New Zealand to help Chinese food giant in safety

Xinhua reports that China National Cereals, Oils and Foodstuffs Corporation (COFCO), the country’s largest agricultural and food products supplier, has signed an agreement with a New Zealand government-owned food safety firm and a multinational business consultancy to improve China’s food safety and quality.

AsureQuality_logo_737x160COFCO signed the agreement with food safety service firm AsureQuality and PricewaterhouseCoopers (PwC) on the sidelines of the APEC (Asia Pacific Economic Cooperation) leaders meeting in Beijing, said a statement from PwC’s New Zealand office on Monday.

Drawing on leading New Zealand and international food and agricultural models, AsureQuality and PwC would support COFCO in embedding best practice in food safety and quality across the food and agriculture industries.

AsureQuality claims to have 1,700 experts working in 60 locations in Australia, China and Singapore. 

Judge denies dismissal in PrimusLabs cantaloupe cases

The Packer reports that a Colorado judge has refused to dismiss at least 24 cases filed against PrimusLabs by victims and their families related to the 2011 listeria outbreak involving cantaloupe from Jensen Farms.

cantaloupe.salmonellaThe judge also refused to dismiss cross claims filed against PrimusLabs by distributor Frontera Produce Ltd. and Dillon’s, one of the Kroger Co. banners.

Judge Charles Pratt filed orders Oct. 28 requiring the cases to move forward. The cases are among 66 victim cases pending in courts across more than a dozen states.

At least 147 people became sick and at least 33 died because of listeria infections after eating the Jensens’ cantaloupe, according to the Centers for Disease Control and Prevention. The CDC estimates at least 10 other people who had the outbreak strains of listeria had eaten the Jensen cantaloupe, but health officials had not confirmed the link when filing out death certificates.

Judge Pratt sided with the plaintiffs, saying PrimusLabs “knew or reasonably should have known that until it completed the audit the cantaloupe would not be released for sale to the public.”

Seattle food safety attorney Bill Marler, who is directly representing 46 of the victim plaintiffs directly and several more indirectly, declined to comment on Judge Pratt’s refusal to dismiss the cases against PrimusLabs.

In his order denying the PrimusLabs’ request to dismiss the victim cases and the cross claims filed by Frontera and Dillon’s, Judge Pratt said he is bound by law to allow the cases to proceed.

Here’s what we think of audits:

Audits and inspections are never enough: A critique to enhance food safety

30.aug.12

Food Control

D.A. Powell, S. Erdozain, C. Dodd, R. Costa, K. Morley, B.J. Chapman

Internal and external food safety audits are conducted to assess the safety and quality of food including on-farm production, manufacturing practices, sanitation, and hygiene. Some auditors are direct stakeholders that are employed by food establishments to conduct internal audits, while other auditors may represent the interests of a second-party purchaser or a third-party auditing agency. Some buyers conduct their own audits or additional testing, while some buyers trust the results of third-party audits or inspections. Third-party auditors, however, use various food safety audit standards and most do not have a vested interest in the products being sold. Audits are conducted under a proprietary standard, while food safety inspections are generally conducted within a legal framework. There have been many foodborne illness outbreaks linked to food processors that have passed third-party audits and inspections, raising questions about the utility of both. Supporters argue third-party audits are a way to ensure food safety in an era of dwindling economic resources. Critics contend that while external audits and inspections can be a valuable tool to help ensure safe food, such activities represent only a snapshot in time. This paper identifies limitations of food safety inspections and audits and provides recommendations for strengthening the system, based on developing a strong food safety culture, including risk-based verification steps, throughout the food safety system.

Recent research on third-party audits

Ronald Doering, the first president of the Canadian Food Inspection Agency and the only one I can remember, writes in his Food Law column:

ron.doeringUntil recently there has been little serious research on the most significant food safety advance in the last decade, a develop­ment that has been entirely outside the realm of public law — the extraordinary growth of third-party supplier audits. There are now over 500 food safety audit firms, many of which have global operations.

The Food Safety Service Providers, an industry association representing nine leading private food safety audit firms, asserts that its members alone conduct more than 200,000 audits and inspections in more than 100 countries each year. It has been estimated that in the U.S. the scale of private food law auditing activity is now 10 times larger than that of the federal government, more than all federal and state efforts combined. Two recently published academic studies provide inter­esting insights into several aspects of this important new area of food law.

Audits and Inspections Are Never Enough: A Critique to Enhance Food Safety (Food Control, vol. 30, issue 2) by Douglas Powell et al. identifies the many limitations of third-party audits and doc­uments several cases of major foodborne illness outbreaks linked to food proces­sors that have passed third-party audits. Audits need to be supplemented by other measures such as microbial testing, and companies must have in-house capacity to meaningfully assess the audit results. Third-party audits are part of “a shift in food safety governance away from government regulation and inspection towards the development of private food safety standards.” This study represents a cogent caution to the audit industry that they must improve their systems, and a warning to the food industry that audits are never enough.

doug.ron.2.jan.13In the latest Wisconsin Law Review American law professors Timothy D. Lytton and Lesley K. McAllister (Oversight in Private Food Safety Auditing: Addressing Auditor Conflict of Interest, 2014) provide the first comprehensive analysis of one of the most serious problems with private food safety auditing — auditor conflict of interest. Auditors are paid by the company being audited. Suppliers have an interest in finding the cheapest and least intrusive audit that will provide a certificate, and auditors have a financial incentive to reduce the cost and rigour of audits to get business in a very competitive environment. This study analyzes several oversight mechanisms that have been developed to mitigate the conflict problem, but concludes that at this time there are still too few financial incentives to assure more rigorous auditing.

Considering how few inspections are actually carried out by the Food and Drug Administration (FDA) relative to the number of businesses it is responsible for, it is ironic that the U.S. has been so reluctant to embrace more fully the advantages that third-party audits represent. Perhaps this is because President Obama is so beholden to consumer activist groups that do not trust the in­dustry, believe that only FDA inspectors can stop big bad food companies from poisoning consumers, and who refuse to recognize that it is private audits that are increasingly the drivers of enhanced food safety. Obama has declared that it is the state that has the primary responsibility for food safety, and the former FDA com­missioner dismissed audit schemes as being merely “a business strategy, not a public health strategy.”

In Canada we have always recognized that while it is a shared effort, practically and legally it is food producers that have the primary responsibility for food safety. Industry recognized some years ago that they couldn’t meet this responsibility adequately just by complying with gov­ernment regulations — that they could protect their brand from recalls, minimize foodborne illness law suits, source ingredi­ents widely and trade internationally only if, among other things, they insisted on warranty agreements from suppliers and that these were backed up by independent third-party audits. There are many legal and other problems with these relatively new instruments at this still early stage in their development, but they’ve come a long way in the last 10 years.

Finding ways to better integrate public law-based food safety regulations with private law-based certification systems may prove to be one of our more inter­esting challenges in the decade ahead.

Defense attorney grills former peanut plant manager in trial linked to Salmonella outbreak

Defense attorneys for three people charged in a deadly salmonella outbreak sought to deflect blame and poke holes in the government’s case Tuesday as they questioned a co-defendant, who is a key prosecution witness.

PCA.AIB.certificateThe co-defendant, Samuel Lightsey, was a former manager of a Georgia peanut processing plant blamed in the 2008-09 outbreak. He was indicted along with his former boss, Peanut Corporation of America owner Stewart Parnell, and two others. Lightsey pleaded guilty in May after reaching a deal with prosecutors.

The 76-count indictment accuses Parnell and his brother, food broker Michael Parnell, of shipping tainted products to customers and covering up lab tests showing they contained salmonella. It also charges Stewart Parnell and the plant’s quality assurance manager, Mary Wilkerson, with obstructing justice.

Tom Bondurant, an attorney for Stewart Parnell, asked Lightsey about his plea agreement, which recommends that he not serve more than six years in prison. He had been facing decades behind bars.

Bondurant then pointed out that the government’s lawyers could ask the judge for further leniency, including no prison time, if Lightsey’s able to “substantially assist” their efforts.

“So the truth alone is not enough. You need a scalp to make this deal work, don’t you?” Bondurant said.

Bondurant asked Lightsey a series of questions to demonstrate that Stewart Parnell had given him considerable authority over the Georgia plant and relied on him.

“You made decisions every day about how to run the plant, didn’t you?” Bondurant said.

“That’s the job,” Lightsey responded.

Bondurant also had Lightsey review audits predating the salmonella outbreak that showed the plant receiving high marks from inspectors and a box of what he said was nearly 4,000 lab reports, of which about a dozen tested positive for salmonella.

Holding auditors blameless

The N.Y. Times writes an editorial about financial auditing, but use imagination and substitute food safety audit.

audit.checklistMatthew Goldstein of The Times reported this week that an arbitration panel of three former judges has found no basis for a malpractice claim against Ernst & Young, the auditor of Lehman Brothers. The panel held that Lehman and its former executives were “more culpable than EY” for accounting maneuvers that misled investors about the firm’s financial condition before its catastrophic collapse in 2008.

Translation: When it comes to cooking the books, not being as guilty as someone else is the same as being blameless. That sounds appalling, and it is. But it echoes a misguided law from 1995 that set an exceedingly high bar for holding outside auditors liable — along with corporate management — for accounting fraud, a law that has encouraged slippery audits.

Even worse, the arbitration panel acknowledged that Ernst had “some hard data” about what Lehman was up to. What was unclear, the arbitrators said, was whether Ernst “had a duty” to review some of Lehman’s management decisions. But to even raise that question is flabbergasting. If an auditor is not reviewing management decisions that are reflected in the books that are being audited, it can hardly be said to be performing an audit.

Ernst has argued all along that Lehman’s accounting tactics, deceptive or not, complied with generally accepted accounting principles. That may be so, but it is a dubious defense for one of the biggest firms in a profession that is presumably based on integrity.

The problem is larger than Ernst and goes beyond this specific case, which was brought by the holding company charged with recovering and selling Lehman’s assets and paying off creditors. The big auditing firms are virtually never the first to uncover and publicly report financial frauds; credit for that goes to the press, whistle-blowers, hedge funds, independent research firms, bankruptcy trustees or regulators. With each failure by auditors to sound warnings, it becomes increasingly clear that the investing public is being shortchanged when it comes to the reliable information it needs to make sound investing decisions.

AIB.audit.eggsAmong many needed reforms is a revamped system in which audits are paid for not by company management, but by fees that companies pay to a public entity for the purpose of financing audits. In the near term, the Securities and Exchange Commission should require audited statements to be signed by the lead auditor, rather than merely affixing the firm name.

Audits and inspections are never enough: A critique to enhance food safety

30.aug.12

Food Control

D.A. Powell, S. Erdozain, C. Dodd, R. Costa, K. Morley, B.J. Chapman

Internal and external food safety audits are conducted to assess the safety and quality of food including on-farm production, manufacturing practices, sanitation, and hygiene. Some auditors are direct stakeholders that are employed by food establishments to conduct internal audits, while other auditors may represent the interests of a second-party purchaser or a third-party auditing agency. Some buyers conduct their own audits or additional testing, while some buyers trust the results of third-party audits or inspections. Third-party auditors, however, use various food safety audit standards and most do not have a vested interest in the products being sold. Audits are conducted under a proprietary standard, while food safety inspections are generally conducted within a legal framework. There have been many foodborne illness outbreaks linked to food processors that have passed third-party audits and inspections, raising questions about the utility of both. Supporters argue third-party audits are a way to ensure food safety in an era of dwindling economic resources. Critics contend that while external audits and inspections can be a valuable tool to help ensure safe food, such activities represent only a snapshot in time. This paper identifies limitations of food safety inspections and audits and provides recommendations for strengthening the system, based on developing a strong food safety culture, including risk-based verification steps, throughout the food safety system.

Ex-peanut plant head testifies on Salmonella

Wednesday marked Samuel Lightsey’s fourth day of testimony in the trial of his former boss at Peanut Corporation of America, Stewart Parnell, and two others. Peanut Corporation is blamed for a deadly 2008-09 salmonella outbreak that caused one of the largest food recalls in U.S. history.

mr_peanut_warningLightsey testified about documents that showed positive tests for Salmonella; emails sent by company employees to customers telling them to hold the product because of “inconclusive” tests, which Lightsey said were actually positive; and documents that showed water sometimes got into the company’s product, which he said can lead to contamination.

Defense attorneys have not yet started questioning Lightsey, who managed the plant from July 2008 until the company went bankrupt in 2009 following the outbreak. He pleaded guilty to seven criminal counts in May after reaching a deal with prosecutors.

Audits and inspections can suck: UK food watchdog admits chicken factory breached hygiene laws

Roy Stevenson was a senior quality controller for more than a decade at one of the UK’s largest poultry abattoirs, in Scunthorpe, until the end of 2012 when he was made redundant. Owned by the 2 Sisters group, the factory still supplies many leading supermarkets and fast-food chains. After the Guardian investigated this factory and others this year to understand why so much chicken across the industry was contaminated with Campylobacter, Stevenson decided to come forward. He wanted to explain what is was like when he worked there, and why there can be such a gap between what auditors see and what workers feel is the reality on the factory floor

FunkyChickenHiThe government’s food watchdog has been forced to admit that an initial inquiry which cleared one of the UK’s largest poultry processing plants of hygiene failings was misleading.

Instances of chickens being dropped on the floor then returned to the production line, documented by a Guardian investigation into failings in the poultry industry, constituted a “breach of the legislation”, the Food Standards Agency has now acknowledged.

Following the Guardian revelations at the site in Scunthorpe in July, the health secretary, Jeremy Hunt, asked the FSA to investigate. It rated the factory as good and wrote to the shadow food and farming minister saying there was no evidence of any breaches of food hygiene legislation.

But in an embarrassing climbdown less than a month on, the FSA has written to Labour’s Huw Irranca-Davies admitting it was wrong. It has reviewed the Guardian’s undercover footage showing dirty birds from the floor being thrown back into food production and concluded there has been a serious breach. But it has not issued a penalty, saying the company has assured it the problem has been addressed.

The admission comes as fresh allegations of hygiene failings at the factory emerged, with three former employees making claims about dirty chickens contaminating the production line and attempts to manipulate inspections up to 2012.

Labour said the FSA admission and the new questions over safety raised serious questions about the poultry inspection system in the UK.

But now three workers who have been in charge of quality control at the factory in recent years have come forward claiming it was “an almost daily occurrence” for birds to fall on the floor and be put back into the food chain instead of being correctly disposed of as waste. The company initially denied any instances of this happening.

The sources also claimed that auditors were often hoodwinked, even when their visits were supposedly unannounced, as managers slowed production lines and cleaned up poor practice when they were present. One described his responsibility for ensuring production managers followed the company’s own rules on food hygiene and safety as “a war of attrition”.

chicken.wrap.campyThe three new sources were all employed as quality controllers until 2012 at the Scunthorpe site. Roy Stevenson was in charge of a team of quality assurance technicians and worked at the factory for more than a decade until being made redundant at the end of 2012.

“On the day of the audit, all the lines would be slowed to a minimum where it was pristine,” he claimed. “There would be no birds dropping on to the floor, an auditor would walk round and everything would look lovely, unlike any other day.”

Richard Lingard worked at the factory as a quality controller for a few weeks in 2012 before moving on because he said it was impossible to do the job correctly. A third former quality controller with several years’ experience at Scunthorpe in the recent past, who asked for anonymity, described being regularly undermined and bypassed when trying to enforce hygiene rules.

All three claimed birds fell on the floor regularly because the line speeds were too fast for workers to keep up, and they would then be recycled back into the food chain in breach of company policy. They allege that their efforts to stop this happening were undermined by production staff.

In response, 2 Sisters said audits could not be cheated and it had no way of knowing when unannounced ones would take place.

Audits and inspections are never enough: A critique to enhance food safety

30.aug.12

Food Control

D.A. Powell, S. Erdozain, C. Dodd, R. Costa, K. Morley, B.J. Chapman

Internal and external food safety audits are conducted to assess the safety and quality of food including on-farm production, manufacturing practices, sanitation, and hygiene. Some auditors are direct stakeholders that are employed by food establishments to conduct internal audits, while other auditors may represent the interests of a second-party purchaser or a third-party auditing agency. Some buyers conduct their own audits or additional testing, while some buyers trust the results of third-party audits or inspections. Third-party auditors, however, use various food safety audit standards and most do not have a vested interest in the products being sold. Audits are conducted under a proprietary standard, while food safety inspections are generally conducted within a legal framework. There have been many foodborne illness outbreaks linked to food processors that have passed third-party audits and inspections, raising questions about the utility of both. Supporters argue third-party audits are a way to ensure food safety in an era of dwindling economic resources. Critics contend that while external audits and inspections can be a valuable tool to help ensure safe food, such activities represent only a snapshot in time. This paper identifies limitations of food safety inspections and audits and provides recommendations for strengthening the system, based on developing a strong food safety culture, including risk-based verification steps, throughout the food safety system.

Someone has to fall on their sword: six arrested over food safety scandal in Shanghai

Six senior executives of scandal-saddled Shanghai Husi Food have been arrested, Shanghai’s police chief said Sunday, while vowing zero tolerance to food safety crimes.

Shanghai Husi FoodSpeaking on a radio program, Bai Shaokang, vice mayor and head of the public security bureau of Shanghai, pledged harsh punishment for food and drug safety crimes.

“Food safety has a direct bearing on the interests and safety of every household,” Bai said. “We should have zero tolerance toward food and drug safety scandals,” the official said. “They should be dealt in accordance with the law and severe punishment is needed to prevent such crimes from becoming rampant,”he said.

Police authorities should join in the investigations into food scandals from the very beginning, like the case in Shanghai Husi, so as to boost the effects of harsh crackdown, he said.

On July 20, a local TV station reported that Shanghai Husi had supplied products tainted with reprocessed expired meat to a string of fast food chains and restaurants across China. The food safety scandal has spread to Hong Kong and Japan.

KFC-parent Yum Brands has already announced a halt on purchases from OSI China, the parent company of Shanghai Husi.

OSI Group said on July 28 that it would investigate all of its units in China, and build an Asian quality control center in Shanghai.

For victims, tainted peanut butter trial a chance for justice

Tainted peanut butter killed three Minnesotans six years ago. Now, the trial against food executives brings hope of justice.

Maya Rao of the Minnesota Star Tribune writes that six years after Shirley Mae Almer died from eating a slice of toast topped with tainted peanut butter, the Almer family is at last sensing justice could finally be at hand.

PCA.AIB.certificateThey are making plans to fly to Albany, Ga., to attend an extraordinary trial of three executives of a now-bankrupt peanut butter company that was the source of a salmonella outbreak that became one of the deadliest of its kind in the country in recent years. More than 700 people were sickened and nine were killed, including three in Minnesota.

“It was a long wait,” Ginger Lorentz said from her house in Brainerd, where what she described as her Finnish mother’s sisu — spiritedness — still lingers at the dining room table where she hosted lively meals with friends and in the goofy photo of her dressed up with her dog for July 4th.

On Friday, as the trial began, prosecutors framed the case as one of a company so driven by profit that its leaders were willing to ship peanuts they knew were tainted to customers around the country. Prosecutors presented an e-mail from the former president, saying, “ … just ship it. I cannot afford to lose another customer.” The defense said that the owner struggled to keep up with day-to-day operations but that his inability to do so “is not a crime.”

Stewart Parnell, former chief executive of the now-defunct Peanut Corp. of America, and two other executives face a 76-count indictment in connection with the salmonella outbreak.

Barbara Flatgard, who lost her mother in 2009, said she doubts the defendants will see any prison time, “but just what an accomplishment [it is] that we at least got them charged.”

Lorentz saw Parnell years ago, at a Congressional hearing in which he invoked his Fifth Amendment right against self-incrimination. She is determined to see him again at the trial this summer — to catch any sign of remorse, to hear some word of apology.

“I would like to see him in jail for the rest of his life,” she said.

Food safety inspections and audits are never enough, in China and elsewhere

When inspectors visited Shanghai Husi Food Co Ltd earlier this summer, the production line at the plant now at the centre of an international food scandal appeared in good order, with fresh meat being handled by properly-attired workers and supervisors keeping a watchful eye over the process.

audit.checklistHowever, if they had arrived unannounced a day before, they would have found piles of blue plastic bags filled with out-of-date meat stacked around the factory floor, a worker at the facility told Reuters, adding the old meat was often added back into the mix to boost production and cut costs.

“The next day, that meat just disappeared – someone must have disposed of it. The manager said it was an inspection,” said the worker, who wasn’t authorised to talk to the media and so didn’t want to be named.

On July 20, following an undercover local TV report that alleged workers used expired meat and doctored food production dates, regulators closed the factory, which is part of OSI Group LLC, a U.S. food supplier. Police have detained five people including Shanghai Husi’s head and quality manager.

The scandal – which has hit mainly big foreign fast-food brands including McDonald’s Corp and Yum Brands Inc, which owns the KFC and Pizza Hut chains – underlines the challenges facing inspectors in China’s fast-growing and sprawling food industry. China is Yum’s biggest market and McDonald’s third largest by outlets.

Behind the thousands of brightly-lit restaurants offering what Chinese consumers see as better quality food lie supply chains that rely on an army of poorly regulated and inadequately audited processing plants. Yum has around 650 suppliers in China alone.

China’s government has struggled to restore confidence in its $1 trillion food processing industry since six infants died in 2008 after drinking adulterated milk. The head of China’s Food and Drug Administration told the China Daily this week that the food safety situation “remains severe” and the existing oversight system “is not effective.”