries.
The USDA currently maintains organic equivalency arrangements with Canada, implemented in 2009; the European Union (EU), implemented in 2012; and Japan and South Korea in 2014; and Switzerland in 2015. Recognition agreements are currently in place with New Zealand (2002); India (2006); and Israel (2006).
The USDA also has an “export arrangement” with Taiwan (2009), where the Asian country recognizes the USDA’s organic regulations to allow U.S. organic imports, but, as of yet, the USDA does not reciprocate. The USDA continues to negotiate with Mexico on establishing organic equivalency agreement.
The audit’s four main findings were:
- Organic standards’ equivalency determination process was not transparent
- NOP organic import documents were not verified at U.S. ports of entry
- Controls over organic products fumigated at U.S. ports of entry were inadequate
- Onsite audits of foreign countries that maintain equivalency arrangements or recognition agreements with USDA were not conducted timely
Audit’s four findings explored
1) Organic standards’ equivalency determination process was not transparent – “The lack of transparency could result in reduced U.S. consumer confidence in the integrity of organic products imported into the United States,” the audit said.
The OIG said it reviewed and evaluated the determinations made for all five current equivalency arrangements and found that the side-by-side comparisons of organic standards identified differences in organic standards for all five equivalency arrangement requests.
For example, one equivalency arrangement identified 68 procedural and 28 technical differences between organic standards. In this case, the equivalency arrangement determination letter contained a provision requiring wine to be produced and labeled according to NOP regulations and a provision prohibiting products derived from animals treated with antibiotics.
The problem was that NOP officials did not document and disclose the final resolution of all identified differences in organic standards, so it could not conclude that these differences were resolved.
“We concluded that the equivalence determination process lacked the transparency that would allow interested parties and the public to understand the basis for NOP’s equivalence determinations,” the audit said.
2) NOP organic import documents were not verified at U.S. ports of entry – “Without controls in place at U.S. ports of entry to verify the authenticity of organic import certificates, non-organic products may be imported as organic, if unscrupulous parties are willing to use fraudulent organic import certificates,” the audit said.
The NOP has reported 83 fraudulent organic certificates since it began disclosing the records in 2011, 37 of them since April. The audit said that AMS was unable to provide reasonable assurance that NOP required documents were reviewed at U.S. ports of entry to verify that imported agricultural products labeled as organic were from certified organic foreign farms and businesses that produce and sell organic products.
While the NOP requires import certificates to accompany shipments of organic agricultural products entering the United States as part of its equivalency arrangements, AMS has not formally requested assistance from other federal agencies in reviewing NOP import certificates at U.S. ports of entry to ensure NOP requirements are met.
3) Controls over organic products fumigated at U.S. ports of entry were inadequate – Imported agricultural products – both organic and conventional – are sometimes fumigated at U.S. ports of entry to prevent prohibited pests from entering the United States.
The audit concluded that AMS had not established controls at U.S. ports of entry to identify organic products that have come in contact with prohibited substances due to treatment for eradicating pests.
“As a result, U.S. consumers of organic products have reduced assurance that foreign agricultural products maintain their organic integrity from farm to table,” the audit said.
4) Onsite audits are not conducted timely – The audit found that one of the five equivalency arrangement audits was not done within the expected two- to three-year timeframe and all three recognition agreement audits were not done within the two-year requirement.
“As a result, foreign governments could have reduced confidence in NOP’s ability to honor its commitments in enforcing the terms of equivalency arrangements and recognition agreements,” the audit said.
The OIG also found that , although AMS established performance measurements for conducting onsite audits of NOP-accredited certifying agents, it did not establish performance measurements for conducting onsite audits of foreign countries that maintain equivalency arrangements or recognition agreements.
OIG’s 9 recommendations
OIG offered nine recommendations to the NOP to build on existing policies and procedures, including:
- Prior to issuance of future U.S. equivalence determination letters, develop and implement a procedure to document and disclose the final resolution of all foreign country organic standards identified as having differences from USDA organic standards.
- Execute a Memorandum of Understanding (MOU) between AMS and Customs and Border Protection (CBP) to obtain assistance from CBP officials in reviewing NOP import certificates from countries with established equivalence arrangements at U.S. ports of entry.
- Request CBP to update the Automated Commercial Environment (ACE) system message sets to provide CBP officials with instructions for reviewing NOP import certificates at U.S. ports of entry and the actions to take if they are not found.
- Develop and implement a plan to verify NOP import certificates at U.S. ports of entry, identify fraudulent import certificates, and capture organic import data.
- Execute an MOU between AMS and APHIS to ensure that APHIS officials notify NOP officials when imported agricultural products are treated with NOP-prohibited substances at U.S. ports of entry.
- Request CBP to update the ACE system message sets to ensure APHIS officials are notified of steps to take when organic agricultural imports are treated with NOP-prohibited substances at U.S. ports of entry. The steps should include a mechanism for the ACE system to notify APHIS officials to provide a copy of the EAN form that includes notice to importers that treated organic products can no longer be sold, labeled, or represented as organic.
- Develop and implement a plan for creating and implementing procedures for tracking organic products treated with NOP-prohibited substances at U.S. ports of entry and ensuring those products are not sold, labeled or represented as organic.
- Develop and implement performance measurements to collect, analyze, and report to management regarding the timeliness of onsite reviews for foreign countries that maintain a recognition agreement or equivalency arrangement with USDA.
- Revise NOP Handbook NOP 2100 to include the requirement that NOP officials conduct onsite audits of foreign countries that maintain equivalency arrangements with USDA every two years.
The AMS responded to the OIG’s audit recommendations on Aug. 10, saying it accepted the OIG’s findings and outlined several projects already underway to improve oversight.
Response 1: To ensure greater transparency when establishing future equivalency arrangements, AMS will develop and implement a procedure to clearly document and disclose the final outcome of the variances from the side-by-side analysis of organic standards to assure interested parties and the public that all variances were resolved in a way that justifies the equivalence determination. AMS plans to complete this request by July 2018.
Response 2: While AMS supports establishing an MOU with CBP to obtain assistance in reviewing NOP import certificates at U.S. ports of entry, CBP officials have expressed to AMS that they have limited capacity to take on additional responsibilities and no current authority to review organic imports or NOP import certificates. In light of those concerns, AMS proposes to first develop a report outlining how AMS and CBP could collaborate in these areas under existing authorities, and present it to CBP by December 2017. If an MOU is deemed practical by both parties, AMS will work with CBP to implement a formal MOU by July 2018.
Response 3: AMS will request that CBP update the ACE system message sets to provide CBP officials with instructions for reviewing NOP import certificates from countries with established equivalency arrangements at U.S. ports of entry. AMS’ request will include instructions that would enable CBP to take appropriate action (e.g., hold product, notify AMS) when NOP import certificates are not found according to message set instructions. AMS plans to complete this request by July 2018.
Response 4: AMS will prepare a needs assessment for an organic verification system that validates organic import certificates, identifies fraudulent certificates and captures organic trade data. This needs assessment would form a baseline for future technology development work as resources become available. AMS plans to complete the needs assessment by July 2018.
Response 5: On January 23, 2017, an MOU was executed to document the collaborative efforts between APHIS and AMS in identifying imported organic shipments of agricultural products that, prior to importation into the United States, are treated for plant pests or are treated as a condition of entry.
Response 6: AMS is working with APHIS to develop mechanisms within the APHIS EAN system to identify, track, and ensure that treated organic products are not sold, labeled or represented as organic. AMS plans to implement these mechanisms by July 2018.
Response 7: AMS and APHIS are establishing procedures to notify importers and certifiers when organic products are treated and can no longer be sold, labeled, or represented as organic. AMS plans to implement these procedures by July 2018.
Response 8: AMS already has a system to monitor audit frequency for accredited certifiers. The audit monitoring system will be used to collect, analyze and report to management the timeliness of the onsite reviews AMS conducted of recognition or equivalence partners as a performance measurement. AMS plans to implement these performance measurements by July 2018.
Response 9: AMS will revise NOP 2100 Equivalence Determination Procedures to require NOP officials to conduct onsite audits of foreign countries that maintain equivalency arrangements every 2 years. Once finalized, NOP 2100 will become part of the AMS-NOP’s quality management system. AMS plans to revise NOP 2100 by July 2018.
Read the full audit “National Organic Program International Trade Arrangements and Agreements.”
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