EU Audit in Belgium on organic production and labeling – Are we still surprised of “organic frauds”?

Here below the summary of the above mentioned audit report:

“This report describes the outcome of a DG Health and Food Safety audit in Belgium, carried out between 19 September 2017 to 29 September 2017, under the provisions of Regulation (EC) No 882/2004 on official food and feed controls.

The objective of the audit was to evaluate the controls on organic production and labelling of organic products.

The control system for organic production in Belgium is only partially in place. There is no competent authority responsible for import controls of organic goods, and market controls only cover follow up of complaints and control bodies are not annually supervised by all regional competent authorities.

Although inspections by control bodies at operators are overall effective and the number of additional and unannounced inspections and sampling by control bodies goes far beyond EU requirements, enforcement is weak, in particular, in cases of severe and recurrent irregularities.

This, together with the fact that the likelihood of irregularities are neither reported to competent authorities nor fully investigated by them reduces the effectiveness of the control system.”

This report highlights some typical factors that increase the likelihood of frauds in the organic sector:

  • weak import controls are the main gate for fraudulent activities. The organic market is assuming a huge dimension in EU and we cannot rely on internal production to cover the needs of raw materials. Certain commodities are in large parte – or mainly – imported: this is the case for instance of many grains and cereals, lentils, tree nuts…
  • the hybrid nature of the control bodies (CBs) is a major weakness as well: in most Member States they are private bodies invested of a public function (namely do the controls for the competent authorities). That means that they have the obligation to report irregularities to the competent authorities (CAs), but they are also competing hard with other CBs to survive on the market. Therefore they could be not so keen to share information about investigations, especially on sensitive cases, with the CAs. They often tend to protect the certified food business operators, that to a certain extent are also their “clients”;
  • the weak supervision of the CAs on the CBs can foster illegality and in any case allows a less transparent management of non compliance cases, for reasons explained in point 2.

The good news is that in most countries the number of inspections is above EU requirements and that they are unannounced, but in our experience on the ground in several Member States the CBs are too focused on paperwork and much less on the fields. An illegal treatment of crops might be spotted much better from a walk beneath them, than from a registry.

Consumers and regulators often rely on labeling and traceability as tools to prevent similar frauds (conventional food passed as organic, country of origin different from what declared), but since these tool are only “paper” they are quite easy to fake for any experienced fraudster. Moreover, they increase the final costs of the products, increasing as well incentives for fraudsters.

The organic sector is mainly involved in what we can call “commercial frauds”: they involve quality and usually are not likely to cause any risk for the public health. As a consequence, in my opinion, this could be one of the sectors where new technologies that might secure transactions along the supply chain and reinforce traceability, including blockchain, should be applied first and get the better added value.

 

Products’ safety self declaration in Vietnam?

Decree No 15, effective since 2 February, 2018, will permit organisations and individuals producing and selling food to self-declare food-product origins and quality, replacing the long-standing method of keeping records at public management agencies and ask for authorizations.

According to local businesses, in the past, to apply for the certificate, an enterprise must prepare two sets of documents and each set had 11 different kinds of papers.

According to a survey of the Central Institute for Economic Management announced recently said that to apply for a food safety hygiene certificate, each enterprise must pay about VN$10 million (US$440), and VN$30 million (US$1,300) in some cases.

(Source: Vietnam Net, Vietnam Plus)

I am totally against the meaningless bureaucracy and very well aware of the global trend of shifting responsibilities to the food business operators and enhancing private-public cooperation control models: this is the future, since the competent authorities won’t have the means and the budgets to check everything. The number of checks to perform is too high and the type of controls too wide.

But, in a country where the food safety average level is still one of the worst worldwide (see one of the thousands of articles regarding the topic: link) maybe this is a too bald move: Vietnam, according to the above mentioned trend, is also strengthening the criminal and administrative sanctions for food safety violations and reviewing the existing food legislation, to protect domestic consumers and meet the strictest requirements of some importing countries (like the EU block itself).

My doubt is that in an environment still not characterized by a solid business culture, this decision would be a step back on this road.