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How to prepare for more stringent food regulations in your supply chain

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By: Julia Kuzeljevich
2014-05-01

The Canadian Food Inspection Agency’s (CFIA) Safe Food for Canadians Act is currently scheduled to come into effect on January 1, 2015. The modernization Act will see CFIA implement consistent practices for all food commodities, many of which were not previously subject to CFIA registration and licensing.

This means a series of new requirements for companies that import or export food commodities as well as companies that prepare food commodities for international or interprovincial trade. Among the requirements are mandatory federal licenses, a Preventative Food Safety Control Plan including recall plans, record keeping requirements and a new inspection model.

In a recent webinar examining the compliance requirements for various supply chain stakeholders under the Safe Food for Canadians Act, Candace Sider, Director, Regulatory Affairs, with Livingston International, noted that there are a “lot of governing components, and it’s important to determine where each aspect falls,” she said.

“When we talk about modernization, CFIA is moving to an outcome-based approach, increasing due diligence in the supply chain.”

The Act aims for a more robust recall, traceability and AMPS structure.

“They’re going to take a look at director and officer liability when there’s a major food contamination issue. The potential is there to have criminal intent or even when there’s not, there’s potential to pursue with charges,” said Sider.

Licensing will be a mandatory requirement under the Act. Companies subject to the new regulations will be required to register and apply for licenses through a CFIA web portal, and must renew every two years. License requirements will apply to legal entities only, not individual establishments or locations.

While it appears there will be one license requirement per one importer/company, there is still some discussion around the impact of any penalties that would be assessed against a master business number vs. other business units, noted Sider.

“What we’re looking at in terms of modernization is introducing licensing of all importers, so you know what’s coming in before it comes and you know the players. You then can put in preventive control recall plans,” said Neil Jan Daniel Bouwer, senior vice-president, Agency Transformation, with the Canadian Food Inspection Agency.

“We hope to move quickly on the timeline for the importer licensing system.

Hopefully within the next twelve months there will be new imported food sector regulations-the proposals are already well advanced,” he said.

It’s expected a compliance period of at least a year is being built in. The government expects to have comprehensive licensing of all food importers and products will also now have to meet the import/export requirements of the country they are being exported to.

How can regulated parties comply?

While many will already have quality management programs in place, regulated parties will need to develop internal risk management plans and to demonstrate what their plans have effectively covered, Sider said.

They must determine their level of risk and what they have to add in terms of additional information.

The third point in the outcome based approach is really performance-based, and looks at the imported Food Sector licensing requirement.

“The consultation process has been very critical. CFIA wants to get it right. Some of the requirements would have potential impact for importers- it’s important you voice your concerns if you feel there is a better approach,” said Sider, who noted that CFIA, from the initial engagement, has really taken to task a lot of the key issues that have been raised.

“We have seen a push from 2014 into 2015 to really allow manufacturers, importers, and exporters time to meet the new standards. Additionally there are program or IT changes that have to go in, in order to more effectively administer policy-it is not all in a manual format,” Sider noted.

“When does licensing apply and when does it not? We don’t have a lot of the detail now on interprovincial trade, so it’s really a communication right now,” Sider said.

Casual importers are also considered outside the scope of CFIA modernization and transformation. There is no change to the imported requirements on chemicals in food processing, and animal feeds and supplements are governed under different regulations.

The issue of non-resident importer is currently under review as an outstanding issue.

Exceptions to the licensing requirement include food sold within the province that meets the requirements of appropriate legislation, and companies that are transporting food or storing it but that are not involved in importing or exporting.

The Act’s Preventive Food Safety Control Plan will also shift- from being a voluntary to a mandatory measure.

Under CFIA’s new food inspection regulations, every company that deals with food and food products will be required to have a detailed Preventative Food Safety Control Plan (PFSCP), documenting all aspects of your food handling operation, including your facilities, equipment, employee training, sanitation and pest control, transportation, storage and more.

Oftentimes plans are written but not put into effect so it is important to “execute it and demonstrate it” for effectiveness, to measure the gaps and ensure that you put the corrective measures in place,” Sider noted.

Lists, such as clearly defined documents of ingredients lists, become very critical.

“You must maintain all the detailed records within a company’s books and records. The CFIA will be conducting more robust audits. There will be an issue for corrective action, allowing companies a certain amount of time to bring themselves into compliance or alignment,” she noted.

Companies will also need to ensure they evaluate their level of risk/exposure to AMPS. The time parameter for companies to address compliance issues, with potential for suspension, is up to two years.

“People tend to forget that they need to go back and review procedures as a ‘fluid’ document. You need to make sure there is an owner and sponsor ensuring these programs are updated, and that there is focus. Oftentimes I find companies have a good sense of where there was contravention, in others, that’s not the case,” said Sider.

Preventative measures are a key component of CFIA’s modernization and food safety efforts. Even companies that aren’t the licensed importer must have procedures in place to track and trace any food product.

“It’ll be up to you to demonstrate that your documents detail any and all product ingredients and that your books and records contain a full trail of your goods. Those records can be requested by CFIA and must be provided within 24 hours if it is determined that a food hazard exists,” she said.

Your company’s compliance history will be an important factor in demonstrating your ability to meet all of CFIA’s new requirements.

Under new regulations, CFIA requires that exports affected by the new standards also meet the standards of the importing country – and Canadian standards may not align with all other countries (for example, Canada and the US are currently operating under different standards). CFIA is assessing its options, one of which may be affixing a label or symbol which would identify that the goods are not for sale in Canada but are viable for export. Exporters will need to remain flexible in case CFIA implements new requirements.

Under the Beyond the Border Action Plan there has been a huge push for alignment and harmonization. Echoing similar levels of increased food safety, the US Food and Drug Administration (FDA) announced recently that it will publish the Sanitary Transportation of Human and Animal Food Proposed Rule after hosting a series of public meetings.

This proposed rule will be the seventh and final rule under the FDA Food Safety Modernization Act (FSMA) and would establish criteria for the sanitary transportation of human and animal food.

Generally, the proposed rule would apply to all shippers, receivers, and carriers who transport food in the United States by motor or rail, whether or not the food enters interstate commerce.   

Melanie Neumann, vice president and CFO with The Acheson Group, a strategic consulting firm for food and beverage companies, said the rule has been in the making for the last 20 years and while the main focus is on separation and proper temperature control it will also have a broader impact. It is not just limited to FDA facilities but to businesses regulated by FDA and USDA, she said.

“It’s normally applied to interstate commerce-but this rule applies to in-state shipments, a different ballgame. Also, receivers now have heightened duties: while there are some exemptions, this rule is shaking up the transportation industry more than had been anticipated,” Neumann noted in a webinar on food safety moderated by Safety Chain SVP and co-founder Barbara Levin.

“The breadth of coverage is much greater than many of the other Food Safety Modernization Act rules. When you’re looking at shippers, carriers and receivers, you can see that it will touch just about everybody-most are one of these or in between. Shippers need to specify their conditions on the foods. If the food is exposed they need hand washing facilities available. There’s a good deal of responsibility on these shippers and a need for heavy communication with the carriers,” she said.

Carriers, who are executing, need to have transport appropriate for hauling, written procedures for cleaning or handling,” said Jennifer McIntyre, vice president and chief science officer with the Acheson Group.

The rule will result in a lot of documentation requirements and become a huge training issue, noted Neumann.

“A lot of the industry is probably already practicing many of these protocols but they need to be focusing on training and documentation, and also on developing procedures for communicating records to shippers, carriers and receivers,” she said.

“In the eyes of the regulators if it’s not documented it did not happen.”

Darin Cooprider, Vice President, Consumer Packaged Goods, Ryder System Inc. said food recalls are a common enough occurrence today that they have become very much a “top of mind issue” with industry, consumers and regulators, and with food supply chains that have become tightly integrated.

“Rarely a few months go by where we don’t see a food recall.

“Nothing is more important than safety and that goes for managing food safety in the supply chain. What that means is we work with our customers to make sure we’re compliant with the law and out there in a leadership role with respect to independent 3rd party audits of our facilities,” he said.

In the event of recalls how much the 3PL becomes involved is on a customer by customer basis.

“In the broadest sense, the customer (manufacturer of the material) is the first holder of liability so they generally seize control of the process. They would activate the recall team, identify who among their 3rd parties received the distressed materials and would identify the code dates in question. We would identify which inbound shipments, carrying party, stock, what has left the building, transport outbound party, and when did it arrive at consignee. We could do this all in a matter of a few minutes. Every outbound customer order is scanned-picking up all the metadata, scanning to a particular pallet. We actually perform mock recalls on a regular basis in a non stressed situation, several times a year with our customers, to make sure people trained and familiar with it,” he said.

“Processes are codified and trained, every touchpoint of the supply chain monitored and at the same time we make sure our systems and processes are in place to make sure that even if a manufacturer were to have an unfortunate circumstance, we would be able to track it from source to destination. Certainly if there were weaknesses it would be incumbent on us to raise our hand and get ahold of the net,” said Cooprider.

He said the US and Canada together are among the world leaders in the food supply chain.

While some transportation providers may be more rigorous than others, “I think by and large if you draw a large canvas print they are all moving in the same direction,” said Cooprider.

“Procedures can be onerous but that’s a good thing. If it was so easy and there weren’t time and money commitments to be made it would jeopardize quality.

It’s one of those areas where regulation is necessary to protect the public,” he said.

Collaboration with transportation providers has improved, he noted.

“A good deal of rigour is put into chain of custody, from source to shelf. Obviously there’s some benefits to reducing handoffs in that regard. There are fewer broader relationships-this improves the shippers’ ability to hold providers accountable.

The one thing I worry about a little bit in transportation is brokered transportation-you don’t really know who is picking up the load-this places a premium on the warehouse provider to make sure the equipment is functioning properly,” he said.

Two pain points in food transport include fresh (produce) and temperature controlled, where there is a narrow band of temperature ranges outside which there is the threat of spoilage or susceptibility to spoilage.

Maintaining integrity through longer supply chains becomes about addressing infrastructure, processes, compliance, and making sure that the supply chain functions in reliable, repeatable manner.

“It’s making sure we’re joining technology and physical transportation,” Cooprider said.



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