US organic body launches industry-focused fraud prevention program

By Aerin Einstein-Curtis contact

- Last updated on GMT

© GettyImages/Duncan_Andison
© GettyImages/Duncan_Andison

Related tags: Organic certification, Organic feed

Assessing ingredients and supply chains for potential fraud, planning to address vulnerabilities and ensure mitigation efforts are effective are all steps in a new company-based anti-fraud program.

The Organic Trade Association (OTA) announced the launch of its fraud prevention program​ earlier this month. OTA members can apply to pre-enroll in the program as full enrollment includes multiple steps.

Work to develop a fraud prevention program for members of the organic industry started several years ago following reports​ of the sales of imported feed grains that had fraudulently been labeled as organic ingredients, said Gwendolyn Wyard, VP of regulatory and technical affairs with the OTA. “The program takes nine steps – the last one is enrollment notification,”​ she added.

“Fraud is something that’s been around since the Middle Ages, it’s something that every sector deals with,” ​she told FeedNavigator. “We felt like we needed to take action, and we needed to take action on several fronts – our position is that everybody plays a role in fraud prevention.”

In addition to work on the legislative and regulatory fronts, the OTA established a task force to develop a best practices guide for industry members, she said. The goal for the project was to create a document to help producers prevent organic fraud but the effort grew into the current program.

“We wanted to do something more than just put together a guide that had a list of best practices that may or may not apply to an operation depending on what products they’re selling and what kind of business they’re engaged in,” ​she said. “We wanted to create a guide that wouldn’t just sit on a shelf and collect dust – we really wanted to operationalize it. That’s when we started thinking about how we might be able to create a program that companies could enroll in.”

The program is for companies that are USDA certified organic, buying USDA certified organic ingredients to put into a USDA certified organic product, Wyard said. “They’re going to be looking at all of their ingredients and looking at where they’re sourcing those ingredients,”​ she added.

Ten companies took part in the pilot project and about 12 have signed up since the program launched, she said. The goal is to have about 75 take part in the first year.

The organic program relies on trust in the organic label, she said. “Something like fraud can so quickly erode trust … what we need to do is send a signal that this won’t be tolerated,” ​she added.

Prevention program background

The fraud prevention program was designed to work in concert with other steps being taken by members of the organic industry, work done at the US Department of Agriculture (USDA) and through the Farm Bill, said Wyard.  

The prevention program focuses on addressing or improving buyer responsibility, she said. “This is something that we have control of, we don’t need to wait for USDA we can get ahead of this,”​ she added.

“We can put in place a program that really is all about best practices and ensuring that the products that each company bring in are in fact organic,” ​she said.

When collecting best practices, the task force also looked to food safety efforts developed to address food fraud, she said. A food safety program provided information on how to complete a vulnerability assessment for a company’s supply chain and was used to inform fraud prevention practices for organic companies.

Assessing risk, addressing vulnerability

The fraud prevention program provides step-by-step instructions for companies or producers to assemble a fraud prevention team, identify where vulnerabilities may exist and plan a way to mitigate them, said Wyard.

The process involves “doing supply chain mapping, doing a complete assessment of your company and looking for where are your weaknesses, where are your gaps, where are you vulnerable to fraud,” ​she said. “Then once you’ve identified where those vulnerabilities are, putting in place a vulnerability control plan essentially putting in place a fraud mitigation strategy.”

When a producer starts the enrollment process, they receive the best practices guide and go through training, she said. The first training is set to be provided later this autumn.

At that point, a company can decide to register with the program and complete the steps involved, including updating its organic systems plan to account for vulnerabilities in their supply chain, she said.  

“Once a company puts together an organic fraud prevention plan, and there are some checkpoints along the way where a competent partner ensures that they’ve conducted an adequate vulnerability assessment review and that their mitigation measures are sound – at that point, the way the program works, there’s an intersection with the existing organic regulation,”​ Wyard said.

The fraud prevention program is not an additional certification, but a way to strengthen internal quality control, she said. “What the company is doing – they update the organic system plan, which is required information that every certified company must have, and it’s what the certification is built on – it describes how a company will meet regulation,”​ she added.

The organic certifier working with the company then reviews that plan, she said. Companies in the prevention program give their updated organic fraud prevention plans to their certifier as part of the audit process.

“An organic company might in the organic systems plan, currently they might say, ‘we collect certificates from all the suppliers we buy our organic ingredients from,’” ​said Wyard. “But, in conducting the vulnerability assessment, they might say, ‘we’re sourcing our corn from Turkey and we know that they have a history of fraud. We’ve identified a high-risk ingredient and a vulnerability to fraud.’”

“A mitigation measure might be, not only are we going to collect the organic certificate from the person we’re buying that ingredient from, but we’re going to require transparency all the way back to the farm,” ​she added. “That would be an update to the plan.”

Companies also need to have monitoring systems in place to ensure that mitigation strategies adopted are effective, she said.

The program includes training regarding how to report suspected or detected fraud, she said. There are times when companies do not report activities because they are unsure about what is happening or because they do not know how.

When a company has put the updated plan into place, the OTA is notified and the company is considered fully enrolled in the program, she said. Only then is the company publically recognized as taking part.

Enrolled companies are set to be publically listed on a website for consumers, she said.

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