Food Safety Regulatory Compliance

1. Food Safety Regulatory Compliance Food Safety Modernization Act The Role of 3rd Party Auditing June 25, 2012

2. FSMA – The Role of 3rd Party Auditing • Bruce Silverglade, Esq. • Principal • Olsson Frank Weeda Terman Matz • bsilverglade@ofwlaw.com

3. FSMA and 3rd Party Auditing What the law says . . . What is the reality? What should industry do?

4. FSMA Provisions Regarding 3rd Party Auditing FDA may require certification of imports under section 801(q) Certification must be provided by the government in the originating country, or An accredited 3rd party auditor

5. FSMA Provisions Regarding 3rd Party Auditing FDA must also establish a voluntary qualified importer program (VQIP) under section 806 Requires a facility certification by FDA or an accredited third party auditor

6. FSMA - Accrediting Auditors FDA must establish a system for recognition of accreditation bodies that accredit third-party auditors by January, 2013 But can directly accredit auditors starting at that time

7. FSMA - Accrediting Auditors FDA must publish model accreditation standards by July 2012 (Delayed) FDA must publish regulations preventing conflicts of interest between 3rd party auditors and food companies by July 2012 (Delayed)

8. FSMA Other 3rd Party Auditing Provisions FSMA contains provisions for: Regulatory audits v. consultative audits Requirements for submitting audits to FDA Provisions regarding conflict of interest Provisions for withdrawing accreditation

9. The Accreditation Process - NOW Verifies CB Compliance to ISO/IEC Guide 65 and Scheme requirements Licensed Accredited Certification Body SQF ISO/IEC Guide 65 Licensed Accredited Certification Body BRC GFSI Guidance Document Accreditation Body Other GFSI Schemes Licensed Accredited Certification Body Verifies Scheme Compliance to GFSI Guidance Document Licenses Certification Body to perform audits Audits and certifies suppliers to scheme requirements; Performs 2nd party and 3rd party audits IAF Members SO Approves AB’s to accredit Certification Bodies Certified Supplier Certified Supplier Certified Supplier IAF Members peer review Member Accreditation Bodies 9

10. The Accreditation Process After FDA Issues FSMA Regulations . . . ? Verifies CB Compliance to ISO/IEC Guide 65 and Scheme requirements ForeignGovernment Accredited Third party auditor SQF ISO/IEC Guide 65 Accredited Third Party Auditor BRC FDA GFSI Guidance Document Accreditation Body Other GFSI Schemes Accredited Third-Party auditor FDA GFSI Verifies Scheme Compliance to GFSI Guidance Document Licenses Certification Body to perform audits Audits and certifies suppliers to scheme requirements; Performs regulatory and consultative Audits. SO Approves AB’s to accredit Certification Bodies IAF Members Certified Supplier Certified Supplier Certified Supplier IAF Members peer review accreditation bodies 10

11. Developments at FDA – Agency Says Priorities Are: Determining the right level of training and experience for an accredited auditor, how much specialized knowledge auditors need to demonstrate competence, and the most predictive measures of an auditor’s competence

12. Developments at FDA –Agency Says Priorities Are: • Ensuring the independence and objectivity of private certification bodies and auditors

13. Developments at FDA – Agency Says Priorities Are: • Establishing how FDA should structure the relationship with accrediting bodies -- What are the thresholds of expertise, experience and capacity that must be reached to be recognized by FDA as an accrediting body?

14. Developments at FDA – Agency Says Priorities Are: Determining what information from audits should be provided to FDA and what information should be made public Mike Taylor, GFSI conference, February 16, 2012

15. Developments at FDA FDA has not ruled out starting a pilot program where the Agency would act as their own accreditor FDA has funded the NEHA to develop a personnel certification credential for food auditors. Intent initially is for use for federal and state government auditors, but could form basis for standards applied to 3rd party auditing industry

16. FSMA – 3rd Party Auditing Delays New York Times reports on April 2 that White House is delaying FDA proposed rules in numerous areas involving food, drug, cosmetics Delay includes a package of four proposed regulations implementing FSMA including the FSVP Administration is concerned about impact on November election – requests economic impact data from FDA

17. FDA’s Plan for FSMA Implementation The four delayed proposed regulations: Preventive controls (human food) Preventive controls (animal feed) Fresh produce safety Foreign Supplier Verification Program for importers

18. FDA’s Plan for FSMA Implementation • Delaying the issuance of these four FDA proposed rules also delays FDA issuance of proposed rules for 3rd party auditors which the agency said would be next in line for release

19. FSMA Delays First four proposed rules sent to OMB November 2011, but review extended Mike Taylor first said rules will be out in “next few weeks,” Mike Landa said “in next few months,” other FDA officials said “this summer” Reality may be not until after the election

20. Diverse Interests Press to End Delay Global Food Safety Initiative urges HHS to Act Consumer groups urge Administration to release rules Unusual alignment of interests

21. Diverse Interests Urge Administration to Act FOR IMMEDIATE RELEASE Contact: Chris Waldrop March 19, 2012 202-797-8551 Consumer Federation of America Member Groups Urge Release of Delayed Food Safety Proposals Consumer Federation of America today announced that as part of CFA’s annual meeting held last week, its members voted to support a resolution urging the Obama Administration to issue four proposed food safety rules that have now been delayed for over two months. “On behalf of CFA’s nearly 300 members, we urge the Administration to immediately issue these important food safety proposals,” said Chris Waldrop, Director of CFA’s Food Policy Institute. “The longer these proposals are delayed, the longer it will take to fulfill the promise of the Food Safety Modernization Act, which is intended to better protect consumers from food borne illness.” The Administration is now two and a half months overdue on meeting deadlines mandated by Congress. In late February, the White House Office of Management and Budget (OMB) announced t

22. Congressional Developments House Appropriations Committee passes FDA FY ’13 Appropriations Bill Report language states:

23. Congressional Developments • The Committee is aware the Administration missed the January 4, 2012, statutory deadline for publishing a notice of proposed rulemaking for fresh produce safety standards and final regulations on the content of the Foreign Supplier Verification Program for imported food.

24. Congressional Developments The Committee encourages the Administration to meet the statutory timelines for implementing P.L. 111–353 and expects FDA to follow a timeline for issuing rulemakings consistent with the sequence and logistics of establishing requirements for a preventive controls framework for domestic and imported foods.

25. Congressional Developments The Committee directs FDA to submit a report within 180 days of enactment of this Act that describes the justification for any proposed rule or final regulation being 60 days or more beyond the timeline.

26. Congressional Developments The Committee further directs FDA to continue to provide such report at the same time that the agency submits its annual budget justification to the Committee. This language will pressure the White House and the FDA to speed up issuance of regulations for the FSVP and 3rd party auditing, and other elements of FSMA.

27. Congressional Developments DeLauro/Latham establish Congressional Food Safety Caucus Bipartisan effort – may be used to influence implementation of FSMA

28. Congressional Developments January 10, 2012 letter from Democratic House minority coalition to FDA

29. Congressional Minority Letter to FDA FSMA “requires that with respect to imported foods, FDA establish an accreditation system and model auditing standards for third party audits.

30. Congressional Developments • “While the law requires these steps only for imported foods, industry officials told the Committee that the FDA standards will influence the actions of auditors inspecting domestically grown products (produce) as well. . .

31. Congressional Minority Letter to FDA “We hope that FDA will consider our findings when drafting these rules, and we suggest that FDA consider developing a voluntary model program for domestic auditors that could become the standard of care for third-party auditing programs in the United States.”

32. What to Do Wait and see . . . [NO!] Ascertain alignment of interests Develop a position Determine how best to make use delay Be proactive

33. What to Do And that is what we are doing to do now with a case study. What are the agency’s priorities and how should a company react now, and during the official comment period?

34. Olsson Frank Weeda Terman Matz Bruce Silverglade, Principal Bsilverglade@ofwlaw.com 202-518-6316